According to the website Daft.ie, the rate of price growth for properties listed on the market slowed in 2023, despite a significant reduction in supply.
Its latest analysis pegs listing price growth for the year at 3.4%, nearly half the 6% growth rate in 2022, and the 8.1% and 7.7% seen in the previous two years. % growth.
The report notes that on December 1, there were just 11,100 homes listed for sale on the Daft.ie website, which was a 27% decrease compared to the same day last year. The number of homes on the market in a given period has fallen significantly compared to the pre-COVID-19 average of 25,000 homes. .
Ronan Lyons, professor of economics at Trinity College, Dublin and author of the Daft.ie report, said: ‘House prices have remained stable not because supply has increased to match demand, but because demand has increased. This is because the number has decreased accordingly.”
“While the supply of new homes for purchase is certainly increasing, the second-hand market, which makes up a large share of the market, is suffering from changing economic conditions and moving in the opposite direction,” he added.
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Changes in economic conditions include significant increases in interest rates to keep pace with inflation, making it more difficult for certain segments of potential buyers to make purchases.
But inflation has fallen rapidly to near the central bank’s preferred 2% target rate, which is seen as a precursor to rate cuts.
“If uncertainty continues to fade and interest rates potentially start to fall again, the second-hand market could recover in 2024,” Ronan Lyons said.
Regional and quarterly variations
This report captures some of the largest variations in regional price changes throughout the year and within each quarter.
The typical list price nationally in the last three months of this year was €320,046, 1.5% lower than in the third quarter and around 14% below the Celtic Tiger peak.
Statistics compiled by Daft.ie show that prices fell in the first three months of this year, but rose again in the second and third quarters.
Property information websites also point out significant differences in price trends across the country.
Prices in Dublin rose by an average of 2% in 2023, compared to 0.8% in the rest of Leinster.
In Cork City, prices rose by 3.7% over the year, and in Galway City by 4.1%.
Waterford City and Limerick City saw the largest increases again at 6.1% and 9% respectively.
Outside the city, prices in the final quarter of 2023 rose by 6.8% in Munster and 8.3% in Connacht-Ulster compared to the same period last year.
Commenting on the report, IPAV said that the availability of affordable housing for people on average wages is the main issue impacting the market.
IPAV CEO Pat Davitt said there were increasing obstacles to home ownership for the average wage earner, most recently with the ECB’s 10th consecutive interest rate hike.
“This means that activity in the housing market is largely restricted to people with above-average incomes and those in the fortunate position of being able to purchase a home without the need for a mortgage or perhaps a small additional mortgage. “This latter group could be as high as 40%,” he said.
Mr Davitt said this situation would only become more pronounced if national schemes such as Help-to-Buy and First Home schemes existed.
“In 2024, the government will need to urgently address serious obstacles that have changed little over the past decade. “These include antipathy towards certain people and the fear of being seen as such. We will support small and medium-sized builders and developers, who have traditionally been the mainstay of Ireland’s housebuilding sector.” Ta.