Following another turbulent year, we appear to be returning to a greater degree of normality in the wider economy. Inflation in Ireland fell to 2.3 per cent in November, edging closer to the ECB’s target of two per cent, and supply chains have mostly recovered following the invasion of Ukraine. However, risks do remain. We now find ourselves on the back of the most aggressive series of interest rate hikes in the history of the euro. Also, escalating tensions between the USA and China, and the conflict between Israel and Palestine remain causes for concern.
After two turbulent years, hopes were high that 2022 would see a return to normality. Unfortunately, it was not to be. The war in Ukraine and the associated economic challenges have all created increased uncertainty in all aspects of life. For property, the most direct impact of uncertainty was on construction. While house completions are expected to reach 26,000 this year, the anticipated precipitous recovery in supply in 2023 and beyond is now less likely. As such, a significant supply deficit will persist.