House price drop forecast for Kilkenny in amid market supply warning

The price of an average family home in Kilkenny is set to fall by up to 5% in the coming months. That’s the prediction of estate agents Real Estate Alliance (REA) following a national survey.

It’s a positive piece of news for potential home buyers alongside a second national survey that property prices in Kilkenny have stayed steady during the last quarter. This is according to the latest MyHome.ie Property Price Report.

However, with supply now close to the historic low of the pandemic, supply shortage is now a ‘very real issue’, say experts.

According to the MyHome.ie report for Q4 2023, in association with Bank of Ireland, the median asking price for a property in the county is still €245,000. This means prices have risen by €5,000 compared with this time last year.

Asking prices for a three-bed semi-detached house in the county also stayed steady over the quarter at €225,000. This means that prices in the segment are unchanged compared to this time last year.

Meanwhile, the asking price for a four-bed semi-detached house in Kilkenny rose by €15,000 over the quarter to €310,000. This price is down by €2,500 compared to this time last year.

This despite a fall in available properties. MyHome.ie report that there were 278 properties for sale in Kilkenny at the end of Q4 2023 – a decrease of 4% over the quarter.
The average time for a property to go sale agreed in the county after being placed up for sale now stands at nearly four months.

Predicted price drop
Looking forward to the coming year, however, the price of the average second-hand three-bed semi in Kilkenny City is predicted to decrease by up to 5% in 2024, with prices across the county expected to fall by 1%, according to a national survey by Real Estate Alliance.

REA county agents reported that first time buyers made up 45% of the market in Q4, with 13% of sales coming from outside the county, and 18% of sales attributed to landlords selling properties.

By the end of 2023, the price of the average three-bed semi in Kilkenny City rose by 9.7% to €340,000, while agents in Callan reported an annual increase of 2.3% to €220,000.

“We are currently seeing a market which is relatively stable when it comes to this type of property,” said Michael Boyd of REA Boyd’s, Kilkenny. “I expect that the start of 2024 will be similar to last year and quite steady.
“Interest rates have affected the market, but they may reduce in the first quarter of 2024. We are also seeing landlords continue to leave the market.”

The REA Average House Price Index concentrates on the actual sale price of Ireland’s typical stock home, the three-bed semi, giving an accurate picture of the second-hand property market in towns and cities countrywide.

Author of the MyHome.ie report, Conall MacCoille, Chief Economist at Bank of Ireland, said the housing market went through a period of change in 2023, with asking prices under pressure at the start of the year.

“Continuing supply issues meant that the market heated up again and by year end we saw once again that asking prices nationally were up over 4% over the year as a whole. Furthermore, we are seeing properties being sold for 4% over asking prices compared with 1% at the start of the year, indicating a more competitive market.

“Ireland’s buoyant labour market has meant that high interest rates have not had a negative impact on property prices. Indeed, Revenue estimates that there has been a 50% rise since 2022 in the number of tax units (single or jointly assessed couples) with incomes exceeding €100,000.

“As for next year, our view is that the most likely outcome is another single digit rise in house prices over the course of the year.
“There will again be competing pressures on prices coming from elevated rates of interest on the one hand and continuing supply shortages on the other. If anything, the rise may be sharper given the supply issues and the possibility – despite mixed signals from policymakers - of interest rate reductions happening at some point during the year.”

Supply Shortage
Joanne Geary, Managing Director of MyHome.ie, said: “Supply shortage is now a very real issue. Pre-Covid, there were about 20,000 homes listed on MyHome.ie. At the end of Quarter 3, that was down to 13,400. But at the end of Q4 the number of listings was down again to just 11,400. That is close to the historically low levels we saw during the pandemic.

“We welcome the recent extensions and changes to the Help to Buy and First Home schemes, as well as the grant available for vacant, derelict homes and for those looking to retrofit.
“That being said, more needs to be done to unlock supply as it will be real crisis issue for the market as we look to 2024 and beyond.”