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Are you thinking of investing in property in the land of Shamrocks? Are you unsure when would be the best time to proceed?
People have different thoughts about market timing. Your Irish friend might suggest that now is the worst time to buy property, whereas your relative who actually lives in Dublin may have a different opinion and suggest waiting for better opportunities.
At Investropa, when we create articles or update our pack of documents related to the real estate market in Ireland, we base our work on verifiable facts and concrete data rather than subjective opinions.
We have gone through official reports and government website statistics in great detail. As a result, we have created a reliable database filled with valuable information. Here's what we found, which can help you decide whether it's the right time to buy real estate in Ireland.
Ready? Let's go!
How is the property market in Ireland these days?
Ireland is, today, one of the most stable countries in the world
Positive
When evaluating real estate opportunities, prioritizing stability is essential as it fosters investor confidence and attracts sustainable development in the country. It is an information you need as a foreigner buying a property in Ireland.
You probably already know that Ireland is incredibly stable. The last Fragile State Index reported for this country is 20.8, which extremely high.
Ireland has a strong economy, with a low unemployment rate and a well-educated population. Additionally, the country has a long history of peaceful transitions of power and a commitment to democracy.
Investors can definitely rely on the country's stability for investment. Let's review the economic outlook.
Ireland is poised for strong growth
Positive
You have to check the country's economic health before making a property purchase.
As indicated by IMF projections, Ireland is likely to finish 2023 with a growth rate of 5.6%, which illustrates the country's rapid development. Regarding 2024, the experts say 4%.
The growth will continue to be there for more years to come since Ireland's economy is expected to increase by 18.2% during the next 5 years, resulting in an average GDP growth rate of 3.6%.
The expected sustainable growth rate in Ireland is a good thing for someone who wants to invest in real estate because it indicates that the economy is stable and likely to remain so in the future, allowing for long-term investments to be made with confidence. Additionally, it indicates that the value of real estate investments is likely to increase over time.
However, GDP growth is not the only metric to look at.
Irish business owners project resolute confidence in the economy
Positive
GDP growth is important, but may not reflect business community views on property market. Thankfully, in Ireland there is an official metric that is regularly reported. It's not the case for every country, so we're lucky.
The metric called the Business Consumer Index (BCI) assesses business leaders' confidence in the current and future economic conditions, based on surveys and assessments.
Based on The Global Economy's findings, the Business Confidence Index is currently at 23 for Ireland. For interpretation, this score is strong.
This trend is sound - optimism was already present 12 months ago. The score, back then, registered at 20.
When local businesses in Ireland are brimming with confidence about the future, it bodes well for property investors. It signifies a flourishing economy with increased job opportunities and higher incomes. This positive sentiment drives up the demand for properties, creating a favorable environment for investors to generate rental income and potentially experience long-term property value appreciation.
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Ireland is dispensing a lot more building permits
Positive
When determining whether it's a favorable time to purchase property in a country, it's helpful to take into account the quantity of construction permits issued. Increasing building permits indicate a positive outlook for the property market, instilling confidence.
We have excellent news to share with you: the number of building permits delivered is booming in Ireland.
Over the course of the past year, according to Central Statistics Office Ireland, the number of building permits granted by Irish local institutions rose by 12%, from 8,815 to 9,870 units.
Definitely, the data tells us that many people believe it's a favorable time to invest in real estate.
Keep in mind, however, that the domestic market will see an increase in the availability of real estate. Taking this into account, there is a chance that property prices will drop in Ireland in 2024.
House prices in Ireland reach a plateau after a period of growth
Positive
Ireland's home prices have increased by 28.4% in 5 years according to Central Statistics Office Ireland.
It means that if you had bought a cottage in County Kerry for $650,000 five years ago, then it would now be worth around $835,000.
In recent times, there has been a period of growth in house prices in Ireland, but now they are stabilizing
This is a clear positive sign. Property prices have been consistently rising, now they're more stable. It's a good time to consider an investment before the next phase of growth.
You can find a more detailed analysis of the real estate prices in our property pack for Ireland.
Everything you need to know is included in our United Kingdom Property Pack
Ireland's population is getting a lot richer
Positive
When you're looking to buy real estate, population growth and GDP per capita deserve careful consideration because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Ireland, the average GDP per capita has changed by 36.2% over the last 5 years. Almost no other country has achieved a higher level of success.
This means that, if you purchase a cozy cottage in the Irish countryside and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, the demand for rentals is predicted to increase in Irish cities such as Dublin, Cork, or Galway in 2024.
Rental yields are really attractive in Ireland
Positive
Rental yield is a common measure used to determine the returns of real estate investments.
It represents the annual rental income generated by a property divided by its purchase price or market value. For instance, if a property in Ireland is purchased for €300,000 and generates €18,000 in annual rental income, the rental yield would be 6%.
According to Numbeo, rental properties in Ireland offer gross rental yields ranging from 5.3% and 8.0%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Ireland.
Yields like these are rare to come by.
Also, as we have seen before, there might be a fall in housing prices (because of more available properties) and potential tenants are getting wealthier. Consequently, gross rental yields are very very likely to soar in Ireland in 2024.
Everything you need to know is included in our United Kingdom Property Pack
In Ireland, inflation is projected to remain moderate
Neutral
In two words, inflation is when prices rise.
It's when your customary pint of Guinness in Dublin costs 6 euros instead of 5 euros a couple of years ago.
If you're considering investing in a property, high inflation can bring you several advantages:
- Property values tend to increase over time, leading to potential capital appreciation.
- Inflation can result in higher rental rates, thereby increasing the cash flow from the property.
- Inflation reduces the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, preserving the value of the investment.
- Diversifying into real estate provides stability during inflationary periods.
As indicated by IMF projections, over the next 5 years, Ireland will have an inflation rate of 12.2%, which gives us an average yearly increase of 2.4%.
This data means that Ireland might experience inflation soon, so it's worth thinking about buying property now.
Is it a good time to buy real estate in Ireland then?
Now it's time to draw our conclusions.
Undoubtedly, 2024 presents a prime opportunity to invest in property in Ireland due to an array of compelling indicators. The country's exceptional stability solidifies its position as an ideal investment destination. Paired with the anticipation of strong economic growth, this stability ensures a favorable environment for property investment, fostering confidence in potential returns.
One of the most encouraging signals is the resolute confidence Irish business owners project in the economy. Their optimism underscores the robustness of Ireland's economic outlook, which bodes well for the property market's performance. Additionally, the notable increase in building permits being issued indicates a vibrant real estate sector, poised for expansion and innovation.
Another factor reinforcing Ireland's attractiveness is the plateauing of house prices following a period of growth. This stabilization prevents the risk of investing at the peak of a price surge, allowing buyers to make more informed decisions. As Ireland's population experiences increasing prosperity, the demand for properties could grow, potentially leading to property value appreciation over time.
Furthermore, the allure of Ireland's property market is bolstered by its highly attractive rental yields. These promising yields offer a lucrative income stream for investors, making the prospect of property ownership even more enticing. While the projected moderate inflation adds a neutral aspect to the equation, the overall positive signals suggest that 2024 is indeed an opportune moment to consider investing in Irish real estate.
We genuinely hope this article has provided you with helpful information.. If you need to know more, you can check our our pack of documents related to the real estate market in Ireland.
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This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
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