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Will Irish Property Price Fall in 2024?

The European Central Bank (ECB) has maintained a high interest rate for the past couple of months. The following figure shows the current rates effective since September, 2023, sourced from the centralbank.ie. Consequently, this has also kept mortgage rates elevated. Given this situation, will we witness a decline in prices in 2024? To explore this question, we will analyze various data points, including mortgage drawdowns and the availability of properties for sale on Daft.

Mortgage Approvals

The record-high mortgage rates indeed have some impacts on the number of mortgage drawdowns. The figure below shows the number of mortgage approvals from BPFI (Banking and Payment Federation Ireland). As evident from the figure, the number of mortgage approvals has been decreasing over the last couple of months. Therefore, fewer people are seeking mortgages to buy properties due to the high rates, which should exert downward pressure on property prices.

Property Price Trends

So... How about the property price in the last few months actually?

The figure below is the Irish property price index from CSO (Central Statistics Office) up untill the last November. The price index is based on the price of 2015 as 100, and we can observe that the index has increased to almost 180 nationwide, around 155 for Dublin, and 200 for the rest of Ireland. The prices in the last few months have been increasing after slowing down a bit, as evident from the figure. Why is this happening? Let's delve into other data a bit more in the following...

Population

First of all, the population has been increasing in the past years and has now surpassed 5 million. This includes the last 2-3 years as well. Obviously, to accommodate this population growth, we need more housing in Ireland. Additionally, this increasing population will exert upward pressure on property prices if demand exceeds supply. How about our supply?

Supply is a big issue

If we examine the supply—the number of available properties to buy on Daft—we notice something concerning.

The figure below illustrates the number of properties for each month over the last two years. Following the pandemic, there was an increase in the number of properties for sale from 2022, peaking at 20,000 nationwide. However, this trend did not continue last year, and we can observe a decrease in supply over the past year instead. Currently, the number of available properties is more or less similar to that of two years ago, despite the increasing population over this period. Therefore, we can see that there is a significant supply issue to meet the current demand, which is leading to upward pressure on property prices.

A similar trend can be noticed for the number of available properties in Dublin, with only around 2,500 properties available in the main city.

One good news here is that the number of available properties for rent in Ireland and Dublin appears to have been increasing. This might be a positive factor, as it provides more choices for renting over buying a property, especially if the available rental properties have reasonable rent prices.

One major change in mortgages this year is the increase in the amount to four times your income, which I personally believe will exert upward pressure on prices as well.

To sum up, with an expected decrease in ECB's rates this year, and considering all these above-mentioned factors, it is hard to anticipate a price fall in 2024; instead, I personally expect a steady increase.

Residential Property Price Index March 2023 - The national Residential Property Price Index increased by 3.9% in the 12 months to March 2023

The Central Statistics Office (CSO) released the Residential Property Price Index for March 2023, which shows that the national residential property index increased by 3.9% compared to 12 months ago.

The good thing is that the 12 month-increasing rate slowed down in the past months as we can notice from the figure below. But still note that 3.9% increase still indicate the house price is increasing. The prices in Dublin rise by 1.7% and prices outside Dublin are up by 5.7%.

Dublin House Prices

If we delve into more details about the Dublin areas, especially houses, we can see that the house prices in Dublin City decreased a little bit. In contrast, we can also notice that South Dublin house prices are still increasing over 6% each month compared to that of 2022.

Available Properties

If we look at the number of available properties on Daft.ie, we can easily notice that the stock level is not increasing during the last couple of months. Normally, there should be some increasing trend during the January and Feburary, and the number should be increasing from May to the end of the year in the past years.

If we look at the increase of the number of properties during the last year, the trend is obvious. However, the trend seems does not hold anymore and the stock level has been steady for both nationally and Dublin, and it seems like the stock level will not go up as usual. This might in turn give an upper pressure to the prices of properties despite of the increasing mortgage interest rates, particularly in the South Dublin areas.

