Annual house price growth accelerates to 9.6% in July

Property prices are now 12.4% above their Celtic Tiger peak and just over 2.5 times what they were at their trough during the downturn, according to CSO figures. Picture Colin Keegan/ Collins

The cost of buying a home in Ireland has risen almost 10% in the last year, as property price inflation continues to increase sharply.

The 9.6% rise in the Central Statistics Office’s Property Price Index for July shows the fastest rise in property prices in over two years.

The national Residential Property Price Index increased by 9.6% in the 12 months to July 2024https://t.co/hL3hkGmI3F#CSOIreland #Ireland #Housing #HousingConstruction #HouseBuilding #NewDwellings #PropertyPrices #HousePrices #IrishBusiness #BusinessStatistics #BusinessNews pic.twitter.com/5h1zs0rkNe

— Central Statistics Office Ireland (@CSOIreland) September 18, 2024

The median price being paid for a home in Ireland in the last 12 months was €340,000, with house prices rising fastest in the Mid-West region — Clare, Limerick and Tipperary — at 13.4%.

It comes after a new Central Bank report suggested Ireland would only see 32,000 homes built this year.

This is lower than Taoiseach Simon Harris’ recent prediction of close to 40,000 homes this year, and way short of the 52,000 a year the Central Bank says is needed each year through to 2050 to meet the current housing shortfall in Ireland.

According to the CSO data, property prices are now 12.4% above their Celtic Tiger peak and just over 2.5 times what they were at their trough during the downturn.

In July, there was an increase of 13.2% in the number of homes being purchased in Ireland, showing a sharp increase in activity. In that month, 4,723 homes were purchased at a value of €1.9bn.

More than a third of homes purchased (35.4%) in the last year were bought by first-time buyers. Over half (52.8%) were bought by second-hand buyers while a further 11.8% were bought by non-owner occupiers such as funds and approved housing bodies.

Revenue data said there were 1,745 first-time buyer purchases in July 2024, an increase of 23.1% on the 1,417 recorded in July 2023. These purchases were made up of 660 new homes and 1,085 second-hand homes.

While €340,000 was the median price countrywide, this rose to €458,000 for homes in Dublin and to €630,000 in the Dún Laoghaire-Rathdown local authority area.

In Cork City, the median price of a home sold was €305,000.

Commenting on the CSO figures, Ian Lawlor of Roundtower Capital said: “The huge mismatch between housing supply and demand is driving up house prices.

We are simply not building enough houses and this mismatch is compounded by the dramatic decrease in the supply of second-hand homes for sale over the past decade.

Mr Lawlor, the managing director of the company which lends to developers, said Government aims of building 50,000 a year likely to be announced in the budget were welcome but the “perennial problem” of planning delays must be tackled head on.

“Any moves to set timelines for and speed up permissions would be a huge step forward for the housing market and the many people struggling to get onto the property ladder,” he said.

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Social Democrats housing spokesperson Cian O’Callaghan, meanwhile, said the Central Bank figures show we are not building enough homes to keep up with population growth, “never mind put a dent in the massive shortfall built up over the past decade”.

“Every year of missed targets is leading to a larger housing deficit and a deeper housing crisis that will take longer to tackle,” he said. 

“The current housing deficit is already estimated to be as high as 260,000 homes.”