The Irish property market has experienced a period of significant change in recent years. Following the 2008 financial crisis, the market saw a sharp decline, followed by a period of gradual recovery. As we enter 2024, experts offer a mixed outlook, with some predicting a continued rise in prices and others emphasizing a potential for stabilization. Let’s delve deeper into the factors shaping Ireland’s property market in 2024.
Signs Pointing Towards Growth
Several indicators suggest that the Irish property market could witness continued growth in 2024:
- Persistent Demand: Despite a series of interest rate increases in 2023, demand for property has remained resilient. Transaction volumes are expected to stay consistent with 2022 levels, indicating a sustained interest in buying despite rising borrowing costs.
- Supply Shortage: A significant supply deficit continues to plague the market. New dwelling completions in 2023, estimated to reach 34,000 units, represent the highest annual level since the “Celtic Tiger” period. However, this is still insufficient to meet the growing demand, pushing prices upwards.
- Positive Migration Trends: Ireland has witnessed a positive net migration trend for several years, with this trend expected to continue in 2024. This influx of people, particularly young professionals, fuels demand for housing across various tenures, from rentals to owner-occupied properties.
- Economic Optimism: While global economic uncertainty exists, Ireland’s economy is projected to remain robust in 2024. This economic stability fosters a sense of security among potential buyers, encouraging investment in property.
Factors Encouraging Stabilization
While the signs for growth are undeniable, other aspects point towards a potential stabilization in the market:
- Interest Rate Hikes: The Central Bank of Ireland has raised interest rates several times in the past year, and this trend is expected to continue in 2024. Higher borrowing costs will likely dampen some buyer enthusiasm, potentially leading to a moderation in price increases.
- Government Intervention: The Irish government is actively exploring measures to address the housing crisis. Initiatives like increased funding for social housing and fast-track planning permission for specific developments could increase supply and stabilize prices.
- Increased Construction Activity: The rise in new dwelling completions in 2023 is a positive sign. If this trend continues, it could gradually address the supply shortage and prevent an unsustainable price boom.
- Market Maturity: The Irish property market has experienced significant growth in recent years. Some experts believe the market may be reaching a point of maturity, leading to a more measured pace of price increases.
What to Expect in 2024
It’s unlikely that 2024 will witness a dramatic property boom like the pre-crisis Celtic Tiger era. Experts predict a more balanced scenario, characterized by:
- Modest Price Increases: Average residential property prices could rise by 2-5% in 2024, a significant slowdown compared to previous years.
- Regional Variations: Price increases are likely to vary across regions, with higher growth expected in urban centers like Dublin and areas with limited housing availability.
- Focus on Sustainability: Demand for sustainable and energy-efficient properties will likely rise, influencing both construction trends and buyer preferences.
- Increased Rental Market Activity: The supply shortage may push more people towards the rental market, potentially leading to rising rents in some areas.
The future of Ireland’s property market in 2024 remains uncertain. While strong demand and economic stability might foster continued growth, rising interest rates, government intervention, and increased construction activity could lead to market stabilization. Ultimately, a balanced approach that prioritizes addressing the supply shortage while maintaining affordability is crucial for the long-term health of the Irish property market.
