House prices rose at slower pace last year as supply dwindled

House prices rose at a much slower pace last year, despite a continued shortage of homes for sale.

The latest report from property website Daft.ie shows house prices increased by 3.4 per cent in 2023. In Dublin prices rose just 2 per cent, while Limerick saw a 9 per cent rise.

The average house price nationally in the closing months of last year was just over €320,000, 14 per cent lower than at the peak of the Celtic Tiger.

Just 11,000 houses were listed for sale on Daft.ie on December 1st, 27 per cent fewer than on the same date a year earlier.

"Housing prices are stabilising not because supply has increased to meet demand, but instead because demand has fallen to meet it," said Prof Ronan Lyons, the author of the report.

"Supply of newly built homes for purchase has certainly increased but the second-hand market, which is the larger share of the market, has been working in the other direction, buffeted by changed economic conditions," he added.

Pat Davitt, chief executive of the Institute of Professional Auctioneers and Valuers, said the same trends will continue into 2024.

He told Newstalk radio: "[Potential buyers] are not able to get enough money to get a mortgage despite the fact that they're able to show that they're paying a lot more rent than what a mortgage would cost, but they're still not able to borrow that extra money to be able to buy a property. And it's very unfortunate."