The latest Daft.ie House Price Report highlights a significant surge in Donegal’s housing market, with the average house price now standing at €217,000. This marks a 45% increase compared to the pre-pandemic levels.

National Trends in Housing

Nationally, house prices have grown by an average of 9% this year, according to Ireland’s largest property website. The typical listed price in the final quarter of 2024 was €332,109, up 1.4% from the third quarter and a staggering 30% higher than at the onset of the pandemic in 2020.

Supply and Demand Dynamics

The housing market is being driven by a significant mismatch between supply and demand. As of December 1st, the number of second-hand homes available for purchase nationwide stood at less than 10,500, down 15% year-on-year and the lowest total since records began in 2007.

Expert Insights

“2024 saw the largest increase in listed prices since 2017,” commented Ronan Lyons, an economist at Trinity College Dublin and the author of the report. “Dublin is now driving price growth, with its rate of inflation outpacing other cities.”

Lyons highlighted that growing incomes and employment levels are likely pushing demand for owner-occupied housing up by nearly 5% annually.

The Building Shortfall

Despite the rise in newly-built homes being transacted, this increase is insufficient to meet the demand. In recent quarters, it has been overshadowed by a decline in the number of second-hand homes put on the market. In 2022, 63,000 second-hand homes were listed, compared to just 51,000 in 2024, numbers similar to those recorded during the pandemic lockdowns.

The new government may consider intervening in the mortgage market to improve the flexibility of those with fixed interest rates. However, the primary solution remains boosting the volume of homes being built.

Conclusion and Future Outlook

The housing market in Donegal and nationwide is experiencing considerable growth, driven by strong demand and limited supply. As prices continue to rise, the focus will remain on increasing the availability of homes to meet the needs of growing populations and improving mobility for homeowners.