Irish Residential Property Price Index - January 2023

The CSO (Central Statistics Office) just published the residential property/house price index of Ireland in January 2023. The increasing rate of the residential property price is decreased again to 6.1%, compared to the last January.

Residential Property Price Index 12 month % change

The national Residential Property Price Index (RPPI) rose by 6.1% in the 12 months to January 2023, with prices in Dublin rising by 4.3% and prices outside Dublin up by 7.4%.

In January 2023, 3,675 dwelling purchases by households at market prices were filed with the Revenue Commissioners, up by 4.4% compared with the 3,519 purchases in January 2022.

The median price of a dwelling purchased in the 12 months to January 2023 was €305,000.

Non-household entities purchased 13,519 dwellings at market prices in 2022, an increase of 15.1% on the 11,749 purchases made by them in 2021.

Non-household entities in the NACE sector K: Financial & Insurance purchased residential dwellings with a total value of €1,562.6 million in 2022, more than in any other NACE sector.

In 2022, dwellings with the total value of €356.9 million at market prices were purchased by non-household entities with an address outside of Ireland

Residential Property Price Index - Historical Trends

Looking at the historical trends, the price in January 2023 also decreased from last month.

The national index has now reached the value of 167.7, which is 2.5% above its highest level at the peak of the property boom in April 2007. Dublin residential property prices are 7.3% lower than their February 2007 peak, while residential property prices in the Rest of Ireland are 2.4% higher than their May 2007 peak.

Recent Months in Dublin

Base 2015 = 100

If we dig into details of Dublin, the residential price has been decreasing during recent months from the final quarter of 2022. Similar trends can be observed for sub regions of Dublin for both apartments and houses.

The price of DLR - houses has been decreasing the most compared to others, in line with the overall decreasing trend in Dublin - all. This should include the highest Eircode such as AY94, which has been the most expensive Eircode in Ireland. And usually we can observe the upper market starts to have the easing of the price.

The price for South Dublin - houses remain higher compared to others, and started decreasing in January.

With the peak points higher than others, the prices for South Dublin - houses and Dublin apartments have been increased quite higher compared to others.

Given the easing of the price increase observed so far, it would be interesting how the property price inflation goes during this year 2023. Do you feel the house price is stabilizing or decreasing recently?

Which months are good for selling or buying house/property in Ireland?

As for buyers, there are four months in a year might be good for buying properties.

January
July
August
December

Those months are relatively quiet period, which means there tends to be relatively less biddings. Of course, on the other hand, there might be less available homes, e.g., on December and January, available on the market.

As for sellers, the following information sheds some lights on how to make decisions:

January: "In January, people tend to have a bit more motivation to buy," says Stephen Day, divisional director of residential sales at Lisney. "When it gets to the new year, all of a sudden they really want to commit." [1]
February: There is a flux of properties into the market and then once you get to mid-February, there is a steady flow.
April: The amount of exemptions banks could offer ran out as early as April in 2018. So selling early in the year when buyers may have access to bigger budgets can also shape the price you achieve.
May: the stock level should be increasing till the end of the year
November: great for sale, as people don't want to go for another year of the purchasing journey and want to focus.

Have you sold or bought a house/property in Ireland? What is your experience or feeling during the journey of selling/buying house/property?

Related articles:

1. What is the best month to sell your home to get the maximum price?

2. Irish real estate expert reveals when the best time to buy or sell will be in 2022

How to know it is a good area when purchasing a property in Ireland?

One of the common questions when purchasing a property is the area, which might be an important factor to make a final decision on top of the price and condition of a property. In this post, I will briefly introduce the Pobal HP Deprivation Index, which could provide a good overview of different aspects regarding an area of your interests. Although things can change and the people living in that area can change as well as time goes, this at least gives a good reference with public data collected in a certain year.

What is Pobal HP Deprivation Index?

The Pobal HP Deprivation Index is a series of maps measuring the relative affluence or disadvantage of a particular geographical area in the Republic of Ireland, using data compiled from various censuses.

How to know whether it is a good area when purchasing a property in Ireland using the Pobal HP Deprivation Index?

