According to the Sherry FitzGerald House Price Barometer, the average value of second-hand homes in Ireland increased by 1.6% in the second quarter of 2022 – demonstrating the slowest rate of quarterly growth in over a year.
Last week Ireland’s largest estate agent reported that the rate of house price growth showing signs of moderation. In a statement by Sherry FitzGerald MD, Marian Finnegan, indications are that although easing, the pace of growth remains elevated. “Over the opening six months of the year, average values rose 4.5%, matching the same rate recorded over the first six months of 2021. In the 12 months to June, average values have increased 9.6%.”
“In Dublin, prices increased 1.5% in the quarter, and are 4.3% higher over the opening six months of 2022. In comparison, growth of 3% was recorded in the first six months of last year. Overall, average values grew 8.5% in Dublin in the 12 months to Q2 2022. Outside of Dublin, the pace of inflation was marginally stronger at 1.8% in the quarter. However, over the past twelve months average values rose 11%, resulting in a perceptible gap in the rate of house price growth between Dublin and the rest of the country.”
Ms Finnegan went on to say: “There are definitive signs now of a cooling in the rate of price growth in the national housing market. Although still strong, the frenzied level of bidding activity observed in the recent past has eased off. Internationally, many markets are similarly noting an alleviation in the rapid appreciation in values which had characterised 2021.
While still insufficient, recent incremental improvements in supply have helped taper house price growth. With both the uptick in construction activity and the volume of second-hand listings coming to the market contributing to this.”
“The rate of inflation should continue to ease as the year progresses due to continued gradual improvements in supply and the forthcoming interest rate rises for the ECB. However, unlike the expectation in many regions globally, continued, albeit more subdued, price growth is expected in Ireland in the near term given the seismic mismatch between supply and demand.’’
The statement confirms that sales activity remains healthy. “Excluding block sales and new homes acquired for social housing, a total of 12,200 housing transactions were recorded on the Property Price Register in quarter one. This represented a marginal increase of 1% year-on-year but was the largest volume of transactions in the first quarter of a year in over a decade.”
“New home sales, while noting some modest improvements on 2021, remain slow-moving overall. Activity levels are more improved in the second-hand market.”
“While there is growing evidence of housing market imbalances in many developed countries, there is no doubt that the accommodation crisis in Ireland is more deep-rooted than most. This is perhaps further highlighted by the recent release of the preliminary figures for the 2022 Census, which underscores the scale of the housing crisis. This data highlights the need to build over 50,000 new homes each year until 2036, if we are to even bring Ireland in line with the European average in household size. This is more than twice as many as we are currently building. Furthermore, the rental crisis lies at the core of this accommodation crisis,” she concluded.