Average residential property prices could increase by a further 5 per cent in 2024 despite the increased number of new-builds last year, with demand still comfortably outstripping supply, the Institute of Professional Auctioneers and Valuers has said.
In its latest six-monthly report in prices across the country, Ipav says the average cost of homes in the latter half of last year was €335,520, up 2.99 per cent on the first half of the year.
The report focuses on three and four-bedroom semidetached houses as well as two-bedroom apartments.
There were considerable variations across both the three different property types and 41 geographical areas surveyed.
Dublin topped the various lists, with prices highest in Dublin 4. In the two-bedroom sector, a property there cost almost twice on average what it did in Dublin 24, at €485,000 compared to €248,334.
Across all property types, Longford was the least expensive location, with the cost of homes averaging €165,000 compared to €917,500 in Dublin 4. Prices in many areas of the capital increased by less than the national average, about 1 per cent, due to already high costs and some improvements in supply factors.
The authors say some of the strongest growth seen, meanwhile, was in areas with lower prices. The average price paid for a three-bedroom semidetached house in Mayo, for instance, was up 7.3 per cent to €220,000, with Donegal the next highest, at 5.6 per cent, to €181,250.
Overall, just two areas experienced any price falls – Dublin 6 and Wicklow – both in the four-bedroom semidetached category. The decreases, however, were small, at 0.23 per cent and 0.09 per cent respectively.
Ipav chief executive Pat Davitt said “prices remain resilient and, given the paucity of supply, it’s not unreasonable to think that, barring a geopolitical crisis or unforeseen catastrophe, we could see rises of the order of 5 per cent this year”.
A lot done, an awful lot more to do before supply of new homes meets demand
He noted that with the population increasing, there have been suggestions that the Government’s targets for new-builds need to be increased substantially.
He accused policymakers of allowing “political correctness” to hinder progress on the issue, arguing that they are “afraid to be seen to assist small builders/developers, and indeed private landlords, with any form of equity with commercial landlords”.
“That needs to change. We need a combination of co-ordinated measures to fix the market,” he said, suggesting a range of measures including changes to planning, reviews of Rent Pressure Zone rules “where they are incapacitating the market”, and support for SME builders in the form of low-cost finance.
In conclusion, the Institute of Professional Auctioneers and Valuers (IPAV) predicts a further 5 per cent increase in average residential property prices for 2024, despite a notable increase in new-builds the previous year. The demand for housing continues to surpass supply, contributing to the upward trajectory in prices. The latest six-monthly report highlights a 2.99 per cent rise in the average cost of homes in the latter half of the previous year, reaching €335,520.
The report scrutinizes three and four-bedroom semidetached houses, along with two-bedroom apartments, revealing substantial variations across different property types and geographic areas. Dublin stands out as the highest-priced location, with Dublin 4 leading the charts, demonstrating nearly twice the average cost of two-bedroom properties compared to Dublin 24. Meanwhile, Longford emerges as the most affordable area, with homes averaging €165,000, in stark contrast to Dublin 4’s €917,500.
Despite some areas in the capital experiencing modest increases due to already high costs and improved supply factors, overall, the majority of regions have seen growth. Notably, areas with lower initial prices, such as Mayo and Donegal, have shown strong growth percentages.
Ipav chief executive Pat Davitt emphasizes the resilience of prices and suggests the potential for a 5 per cent increase in the coming year, provided there are no unforeseen crises. He advocates for a reassessment of government targets for new builds, criticizing perceived obstacles related to “political correctness” and urging coordinated measures, including changes to planning, reviews of Rent Pressure Zone rules, and support for small to medium-sized builders through low-cost finance. In essence, the report underscores the need for a comprehensive and collaborative approach to address the ongoing housing challenges in the market.