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24th September 2024
09:54am BST
The Banking & Payments Federation Ireland (BPFI) has predicted that average house prices may soon begin to fall.
The news comes despite the fact that property costs surged by 7.3% between May 2023 and May 2024.
The BPFI released its latest Housing Market Monitor report, and it has indicated that the Irish property market may be approaching a turning point.
Speaking on Newstalk Breakfast, BPFI Chief Economist, Ali Ugur explained that housing output has remained stagnant in the first half of 2024, with fewer homes being completed compared to the same period in the previous year.
"It actually declined in the first six months of this year compared to last year," he noted, before saying that much of this slowdown was down to the time it takes to construct apartment buildings.
Ugur also emphasised that while housing construction activity has been good in recent years - particularly in terms of project commencements - those efforts are only now materialising in actual homes being completed.
Last year saw 32,695 homes built across the country, and the government believes that this figure will rise to approximately 40,000 by the end of 2024.
The increase in housing supply is expected to help ease property prices.
"We expect in the second half [of the year] the housing output to increase significantly,” Ugur said. He went on to say that he is optimistic that this surge in new homes will help bring down the average cost of buying a property.
"Hopefully, that will affect the average prices to bring them down in the second half of the year."
So, while property prices have risen sharply over the past year, the BPFI remains hopeful that the upcoming boost in housing output will ease pressures on the market and help stabilise or even reduce home prices in the months ahead.
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