Price growth in the State’s housing market continues to slow in the face of higher borrowing costs and a modest pick-up in supply, according to Sherry FitzGerald.
The estate agent said asking prices for second-hand homes nationally rose by 1.1 per cent in the third quarter and by 5.5 per cent over the first nine months of 2022. This compares to growth of 7.1 per cent for the same period last year.
In Dublin the uplift in values was just 0.9 per cent in the third quarter, the slowest level of quarterly growth seen in the market in nearly two years. Price growth outside Dublin was stronger at 1.3 per cent quarter on quarter.
Real estate markets the world over have begun to cool in response to wider inflationary pressures and higher interest rates, which make mortgages more expensive.
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“The deceleration in the pace of price growth, which began to emerge during the second quarter of this year has persisted during quarter three,” Sherry FitzGerald’s managing director Marian Finnegan said. “Although demand remains robust, the frenzied bidding activity that was a feature of the post-pandemic period has eased. This combined with a slight increase in the stock of second-hand properties available for sale has resulted in a more moderate pace of price growth.”
The company’s latest report indicated there were 15,300 second-hand properties for sale nationwide in July, representing an annual increase of 1,800 properties.
Despite this improvement in supply the total volume of properties for sale in July represented just 0.8 per cent of the overall total housing stock, which is low by international standards.
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The headline figure was also 26 per cent or 7,900 properties below the “more normalised pre-Covid trading period”of July 2019, it said.
“In the period preceding the Covid-19 crisis Ireland’s housing market faced substantial challenges, most notably the imbalance between supply and demand,” Ms Finnegan said. “The pandemic and subsequent geo-political discord have served to exacerbate this supply problem and while there have been modest improvements in supply year-on-year the overall stock of houses available for sale remains near to record low levels.”
In the first half of 2022 there were over 26,240 sales recorded on the property price register (PPR), excluding block sales and new homes acquired for social housing, Sherry FitzGerald said, noting this represented an 8 per cent increase on the levels of a year ago, and up 9 per cent on the same period in 2019.
Ms Finnegan described Ireland’s accommodation crisis as “deep-rooted and complex”.
“Budget 2023 was the perfect occasion for the Government to address the crisis but unfortunately it not only failed to make any meaningful policy changes but incredulously introduced a 10 per cent levy on concrete block which is without a doubt counter-intuitive in the current environment,” she said.
Ms Finnegan also said the introduction of €500 tax credits for renters would have a limited impact on affordability.
