Business

Growth in value of second-hand homes slows in 2023

Demand resilient but squeezed by lack of properties for sale, according to estate agent Sherry FitzGerald

House prices were steady over the past year, according to Sherry FitzGerald. Photograph: iStock

Ciara O'Brien
Fri Dec 29 2023 - 17:27

The average value of second-hand homes in Ireland has risen by more than 3 per cent in the past year, new data has shown — a sharp slowdown compared to the previous two years.

But demand remained resilient, estate agent Sherry FitzGerald said, with tighter supply outside Dublin supporting growth.

The latest data showed the average house price was 3.4 per cent higher compared to a year ago, down from 5.7 per cent growth last year and 9.6 per cent in 2021.

In Dublin, the value of second-hand homes was 2.7 per cent higher, compared to growth of 5.2 per cent in 2022, and 7.2 per cent a year earlier.

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Price growth was stronger in rural and regional Ireland, with average values nationally excluding the capital up 5.5 per cent.

“Following the above trend price inflation evident during the post-Covid era, we saw a return to more moderate price growth during 2022, a trend which continued throughout 2023,” said Sherry Fitzgerald managing director Marian Finnegan. “This is expected to persist into 2024 with overall prices anticipated to increase by 2-3 per cent in the year ahead.”

Activity in the market was broadly stable, with 42,700 sales recorded in the first nine months of the year, a 1.8 per cent increase on the same period of 2022. This excludes block sales and new homes acquired for social housing.

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Meanwhile, new homes sales increased 2.1 per cent, with stronger growth outside Dublin year on year.

The second-hand market was almost 2 percentage points stronger than a year earlier, with 36,000 sales in the first nine months of the year. However, this was constrained due to a lack of stock for sale.

[ Exodus of small landlords from the market has been greatly exaggerated ]

The estate agent also reported a net loss of tenancies in the private rental market of about 15,000, with 35 per cent of its sales during the year coming from investors, and only 11 per cent of purchases attributed to the same sector.

“Despite a series of 10 interest rate increases over the past 16 months, the demand for various property categories has proven resilient, with transaction volumes slightly higher than those in 2022,” Ms Finnegan said. “While it is anticipated that house completions will average 31,000 this year, the preferred V-shaped recovery in supply has not materialised. Consequently, a significant supply deficit is likely to persist in the coming years. The scarcity of new supply has had a cascading effect, negatively impacting the volume of other properties entering the market. This trend is likely to endure or potentially worsen in the approaching year.”

Ciara O'Brien

Ciara O'Brien

Ciara O'Brien is an Irish Times business and technology journalist

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