Irish Housing Market Cools as Asking-Price Inflation Falls to Two-Year Low
The rate of asking-price inflation for residential properties in Ireland has fallen to its lowest level in more than two years, according to new data published on 9 April, suggesting a potential stabilisation in a housing market that has seen rapid price growth in recent years.
Despite the slowdown in the pace of price increases, the market remains highly competitive for buyers. In March, the median property transaction was completed at 7 per cent above the original asking price, indicating that demand continues to significantly outstrip supply in many parts of the country.
Background
The Irish housing market has been one of the most challenging in Europe for prospective buyers over the past decade. A structural undersupply of housing has been the defining feature of the market, with housing completions reaching a 15-year high of 32,695 in 2023 — yet still falling well short of the estimated annual demand of 45,000 to 50,000 new homes. Ireland's population grew by 78,300 in the year to April 2025, adding further pressure to an already strained market.
The government's "Housing for All" plan, launched in 2021, has had mixed results. While overall housing completion targets were exceeded in 2022 and 2023, the plan has consistently fallen short of its social housing delivery targets. A successor plan, "Delivering Homes, Building Communities 2025-2030," has set a target of 300,000 new homes by 2030, but a significant drop in housing commencements in early 2025 has cast doubt on the feasibility of those targets.
Following a series of European Central Bank rate cuts in 2024 and 2025, average mortgage rates in Ireland have eased to around 3.58 per cent, providing some relief to buyers. However, with the ECB signalling a pause in further reductions, rates are expected to remain broadly stable in the near term. The average price-to-income multiple stands at a high 7.3, meaning affordability remains a significant hurdle for many first-time buyers.
Key Developments
In the first quarter of 2026, the annual rate of asking-price inflation in Ireland slowed to 4.7 per cent — the lowest in over two years. The moderation is more pronounced in Dublin, where asking prices rose by 2.9 per cent, while the rest of the country saw a 6.1 per cent increase. The national median asking price stands at €385,000, with Dublin at €450,000 and the rest of Ireland at €330,000.
Despite the cooling inflation, the market remains fiercely competitive. Properties are selling for a median of 7 per cent above their asking price and going "sale agreed" in just over a month — a pace that reflects the persistent imbalance between supply and demand. The second-hand market is particularly tight, with available stock at less than half of pre-pandemic levels.
Housing Minister James Browne has acknowledged that the pace of delivery needs to increase significantly and has indicated that further planning reforms are under consideration to streamline the approval process for new developments. Planning delays, construction cost inflation, and a shortage of skilled workers in the building sector continue to hamper progress.
Why It Matters
The cooling of asking-price inflation is a welcome development for prospective buyers who have been priced out of the market in recent years, but it should not be mistaken for a resolution of Ireland's housing crisis. The fundamental problem — a structural undersupply of homes relative to demand — remains unresolved, and the drop in housing commencements in early 2025 suggests that the supply pipeline may be weakening rather than strengthening. For renters, the situation remains particularly acute, with rents continuing to rise at a pace that is making it increasingly difficult for workers on average incomes to afford accommodation in major cities. The government's housing targets for 2026 will be closely watched as a measure of progress on a crisis that has become one of the defining political issues of the era.
Local Impact
The contrast with Northern Ireland is striking. While the Republic's market is cooling, Northern Ireland's housing market has had a strong start to 2026, outpacing the rest of the UK for the third consecutive year. Rising buyer demand, an increase in the number of homes for sale, and expectations of continued price growth characterise the Northern market, with a net balance of 69 per cent of surveyors anticipating further house price increases in the coming months. For those living and working across the border, the divergence in market conditions adds a further dimension of complexity to housing decisions — particularly for workers in the cross-border economy who may be weighing up options on both sides of the frontier.
What's Next
Property market analysts expect asking-price inflation to continue moderating over the coming months, though they caution that any significant reduction in interest rates could reignite demand and push prices higher again. The government's housing targets for 2026 will be closely watched as a measure of progress on the crisis. Read more at The Irish Times. Further data is available from the MyHome.ie Q1 2026 Property Report.
