Housing Market in Ireland Faces Tight Supply and Modest Price Growth in 2023
The analysis reveals that the number of homes available for sale in Ireland last year remained significantly below pre-COVID levels, despite an increased supply of new homes. According to the latest Daft.ie House Price Report, house prices experienced a modest average increase of 3.4% in 2023, marking the smallest annual rise since 2019.
The average listed price nationwide stood at €320,046 in the final quarter of 2023. While Cork City witnessed a 3.7% price increase, Dublin saw a 2% rise. Waterford and Limerick cities experienced faster rates with 6.1% and 9% respectively.
Outside the cities, prices in Munster rose by 6.8%, and Connacht-Ulster recorded an 8.3% increase in the last quarter of 2023 compared to the previous year. This highlights an east-west divide, indicating higher price growth in the west of the country than in Leinster.
Despite an increase in new home prices, with a median of €407,500 in the first three quarters of 2023, economist Ronan Lyons notes that 2023 marked the smallest increase in house prices in a decade. The median price for a new home in Cork was €380,000 but soared to €650,000 in south Co Dublin.
Lyons emphasized the impact of rising interest rates on the market, and while acknowledging the lack of price growth due to sufficient supply as positive, he expressed concern when scarcity of supply meets weak demand in the second-hand market.
As of December 1, 2023, there were just over 11,100 homes for sale in the country, significantly lower than the pre-COVID average. Lyons noted that this scarcity is particularly evident in the second-hand market, with Dublin experiencing a 33% decrease in available homes compared to the previous year.
A survey of prospective homebuyers revealed that half faced challenges saving for an adequate deposit, while two-thirds cited a lack of available homes as the reason for delaying their home purchase.
Looking ahead to 2024, Lyons emphasized the critical role of the second-hand market in the overall housing system. He anticipates potential recovery if uncertainty diminishes, and interest rates decrease, leading to a healthier housing market with increased transactions and stable prices.
Source: Sean Murray, Irish Examiner
