Sherry FitzGerald, Ireland’s largest estate agent, reported today (Monday, April 3rd, 2023 ) that the average value of second-hand homes in Ireland increased by 0.8%i in the first quarter of 2023. Overall, average values have increased 3.6% over the past twelve months.
“The evidence available suggests a return to more normalised levels of growth in the residential property market. The increase in average values of second-hand homes by 0.8% in the first quarter of 2023, and 3.6% in the year, indicates that the market is stabilising after a period of strong inflation. Furthermore, this is also evidenced in the Dublin market, which recorded growth of 0.6% in the quarter, while prices annually in the capital have increased by 2.9%,” Marian Finnegan, Managing Director, Sherry FitzGerald, stated.
The rate of price inflation outside of the capital remains higher, recording growth of 1% in quarter and 4.5% over a twelve-month period. Nationally, price growth is strongest in the South-East and West, with the regions recording annual growth rates of 6.5% and 6.1% respectively.
A review of transaction activity reveals that last year saw housing sales exceed their pre-pandemic levels. Excluding block sales and new homes acquired for social housing, there were over 59,500 housing transactions in 2022, according to the Property Price Register (PPR ). This was 9.0% higher than the year previous, and 7.7% higher than 2019.
Activity in the second-hand market was brisk, with approximately 49,700 units sold. This represents an increase of 5.8% on 2021 and 8.4% on 2019. Second-hand activity in Dublin, and the regional centres remains strong. Dublin recorded a 7.9% increase in second-hand transactions versus 2021, with Galway, Limerick and Cork recording increases of 5.8%, 4.8% and 3.2% respectively.
The New Homes market saw improved transaction activity in 2022, exceeding pre-pandemic levels by 4.2%. The Greater Dublin Area (GDA ) which includes counties Dublin, Wicklow, Meath and Kildare and which has seen the most construction activity over the past number of years, accounted for 57% of new homes sales in 2022.
However, while last year was a particularly strong year for new home sales, it is unlikely that this will continue into next year. 2022 was a record year for completions, however, all indicators now suggest this may not be repeated this year.
The exodus of landlords from the market continued unabated in the opening quarter of 2023. In the three months to the end of March, just 13% of purchasers of second-hand homes with Sherry FitzGerald were investors, whereas 36% of vendors were investors selling their properties. If this trend persists, we will see a net loss of 15,000 tenancies from the private rental sector in 2023.
“While the Government’s commitment to provide tax breaks for small landlords in Budget 2024 are welcome, it is not sufficient. Immediate action is required to address the impact of the exodus of landlords from the market this year. We urge the Government to provide further clarity on both the proposed tax measures and indeed on proposals such as the tenant-in-situ scheme.
“The analysis of the first quarter reveals a return to a more normalised level of price inflation in the residential market, following two years of heighted inflation in the post covid period.
“That said, the underlying challenges in the residential market persist with risks of a contraction in output in the new homes sector combined with a further net loss of 15,000 units from the private rental market. We can no longer describe this as a housing crisis, it is a housing emergency and needs to be treated as such. The Government successfully steered the country through the Covid Emergency, we now need the same approach to the Housing Emergency,” Ms Finnegan concluded.
