The Irish housing market delivered modest gains in 2023, with average prices rising just 1% in the final quarter. Although growth was slow at the end of 2023, we envisage a similar overall growth in 2024, with an estimated annual growth of 3%, there has never been a better time to buy property. Here’s an overview of the key trends shaping next year’s housing outlook.
Affordability Ceilings Limiting Urban Growth
In major cities like Dublin and Cork, average three-bed semi prices now sit between €370,000-€511,667. These elevated values create affordability ceilings for many buyers, especially first-timers. With mortgage rates rising, purchasing power will remain constrained in urban markets next year.
I expect a modest 1-2% annual growth at best in Dublin and other cities where prices exceed nationwide averages. Demand remains robust, but supply shortages may ease slightly if surging costs deter some investors. Urban markets feel ripe for a price correction in 2024.
Commuter Belt Still Booming
While cities slow, communities surrounding Dublin and other job hubs continue experiencing rapid growth. Lucan and Tallaght saw major price jumps in 2023’s final quarter as buyers chased affordability. With mortgage approvals hitting 80% in commuter counties, these areas feel primed for another strong year.
Limited supply amidst ongoing demand from first-time buyers, remote workers, and investors means commuter belt counties seem positioned to again outperform urban markets in 2024 in the 3-5% growth range.
Regional Markets Holding Steady
Outside of the Greater Dublin Area, most regions saw modest quarterly gains of around 0.5% in late 2023. Agents expect this stability to continue into 2024, with average prices in cities like Galway and Limerick forecast to remain largely unchanged barring an economic shift.
With remote work trends opening up new local buyer pools, I do expect slightly stronger demand in select regional markets in 2024. But supply remains sparse countrywide, limiting price growth apart from some rural hotspots.
An Uncertain Economic Outlook
Of course, forecasts can change quickly if Ireland’s economic tailwinds fade. With inflation still elevated, energy volatility, and weakening consumer sentiment, risks loom of an economic slowdown. A recession could dent buyer demand enough to stall price growth in 2024.
Barring a sharp downturn, average values likely continue inching upward nationwide next year, though at a more moderate pace than the over 10% annual gains seen back in 2021-early 2022. Home shortages persist, but affordability limits may finally slow runaway housing inflation.
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