House prices continue to settle but gap widens between new and second-hand house prices

The latest Residential Property Price Index by the Central Statistics Office shows that prices are still rising at a faster rate outside of Dublin (up 4.4%) than in the capital (up 0.9%). File photo

House prices in Ireland continue to stabilise, new figures suggest, with the national index rising by 2.9% in the 12 months to November 2023.

The latest Residential Property Price Index by the Central Statistics Office shows that prices are still rising at a faster rate outside of Dublin (up 4.4%) than in the capital (up 0.9%).

However, a huge disparity still exists between the price of new homes versus second-hand homes. In the third quarter of 2023, the price of new homes rose significantly by 10.4% compared to the same time last year. On the other hand, the price of existing dwellings actually fell by 1%.

CSO statistician Niall Corkery said: “In November 2023, 4,618 dwelling purchases by households at market prices were filed with the Revenue Commissioners, a decrease of 5.8% when compared with the 4,901 purchases in November 2022.

“Households paid a median or mid-point price of €325,000 for a residential property in the 12 months to November 2023. The lowest median price paid for a dwelling was €161,000 in Longford, while the highest was €622,000 in Dún Laoghaire-Rathdown.” 

Housing supply

The latest figures on house prices come ahead of crucial data set to be released on Thursday by the CSO on the total number of homes built in Ireland last year. According to the stats body, there were 29,851 new dwellings built in Ireland in 2022.

Figures released earlier this month by the Department of Housing showed that 32,801 new homes commenced building in all of 2023. Minister Darragh O’Brien said that all the key housing indicators were “trending upwards which bodes well for future supply”.

Earlier this week, the Society of Chartered Surveyors Ireland said a survey of its members showed that a majority believe that residential property prices have either peaked or will level off soon. However, they also said that housing supply remains a persistent issue according to the new report.

John O’Sullivan, chair of the SCSI's practice and policy committee, said that after several years of rising house prices, it "looks now as if prices are set to consolidate for the medium term".

The national Residential Property Price Index increased by 2.9% in the 12 months to November 2023https://t.co/brFoqPtHIG#CSOIreland #Ireland #Housing #HousingConstruction #HouseBuilding #NewDwellings #PropertyPrices #HousePrices #IrishBusiness #BusinessStatistics #BusinessNews pic.twitter.com/inN9MuURgK

— Central Statistics Office Ireland (@CSOIreland) January 24, 2024

"Prices are levelling off below current inflation rates and this is a welcome development for potential buyers, as their purchasing power will increase as affordability improves."

Taking individual case studies of different areas in the country, the SCSI said that new homes are affordable for first-time buyer couples on a combined gross income of €89,000 in most parts of the country. But, in the greater Dublin area, there is an affordability gap of €62,000. In Galway, this figure is €22,000.

Trevor Grant, the chair of the Association of Mortgage Advisors, said that prices on the rise will continue to worry those wishing to get on the property ladder.

“More supply will ultimately make more homes available to would-be buyers, while also keeping the rate of house price growth in check," he said. 

"There is clearly a huge amount of pent-up demand in the market and first-time buyers are still very much dominating the mortgage market, despite rising property prices and the recent ECB rate rises, according to a report published by the BPFI earlier this month.”