Sherry FitzGerald, the largest estate agent in the country, has said the number of second-hand homes available for sale has fallen by a quarter (26%) in the past three years.
There were approximately 15,300 second-hand properties for sale nationwide in July, a decline of 7,900 fewer when compared to the same month in 2019. However, the July 2022 total represents an annual increase of 1,800 properties.
The volume of properties for sale in July represented just 0.8% of the total housing stock, and Sherry FitzGerald managing director Marian Finnegan said the Covid-19 and ongoing geopolitical uncertainty have exacerbated supply and demand issues seen pre-pandemic.
"In the period preceding the Covid-19 crisis, Ireland’s housing market faced substantial challenges, most notably, the imbalance between supply and demand," 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.”
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Sherry Fitz said the average value of second-hand homes increased 1.1% in the third quarter and 5.5% during the first nine months of 2022, compared to inflation of 7.1% during the same period in 2021.
In Dublin, prices rose 0.9% in the quarter, the slowest quarterly growth rate since the start of 2021. Cumulatively, values have increased 5.2% since the start of the year, and average values have increased 7.3% within the capital year-on-year.
Price growth continues to be stronger outside Dublin, with inflation of 1.3% in the cost of second-hand homes during the third quarter, 5.9% for the year to date, and 8.9% year-on-year.
"The deceleration in the pace of price growth, which began to emerge during the second quarter of this year has persisted during quarter three," Finnegan added.
"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 more moderate pace of price growth.”
While housing stock has diminished in all locations, supply levels in rural Ireland have contracted most over the past three years, falling 51% in that time.
Just 13% of purchasers of second-hand homes with Sherry FitzGerald this year were investors, whereas 36% of sales were investors selling their properties, and owner-occupiers remain the dominant purchasing cohort (79%), with first-time buyers making up more than half of owner-occupiers.
In the first half of this year, there were over 26,240 sales recorded on the property price register (PPR), excluding block sales and new homes acquired for social housing. This represented an 8% increase on the levels of a year ago, and up 9% on the same period in 2019.
New home sales have also recovered to their pre-pandemic levels, recording 3.4% growth on the level of transaction activity witnessed in the first half of 2019. Transactions in the second-hand market remain brisk, up 5% on the opening six months of 2021 and up 10% on 2019.
“There is no doubt that accommodation crisis in Ireland is deep rooted and complex," Finnegan said. "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% levy on concrete block which is without a doubt counterintuitive in the current environment.
"Most significantly perhaps the government failed to introduce crucial measures to tackle the deeply embedded issues within the rental market.
"The introduction of €500 tax credits for renters, representing as it does less than 3% of average annual rent in Ireland, will have a limited impact on affordability. More importantly, it fails to address the crux of the problem in the rental market, a lack of supply.”
