Last year, we continued our biannual GeoDirectory Buildings Reports which analyse our extensive database of over 2 million residential building records and the commercial building stock across Ireland. Here is a quick review of the findings from these four reports and the potential trends and challenges for the Irish property market in 2025.
Residential Property Market
Construction Activity and New Address Points: The GeoDirectory Residential Buildings Report for Q4 2023 indicated a 3.5% year-on-year increase in residential buildings under construction, with 22,777 units recorded in December 2023. This upward trend continued into 2024, with a notable 17.1% increase in new residential address points, totalling 31,384 by June 2024. However, the number of buildings under construction slightly decreased by 4.3% to 21,851 during the same period. This decline could be attributed to supply chain disruptions or economic uncertainties.
Vacancy Rates and Property Prices: The national residential vacancy rate remained relatively stable, dropping marginally to 3.9% by the end of 2023 and maintaining this level into mid-2024. Concurrently, property prices experienced a consistent rise, with the average house price increasing by 4.7% to €370,709 in 2023 and by 4.3% to €381,749 in 2024. These trends suggest a sustained demand for residential properties, contributing to a competitive market environment.
Commercial Property Market
Vacancy Rates: The commercial property sector presents a contrasting scenario. The national commercial vacancy rate reached a new high of 14.4% in June 2024, up from 14.1% in 2023. This increase was observed across 14 out of 26 counties, with the highest rates in the west, particularly Sligo (20.5%) and Donegal (19.4%).
Sectoral Distribution and Regional Disparities: The Accommodation and Food Services sector accounted for a significant portion of commercial units, especially in counties like Kerry and Clare. Dublin’s commercial vacancy rate stood at 13.3%, with notable disparities within the city itself. These figures highlight regional differences and sector-specific trends within the commercial property market.
Implications for 2025
Residential Market Outlook: The steady increase in residential construction and new address points suggests a robust pipeline of housing projects. However, the slight decline in buildings under construction in 2024 indicates potential challenges, possibly due to supply chain issues or economic factors. The stable vacancy rate and rising property prices point towards sustained demand, which could keep the market competitive and prices high.
Commercial Market Outlook: The rising commercial vacancy rates, particularly in the west, signal potential oversupply or declining demand in certain regions. This trend could lead to lower rental yields and increased pressure on landlords to offer incentives to attract tenants. The sectoral concentration in Accommodation and Food Services might also reflect broader economic shifts, such as changes in consumer behaviour or tourism patterns.
For 2025, the Irish residential property market is likely to remain strong, driven by ongoing construction and high demand. However, economic uncertainties and potential supply chain disruptions could pose risks. The commercial property market, on the other hand, may face challenges with high vacancy rates and regional disparities.
Look out for our 2025 property market reports in the coming weeks. If you would like to revisit any of our previous reports, you can find all the reports here.
Posted: 06/01/2025 12:23:53