Statement by Marian Finnegan, Managing Director, Sherry FitzGerald.
June 30th, 2022
Sherry FitzGerald, Ireland’s largest estate agent, reported today (Thursday, June 30th, 2022) that the rate of house price growth is exhibiting signs of moderation.
According to the Sherry FitzGerald House Price Barometer, the average value of second-hand homes in Ireland increased by 1.6%[i] in the second quarter of 2022. This represented the slowest rate of quarterly growth in over a year.
Nevertheless, although easing, the pace of growth remains elevated. Over the opening six months of the year, average values rose 4.5%, matching the same rate recorded over the first six months of 2021. In the twelve months to June, average values have increased 9.6%.
In Dublin, prices increased 1.5% in the quarter, and are 4.3% higher over the opening six months of 2022. In comparison, growth of 3% was recorded in the first six months of last year. Overall, average values grew 8.5% in Dublin in the twelve months to Q2 2022.
Outside of Dublin, the pace of inflation was marginally stronger at 1.8% in the quarter. However, over the past twelve months average values rose 11%, resulting in a perceptible gap in the rate of house price growth between Dublin and the rest of the country.
Commenting Marian Finnegan, Managing Director, Sherry FitzGerald said; “There are definitive signs now of a cooling in the rate of price growth in the national housing market. Although still strong, the frenzied level of bidding activity observed in the recent past has eased off. Internationally, many markets are similarly noting an alleviation in the rapid appreciation in values which had characterised 2021.
While still insufficient, recent incremental improvements in supply have helped taper house price growth. With both the uptick in construction activity and the volume of second-hand listings coming to the market contributing to this. The rate of inflation should continue to ease as the year progresses due to continued gradual improvements in supply and the forthcoming interest rate rises for the ECB. However, unlike the expectation in many regions globally, continued, albeit more subdued, price growth is expected in Ireland in the near term given the seismic mismatch between supply and demand.
Sales activity remains healthy. Excluding block sales and new homes acquired for social housing, a total of 12,200 housing transactions were recorded on the Property Price Register in quarter one. This represented a marginal increase of 1% year-on-year but was the largest volume of transactions in the first quarter of a year in over a decade.
New home sales, while noting some modest improvements on 2021, remain slow-moving overall. A total of 1,600 new homes sold between the start of January and the end of March, up 8% on the year before, but down 3% on 2020. New homes sales remain particularly sluggish in Dublin, with quarter one sales in the county their lowest since 2015. Outside of Dublin, new homes activity is trending upwards, with sales improving 12% year-on-year.
Activity levels are more improved in the second-hand market. Approximately 10,600 sales were recorded in quarter one. Although, only a slight, 0.2%, increase on the previous year, it represented the strongest quarter one, since at least 2010.
Owner occupiers remained the most active purchasing cohort in the market in year to date. They represented 79% of all second-hand home purchases made through Sherry FitzGerald, with first time buyers comprising over half of all owner occupiers.
Unfortunately, the exodus of landlords from the rental market continued unabated in the year with just 12% of purchases made by investors. Vendor statistics further highlight the deterioration in the rental market. Of all vendors of second-hand homes with Sherry FitzGerald in Q2 2022, 37% were investors selling their properties. This was one of the highest proportions on record since Sherry FitzGerald Research began tracking in 2003.
In conclusion Ms Finnegan stated “While there is growing evidence of housing market imbalances in many developed countries, there is no doubt that the accommodation crisis in Ireland is more deep-rooted than most. This is perhaps further highlighted by the recent release of the preliminary figures for the 2022 Census, which underscores the scale of the housing crisis. This data highlights the need to build over 50,000 new homes each year until 2036, if we are to even bring Ireland in line with the European average in household size. This is more than twice as many as we are currently building.
Furthermore, the rental crisis lies at the core of this accommodation crisis. This is particularly wearisome because unlike the complex nature of the overall market, there are many well documented solutions to the rental crisis, which have been disregarded by policy makers for over a decade. The time for action on this debacle is now.”
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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, Residential & Advisory, Sherry FitzGerald Group. Ph: 01 237 6341 / 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.