“Resilient demand, rising price inflation and persistent supply side challenges.”
Statement by Marian Finnegan, Managing Director, Sherry FitzGerald.
March 28th, 2024
Sherry FitzGerald, Ireland’s largest estate agent, reported today (Thursday, March 28th 2024) that the average value of second-hand homes in Ireland increased by 2.0%[i] in the first quarter of 2024. Overall, average values have increased 5.1% over the past twelve months. This compared to annualised growth of 3.6% in the year ending quarter one 2023.
Dublin recorded strong price growth in the opening quarter, with the average value of second-hand homes increasing by 2.1% in the three-month period. In a move away from the trend witnessed over the past 18 months or so, the pace of price inflation outside of the capital was marginally more moderate in the first quarter of the year, with prices outside of Dublin increasing by 1.9% in the quarter.
Commenting Marian Finnegan, Managing Director, Sherry FitzGerald said; “The opening quarter of 2024 saw a notable uptick in the pace of price inflation, bringing the annual growth to 5.1%. One of the key factors sustaining this strong price growth is a chronic lack of supply in the second-hand market. An analysis by Sherry FitzGerald Research earlier this year revealed that in January 2024, only 11,050 second-hand properties were listed for sale nationwide, representing a mere 0.6% of the entire private housing stock in Ireland, with rural and regional Ireland disproportionately affected.”
A review of transaction activity reveals that last year saw housing sales remain relatively stable. Excluding block sales and homes acquired for social housing, there were almost 60,200 housing transactions in 2023, according to the Property Price Register (PPR). This was just 1.1% higher than the year previous.
Activity in the second-hand market saw a minor reduction, with approximately 49,650 units sold in 2023, a reduction of 50 units transacting when compared to 2022. Unsurprisingly, given the shortage of second-hand stock that has been available in rural counties over the last couple of years, some counties such as Longford, Kerry, Roscommon and Donegal saw transaction activity in the second-hand market decline by over 8% in 2023 when compared to 2022.
Looking at the regional centres, Cork saw an increase in transactions of 1.3%, while Galway and Limerick saw activity in the second-hand market decline by -1.3% and -3.1% respectively. Conversely, second-hand activity in Dublin remains strong recording a 5.1% increase in second-hand transactions versus 2022.
The new homes market saw a modest uptick in transaction activity in 2023, with 10,550 transactions recorded in the year, an additional 700 units, or 7.1% increase, when compared to 2022. Dublin, Kildare, Meath and Wicklow, known as the Greater Dublin Area, accounted for 56% of transaction activity in the new homes market, unsurprising given the concentration of construction in these counties over the past number of years.
The exodus of landlords from the market continues to be a key issue for the rental market, with landlords continuing to exit the market unabated in the opening quarter of 2024. In the three months to the end of March, just 12% of purchasers of second-hand homes with Sherry FitzGerald were investors, whereas 35% of vendors were investors selling their properties.
Further analysis of Sherry FitzGerald’s sales in the first quarter of the year shows that executor sales accounted for 17% of sales across Ireland. An executor sale relates to the process of selling a property on behalf of a deceased person. Historically, this figure would be about 13%. When looking at Dublin, executor sales accounted for 20% of sales in the quarter.
In conclusion, Marian Finnegan said; “Despite all the myriad of challenges facing the market, over the past two years demand for all types of property has remained robust. The combination of this demand and supply constraints has resulted in an increase in the pace of price inflation in the residential market, during the opening months of 2024, following a more moderate pace of growth in 2023.
While it is anticipated that house completions levels will improve again this year, the desired V-shaped recovery in supply has not occurred. As such the deficit in supply is likely to persist. This shortage in new supply has had a ripple effect, adversely affecting the supply of other properties to the market. This pattern is particularly noticeable in more rural locations as is evidenced in contracting transaction volumes.
Finally, the continued exodus of landlords from the private rental market is perhaps the most worrying trend and one which needs an immediate response.”
- ENDS -
For any further information, please contact:
Jill O’Neill Marian Finnegan
PR Director Managing Director, Residential & Advisory
Sherry FitzGerald Group Sherry FitzGerald Group
Ph: 01 2376 500 / 086 252 3277 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.
