House prices nationally rose in 2023 across the country, but by the smallest increase since 2013 – but people ‘struggle’ to get mortgage approval from banks despite paying more in rent than what a mortgage would cost.
That’s according to Daft’s quarterly house price report, which found that the average listed house price rose by 3.4% in 2023 – and to commentary from the Institute of Professional Auctioneers and Valuers CEO, Pat Davitt.
Prices rose across the country, with the largest increases recorded in Connacht-Ulster, up 8.3%, and in Munster, up 6.8% – while prices rose just 2% in Dublin and 0.8% in the rest of Leinster.
Ronan Lyons, author of the House Price Report, and an economist at Trinity College Dublin, said that the 3.4% annual rise recorded nationally compared with a 6% rise during 2022 and increases of 8.1% and 7.7% in 2021 and 2020.
“With the exception of 2019, when prices fell by 1.2% on the back of increasing supply, it is the smallest increase in prices since 2013,” he said.
“Lack of price growth because there is sufficient supply to meet demand is, by anyone’s measure, a good thing. But lack of price growth when there is scarce supply ‐ simply because it is sufficient to meet weak demand ‐ is less welcome. That seems to be the picture facing the second-hand market in particular at the moment.
On December 1st, there were just over 11,100 homes for sale in the country. Two things put that in perspective. Firstly, it is very low compared to almost any point over the past 15 years. It’s in line with the volume of homes for sale in the fifteen months between March 2021, when Ireland started to emerge from its heavy lockdown, to May 2022.”
“But it’s dramatically below, for example, even the pre-covid19 average. Between 2015 and 2019 ‐ not a period known for abundance of homes for sale ‐ there were on average almost 25,000 homes for sale,” Prof Lyons commented.
Speaking to Newstalk, Pat Davitt, CEO of Institute of Professional Auctioneers and Valuers, said that it looked likely that house prices would continue “to move on in 2024 – unless something else happens in the marketplace”.
Mr Davitt told the station that many people are struggling to get their mortgage applications approved by banks.
“Despite the fact that they’re able to show that they’re paying a lot more rent than what a mortgage would cost, they’re still not able to borrow that extra money to be able to buy a property,” he said.
“It’s very unfortunate for a lot of people, I think, to have to stay in that situation when they could actually buy a house.”
Prof Lyons said that over the course of 2023, Ireland lost over 4,000 homes from its inventory, net of new listings.
“On the one hand, that suggests perhaps strong demand, despite everything. But in the 12 months to December 1st, the total number of homes listed for sale was a little bit over 51,000. In the preceding 12 months, it had been almost 57,000,” he wrote.
“Housing prices are stabilising not because supply has increased to meet demand, but instead because demand has fallen to meet it. Supply of newly built homes for purchase has certainly increased but the second-hand market, which is the larger share of the market, has been working in the other direction ‐ buffeted by changed economic conditions,” he said.
“With construction of homes seemingly set to remain high, compared to recent years, for the next year at least, drilling into the differential trends between the new and second-hand markets is a target for this report as 2024 begins. “