Orla McMorrow, deputy chief executive at the DNG Group
Forecasting the residential market outlook is always challenging, and this year is no different given that we have just had a general election. Housing has been a big issue during the election campaign and the main political parties have released housing policies that have potential to impact the market.
A shortage in supply remains the biggest challenge faced by the market, and it is the biggest factor underpinning price growth. While new housing completions in 2024 are forecast to equal last year’s total of 32,695, the increase in new housing commencements this year bodes well for higher output totals over the next number of years. More than 49,000 units commenced construction between January and September this year, compared with less than half that amount (23,923) in the same period in 2023.
On the demand side, falling interest rates are helping the affordability equation and supporting appetite.
The population continues to grow with the Central Statistics Office projecting 0.8-1.2 per cent growth per year, which would equal 6-9 per cent by 2030, resulting in a population of 5.6 to 5.8 million. Furthermore, our strong economic backdrop of rising employment levels and increasing wages will also feed into continued demand for housing in the years ahead.
Taking all of these factors into account, we forecast average price growth in the region of 5 per cent in the residential market for 2025.
Pat Davitt, chief executive of the Institute of Professional Auctioneers and Valuers
This year saw prices rise at least 10 per cent on 2023, with areas outside cities experiencing even higher growth. While the latter overall are up 14 per cent on the 2007 peak, particular areas are below the cost of building. A factor here is private landlords selling rent-capped properties and sometimes replacing them with owner-occupied properties. Paying fees and stamp duty and buying a newer property can be seen as a better proposition than leaving a property vacant for two years.
Recent Residential Tenancies Board (RTB) data found an increase of 1.96 per cent in the number of landlords between Q3 2023 and Q1 2024; among those are landlords with between 20 and 100-plus tenancies. Previous RTB figures showed a 40 per cent drop in landlords between the end of 2021 and the end of 2023.
Rent pressure zones have distorted the market, much independent research concurs. Whether or not political leaders have the courage to do the right thing and scrap them is a moot point.
Increasing supply of homes to buy and rent is critical – socially and economically. Our new Government will have to do something very different – in particular, drawing the disparate parts of housing policy together and giving leadership from the very top. The Housing Commission report would be a good starting point.
Extending the Help-to-Buy and First Home schemes to second-hand properties is one measure that would help first-time buyers and create more movement in the market.
If things stay as they are, I see only further increases in 2025.
Marian Finnegan, managing director of residential & advisory at Sherry FitzGerald
Forecasting the future remains a complex challenge, particularly given the diverse factors shaping the housing market. The falling interest rates environment has sustained strong demand, further intensifying upward pressure on prices. Consequently, average property values have experienced price inflation of 6-7 per cent, nearly double the growth rate recorded in 2023. This upward trend is anticipated to persist into the coming year.
Housing completions are expected to modestly surpass the 32,700 units achieved in 2023. However, they are projected to fall significantly short of the long-awaited goal of 40,000 units. Consequently, a significant supply shortfall is expected to persist in the years ahead.
The ongoing scarcity of new housing supply has had a ripple effect, constraining the number of other properties entering the market. This dynamic is likely to endure or even deteriorate in the near term.
Looking ahead, a bold and decisive policy intervention to address the supply deficit is imperative for the new Government. Without such measures, the housing market may face yet another challenging year in 2025, leaving prospective buyers and tenants grappling with continued frustration.
Stephen Day, senior director at Lisney Sotheby’s International Realty
It is difficult to envisage any change in 2025 to the upward trajectory in house prices that the Irish market has seen in recent years. Demand remains robust from an ever-expanding population that the delivery of new homes has failed to satisfy. Supply remains limited and the issue is self-perpetuating, as a reluctance to sell is fuelled by restricted choice to buy.
This year, there were approximately 3,500 second-hand homes for sale in Dublin at any given time, with a further 80 or so new homes schemes advertised. Ideally, there should be almost double this amount on offer.
At the upper end of the market, inflationary pressures have yet to have a material impact on affordability, and the recent stamp duty increase to 6 per cent on prices over €1.5 million seems to have caused few reverberations. Confidence from international buyers remains strong, with Asian buyers in particular seeking to invest their money in the perceived strength of the Irish market. Demand remains strongest for turnkey, energy-efficient homes near city and coastal locations.
There are some emerging trends, particularly around “lifestyle” decision-making. Bidder reactiveness, particularly for well-priced properties, is almost instantaneous. Furthermore, there is less seasonality in the market with increased summer activity year on year.
Failing a significant and unforeseen global event, we expect no material change in market confidence. The prevailing annual average growth rate is running at approximately 10 per cent, and while we do expect continued increases next year, it remains to be seen if this level of growth is sustainable.
Joanne Geary, managing director at MyHome.ie
As the dust settles on the general election, housing will be a key priority for the new Government. The election campaign was notable for a range of pledges to improve housing supply – it is heartening to see cross-party acknowledgment of this issue, but this is not a short-term fix. In the MyHome.ie Q3 Property Report, we noted that Ireland would need an additional 200,000 homes to match the UK’s housing-to-population ratio.
