House prices could be largely stable this year as the second-hand market recovers from several years of economic uncertainty and the number of new homes built continues to grow, one expert predicts.
In its House Price report, published on Tuesday, property website, Daft.ie calculates that prices rose by 3.4 per cent on average last year. That compares with a 6 per cent rise during 2022 and increases of 8.1 per cent and 7.7 per cent in 2021 and 2020. With the exception of 2019, when prices fell by 1.2 per cent, it is the smallest increase in prices since 2013.
Ronan Lyons, associate professor in economics at Trinity College Dublin, says that if economic uncertainty continues to fade and interest rates start falling, the second-hand market could recover in 2024.
“This would likely mean a healthier housing market than for some time, with transactions up but prices largely stable,” he adds.
Builders are likely to have completed more than 29,000 new homes in 2023, beating the Government’s target, and could exceed 30,000 this year, according to official estimates.
Prof Lyons says new home building will remain high for the next year at least, but notes that supply in the larger second-hand market has been going in the other direction, “buffeted by changed economic conditions”.
On December 1st, he says, there were just more than 11,100 homes for sale in the Republic, a figure that is low compared with almost any point over the last 15 years and 27 per cent less than a year previously. It was less than half the 2019 average of 24,200.
The number of houses for sale began to fall in the middle of 2023 and affected all regions of the State, he said, but was most visible in Dublin where