Inflation slowing but record property prices means many are 'being outpriced'

House prices are now 2.5% higher than their Celtic Tiger peak, at a median price of €305,000 across the country. Picture: Denis Minihane

Property price inflation is continuing to slow, but the record prices being seen in the market means “many people are now being outpriced” from areas they hope to buy in.

The Central Statistics Office’s Property Price Index showed property prices rose 6.1% in the year to January 2023.

The national Residential Property Price Index increased by 6.1% in the 12 months to January 2023https://t.co/mWJMSUfeVQ#CSOIreland #Ireland #Housing #PropertyPrices #HousePrices #PlanningPermissions #IrishBusiness #BusinessStatistics #BusinessNews pic.twitter.com/FauoE47UPQ

— Central Statistics Office Ireland (@CSOIreland) March 15, 2023

The CSO’s latest stats also show a ramp-up in “non-household entities”, such as investment funds and real estate firms, buying homes in Ireland with the 13,519 purchased last year, a 15% rise on 2021. 

This included €365.9m spent on homes by non-household entities based outside of Ireland.

House prices are now 2.5% higher than their Celtic Tiger peak, at a median price of €305,000 across the country. Property prices have also risen 128.5% since their trough in early 2013.

The price of a home continues to rise at a faster pace outside of Dublin, with the border region of Cavan, Donegal, Leitrim, Monaghan and Sligo rising 10.1%. This compared to a 4.3% rise in the capital.

However, the cost of new builds are rising at a faster pace than second-hand homes, up 10% in the fourth quarter of 2022 compared to the same period in 2021.

The CSO data also includes a detailed breakdown on how house prices have changed significantly by Eircode over the last 10 years, as well as the number of homes bought in that area.

It shows house prices have been rising steadily in many areas for some time. In the T12 area covering the southside of Cork, the median price of a second-hand home was €230,000 in January 2018.

In January 2023, this had risen to €355,000 for a second-hand home.

On T23 on Cork’s northside, meanwhile, the rise has been less dramatic but still significant, from a median price of €180,000 for a second-hand home in January 2018 to €227,500 in January 2023. 

In the same time, a second-hand home in Cobh has risen by just under €100,000.

CSO statistician Viacheslav Voronovich said: “The lowest median price paid for a dwelling was €151,500 in Longford, while the highest was €630,000 in Dún Laoghaire-Rathdown.

“The most expensive Eircode area over the 12 months to January 2023 was A94 'Blackrock', with a median price of €755,000, while F35 'Ballyhaunis' was the least expensive at €127,500.” 

In January 2023, here were 3,675 homes bought at market prices, a rise of 4.4% on the previous year.

The Association of Irish Mortgage Advisors chairperson Trevor Grant warned the strong level of activity in the market could push the rate of Irish house price growth up again.

“While the rate of house price growth continues to slow, at 6.1% the rate of increase in national house prices is still strong,” he said.

“House price growth outside the capital continues to outpace that of Dublin, which is worrying because many people are now being outpriced in the areas which they had turned to after Dublin house prices climbed beyond their reach.

“This is why it is so important that the Government starts to hit its targets around housing supply because otherwise, house prices could start to spiral again.”