Number of homes to buy at all-time low

THE number of homes available to buy nationwide has reached an alltime low, with high interest rates deterring people from selling up.

On March 1, there were fewer than 10,500 properties for sale, down 24% compared with the same time last year, and the lowest level since Daft.ie started its House Price Report 17 years ago.

The number of homes available to buy at the moment is just 40% of the 2019 average.

The fall in availability affects all major regions of the country and started in mid-2023, after 12 consecutive months of recovering supply following pandemic lockdowns.

Homeowners’ reluctance to surrender fixed term mortgages with relatively low interest rates, to buy a new house on a new higher rate loan, is one of the reasons cited by experts for the lack of turnover in the secondhand market.

Ronan Lyons, economist at Trinity College Dublin, said: ‘The new low in homes available to buy is driven by the second-hand segment and highlights the very tight conditions in the second-hand market across the country since Covid-19.

‘The number of homes being built has risen steadily. But interest rate increases have affected the recovery of the second-hand market.

‘As interest rates peak and then fall, and in particular as sitting homeowners roll off fixed rate mortgages, there should be an improvement in second-hand supply.

‘Availability is well below half the levels seen pre-Covid, meaning it may take years for second-hand supply to recover to normal levels.’

Between 2015 and 2019, there were on average over 24,000 second-hand homes on the market at any one point.

Then, between April 2020 and April 2021, lockdowns effectively closed the secondhand market, and the number of those homes on the market fell from 20,000 to 11,600. It recovered in 2022, rising from just below 10,000 in February to over 16,000 in November.

However, the trend reversed in 2023, most likely driven by interest rate increases, Mr Lyons said. That trend has continued into 2024. On March 1, there were just 9,700 second-hand homes on the market.

He noted that interest rates are expected to level off and maybe fall later in the year.

‘As that happens, and as existing homeowners come off their fixed rate mortgages, the supply situation ought to improve,’ he said.

David Hall, head of the Irish Mortgage Holders Organisation, said homeowners had been holding on to fixed rate mortgages, as well as being reluctant or unable to move during a cost-of-living crisis, and at a time when two banks have left the market. He said the ECB is expected to start to lower interest rates in June, which would help.

The Daft.ie report also

Increases higher outside Dublin

found prices rose by an average of 1.8% in the first three months of 2024. The typical listed price nationwide was €326,469, 5.8% higher than in the same period last year, and 30% higher than at the onset of the pandemic.

The report shows differences in trends across the country continue, with increases generally higher outside of Dublin. Prices in Dublin were up 3.2% in the first quarter of 2024 compared to last year, while in the rest of Leinster, the rise was 5%.

Prices in Cork city rose by 7.3% year-on-year, and in Galway city they rose by 9.4%.