The average value of second-hand homes in Ireland increased by 5.7 per cent in 2022, according to data from Sherry FitzGerald. This, it says, was a notable slowdown on the growth of 9.6 per cent recorded in 2021 when the market was bouncing back from the effects of Covid-19 restrictions.
However, the estate agent expressed concern at a 43 per cent slump in the number of planning permissions granted in the third quarter, describing the drop on the same period in 2021 as a “worrying trend”. It also noted that commencements of new builds had also slowed, with the latest data from October showing residential housing starts are down 31 per cent on 2021.
The State’s largest estate agent also said the “exodus” of landlords from the rental market “continued unabated” in the year, with just 13 per cent of purchases made by investors. By comparison, 36 per cent of all sales were investors selling their properties, “signalling a huge disparity between those entering and exiting the market”.
The company’s year-end residential property report said the rental sector “remains crippled by historically low supply, with enduring high levels of rental inflation”.
Sherry FitzGerald managing director Marian Finnegan said the uncertainty and economic challenges caused by the war in Ukraine mean a “significant supply deficit” will persist in housing.
“After two turbulent years, hopes were high that 2022 would see a return to normality,” she said. “Unfortunately, it was not to be. The war in Ukraine and the associated economic challenges have all created increased uncertainty.
“That said, demand for all categories of property remained quite robust, with transaction volumes surpassing their pre-pandemic levels. Further growth to over 60,000 transactions is expected for 2023, with particularly robust activity in rural and coastal areas.
“The most direct impact of uncertainty was on construction. While house completions are expected to exceed 26,000 this year, the anticipated V-shaped recovery in supply is now less likely. As such, a significant supply deficit will persist.
“After above-trend price inflation in the post-Covid era, 2022 saw a return to more moderate price growth and prices are now expected to grow by 2-3 per cent in the year ahead,” the report said.
In Dublin, values grew 5.2 per cent in the year, compared to 7.2 per cent in 2021, the report says. Price growth continues to be stronger outside of Dublin, with average values nationally excluding Dublin rising 6.4 per cent in 2022. The figures are based on property sales by Sherry FitzGerald.
Sales activity was ahead of 2021 and above pre-Covid-19 levels as well. In the first three quarters of the year, approximately 41,940 sales were recorded on the property price register, excluding block sales and new homes acquired for social housing. This represented a 7.3 per cent jump on the first nine months of 2021, and a 7.6 per cent increase on the comparable period in 2019.
New homes sales nationally increased 35.1 per cent on the same period in 2021, and a 16.8 per cent increase on 2019, as developments which were previously delayed due to Covid-19 public health restrictions were completed and sold.
The second-hand market “remains robust” with sales 4.1 per cent stronger than 2021 and activity up 8.1 per cent compared to 2019.
Owner-occupiers remained the most active purchasing cohort in the market in 2022, accounting for 79 per cent of all second-hand home purchases made through Sherry FitzGerald in the year, with first-time buyers comprising more than 40 per cent of all owner-occupiers.