Ireland’s Housing Market: Navigating Affordability Challenges and Future Trends
The Irish housing market continues to present a complex picture, with prices steadily increasing despite a slowdown in the rate of growth. Recent data from the Central Statistics Office (CSO) reveals a national price increase of 7.4% in the year to August 2025, while December 2025 saw a 5.6% rise in Dublin and an 8.1% increase outside the capital. This sustained growth is placing significant pressure on affordability, particularly for first-time buyers.
Regional Disparities in Price Growth
The Dublin market remains particularly competitive, with median prices exceeding €500,000. However, significant variations exist within the city itself. Dún Laoghaire-Rathdown currently boasts the highest median price at €679,999, while Fingal stands at €475,000. Outside of Dublin, Wicklow commands the highest prices at €454,000, contrasting sharply with Donegal’s more affordable median of €195,000.
The Impact on First-Time Buyers
Brokers Ireland highlights the challenges faced by aspiring homeowners, who are increasingly reliant on mortgages and taking on greater levels of debt. Despite high rents often exceeding mortgage repayments, the barrier to entry remains substantial due to rising property values. The squeeze on purchasing power is a key concern, as wage growth lags behind house price inflation.
Fresh Construction and Government Targets
While new home completions increased by 20% to 36,000 in the past year, the pace of construction is falling short of the Government’s ambitious target of 50,000+ new homes annually by 2030. Forecasts suggest completions will reach 37,000, 40,500 and 44,500 in 2026, 2027, and 2028 respectively. A slowdown in commencements raises questions about the feasibility of achieving the long-term housing goals.
Expert Perspectives and Market Sentiment
Mortgage advisors note a positive sentiment among prospective sellers due to the recent uptick in house price growth. However, this trend exacerbates affordability concerns for buyers, particularly in areas with high demand and limited supply. The market is described as “dysfunctional” by some, requiring sustained intervention to address the imbalance between supply and demand.
Looking Ahead: Potential Trends for 2026 and Beyond
Experts predict a further 3-5% increase in house prices this year. Several factors will likely shape the market’s trajectory:
- Interest Rates: Fluctuations in interest rates will continue to influence mortgage affordability and buyer sentiment.
- Supply Chain Issues: Ongoing disruptions to building material supply chains could impact construction timelines and costs.
- Government Policies: Changes to housing policies, including planning regulations and incentives for developers, will play a crucial role.
- Economic Growth: Overall economic performance will affect consumer confidence and the ability to secure mortgages.
The Role of New Developments
The completion of large-scale residential developments will be critical in addressing the housing shortage. However, the speed of delivery and the affordability of these new homes will be key determinants of their impact on the market. The focus on delivering a diverse range of housing options, including apartments and smaller homes, will be essential to cater to different buyer profiles.
FAQ: Navigating the Irish Housing Market
Q: What is the current median house price in Ireland?
A: The national median price was €375,000 as of August 2025.
Q: Which county has the highest median house price?
A: Dún Laoghaire-Rathdown currently has the highest median price at €679,999.
Q: What is the forecast for house price growth in 2026?
A: Experts predict a further 3-5% increase in house prices this year.
Q: Is it better to buy or rent in Ireland?
A: First-time buyers often find that, long-term, buying is more financially advantageous than renting, given high rental costs. However, affordability remains a significant challenge.
Did you understand? The Residential Property Price Index (RPPI) is a key indicator of house price trends in Ireland, published monthly by the CSO.
Pro Tip: Consider exploring different regions and property types to find options that align with your budget and needs.
Stay informed about the latest developments in the Irish housing market by exploring additional resources on the CSO website and consulting with financial advisors.
