House prices go up while supply goes down, according to latest property report

House prices in Galway city and county continue to rise as supply is down one quarter.

An end of quarter report for 2023 released by online property platform, Daft.ie, has revealed that house prices in Galway and county have seen a substantial increase compared to figures from the same period in 2022.

The last 12 months have seen an 8.1 per cent rise in average house prices in Galway county, and a 4.1 per cent increase in the city. The average house price in Galway Co now sits at €280,000, and the figure of newly-built homes standing at €390,000.

Despite the rise in average price listings locally, the national price growth is less substantial.

Lack of house price growth annually

Over the course of 2023 the average listed price for homes nationally rose by 3.4 per cent. Compared to previous ebbs and flows in the national market across the last 12 months, the most recent quarter saw a fall of 1.5 per cent on average, quarter-on-quarter.

Nationally, this year’s end of quarter report shows the smallest increases in prices since 2013, with the exception of 2019 where prices fell by 1.2 per cent due to increased supply.

While the sign that price increases are slowing could be interpreted as positive, the reality is far less welcome.

Scarce supply meets weak demand

Ronan Lyons, Associate Professor in Economics Trinity College Dublin, who compiles the quarterly and annual reports for Daft.ie, said, “Lack of price growth because there is sufficient supply to meet demand is, by anyone’s measure, a good thing. But lack of price growth when there is scarce supply ? simply because it is sufficient to meet weak demand ? is less welcome. That seems to be the picture facing the second-hand market in particular at the moment.

“On December 1, there were just over 11,100 homes for sale in the country. Two things put that in perspective. Firstly, it is very low compared to almost any point over the past 15 years. It’s in line with the volume of homes for sale in the fifteen months between March 2021, when Ireland started to emerge from its heavy lockdown, to May 2022.

“But it’s dramatically below, for example, even the pre-covid19 average. Between 2015 and 2019 ? not a period known for abundance of homes for sale ? there were on average almost 25,000 homes for sale.”

Decrease in houses on the market

Lyons goes on to state that the total of housing listed for December 1, 2023 was 27 per cent lower than the previous year and over the course of 2023, Ireland has seen a loss of 4,000 homes from its inventory.

“On the one hand, that suggests perhaps strong demand, despite everything. But in the 12 months to December 1, the total number of homes listed for sale was a little bit over 51,000. In the preceding 12 months, it had been almost 57,000.”

Hopeful buyers are ‘locked out of home ownership’

Reacting to the report, Sinn Féin candidate for Galway East, Louis O’Hara says that as prices spiral out of control, Government introduced housing schemes fail to confront the issue.

“As house prices here continue to spiral out of control, people across Galway on ordinary incomes are locked out of home ownership. The Government is out of touch and isn’t grasping the extent or urgency of this crisis. Meanwhile, people are trapped into paying sky high rents while their hopes of home ownership slip even further out of reach.

“The gap between new and second hand homes is enormous and growing. This is a direct consequence of bad Government policy, demand side subsidies such as so called ‘Help to Buy’, and the controversial Shared Equity Loan scheme, all pushing up new house prices.

“Government policy must shift to bringing the price of new homes down. They must end policies that push up house prices and they must increase and accelerate the delivery of genuinely affordable homes by Local Authorities and AHBs, at prices that working people can afford.”

 

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