New figures from estate agents Sherry FitzGerald show that the average value of second-hand homes in Ireland increased by 3.4% in 2023 during a year of "resilient demand".
But the 2023 growth rate was a notable slowdown on the growth of 5.7% recorded in 2022 and 9.6% in 2021.
In Dublin, values grew 2.7% in the year, compared to 5.2% in 2022 and 7.2% in 2021.
Sherry FitzGerald said that price growth continues to be stronger outside of Dublin, in regional and rural Ireland, where the stock for sale is significantly tighter. Average values nationally - excluding Dublin - rose 5.5% during the year.
The estate agent said that sales activity remained stable during the year, with transactions marginally ahead of 2022.
In the first nine months of 2023 - the latest data available - there were about 42,700 sales recorded on the property price register (PPR). This figure excludes block sales and new homes bought for social housing and represented an increase of 1.8% on the same time in 2022.
Sherry FitzGerald said that new homes sales continued to increase in 2023, with an additional 140 units or 2.1% sold compared to the same time in 2022. Growth appeared to be stronger outside of Dublin, where an additional 450 units transacted in in the first nine months of the year compared to 2022, it added.
Meanwhile, the second-hand market remains steady with 36,000 second-hand homes transacting in the first nine months of the year, 1.8% stronger than 2022.
The estate agents said that activity in the second-hand market is limited by a lack of stock coming to the market for sale.
"This may be attributed to the deficit of new homes delivered to the market over the past decade, which has had trickle-down effects throughout the entire housing market," it added.
Over 31,000 new homes are expected to be completed this year. But Sherry FitzGerald noted that not all of these units will reach the private market, as many are either self-builds or will be allocated to different housing initiatives set out by Housing for All and purchased by approved housing bodies.
It added that the expected completions figure remains far below the 52,600 units required every year for the next decade to satisfy latent demand in the market.
Marian Finnegan, Managing Director of Sherry FitzGerald, said that similar to previous years, 2023 was a year of resilient demand.
"Following the above trend price inflation evident during the post Covid era, we saw a return to more moderate price growth during, 2022 a trend which continued throughout 2023. This is expected to persist into 2024 with overall prices anticipated to increase by 2-3% in the year ahead," she said.
She noted that despite a series of ten interest rate increases over the past 16 months, the demand for various property categories has proven resilient, with transaction volumes slightly higher than those in 2022.
"Furthermore, price inflation has exhibited stability, with average values showing a modest growth of 3.4%, a trend expected to persist in the upcoming year," she added.
"While it is anticipated that house completions will average 31,000 this year, the preferred V-shaped recovery in supply has not materialised. Consequently, a significant supply deficit is likely to persist in the coming years," Ms Finnegan said.
"The scarcity of new supply has had a cascading effect, negatively impacting the volume of other properties entering the market. This trend is likely to endure or potentially worsen in the approaching year," she cautioned.
