Real estate prices are likely to rise again this year, albeit more slowly

According to real estate website, house prices have risen over the past year despite falling over the last three months of the year.

Rice rose 6.1 percent in 2022 but fell an average of 0.4 percent in the last three months of last year.

Prices are expected to rise this year, but at a slower rate than in the past
three years, according to report author Ronan Lyons.

The median price for a home was €310,000 at the end of last year, slightly below the third quarter average and 16 percent below the Celtic Tiger’s peak.

At the beginning of last month, 15,200 houses were available for purchase. This was up a third from the same date last year but was still below 2019’s average of 24,200, said.

Mr Lyons, associate professor of economics at Trinity College Dublin, said supply had recovered slowly and steadily rather than quickly. He said 64,000 homes were listed for sale in 2022, a similar offering to 2018.

“However, any supply outage will take time to be replaced and while the flow of property into the market has almost fully recovered, availability – with just over 15,000 homes as of December 1 – remains closer to the pandemic low than it was before the pandemic” said Mr Lyons.

Prices in Dublin have increased by 5 per cent in the last three months of last year compared to last year.

There was a similar increase in Galway city.

Waterford City prices were up 6.4 per cent and Cork City prices were up 3.3 per cent year-on-year. Outside the cities, prices rose by an average of 7.1 per cent, with similar increases in Leinster, Munster and Connacht-Ulster.

The average house price in the city of Dublin is now €425,560, up 5 per cent in one year.

In Cork city, the average price increased by 3.3 per cent to €324,840, while in Galway city it rose to €350,541, an 8 per cent increase over the year.

For Limerick City, said the median price rose 5.4 per cent to €248,531.

The City of Waterford has an average price of €225,465, an increase of 6.4 percent. Across the rest of the country, the average price is now €260,737, up 7.1 percent year-on-year.

Mr Lyons said 2022 had started similarly to the previous two years, with significant upward pressure on prices.

“However, the year ends with prices falling, albeit slightly, in the final quarter,” he said.

He added that the decline was likely due to slightly weaker demand.

Mr Lyons said expected house inflation had hit its lowest level since the pandemic began. “Overall, with supply recovering and demand slowing, 2023 is unlikely to see price increases similar to those of the past three years.”

Demand will be hurt by rate hikes, he added.

Mr Lyons said a mortgage provider started with fixed rates below 2 per cent last year but rates on the same product this year are almost double what they are this year.

“This mathematically affects affordability and the maximum loan a provider will lend,” he said.

This is despite a central bank rule change coming into effect this year that allows first-time buyers to borrow four times their income, instead of 3.5 times an individual’s income.

The war in Ukraine makes people less confident about the future, he added. Real estate prices are likely to rise again this year, albeit more slowly

Fry Electronics Team

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