House prices unlikely to drop for a few years, says Tánaiste

New figures released yesterday show that house prices rose faster in 2024 than in 2023, with the cost of a new home surging over the past five years. Picture: Gareth Fuller/PA Wire

It could take several years before house prices in Ireland start to decline, Tánaiste Simon Harris has warned.

New figures released yesterday show that house prices rose faster in 2024 than in 2023, with the cost of a new home surging over the past five years. 

According to the Central Statistics Office, the average sale price of homes filed with Revenue in December was €420,656, compared to €296,877 in December 2019.

Speaking in Johannesburg, South Africa, on Thursday, Mr Harris said the Government must be "honest" with people about the reality that prices will not decrease until housing supply meets demand—estimated at 50,000 new homes per year.

When asked about the fact that housing output in 2024 was just over 30,000, he acknowledged that reaching the target is still several years away.

"It is a couple years away, and you've got to be honest with people, but I don't think that's a surprise to any young person in Ireland," he said.

Simon Harris said the Government must be "honest" with people about the reality that prices will not decrease until housing supply meets demand. Picture: Brian Lawless/PA Wire

"And that's why, unlike other political parties, who can have their own views and own policies, we haven't pulled the rug from under first-time buyers in terms of removing the Help to Buy, removing the first home scheme. 

"It's why I actually want to see those schemes further improved and enhanced. Because while none of these schemes are ideal they are, in my view, absolutely essential, while you're waiting for supply and demands to begin to meet."

Until the market reaches the necessary housing output, he said, these government schemes will likely remain in place.

"I think it is important to acknowledge the government schemes. That is a reality when you see a headline price for a new home. Of course, that's not what many people actually pay because of the interventions by government. 

"But of course, nobody wants to be in that position. We want to have a functioning housing market where housing is affordable for people," he added.