With staggering national house price growth of almost 72% across the country over the past five years, Ireland is among the fastest growing property markets globally, and experts predict prices are set to climb further.
As Ireland’s economy continues to boom as it belatedly recovers from the recession, house prices have also soared, which is a double-edged sword as some homeowners benefit from the rising values while others struggle to get onto the ladder.
In Dublin, property prices have leapt by 88% over the past five years, which equates to an average of £130,000 per home, and the growth has created a rush of buyers who want to to purchase property before the prices rise any further.
Dublin is the frontrunner
However, the picture across the country varies massively, as other parts of the west and the midlands of Ireland haven’t seen such recovery and are still struggling with below average house price gains and swathes of empty homes. While demand is high in desirable parts of the country such as the capital and the east, which has pushed prices up, the lack of buyers in these other areas has kept values down.
Ronan Lyons, an assistant professor of economics at Trinity College Dublin, said: “In many ways prices increasing at the moment in Ireland is both a boom and a crisis. It’s a boom because the demand is there, population is going up, the economy is growing strongly.
“Those are all good things but they are translated into more housing demand. And if you don’t get the housing supply, you manage to turn the boom into a crisis.”
The future of Ireland’s property market
The latest Friends First Economic Outlook report has revealed that average house prices in Ireland are expected to increase by a minimum of 10% in 2019, due to the “significant shortage of owner-occupied housing, social housing and rental property“.
The report warns: “While the momentum in the Irish economy is very strong at the moment, it is important for policy makers and all other stakeholders to pay proper attention to the challenges, threats and vulnerabilities and plan accordingly.”
The solution to the imbalance between demand and supply is to remove the barriers to delivering more housing, states the report, which is a similar story to what we are seeing in the UK with the current housing shortage pushing prices up to a lesser extent.