House prices across the country will probably rise by as much as 8 per cent this year, according to estate agent DNG, which would bring the average price of a second-hand home in Dublin to almost €630,000.
The company, in its latest residential market review and outlook, forecasts prices will “continue to rise”, with an increase of “at least mid-single digit figures” anticipated due to the “continued lack of new homes available to purchase by private buyers”.
It further anticipates “robust demand” for houses, underpinned by real wage growth, falling interest rates and the strong economy.
DNG believes the total number of new homes built last year was about 32,500, which is short of the “almost 40,000″ promised by Taoiseach Simon Harris in August. The Central Bank believes about 52,000 are needed per year to meet demand.
DNG director of research Paul Murgatroyd said price growth in the residential market last year “surprised on the upside somewhat”. While housing supply is gradually increasing, he said it was “by no means” at a level to satisfy demand in the market.
DNG chief executive Keith Lowe said these factors mean it is “likely that prices will rise 5-8 per cent in 2025″.
At a national level, excluding Dublin, the average price of a second-hand home is now €299,429 compared with €276,149 at the end of 2023. An 8 per cent increase over the coming 12 months would bring the average price to €323,383.
[ House prices surge with supply of second-hand homes at lowest level since 2007Opens in new window ]
The average price of a second-hand property in Dublin now stands at €582,772 compared with €531,773 at the end of 2023. An 8 per cent increase here would bring the average price to €629,393.
Looking back, the annual rate of price growth nationally, excluding Dublin, strengthened in the second half of 2024, increasing from 6.8 per cent in the 12 months to June to 8.4 per cent for the year to December, almost double the rate of growth witnessed in 2023.
A similar picture emerged in the Dublin market. Second-hand house prices increased by 9.6 per cent on average, which was a marked increase on the 3.3 per cent rise witnessed in 2023.
DNG said the total number of residential property transactions last year was likely to reach about 58,000 once all were recorded on the Property Price Register.
“This means that, firstly, the number of transactions last year will lag that of 2023 by around 8 per cent, and secondly, Ireland still falls behind the UK by 26 per cent in terms of the number of house sales per thousand head of population,” Mr Lowe said.
An analysis of DNG buyers during 2024 shows first-time buyers continued to dominate the second-hand market in the capital, accounting for 54 per cent of purchases of resale homes during the year.
In addition, 18 per cent of purchasers were buying to trade up in the market, while only 6 per cent of buyers were doing so to trade down.
“This is partly explained by the limited availability of bridging finance currently available in the market and the lack of suitable new homes for buyers to trade down too,” DNG said.
With regard to investment properties, DNG said its analysis also pointed to a “continued exodus” of small- and medium-sized landlords from the Dublin market.
It said one in four of all sales last year were landlords selling investment properties, while only one in 12 purchases last year were made for investment and rental purposes.
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