Property Insights by Johnny Gannon, Fair Deal Property
Ireland’s residential property market has developed a striking paradox that is becoming increasingly visible across the Galway property market. Over the past five years the country has built more than 180,000 new homes, yet the number of properties available for sale nationally has collapsed by roughly 50 percent, falling from about 24,000 homes on the market in 2020 to approximately 12,000 today.
At first glance this appears contradictory. If Ireland has been building thousands of homes each year, why are there fewer houses available to buy?
The answer lies not simply in construction levels, but in a deeper structural issue affecting the Irish second-hand housing market: the collapse of housing turnover. Understanding this dynamic is essential for anyone trying to interpret the direction of Galway house prices, the availability of homes across Galway city and county, and the broader trends shaping the Irish housing system.
Property markets function best when homes circulate regularly between buyers and sellers. This circulation is measured through housing turnover, the percentage of total housing stock that changes hands each year.
In Ireland today, annual housing turnover has fallen to around 2.8 percent of total housing stock.
To understand how significant that is, it helps to compare it with previous periods:
When turnover falls below a critical threshold, the housing market can enter a self-reinforcing cycle of paralysis.
Fewer homes listed for sale means fewer buying opportunities. When buyers cannot find suitable properties, many delay their plans to move. This further reduces the number of homes entering the market, which in turn tightens supply even more.
The result is exactly what we are witnessing today: record demand combined with historically low housing stock.
One of the least discussed dynamics in the Irish housing market is the hierarchy of buyers.
In competitive bidding situations there are typically three categories of buyer:
In practice, movers occupy a distant third place.
Cash buyers have complete flexibility. Mortgage buyers who are not dependent on selling a property can move quickly and with certainty. Movers, however, face complex timing constraints that place them at a major disadvantage.
A homeowner looking to move must typically sell their current home first before they can complete the purchase of another property. This creates a chain transaction where the success of the purchase depends on multiple parties completing sales simultaneously.
In competitive markets such as Galway city, Salthill, Knocknacarra, Oranmore, Claregalway and Athenry, sellers frequently favour buyers who can complete quickly without these complications.
Faced with the risk of losing out repeatedly, many potential movers simply abandon plans to move altogether.
This behaviour removes thousands of potential properties from the market.
The COVID-19 pandemic dramatically altered how people relate to their homes.
During lockdowns, houses stopped being simply places people left each morning and returned to each evening. Instead they became offices, schools, gyms and refuges all at once.
Research across several housing markets shows that this period created a phenomenon known as “place attachment” a stronger psychological bond between people and their homes.
This shift has had lasting consequences.
Many households that might previously have moved house have instead chosen to renovate, extend or adapt their existing homes rather than relocate.
Across Galway this trend is visible in the surge of:
Every household that chooses to upgrade rather than move removes another potential property from the second-hand housing market.
Demographic changes are also playing a significant role.
The average age of first-time buyers in Ireland is now around 38 years old, roughly a decade older than historical norms.
In previous generations, buyers might have purchased a starter home in their mid-twenties and moved again several times during their lifetime as their circumstances changed.
Today many buyers are entering the market much later in life, often purchasing homes that they intend to remain in for the long term.
This shift removes several traditional rungs of the property ladder:
When these stages disappear, housing mobility slows dramatically.
Another overlooked factor is that much of Ireland’s new housing never enters the second-hand market at all.
A substantial share of new homes are purchased by:
These homes play a vital role in providing social and rental housing, but they typically remain permanently outside the resale market.
Unlike owner-occupied homes, which may change hands several times over decades, these properties often remain within institutional ownership indefinitely.
This creates an unusual situation where Ireland is building homes, yet the stock of homes available for sale continues to shrink.
While supply circulation has slowed dramatically, demand has continued to rise.
Ireland has experienced exceptionally strong population growth over the past decade. Between 2015 and 2023, roughly four additional people were added to the population for every new housing unit built.
Recent migration trends have further intensified demand. These include:
Cities such as Galway have experienced particularly strong demand due to their combination of employment opportunities, educational institutions and quality of life.
These national dynamics are especially visible across the Galway housing market.
Galway continues to attract strong inward migration due to its thriving industries, including:
This economic base supports consistent housing demand across both Galway city and surrounding commuter towns such as:
However, the availability of homes for sale in these areas remains historically low, leading to intense competition among buyers.
Many Galway properties attract multiple bidders shortly after being listed, particularly well-presented family homes in established residential areas.
The result is a market characterised by low supply but sustained demand, which helps explain why prices have remained resilient despite broader economic uncertainty.
Increasing construction is clearly essential to addressing Ireland’s housing shortage. However, focusing solely on building overlooks the second major issue affecting the market: housing mobility.
Even if Ireland significantly increases housing completions, the market will remain constrained if existing homeowners continue to struggle to move between properties.
For the second-hand market to function efficiently, homeowners need financial tools that allow them to move without excessive risk.
One promising development is the emergence of bridge financing and equity-release products designed to help movers purchase their next home before selling their existing one.
A recent example is Bank of Ireland’s “Trade Down” mortgage product, which allows homeowners to secure a new property using both homes as temporary security.
If similar products become more widely available and affordable, they could dramatically improve housing liquidity.
Movers would be able to compete more effectively with other buyers, increasing the number of homes entering circulation.
The Irish housing crisis is often framed as a simple shortage of new homes.
In reality, it has two distinct components:
Both issues must be addressed if the market is to function properly.
Building more homes will increase overall supply, but improving housing mobility could unlock thousands of existing properties that currently remain outside the market.
For buyers searching for property in Galway city or county, the current environment means competition is likely to remain strong as long as stock levels remain low.
For sellers, however, the market conditions remain favourable. Well-presented properties in desirable locations continue to attract strong interest from motivated buyers.
Understanding these dynamics is crucial for anyone navigating the Galway property market in 2026 and beyond.
The collapse in housing stock is not simply the result of insufficient building. It reflects deeper structural changes in how Ireland’s housing market functions.
Until Ireland finds ways to restore mobility to the housing system, the second-hand market will remain tight, and the paradox of rising construction alongside shrinking resale supply will persist.
For more Galway property insights and market analysis visit:
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