“Annual house price inflation rises to 5.5%.”
Statement by Marian Finnegan, Managing Director, Sherry FitzGerald.
Thursday June 27th, 2024
Sherry FitzGerald, Ireland's largest estate agent, announced today that the average value of second-hand homes in Ireland saw a 1.8% increase in the second quarter of 2024. This brings the year-to-date figure to a 4.3% rise, contributing to an overall 5.5% increase over the past twelve months. This growth is a noticeable uptick from the 3.4% annual growth rate recorded at the same time last year.
In Dublin, average values grew by 1.7% during the quarter, resulting in a year-to-date increase of 3.8%. Notably, the annual growth rate in Dublin has risen to 5%, a significant increase from the 2.4% growth recorded in the previous twelve months.
Outside of Dublin, the trend of higher price inflation continues, albeit the gap is narrowing. Average values in these areas grew by 1.9% in the quarter, leading to an annual growth of 6%. This is a robust increase compared to the 4.6% annual growth rate recorded in June 2022.
Regionally, the Mid-West and West regions experienced the strongest annual price growth, with increases of 7.9% and 7.4% respectively. The Border and Midlands regions also recorded strong price growth, with increases of 7.1% and 7.0% respectively. The South-East region saw the lowest annual growth rate at 4.7%.
Commenting on the latest analysis, Marian Finnegan, Managing Director, Sherry FitzGerald said; "The latest figures demonstrate a notable increase in the value of second-hand homes across Ireland, with strong growth in both urban and rural areas. However, the market faces significant challenges, particularly with the decline in transaction activity as a result of persistent supply shortages."
A review of transaction activity in the first quarter of 2024, the latest available data, revealed a decline in sales volumes year-on-year. Housing transactions made by household buyers as per stamp duty executions totalled 9,450 in the first quarter of this year, representing a 10.8% decrease compared to the same quarter in 2023. In the second-hand market, approximately 7,880 units were sold, a 10.4% decrease compared to the opening quarter of 2023. This decline is unsurprising given the shortage of second-hand homes available for sale over the past year.
In January 2024, there were just 11,050 second-hand homes advertised for sale, marking a 27% decline from the previous year. Rural and regional areas have been particularly affected, with Sligo, Laois, and Roscommon recording declines in second-hand transaction activity of 31.2%, 28.9%, and 26% respectively.
The new homes market also witnessed a reduction in transaction activity during the first three months of 2024, recording a 13.0% decrease compared to 2023. Given the challenges faced by the sector over the past 18 months, such as construction cost inflation and interest rate increases, this decline is not surprising. However, with inflation falling and a recent interest rate cut, it is likely that we will see an uptick in transaction activity in the new homes sector through the rest of the year. Moreover, Government supports such as the temporary waiver of development contributions and Uisce Eireann rebate are proving effective, which should also underpin transaction activity in the months ahead.
The exodus of landlords from the market has continued throughout 2024, posing a key issue for the rental market. In the first six months of the year, landlords continued to exit the market at an unsustainable pace. An analysis of Sherry FitzGerald’s sales reveals that only 12% of purchasers of second-hand homes were investors, while 36% of vendors were investors selling their properties. This trend has persisted over the past number of years, and it is imperative that it is addressed adequately by the Government in Budget 2025.
In conclusion, Marian Finnegan, Managing Director, Sherry FitzGerald stated, "The data for the first six months underscores the ongoing supply challenges that are significantly affecting transaction volumes and price inflation. Notably, the rental market issues are intensifying, making it absolutely essential for these to be addressed adequately in Budget 2025."
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For any further information, please contact:
Jill O’Neill Marian Finnegan
PR Director Managing Director, Residential & Advisory
Sherry FitzGerald Group Sherry FitzGerald Group
Ph: 01 2376 500 Ph: 01 237 6341
086 252 3277 086 814 8251
