House prices in Ireland have seen a significant increase in the second quarter of 2024. According to a report by Daft.ie, the average price for a home rose by 3.8% compared to the previous quarter, reaching €340,398. This marks a 6.7% increase from the same period last year and a 35% rise since the onset of the COVID-19 pandemic.
The shortage of available homes is a key factor driving up prices. As of June 1st, there were just over 11,350 second-hand homes available for sale, down 18% from the same time last year. This tight supply is putting upward pressure on prices across the country.
Regional Variations:
Price increases vary by region. In Dublin, prices are up 4.7% year-on-year, with the average home costing €453,671. In Cork and Waterford cities, the increase is around 10%, with average prices at €363,845 and €258,199 respectively. Limerick and Galway cities have seen the highest increases, with prices more than 12% higher than last year. The average price in Limerick is now €292,253, and in Galway, it is €402,885.
In Leinster (excluding Dublin), prices have climbed 6.1% over the year, while in Munster, the increase is 10.4%, and in Connacht-Ulster, it is 6.2%.
Factors Influencing Prices:
Economist Ronan Lyons from Trinity College Dublin noted that the tight availability of homes, combined with recent interest rate increases, is contributing to the rising prices. Many homeowners are staying in their homes longer due to fixed-rate mortgages at lower interest rates, which limits the number of homes available for sale. Lyons expects that as interest rates come down and more homeowners come off fixed-rate mortgages, the supply of homes should improve, but this will take time.
Future Outlook:
The report suggests that the tight conditions in the housing market may continue for some time. The availability of second-hand homes has been consistently low since the start of the year, leading to the largest three-month increase in prices since 2020. As interest rates decrease and more homes become available, the market may see some relief, but this process is expected to be gradual.
