‘Rising property prices, supply shortages, and geopolitical uncertainty intensify housing market pressures’

Analysis by Sherry FitzGerald

Sherry FitzGerald, Ireland’s largest estate agent, today (April 4) reported a 2.3% increase in the average value of second-hand homes in Ireland during the first quarter of 2025.

Over the last 12 months, average property values have risen by 7.5%, underscoring the continued upward trajectory of the housing market.

Marian Finnegan, managing director, Sherry FitzGerald, stated: “The first quarter of 2025 witnessed sustained and robust price growth in the residential market. A critical factor underpinning this trend is the persistent shortage of supply in the second-hand housing sector, with stock levels reaching historic lows in January this year.”

Dublin experienced particularly strong price growth, with the average value of second-hand homes increasing by 2.6% in the first quarter. Annually, price growth in the capital reached 7.6%. While inflation in property prices outside Dublin was somewhat more moderate, it remained significant at 1.9% for the quarter, contributing to an annual increase of 7.3%.

Research conducted by Sherry FitzGerald earlier this year revealed that only 10,380 second-hand properties were listed for sale nationwide in January 2025. That figure represents just 0.5% of Ireland’s total private housing stock, highlighting the acute supply constraints that continue to affect transaction activity across the country.

A review of transaction activity for 2024 further illustrates the market challenges, as total housing sales contracted by 3.2% compared to the previous year.

Stamp duty records indicate that household buyers completed 48,617 housing transactions in 2024, down from 50,239 in 2023. Notably, second-hand market activity declined by 5.8%, and approximately 38,401 second-hand units were sold in 2024 – a direct consequence of the severe supply shortage.

Conversely, the new homes market demonstrated resilience, recording a 7.7% increase in transactions last year. Household buyers completed 10,216 purchases in this sector. The Greater Dublin Area (comprising Dublin, Kildare, Meath, and Wicklow) remained a focal point for new housing activity, accounting for 54% of all new home transactions.

However, overall housing completions fell to 30,330 in 2024, a disappointing decline amid the ongoing housing crisis. While early indicators suggest some improvement in completions this year, projections remain well below the estimated 62,000 units required to meet demand, which may further impact transaction activity in 2025.

Of particular concern, the trend of landlords exiting the market persisted into the first quarter of 2025, exacerbating challenges in the rental sector. During that period, only 8% of second-hand home buyers through Sherry FitzGerald were investors, while 30% of vendors were investors selling their properties.

Addressing that trend is crucial, and the government must carefully consider the forthcoming recommendations from the Housing Agency on rental caps to increase the stock of rental properties nationwide.

Marian Finnegan concluded: “The residential market in 2025 continues to grapple with persistent challenges. Declines in planning permissions, housing commencements, and completions, as highlighted in recent reports, emphasise the urgent need for government action to tackle the housing crisis.

“It is crucial to implement effective policies that drive sustainable supply growth. Moreover, given broader geopolitical challenges, prioritising investment in our physical infrastructure is more important than ever.”