John Fahey: Housing shortfall likely to cushion decline in prices this year

Ongoing supply shortfall likely to mean falls in house prices should be modest

Commencement notices have been running about 28,000 on a 12-month basis in the first half of the year, and the total number of dwelling units granted planning permission in early 2023 was 16% lower than a year earlier.

Based on underlying demographics, the Irish economy needs at least 30,000 new residential units to be built each year. However, new supply had been running well below this level for years, before jumping sharply to 30,000 units last year.

The recent 2022 Census data showed population growth has been outpacing the growth in the housing stock, although mitigated to some extent by the fall in the number of vacant homes.