The latest housing figures tell a familiar story of a market which is not working as it should. The latest survey from website Daft.ie shows asking prices up 9 per cent over the past year. This is in line with other recent evidence, for example the sales price data from the Central Statistics Office. All show little evidence of any easing of price pressures.
The underlying issue remains a supply of housing running well below demand. There has been some pick-up in new housing supply and in transactions in that part of the market. But supply in the second-hand market – which accounts for the bulk of purchases – remains low, leaving many potential purchasers frustrated and adding to price pressures.
The extent and persistence of the upward pressure on prices is concerning. In part, this is being fuelled by rising wages, which are allowing people to pay a bit more and – in the new homes market – by demand supports such as the Help-to-Buy scheme. The scale of increase in asking prices last year on the Daft.ie site was last seen in 2017 and despite the cumulative rise since then, prices just keep rising. Most forecasters expect something similar in 2025.
There are peculiarities in the second-hand market. The report points out that many people fixed their mortgages as interest rates started to rise in 2022. This can make it difficult to move before the fixed term is finished – an issue which the next government might address.
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However, its main challenge remains boosting supply across the board. Catching up with demand may look to be an impossible task. And the next administration may be tempted to plough on with current policies and hope for the best.
During the general election campaign, the two big parties in the outgoing administration – Fianna Fáil and Fine Gael – claimed that existing policies were working and could further increase supply. The reality is otherwise. Unless it accepts the scale of the housing emergency and responds to this, the next administration is destined to repeat the mistakes of the past.