Sherry FitzGerald, Ireland’s largest estate agent, held a briefing for its valued clients, on Thursday, October 10 offering an in-depth analysis of the current property market landscape. Held at the Hardiman Hotel, the event provided key insights on trends, opportunities, and challenges in the Irish and Galway residential market.
The briefing was hosted by Tony Kavanagh, regional director Sherry FitzGerald, with the key address given by Marian Finnegan, managing director, Sherry FitzGerald. Ms Finnegan delivered a comprehensive presentation covering market performance, price movements, interest rates, and regulatory developments. The presentation also explored future demand, highlighting the significant supply pressures evident in the Galway market in particular.
Speaking on the day, Ms Finnegan forecast that approximately 56,000 new homes will be required each year to meet demand over the period to 2036, with a higher figures of 62,000 required to address latent demand in the next five years. She noted that although positive movements have been made to increase housing supply over the past number of years, with approximately 32,700 new dwellings completed last year, demand continues to grow. This has largely been driven by demographic changes.
Commenting on the forecasts, Marian Finnegan, managing director, Sherry FitzGerald said: “Recent population projections from the CSO have made it clear that current housing targets are well below what is needed in order to close the gap between supply and demand. Housing output needs to be increased to 62,000 units annually over the next few years. There are significant hurdles to achieving this however, including labour constraints, adequate infrastructure and a shortage of serviced land.”
Looking specifically at the Galway market, Ms Finnegan reported approximately 2,900 new homes will be required each year to meet demand over the period to 2036. This compares to 1,320 units built in Galway city and county in 2023.
According to Sherry FitzGerald the imbalance between supply and demand continues to drive price inflation in the second-hand market. The average value of second-hand homes in Ireland increased by 6.6 per cent in the past 12 months. This compares to annual price inflation of 8.3 per cent recorded in Galway city in the same period.
Ms Finnegan noted: “All key market indicators highlight that the persistent supply challenges are now heavily impacting transaction volumes and driving price inflation in the Irish and Galway residential market. It is crucial, therefore, that we acknowledge, without bias, the urgent need for a substantial increase in housing delivery targets, alongside the implementation of effective measures to ensure their achievement.”
Turning to supply-side issues, Ms Finnegan said it is unlikely that the level of completions achieved in 2023 will be surpassed this year. From January to June 2024, a total 12,730 residential units were completed, 8.6 per cent lower than the first half of 2023. Additionally, between 2015 and 2023, an average 43 per cent of total new dwelling completions were completed in the first half of the year. This suggests that completions for 2024 are likely to be similar to those seen in 2023. Ms Finnegan further noted that only 615 units were completed in Galway city and county during the opening six months of 2024.
Despite the increased interventions undertaken by the Government in recent years to address shortages in the market, significantly more needs to be done. Recent reports by the Central Bank and the Department of Finance highlight the need for substantial private investment in the sector if higher levels of completions are to be achieved. Without this investment, increased upward pressure will be placed on rents and prices, eroding affordability and increasing the need for more social and affordable housing.
In conclusion, Marian Finnegan, managing director, Sherry FitzGerald, stated: “It is disappointing that the Government missed the opportunity to address a vital element of the accommodation crisis in Budget 2025. Institutional investors are an essential element of the market, providing much needed rental accommodation. Therefore, it is imperative that a key goal of the next government is to attract private equity to Ireland.”