The website (click the hyperlink) provides a great visualization about the index using different datasets from various years.

You can zoom in to an area of your interests and click the button highlighted in red below on the right top area of the page, which allows you to select one of the data sources.

For instance, the updated screenshot below shows the results when we choose the "2016-By Small Area" data source for our visualization. You can choose different data sources and have a look based on those sources.

The colors represent the degree of affluence in that small area, e.g., the orange color indicates "extremely disadvantaged" while the dark blue indicates "extremely affluent".

You could also click a specific small area to delve into details about that area. For example, the figure below shows some useful statistics about the chosen area such as:

Total population
3rd level education percentage
Local authority rented/Social housing percentage
Unemployment rate (%)
...
...

As you might expect, normally speaking, the property/housing price tends to be higher in those affluent areas when you look at prices listed on Daft.ie compared to less affluent ones.

It would be even better if there is data about recent years, but the most recent year seems to be 2016. So there might be some changes of the areas during the past years as well. Leave a comment or share the post in case it is helpful!

Irish property tredns - January 2023

From CSO (Central Statistics Office) data till December 2022

The national Residential Property Price Index (RPPI) increased by 7.8% in the 12 months to December 2022, with prices in Dublin are rising by 6% and prices outside Dublin up by 9.3%.
In December 2022, 5,213 dwelling purchases by households at market prices were filed with the Revenue Commissioners, an increase of 0.8% compared with the 5,170 purchases in December 2021.
The median price of a dwelling purchased in the 12 months to December 2022 was €305,000.
The lowest median price for a house in the 12 months to December 2022 was €152,000 in Longford, while the highest median price was €625,000 in Dún Laoghaire-Rathdown.
The overall trends of residential property price keep increasing, although the increase rate has been slowing down a little from the previous figure.

From Property Price Register data till January 2023

2945 sold properties have been registered for 2023-1
This is -55.09% change from last month
This is -18.76% change from the same month of last year

The mean price of sold properties is 345306.9 EURO for 2023-1
This is -17.74% change from last month
This is 2.96% change from the same month of last year

The median price of sold properties is 295000.0 EURO for 2023-1
This is -1.52% change from last month
This is 6.88% change from the same month of last year

The top-5 most expensive sold properties are

8 MARLBOROUGH RD, GLENAGEARY, DUBLIN (6500000 EURO)
GRENAGH, AVOCA AVE, BLACKROCK (5200000 EURO)
12-24 PARK GREEN, COULTER PLACE, DUNDALK (4149289 EURO)
HILLSIDE, THE HILL, MALAHIDE (3665500 EURO)
59 MERRION RD, BALLSBRIDGE, DUBLIN 4 (3600000 EURO)

From the number of properties available on Daft.ie we can have an idea about how many properties are available on the market at the moment.

The number of properties available for purchase now (~17000) is larger than that one of April last year.
It is likely to have more properties from April this year and hopefully towards the level before pandemic.

ECB Interest rate

The ECB interest rate has been increased during the last year several times, and is record high. And it is likely to be increased again, which might hinder the increase of property prices

From the number of mortgage approvals till December 2022 (data from BPFI)

A total of 3,635 mortgages were approved in December 2022 – some 1,789 were for FTBs (49.2%) of total volume) while mover purchasers accounted for 798 (22.0%).
The number of mortgages approved in December fell by 33.1% month-on-month and by 5.7% year-on-year.
Mortgages approved in December 2022 were valued at €996 million – of which FTBs accounted for €485 million (48.7%) and €255 million by mover purchasers (25.6%).
The value of mortgage approvals fell by 33.5% month-on-month and 1.5% year-on-year.
Year-on-year approval volumes rose by 9.3% to 58,276 while values rose by 17.9% to €15.9 billion.

Population trends

Population in Ireland has been increased a lot, and now it is over 5 million. This causes the shortage of residential properties and the increase of the property price.

Find more about previous trends: https://parklize.blogspot.com/p/ireland-housing-sale-trends.html