Understanding the Irish Property Market: Current Trends and Future Projections
House Price Growth Slows But Remains High
The Irish property market continues to experience significant growth, with house prices rising at an annualised rate of 8.1% in January. This growth, while down from 8.8% in December and over 10% in August, indicates a cooling but persistent upward trend. The Central Statistics Office (CSO) reports that prices in Dublin rose by 7.5% year-on-year, slightly lower than the 8.6% increase outside the capital. On a monthly basis, prices were flat in January, suggesting a stabilisation in the short term.
Dublin vs. Regional Markets: A Tale of Two Trends
The disparity between Dublin and regional markets is stark. The capital’s residential property prices are now 4.3% higher than their February 2007 peak, while nationally, prices are 16.9% above their 2007 high. The median price paid for a home in the 12 months to January was €359,999, with Dún Laoghaire-Rathdown commanding the highest median price of €662,349 and Leitrim the lowest at €180,000.
| Region | Median Price (€) |
|---|---|
| Dún Laoghaire-Rathdown | 662,349 |
| Dublin | 550,000 (estimated) |
| National Average | 359,999 |
| Leitrim | 180,000 |
Note: Dublin’s median price is estimated based on national and regional data.
Supply Pressures and Market Dynamics
The market snapshot reveals a slowdown in new home completions, dropping to just over 30,000 units in 2023, far below the government’s 40,000-unit target. This shortage, coupled with high demand, continues to underpin price growth.
Goodbody economist Dermot O’Leary
Dermot O’Leary advises looking at the annualised rate of growth over the past three months to gauge market momentum. This shows a 6.1% growth nationally, with house prices growing by 6.7% and apartments by just 2.4%. The greatest price momentum is seen in the south-east, with a 12.9% increase.
What does this mean for buyers?
Supply pressures are likely to continue driving prices upwards, albeit at a slower pace. First-time buyers are feeling the pinch, with 17,814 (36.4%) of the 48,955 dwelling purchases in the year to January made by this group. Former owner-occupiers, with 25,770 (52.6%) of purchases, remain the largest cohort.
Trevor Grant, chairperson of Irish Mortgage Advisors, notes the frustration among house hunters:
“While many are qualifying for mortgage and buying homes, for too many of this country’s young people, buying a house has simply become unachievable”
Hold off on specific advice, it’s hard to give but looking at a 36.4% marketshare of first time buyer we are optimistic.
First-Time Buyers Face Challenges
First-time buyers are crucial to the market’s health. However, the current market dynamics present significant challenges. The high demand and low supply scenario is pushing prices beyond the reach of many first-time buyers, exacerbating the affordability crisis. For instance, in Dublin, the median price for a first-time buyer property is estimated to be around €450,000. This means potential buyers need a deposit of at least €90,000, a substantial hurdle for many young adults.
Pro Tips for First-Time Buyers
To navigate the current market, first-time buyers should:
- Save Aggressively: Aim to save as much as possible for a deposit. Government schemes like the Help-to-Buy initiative can provide additional support.
- Explore Different Areas: Consider looking outside of major cities or popular commuter belts where prices may be lower.
- Seek Expert Advice: Consult with mortgage advisors and financial planners to understand your options and plan accordingly.
The Role of Government and Policy
Addressing the perennial housing shortages and updating policies drive Pat Davitt, CEO of the Institute of Professional Auctioneers and Valuers (Ipav), articulated the necessity for a fundamental change.
“We now need to see the fundamental change in housing policy” Davitt elaborates
Government investment and policy direction will be key in tackling the housing crisis.
| Policy Area | Potential Impact |
|---|---|
| Increased Housing Supply | Reduces demand-pressure, leading to stabilised or lower price growth. |
| Affordable Housing Initiatives | Directly supports first-time buyers and low-income households. |
| Rent Control Measures | Provides temporary relief to renters, benefiting potential first-time buyers. |
What does this mean for investors?
"Investing in the property market remains a viable option, although the current market conditions favour buyers more than sellers. O’Leary adds his take.
Construction completions, not reopened completions
Home completions are generally a good indicator of future buyer activity as they highlight the future ‘new supply’ into the market.
Remember
Investors need to be proactive in identifying emerging trends and opportunities, such as increased demand in regional areas due to remote work trends.
Do first-time buyers still have a chance in the Irish property market?
While the market presents challenges, first-time buyers still have opportunities, particularly with government schemes and smart financial planning.
The Future of the Irish Property Market
The Irish property market shows resilience and ongoing demand, despite supply pressures and cooling growth rates. Despite this, increasing interest from offshore investors could drive further upward pressure on prices.
First-time buyers will continue to face challenges, necessitating proactive government intervention to boost supply.
We can expect to see increased policy debates, innovative financial products, and potential market shifts towards regional areas. Investors, meanwhile, should monitor market dynamics closely and seize opportunities as they arise.
Vigilantly engage with these dynamics to anticipate coming trends and optimise this unique context to your benefit.
Recent data shows a 6.1% national growth rate over the past three months, with house prices growing by 6.7% and apartments by just 2.4%.
Continue the Dialogue
We encourage you to share your experiences, insights, and questions in the comments section below. Your input can provide valuable context for others navigating the Irish property market. For more in-depth analyses and expert opinions, feel free to explore our other articles on the latest property market trends.