Q3 2021 Residential Index

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News

“Demand Rebounds to Pre-Pandemic Levels but Supply Side Challenges Persist”

Statement by Marian Finnegan, Managing Director, Sherry FitzGerald.

October 6th, 2021

Sherry FitzGerald, Ireland’s largest estate agent, reported today (Wednesday 6th, 2021) that the average value of second-hand homes in Ireland increased by 2.5%[i] in the third quarter of this year, with values rising 7.2% cumulatively over the first nine months of 2021. This compares to growth of 0.7% over the same period in 2020.

In Dublin, there was a further rise of 2% in the quarter, with values growing 5.1% since the start of the year. Overall, average values have increased 5.5% within the capital year-on-year.

Price growth continues to be stronger outside of Dublin, with average values nationally excluding Dublin rising 3.2% in quarter three, and 10% over the first three quarters of the year. Dublin recorded the lowest rate of price growth of any region.

According to Eoin Lynch, Economist, Sherry FitzGerald; “With most restrictions lifted, the residential market has seen a return to more normalised trading levels. Overall sales volumes are currently slightly above their pre-COVID levels, with the second-hand market, more elevated. Strong demand and diminished stock levels continue to influence above trend levels of price growth, although there are emerging indications that this rate of growth is easing.

Transaction activity has now recovered to its pre-pandemic levels. In the first half of this year[ii], there were over 24,300 sales recorded on the property price register (PPR), excluding block sales and new homes acquired for social housing. This represented a 29% increase on the levels of a year ago, and up 1% on H1 2019.

New homes sales remain below pre-pandemic levels, although this is a result of increased government presence in the new homes market and reduced output due to site restrictions. Activity in the second-hand market is brisk, up over 30% on last year and 5% ahead of trading in the first six months of 2019. In Dublin, second-hand activity is on par with 2019 levels.

 The profile of buyers has remained largely consistent. Owner occupiers remain the dominant purchasing cohort representing 78% of all purchasers of second-hand homes with Sherry FitzGerald nationally in the first nine months of 2021. First-time buyers continue to make up over half of all owner occupiers.

Again, vendor statistics highlight the disparity between investors entering and exiting the rental market. Only 14% of all purchases were made by investors, whereas 30% of sales were investors selling a property.

In conclusion, Marian Finnegan, Managing Director, Sherry FitzGerald said “With Budget 2022 approaching, the Government has a meaningful opportunity to address failings in the residential market, specifically the plight of the rental sector. These investors have been exiting the market at a rate of two to one for a prolonged period, while figures from the BPFI and CSO highlight purchases made by this cohort have been in decline in recent years, despite the overall market growing. This has ultimately led to the significant erosion of rental stock. Immediate measures are needed to redress this.

Recent indications are that Help-to-Buy will be extended in the Budget; this is an important action as the measure has been key steppingstone in enabling first-time buyers to enter the market. Furthermore, the measure has played a crucial part in the upturn in construction activity since its introduction.

This budget also provides the Government a great chance to tackle viability issues. While much has been done in the recent past on the demand side, and these are welcome, measures need to be adopted minimise costs and ultimately allow the delivery of new homes at more affordable prices.

Along with the recent announcement of Housing for All, Budget 2022 is a critical juncture in the bid to rectify the national housing crisis with not only significant action needed, but prompt action also.

- ENDS -

For any further information, please contact:

Jill O’Neill                                                                            

PR Director                                                               

Sherry FitzGerald Group                                           

Ph: 01 2376 500 / 086 252 3277                            

Marian Finnegan      

Managing Director, Residential & Advisory

Sherry FitzGerald Group   

Ph: 01 237 6341 / 086 814 8251


[i] The Sherry FitzGerald house price index model reflects achieved prices which results in a differential when compared to other industry commentators using data sources such as vendor expectations, asking prices, average values etc.

[ii] Due to the time lag in adding properties to the PPR, quarter two data is the most accurate data available.

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