'Get more homes built': House prices soar 9% in 2024 as supply crisis deepens

The latest Daft.ie housing report shows house prices rose by 9% on average across the country last year, with the typical listing price nationwide standing at €332,109 in the last three months.

This increase was the highest since 2017, with Dublin driving the growth as its inflation outstrips the other cities. Prices are now 30% higher than they were at the onset of the covid-19 pandemic in 2020.

Trinity College Dublin economist Ronan Lyons, who authored the Daft report, said that “once again” it is a story of “weak supply and strong demand” in Ireland’s housing market.

“If the goal of policymakers is to ensure stable housing prices, then, this has been the least successful year for policymakers since 2017, when prices rose by roughly the same proportion,” he said.

“With incomes and employment growing, demand for owner-occupied housing is likely growing at close to 5% per year. But while the number of newly-built homes being transacted is increasing, it is growing much more slowly than demand.” 

In Dublin, the average list price rose 9% in the year to Q4 2024 and now stands at €442,909.

Cork prices rose 6.3% to €347,263 and Galway’s up 9% to €389,742, while Limerick City listed prices rose 8.2% to €284,138, and Waterford City’s rose 6.3% to €247,236.

Mr Lyons said that with significant growth in demand in recent years, a similar increase in supply is needed to keep pace with what is required.

But, he said, a “significant chunk” of the growth in construction over the past five years has been a combination of private rentals and, more recently, public and subsidised housing.

“There is nothing at all wrong with the number of homes being built for these tenures growing,” he said. “But in a country that needs more of all homes, more of some will not be enough.

“The number of newly homes transacted in the open market in the first nine months of 2024 was the highest on record, since the start of the Property Price Register in 2010. But, at just over 7,200, it was only marginally higher than the number transacted in 2023 – and indeed only 4% higher than the 6,950 transacted in the same nine months of 2018, a full six years ago.” 

In terms of housing supply, official data such as CSO statistics have suggested that Ireland will have fallen far short of the 40,000 new homes that the Government had touted would be built in 2024.

All parties pledged to significantly boost housing delivery in their election manifestos, while the Government has also pointed to the high number of commencements as reason for optimism heading forward.

In the secondhand market, meanwhile, the Daft.ie report said that the number of secondhand homes available to buy nationwide on December 1 stood at less than 10,500. This was down 15% compared to the previous year and the lowest total ever recorded in a series dating back to January 2007.

Mr Lyons said that this market has shrunk as homeowners locked themselves into fixed interest rates as these rates surged significantly in recent years.

He said the earliest of these interest rate “fixers” may have rolled off their fixed rates in late 2024 which may free them up in the market but there is only the “faintest hint” of that in the data.

“The new government could look to implement pro-competition measures in the fixed rate segment of the market, to try to speed up what will otherwise be a very slow return to normality over the next five years in the second-hand segment,” the Trinity economist added.

“The other solution, of course, is to get more homes built. Plus ça change.”