Meanwhile, demand has been remarkably strong for some time, driven in part by a significant rise in high-earners, falling interest rates and a booming labour market. This has led to a fiercely competitive market, with one in seven properties now selling for 20 per cent over the asking price. All the while, annual asking price inflation nationwide has been creeping upwards over the year, rising from 6.5 per cent in Q1 to 7.5 per cent in the third quarter.
As we look to 2025, it is unlikely we will see any big shift in either our property demand or supply, although any significant moves on tariffs or corporation tax by the incoming Trump administration in the US would be most unwelcome.
In the meantime, the onus is on the new Government to accelerate housing starts and completions.
Guy Craigie, director of residential at Knight Frank
Next year we will continue to see first-time buyers and downsizers competing against each other in the second-hand market, often bidding on multiple properties at the same time in the hope of securing a home. Nationally, the total number of second-hand homes available to buy is roughly half what it was in 2019. With supply levels so low, we expect house prices to continue to rise steadily into the new year.
For most downsizers, their family home is their primary asset which they need to sell in order to buy – leaving them in a chain and often unable to compete with first-time buyers. This is resulting in downsizers not selling at all, only compounding the lack of supply. For 2025, we need affordable equity release or bridging finance to help free up the family home market.
On a more positive note, the new homes market has remained strong and will do into 2025. In Dublin, between January and August 2024, sales of new homes were up 14 per cent compared with the same period last year.
Although the market is dominated by first-time buyers, we are already seeing an increase in apartment purchases as several developments near completion. These buyers will be downsizers wanting to stay in their local communities and people relocating to Ireland – and, since the beginning of November, we have seen a sharp increase in enquiries from US-based clients.
Although a more price-sensitive market, and less competitive, we will continue to see strong results for prime and super prime sales into 2025 given the significant wealth being created in this country, particularly from the sale of businesses, while there has also been an influx of high-net-worth individuals from overseas looking at Ireland as a place to call home.
James Butler, director of country agency at Savills Ireland
The market in 2024 has been characterised by limited supply, particularly for best-in-class properties. This trend spans both urban and rural locations, highlighting the scarcity of high-quality homes that meet contemporary standards.
The impact of the recent stamp duty increase on demand for prime houses remains negligible, for now. Prime residential properties are often discretionary purchases made by high-net-worth individuals, who are less sensitive to such measures.
However, a notable trend has emerged: the widening price gap between move-in-ready homes and those requiring upgrading. High renovation costs, extended timelines and the preferences of a younger buyer demographic are driving this divergence.
Meanwhile, the “race for space” continues, fuelled by flexible working arrangements. Buyers are increasingly willing to expand their search areas and accept longer commutes to secure properties offering privacy, ample amenities and space.
Cash buyers remain dominant in the prime market, while overseas interest, notably from successful expatriates, continues to bolster demand. The outlook for 2025 suggests these trends will persist as supply pressures remain a defining market feature.
Shirley Coulter, chief executive of the Society of Chartered Surveyors Ireland
The market remains challenging for prospective buyers, with agents reporting that most homes attract at least half a dozen interested buyers. Even though housing supply is ramping up each year, prices are continuing to rise as buyers compete for a limited pool of housing.
While new homes are generally the most desired, second-hand homes that are well presented continue to sell well. Unfortunately, the shortage of well-located rightsizing options is stalling the supply of second-hand homes.
Given the tight supply of new homes, there will always be those willing and able to take on renovation projects, particularly in parts of the country where the new home market is not meeting local demand. Significant untapped potential remains in vacant and derelict buildings, with grants available to those willing to take on the projects.
However, many opportunities are not being realised due to the tight construction labour market and skill shortages. With affordability issues driving many buyers to look beyond their desired location, it is vital that additional supports are put in place to get vacant properties across the country back into residential use as soon as possible.
Ongoing conveyancing delays are another barrier many home purchasers face, which the Society of Chartered Surveyors Ireland (SCSI) is working to solve as part of the Government’s Housing for All group. In addition, the SCSI and the Law Society of Ireland have published a joint guide to help speed up the conveyancing process.
David Cantwell, director at Hooke & MacDonald
Next year is set to be positive for the residential sector, with interest rates finally on the way down, having stabilised in 2024. A new or reintroduced loan for people trading up or down in the form of bridging finance from ICS Mortgages is to be welcomed. This will facilitate the easier movement between homes. This is important for any mature market – and particularly for Ireland, where we have one of the lowest occupancy per dwelling rates in Europe.
Affordable Home scheme sales are on the rise, which is a positive move for many first-home buyers; most A-rated two-bedroom homes in the Dublin area are available to buy with prices starting below €300,000.
[ ICS revives bridging loans ‘to ease bottleneck’ in second-hand home marketOpens in new window ]
Apartments are now a good alternative for many buyers. There has been and will continue to be a good supply of well-located new and second-hand apartments aimed at the owner-occupier market. These will prove popular with both downsizers and young couples.
Housing outside Dublin is also proving very popular with good sales in all parts of the country for new homes. We also note good sales of new homes outside of Dublin. However, the market remains undersupplied and while progress is being made, this will take time.
