Sherry FitzGerald, Ireland’s largest estate agent, reported today (Monday, October 11th, 2022) that the average value of second-hand homes in Ireland increased by 1.1%[i] in the third quarter of this year, with values rising 5.5% over the first nine months of 2022. This compares to growth of 7.1% in the same period in 2021.
In Dublin, there was a further rise of 0.9% in the quarter. This is the slowest quarterly growth rate since the start of 2021. Cumulatively, values have increased 5.2% since the start of the year, and average values have increased 7.3% within the capital year-on-year.
Price growth continues to be stronger outside of Dublin, with average values nationally excluding Dublin, rising 1.3% in quarter three, 5.9% over the year to date and 8.9% annually.
According to Marian Finnegan, Managing Director, Sherry FitzGerald; “The deceleration in the pace of price growth, which began to emerge during the second quarter of this year has persisted during quarter three. Although demand remains robust, the frenzied bidding activity that was a feature of the post pandemic period has eased. This combined with a slight increase in the stock of second-hand properties available for sale has resulted in more moderate pace of price growth.”
According to the latest findings by Sherry FitzGerald Research, there were 15,300 second-hand properties for sale nationwide, in July 2022. This represents an annual increase of 1,800 properties year on year. Despite this improvement in supply, the total volume of properties for sale in July 2022 represented just 0.8% of the overall total housing stock. Furthermore, comparing current supply to a more normalised pre-covid trading period July 2019, reveals a substantial fall in supply of 26% or 7,900 properties.
According to Marian Finnegan, Managing Director, Sherry FitzGerald; “In the period preceding the Covid-19 crisis, Ireland’s housing market faced substantial challenges, most notably, the imbalance between supply and demand. The pandemic and subsequent geo-political discord have served to exacerbate this supply problem and while there have been modest improvements in supply year on year, the overall stock of houses available for sale remains near to record low levels.”
Over the three years, there has been contrasting developments in terms of supply between more urban and rural areas. Most notably, while the stock of property has diminished in all locations, supply levels in rural Ireland has endured the most significant contractions of up to 51% in the three-year period.
The dearth of supply available for sale is not unique however as supply is equally, if not more significantly constrained in the rental market. As has been the case for over a decade, vendor statistics once again highlight the disparity between investors entering and exiting the market.
In the year to date, just 13% of purchasers of second-hand homes with Sherry FitzGerald were investors, whereas 36% of sales were investors selling their properties.
The profile of buyers has remained largely consistent. Owner occupiers remain the dominant purchasing cohort representing 79% of all purchasers of second-hand homes with Sherry FitzGerald nationally in the first nine months of 2022. First-time buyers continue to make up over half of all owner occupiers.
Transaction activity has now surpassed its pre-pandemic levels. In the first half of this year[ii], there were over 26,240 sales recorded on the property price register (PPR), excluding block sales and new homes acquired for social housing. This represented an 8% increase on the levels of a year ago, and up 9% on the same period in 2019.
New home sales have also recovered to their pre-pandemic levels, recording 3.4% growth on the level of transaction activity witnessed in the first half of 2019. Transactions in the second-hand market remain brisk, up 5% on the opening six months of 2021 and up 10% on 2019.
In conclusion, Marian Finnegan, Managing Director, Sherry FitzGerald said “There is no doubt that accommodation crisis in Ireland is deep rooted and complex. Budget 2023 was the perfect occasion for the Government to address the crisis but unfortunately it not only failed to make any meaningful policy changes but incredulously introduced a 10% levy on concrete block which is without a doubt counterintuitive in the current environment.
Most significantly perhaps the Government failed to introduce crucial measures to tackle the deeply embedded issues within the rental market. The introduction of €500 tax credits for renters, representing as it does less than 3% of average annual rent in Ireland, will have a limited impact on affordability. More importantly, it fails to address the crux of the problem in the rental market, a lack of supply.”
- ENDS -
For any further information, please contact:
Jill O’Neill
PR Director
Sherry FitzGerald Group
Ph: 01 237 6500 / 086 252 3277
Marian Finnegan
Managing Director
Sherry FitzGerald Residential & Advisory
Ph: 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.
