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‘Strong labour market boosting house prices’

A report from property website MyHome.ie suggests that the housing market regained momentum in the second half of last year, with asking prices across the country rising by 4.1% in 2023.

The report, in association with Bank of Ireland, says that the final 2023 figure was “in marked contrast” to the first six months of the year, when higher interest rates forced sellers to adjust valuations.

Prices in Dublin rose at an annual rate of 4% in the final quarter (Q4) of the year, while those outside Dublin were up 3.9%.

Compared with the previous three months, prices in Dublin rose by 0.2%, while prices elsewhere dropped by 1.2%. This reflected quieter activity during the winter months, according to the report.

Market ‘more competitive’

The median asking price nationally in Q4 was €325,000. In Dublin it was €415,000, and elsewhere around the country it was €280,000.

“Continuing supply issues meant that the market heated up again,” said the report’s author Conall Mac Coille (Bank of Ireland’s chief economist).

“Furthermore, we are seeing properties being sold for 4% over asking prices, compared with 1% at the start of the year, indicating a more competitive market,” he added.

‘Competing pressures’

The economist attributed the recovery mainly to the strong labour market, citing figures from Revenue showing that there has been a 50% rise in the number of tax units (single or jointly assessed couples) earning €100,000 or more since 2022.

“As for next year, our view is that the most likely outcome is another single-digit rise in house prices over the course of the year. There will again be competing pressures on prices coming from elevated rates of interest on the one hand, and continuing supply shortages on the other,” Mac Coille said.

He added that interest-rate reductions during the year could lead to an even sharper rise in house prices.

Joanne Geary (managing director of MyHome.ie) said that the number of homes listed on its website had fallen to 11,400 by the end of 2023, compared with around 20,000 before the COVID pandemic.