House prices to rise, pay to increase by 2.5%, says Central Bank

Supply constraints will likely continue to drive home prices higher at a time when pay increases will rise at a modest rate, Central Bank forecasts suggest.

Amid a shortage of building starts, home prices will rise as “demand supported by the more favourable labour market” places “upward pressure on prices”, it said.

The latest CSO figures showed residential prices across the State rose 6.5% in the year to November, and rose 3.3% in Dublin.