2024 proved to be highly favourable for sellers and owners of residential properties in Dublin, though it presented significant challenges for prospective buyers. In January of last year, I anticipated a modest increase in Dublin property values of 1% to 2%. However, the outcome far exceeded expectations. Supported by robust buyer demand, a strong economy, full employment, and declining interest rates, coupled with insufficient supply to meet demand, property values in our key markets experienced an approximate 7% increase.
In the rental sector, market dysfunction persisted as landlords continued to exit, and there was a cooling in rental inflation in 2024 driven by the completion of several build-to-rent developments, hybrid working and a slowdown in the multinational sector. Below, we present key trends derived from our 2024 sales and lettings data, alongside insights and projections for 2025.
Sales Market Trends 2024
Strong price inflation
As stated, property values in our key markets experienced an average increase of 7%. However, the performance varied significantly depending on property type, location, and price range. Houses in South Dublin saw a notable rise of nearly 10%, whereas apartments in the city centre and Docklands recorded a more modest increase of approximately 4%. Bidding wars remained a consistent trend throughout the year, particularly in the sub-€500,000 price range, where first-time buyers were most active. Houses, especially those in turn-key condition, performed exceptionally well, with some achieving sale prices up to 20% above the asking price. Our average selling price for the year was €608,220, representing a 5% increase compared to 2023.
Supply Constraints
A major driver of price inflation in 2024 was the persistent imbalance between supply and demand. While the number of properties listed for sale increased by 3% compared to 2023 (15,095 versus 14,626, according to Myhome.ie), this supply was far from sufficient to meet the demand. Notably, the availability of properties for sale was 25% lower than in 2019, further exacerbating the pressure on prices.
First time buyers dominant as investor demand weakens
In 2024, 82% of our buyers were owner-occupiers, with first-time buyers comprising 66% of this group. The average age of buyers continued to rise, reaching 43 years, compared to 39 years in 2023. We observed a notable increase in transactions by buyers trading down, rising to 12% from just 4% in the previous year. This trend reflects homeowners capitalizing on record property values and transitioning to brand-new A-rated apartments, the supply of which expanded in 2024.
Investors accounted for only 18% of our buyers, marking the lowest figure recorded in 17 years. This decline can be partially attributed to the sale of rent-capped properties, as most investors prioritize properties that can be rented at market rates. Notably, a significant portion of these investors are purchasing through pension funds.
Cash Buyers and International Influence
Cash buyers remained a significant force in our markets, accounting for 56% of transactions in 2024, up from 42% in 2023. Many of these buyers utilized funds from property sales, inheritances, or business exits. Additionally, 38% of our buyers were non-Irish, highlighting Dublin’s cosmopolitan appeal and its strong attraction for professionals employed by multinational companies. It is particularly encouraging to see more expatriates establishing permanent roots in Dublin, contributing positively to the city’s diverse and dynamic community.
Postcode Highlights
Dublin 4 recorded the highest average selling price among our markets at €689,000. However, Dublin 6 stood out with the highest price per square foot, averaging €762. Additionally, Dublin 6 achieved the fastest selling times, with properties spending an average of just 4.4 weeks on the market, and the highest variance above asking prices at 10%—nearly double the 5.7% variance observed in Dublin 1.
Sales Metrics
The average selling price across all our transactions in 2024 was €608,220, an increase from €576,916 in 2023. Notably, 74% of our properties sold for prices above their asking price. The average variance above asking was 8%, the highest we have ever recorded, with properties in the €500,000 to €1 million price range achieving an average of 9% over asking. Selling times remained swift, averaging 6.8 weeks, with some properties selling within just a couple of weeks. However, there was a notable rise in the number of sales falling through, reaching 12%.
Lettings Market Trends 2024
Persistent Supply Crisis
The lettings market continued to grapple with an acute supply shortage, particularly in the sub-€2,000 per month segment. With 65% of sellers being landlords exiting the market, the reduction in available rental stock further exacerbated the crisis. Investor activity remained subdued, accounting for only 18% of purchases, as regulatory and financial disincentives persisted.
