According to a recent report from MyHome.ie, the average asking price for a home in Ireland between March and June was €325,000. This is higher than previous quarters, with prices rising by 4.3% compared to the previous quarter. However, compared to the same period last year, the increase in asking prices was slower at 2.2%. The average price in Dublin was €418,000.
Economists at MyHome.ie have also revised their forecast for housing completions this year, now predicting 29,500 new units. This is an increase of 2,000 from previous estimates and narrowly exceeds the government’s target of 29,000. It is believed that the construction sector is expanding, with new orders coming in more quickly, leading to job growth and lower cost inflation.
BNP Paribas Real Estate Ireland has reported that the construction sector experienced growth in June, marking the first increase since September of the previous year. Their construction purchasing managers’ index rose to 50.4, indicating growth in the industry. The director and head of research at BNP Paribas Real Estate Ireland, John McCartney, attributes this growth to decreased cost pressures and increased demand for newly constructed properties, particularly new homes and warehouses.
Despite these positive indicators, residential activity has been decreasing for the past nine months. Viability remains a challenge for builders, especially for apartments. However, the higher prices of new homes compared to second-hand dwellings have helped offset some of the costs for builders.
MyHome.ie’s managing director, Joanne Geary, believes that the market still has momentum despite rising interest rates. While prices may be cooling compared to last year, they are unlikely to fall. Vendors’ expectations have become more realistic, with homes being sold for around 1.4% over the asking price, compared to up to 6% last year.
However, there is still a shortage of available properties for sale, with only 14,000 listed on the MyHome.ie website in the second quarter. This is significantly lower than the pre-pandemic figure of 20,000. Conall MacCoille, chief economist at Davy stockbrokers, suggests that these supply shortages make the Irish market more resilient to interest rate hikes compared to the UK or US.
In conclusion, the Irish housing market is experiencing increased asking prices, a rise in forecasted housing completions, and growth in the construction sector. While there are challenges to overcome, such as supply shortages, the market remains strong and resilient.
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