Ireland was one of the 12 European nations that first began circulating the euro in 2002, so in a sense, it’s fitting that its economic and real estate fortunes are heavily tied to the current events of the trade bloc. The island nation’s housing market is nominally strong on the back of a few years of strong property-price appreciation. Ireland’s Central Statistics Office reported an annualized home-price gain of 8.4% in October 2018, which arrived on the heels of an 11.7% year-over-year increase in October 2017.
It’s a long-term trend that somewhat mirrors present-day conditions in the U.S. — strong demand met by constrained supply. In Ireland’s case, the world financial crisis in the late 2000s subsequently triggered a meltdown of both the domestic property market and the construction industry, leading to sluggish building for years, even after the recovery. From a social standpoint, the collapse led to affordable-housing issues that the country grapples with even today, especially in the capital city of Dublin. The average rent for a one-bedroom apartment in Dublin last year was one of the most expensive among European Union capitals — only London commanded a heftier monthly price, according to Eurostat.
Meanwhile, Ireland’s economic recovery kicked off in 2014 and hasn’t looked back, giving rise to an eager homebuyer population constrained by limited options. As recently as September 2018, for example, Standard & Poor’s predicted that Irish home prices would rise at the fastest rate in Europe for the subsequent four-year period.
Recent news from the Emerald Isle, however, has reined in the talk of Ireland’s sizzling housing pace. A third-quarter 2019 report from Daft.ie, Ireland’s largest property website, effectively proclaimed the lengthy period of price gains over in many parts of the country. Nationwide, annual growth of list prices was only 0.1% during the third quarter, with prices in Dublin 0.6% lower on a year-over-year basis — the first time in 25 quarters that Dublin’s home prices had receded.
Just like in the U.S., much of the story has revolved around economic uncertainty. In Ireland’s case, it’s the U.K.’s messy divorce from the European Union that is causing question marks to sprout. Ireland’s neighbor to the east has, as of this past October, yet to negotiate a Brexit blueprint, and the volatility has dampened the eagerness to purchase homes in Ireland.
According to CBRE’s 2019 outlook report, Dublin’s office market was on track for a third consecutive year of record-breaking sales. The real estate services company anticipated healthy levels of foreign investment over the course of the year. The bulk of new jobs created nationwide were expected to be in the Dublin area, but employment gains also were expected to positively impact the office markets in cities such as Cork, Galway and Limerick.
Dublin’s industrial and logistics sector saw solid growth in 2018, CBRE reported, following a decade of speculative-investment shortages. Rent prices for prime industrial properties in Dublin rose by 6.5% last year. Online sales comprise 11% of the nation’s overall retail sales, and CBRE expected tenant demand in the industrial and logistics sector to be fueled by e-commerce, pharmaceutical and food-manufacturing companies.