Extra supply has an impact
The average monthly rent in our portfolio rose modestly in 2024 to €2,740, representing a 1.2% year-on-year increase. This restrained growth was primarily driven by the addition of new Build-to-Rent (BTR) developments competing for the same pool of tenants.
In the Dublin Docklands and city centre, where several new BTR developments entered the market, the competition resulted in inducements for tenants, creating a tenant-friendly market in the first half of the year. In some cases, rents were lower than those achieved in 2023, underscoring the potential of BTR to positively influence the rental market. By Q3, however, the market reached greater equilibrium between landlords and tenants as occupancy levels increased.
The Docklands rental market serves as a case study for what the BTR model could achieve in addressing Dublin’s housing needs. Unfortunately, for renters, only one new development is expected to come to market in the Docklands within the next 12 months. While interest rates are now falling, and demand remains robust, new BTR construction activity is not picking up as it should and needs to. Instead, developers face significant challenges due to unreliable market conditions, particularly in terms of planning and government policy. Just as the BTR sector was beginning to demonstrate its potential, these obstacles have severely hindered progress, squandering an opportunity to stabilize and improve Dublin’s rental market.
After a challenging first six months there was a very strong pick up in activity at the upper end of the rental market, especially for corporate houses and penthouses.
Tenant profile
The typical tenant in our portfolio is 34 years old, originates from continental Europe, works in the technology sector, and earns an individual salary of €75,000. Hybrid working continues to exert a significant influence on the Dublin rental market, particularly in central Dublin and the Docklands.
In 2024, 43% of our tenants were employed in the technology sector, a decrease from 49% in 2023 and considerably lower than the 60% recorded in 2022. This decline aligns with Ireland’s position as the country with the second-highest level of remote working in Europe. The financial services sector comprised the second-largest group of tenants, accounting for 17% of the total.
The average tenant household salary rose to €154,150 in 2024, an increase of €10,000 compared to 2023, reflecting the strong earning potential of those renting in Dublin’s competitive market.
Outlook for 2025
Sales Market
We anticipate property prices to experience growth in 2025, albeit at a more moderate pace compared to 2024. Despite projections that the European Central Bank will reduce interest rates multiple times, affordability pressures are likely to temper significant price increases. Values are high, affordability challenges will persist, particularly for buyers in higher price brackets.
Price growth is expected to be strongest in lower price ranges, driven by robust first-time buyer activity. Family homes in prime condition will continue to be in high demand and are likely to command strong competition.
Developers may shift toward ‘build-to-sell’ models in response to the declining activity in the ‘build-to-rent’ sector, which could provide much-needed supply in core markets.
We estimate property values will increase by 4% to 5% in 2025, though we remain cautious in our projections—especially given our underestimation of last year’s market performance!
Lettings Market
The lettings sector is expected to remain under significant pressure in 2025, driven by a persistent supply-demand imbalance and limited availability of new rental stock.
Tenant demand is likely to continue shifting toward energy-efficient properties and those offering premium amenities, particularly as hybrid work arrangements become more entrenched. This trend highlights the growing importance of sustainability and convenience in tenants’ decision-making.
Nevertheless, without meaningful incentives to retain landlords in the market, the ongoing exodus of rental property owners is expected to persist, further straining supply and maintaining upward pressure on rents. Addressing these structural issues will be critical to achieving a more balanced and sustainable rental market.
Conclusion
The Dublin residential property market remains highly segmented, with divergent trends influencing the sales and lettings sectors. First-time buyers and cash purchasers continue to be the primary drivers of activity in the sales market, while the lettings sector grapples with persistent supply shortages and ongoing policy challenges.
As we look ahead to 2025, it is clear that this will be another pivotal year for Dublin’s property market, necessitating innovative solutions and forward-thinking policy measures to effectively address the city’s housing crisis. At Owen Reilly, we remain steadfast in our commitment to navigating these complexities and delivering exceptional results for our clients in an ever-evolving market.
Owen Reilly, 29th January 2025.
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