Irish homes increased in price last year at almost double the rate of 2023 as the stock of homes available in the Republic slumped to a historic low in January, two reports published on Wednesday revealed.
House prices were 8.7 per cent higher in December than a year previous, the Central Statistics Office (CSO) said in its latest residential property price index. It means the annual house price inflation rate practically doubled in 2024 from 2023 when prices accelerated by 4.4 per cent.
On a monthly basis, house prices were 0.5 per cent higher in December than the previous month, down from a rate of 0.9 per cent between October and November, the CSO said. The annual rate of increase was also down from 9.6 per cent in November, falling from a high of 10.1 per cent in August.
Still, house prices are expected to rise further in the short term amid chronic shortages of supply and missed Government housing targets.
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Falling borrowing costs are also likely to add to the momentum as Irish lenders pass declining European Central Bank (ECB) interest rates to customers.
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If the ECB cuts its key rates again in March, as it is expected to do, it will make it cheaper for buyers to borrow. This is likely to add fuel to the fire of house price inflation, said Gerry Griffin, a senior mortgage adviser with financial planning firm NFP Ireland.
“While this would benefit buyers, it could also drive further price inflation by increasing competition for available homes,” he said. “The real issue remains supply – without a significant increase in new housing, lower borrowing costs will likely push prices higher in the short term.”
House prices in Dublin increased by 8.3 per cent in 2024, the CSO said, while prices outside the county climbed by 9 per cent over the year.
The median price of a residential property in the Republic last year was €355,000, up from €327,500 in 2023.
The CSO said the lowest median price for a dwelling in the 12 months to December 2024 was €165,000 in Leitrim, while the highest median price was €622,250 in Dún Laoghaire-Rathdown.
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In a separate report on Wednesday, estate agency Sherry Fitzgerald said the supply of available housing stock plunged to an historic low in January with just 10,380 second-hand properties listed on the market for sale.
Having fallen by half over the past five years nationally, the county with the largest drop in advertised housing stock compared to January 2024 was Leitrim, where listings plummeted by more than 30 per cent.
Waterford, where second-hand home listings were down 21.5 per cent, and Tipperary, down 19.8 per cent, were next.
“The acute shortage of available housing continues to deepen the imbalance between supply and demand in Ireland, exacerbating challenges for individuals and families seeking suitable homes,” said Marian Finnegan, managing director of Sherry Fitzgerald.
She said the Government must prioritise a more even regional spread of housing delivery to combat “severe housing shortages” in rural and regional Ireland.
The effects of this chronic undersupply of second-hand homes are also evident in the CSO data.
New home prices were 5.2 per cent higher in the fourth quarter of 2024 than in 2023, while existing homes were 10.5 per cent higher nationally over the same period, according to the figures.
Rachel McGovern, deputy chief executive at Brokers Ireland, said the rate of increase is “not sustainable” for most property hunters, except those on the very highest salaries.
“There are appalling consequences for our society if policymakers don’t turn around housing in the near future and ensure that those on average incomes can achieve the ambition of owning a home,” she said.
