A Strong Labour Market Boosts Property Prices – MyHome.ie
Ireland’s strong labour market had a significant effect on the housing market, reducing the negative impact of high interest rates on property prices last year.Asking prices for properties nationally rose by over 4% through 2023, in Dublin and outside the capital.In this report by Myhome.ie, which was done with the Bank of Ireland, said much of this was due to a 50% rise since 2018 in those earning in excess of €100,000.”The strong labour market has meant that high interest rates have not had a negative impact on property prices,” said author of the report, Conall Mac Coille, Chief Economist at Bank of Ireland.The Revenue estimates that there has been a 50% rise since 2022 in the number of tax units (single or jointly assessed couples) with incomes exceeding €100,000.” For the full year the outcome was in marked contrast to the house price performance over the first six months when rising interest rates forced sellers to adjust valuations and reduce expectations for the prices they might receive.In the Q4 2023 report found that annual asking price inflation was 4.1% nationwide, 4% in Dublin and 3.9% in the market outside of Dublin. The report found asking prices rose marginally by 0.2% on the quarter in Dublin but fell by 0.4% nationally and by 1.2% outside the capital.This downturn is of similar magnitude to that which occurred in the same quarter last year and reflects the quieter winter months.
“Continuing supply issues meant that the market heated up again and by year end we saw once again that asking prices nationally were up over 4% over the year as a whole. 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.”
The average asking price for new instructions nationally in Q4 was €325,000. In Dublin it was €415,000 and elsewhere around the country it was €280,000.
In December the report also found that houses were being sold for 4% over asking prices.
At the beginning of the year that figure was just 1% and the shift is indicative of a more competitive market as demand outpaces supply.
In contrast just 1.4% of properties listed on MyHome cut their price in Q4 – the lowest proportion of price cuts for the final quarter of the year since MyHome.ie began collecting data in 2011.
On MyHome at the end of 2023, there were 11,600 properties for sale, down from 13,400 in Q3 – and well below the pre-pandemic figure of 20,000-plus. This equates to just 0.6% of the 2.1 million total homes in Ireland.
“Supply shortage is now a very real issue. Pre-Covid, there were about 20,000 homes listed on MyHome.ie. At the end of Quarter 3, that was down to 13,400,” said Joanne Geary, Managing Director of MyHome.ie.
“But at the end of Q4 the number of listings was down again to just 11,400. That is close to the historically low levels we saw during the pandemic.”
On a positive note, there were 30,700 housing starts in the twelve months to October – well up from the 27,000 recorded through 2022.
Looking now at 2024, Mr Mac Coille said his view is that the most likely outcome is another single digit rise in house prices over the course of the year.
“Again there will be competing pressures on prices coming from elevated rates of interest on the one hand and continuing supply shortages on the other,” he said.
” The rise may be sharper given the supply issues and the possibility – despite mixed signals from policymakers – of interest rate reductions happening at some point during the year”.
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