Property insights by Johnny Gannon, Fair Deal Property
Ireland's second-hand housing market has developed a paradox that few commentators have properly grasped. Since 2020, we've built over 100,000 new homes. Yet the number of properties available for sale has halved, from 24,000 to roughly 12,000. Understanding this collapse requires looking beyond simple construction metrics to buyer psychology and market structure.
Ireland's annual property turnover sits at approximately 2.8 per cent of total stock, down from 4.2 per cent in the period from 2013 to 2022 and 7.5 per cent in the early to mid 2000s. When turnover falls below a critical threshold, the market tips into self-reinforcing paralysis. Fewer homes circulating means fewer buying opportunities, which discourages potential movers, which further depletes available stock.
This dynamic hits hardest at existing homeowners looking to move. In today's market, there's a clear buyer hierarchy. Cash buyers sit at the top, mortgage buyers second, and movers, those needing to sell before they can buy, occupy a distant third place.
In competitive bidding situations, movers face impossible timing constraints. They must either sell before securing their next property or attempt precarious chain transactions where timing misalignment can derail deals. Faced with these odds, many simply abandon moving plans entirely.
This behaviour cascades through the entire system. Families who might trade up, older households who might downsize, professionals seeking relocations, all become trapped by market mechanics that systematically disadvantage them. When existing homeowners stop moving, the fundamental circulation that drives healthy property markets grinds to a halt.
The pandemic fundamentally altered how people relate to their homes. During lockdowns, houses transformed from places you left daily into offices, classrooms, gyms and refuges simultaneously. Research shows this created unprecedented "place attachment", a psychological anchoring that makes moving feel disruptive rather than progressive.
The average age of first-time buyers in Ireland is now 38 years old. A decade older than historical norms. Buyers are entering the market at an age when they'd previously be trading up from starter homes. This demographic shift eliminates entire rungs of the property ladder, reducing circulation throughout the system.
Much of Ireland's new housing never reaches the second-hand market where ordinary families actually buy. Institutional investors, approved housing bodies, and local authorities absorb significant portions of new completions. While these homes serve essential roles in rental and social provision, they rarely re-enter open circulation.
This creates a peculiar dynamic: we are building homes, but we are not creating the market churn that drives availability. Properties become locked in institutional ownership or social housing tenures, permanently removed from the circulation pool that feeds second-hand sales.
None of this occurs in isolation. Ireland's population growth has been exceptional. Nearly four people added for every new housing unit delivered between 2015 and 2023. Recent migration surges, including Ukrainian displacement and record economic immigration, have intensified demand precisely when market circulation collapsed.
The answer isn't simply building faster, though construction remains essential. The market needs mobility. Currently, movers compete from positions of weakness because they lack liquidity. They're forced to sell before buying, making them uncompetitive against cash buyers and standard mortgage holders.
Bridge financing and equity release schemes could revolutionise this dynamic. Bank of Ireland recently launched Trade Down, allowing movers to purchase new properties before selling existing ones, using both homes as security. If such products became affordable and widely available, movers could bid competitively rather than desperately.
These national dynamics are starkly visible across Galway. Strong employment growth in technology and medical devices, combined with lifestyle appeal, sustains robust demand. Yet available stock remains historically low, creating the intense competition that defines today's market.
Ireland's housing shortage is twofold: insufficient new supply and insufficient circulation of existing stock. Until movers receive financial tools to compete fairly through accessible bridging loans, equity release products, or innovative mortgage structures the second-hand market will remain depressed.
There is no doubt that we need to build more homes but it appears what is also missing is the confidence and liquidity for people to move between the stock of homes that already exists. For more property insights visit www.fairdealproperty.ie
