The Irish housing market experienced a significant surge in 2024, with average home prices nationwide rising by 9%, marking the largest increase in seven years. According to Daft.ie’s latest House Price Report, the typical listed price nationwide reached €332,109 by the fourth quarter, representing a 1.4% increase from the previous quarter and a 30% jump compared to pre-pandemic levels.
Regional Price Trends
The 9% increase was not evenly distributed across the country, with some regions experiencing more pronounced changes than others:
- Dublin: Prices rose for the fourth consecutive quarter, matching the national average of 9% for the year. The average home price in Dublin reached €442,909, the highest since late 2017.
- Galway City: Mirroring Dublin, prices in Galway also rose by 9%, with the average price now at €389,742.
- Limerick City: Prices increased by 8.2%, bringing the average to €284,138.
- Cork and Waterford Cities: More moderate growth was observed, with prices rising by 6.3% in both cities. The average prices were €347,263 in Cork and €247,236 in Waterford.
- Rest of the Country: Outside major cities, the average price rose by 9.2%, reaching €284,163. The strongest growth was seen in Leinster at 11.1%, while Connacht-Ulster experienced a more modest 5.3% rise.
Factors Driving Price Growth
The sharp rise in home prices in 2024 can be attributed to several key factors:
- Weak Supply: The supply of second-hand homes for sale hit a record low, with fewer than 10,500 properties available nationwide as of December 1st. This represents a 15% decrease compared to 2023 and the lowest figure since records began in 2007.
- Strong Demand: With growing incomes and employment, demand for owner-occupied housing is estimated to be rising at approximately 5% annually.
- New Builds Lagging Behind: While the number of newly built homes being transacted is increasing, the pace of growth is far slower than the rising demand. In recent quarters, the decline in second-hand homes coming to market has outweighed the gains in new builds.
Expert Commentary
Ronan Lyons, economist at Trinity College Dublin, highlighted the challenges underpinning the 2024 housing market: “This is, once again, a story of weak supply and strong demand. With incomes and employment growing, demand for owner-occupied housing is likely growing at close to 5% per year. However, while newly-built homes are entering the market, their numbers remain insufficient to meet the rising demand. Additionally, the drop in second-hand homes listed for sale exacerbates the issue.”
Lyons suggested that government intervention in the mortgage market could improve mobility for those with fixed interest rates. However, he emphasised that the ultimate solution lies in significantly increasing the volume of homes being built.
The Path Forward
Addressing Ireland’s housing challenges requires coordinated efforts from both the public and private sectors. Key steps include:
- Boosting Construction: Accelerating the pace of new builds to close the gap between supply and demand.
- Policy Interventions: Implementing measures to improve housing market mobility, particularly for those locked into fixed-rate mortgages.
- Encouraging Regional Growth: Supporting development outside major cities to balance demand across the country.
Building a Sustainable Housing Future
The 9% spike in home prices in 2024 highlights the pressing need to address Ireland’s housing supply issues. While demand continues to grow, the lack of available properties remains a significant barrier. With the right policies and investment, it is possible to create a more balanced and sustainable housing market in the years to come.
Take Action with All Financials
Navigating the housing market during times of rapid change can be challenging. Whether you’re looking to secure a mortgage, refinance, or plan your financial future, All Financials is here to help. Our team of experts provides tailored advice to help you make informed decisions and achieve your property goals. Contact us today to get started.
Author: Fran Cooke