House price rises means first-time buyers 'unable to purchase home' 

In the 12 months to May 2024, the median price of a home purchased in Ireland stood a €335,000, with Dublin having median prices of €450,000 and just under €340,000 in Cork county.

Rapid inflation in house prices means first-time buyers are “constantly finding themselves unable to reach the point where they can finally buy a home”, as new figures showed property prices have risen by 8.2% in the last year.

The Central Statistics Office’s latest Property Price Index shows inflation for new homes remains high, while the price of second-hand homes is surging again.

In the 12 months to May 2024, the median price of a home purchased in Ireland stood a €335,000, with Dublin having median prices of €450,000 and just under €340,000 in Cork county.

Trevor Grant, the chair of Irish Mortgage Advisors, said the latest figures again highlighted the “mismatch” between housing supply and demand.

“Although housing supply is increasing, approximately only one-third of these new properties will be made available to private purchasers,” he said.

This lack of supply combined with the continued high level of demand and potentially falling interest rates is likely to add to house price inflation. 

"Furthermore, the shortage of new homes available to private buyers means many first-time buyers are bidding against trader-uppers/movers, which in turn is driving up second-hand prices.” 

Property prices are increasing at a faster rate in Dublin, rising 8.6% in the last year compared to 7.8% in the rest of the country.

House prices are now almost 10% above their Celtic Tiger peak, and a staggering 144.5% higher than their lowest point in early 2013.

While inflation for new homes peaked at 11% in the first half of 2023, it still remains high at 8.4% and is showing signs of levelling off. And, having actually fallen by 0.9% in the third quarter of 2023, inflation in second-hand homes is rising sharply again, with a 5.7% rise in the first quarter of this year.

Following on from existing trends, more than half of house purchasers (52.9%) in the last year were former owner-occupiers while just over a third (35.2%) were first-time buyers.

The figures showing sharp increases in house prices came a day after the Government lauded its latest progress report for the Housing for All plan.

Taoiseach Simon Harris said there were “some very encouraging signs” given we have now seen more than 52,000 new homes commence construction in the 12 months to the end of May.

“We are confident to say that we will exceed our output targets for 2024 and this indeed will be the third year in a row that we have exceeded the target,” he said.

“This is good progress, but it also provides a good platform from which we can further scale up our delivery to meet future demand.” 

The Government has acknowledged, however, that its housing targets will need to be revised significantly upwards to meet the scale of what is required to meet the needs of the population.

A new goal of more than 50,000 a year is expected to be revealed later in the year. It comes after recent separate reports from the independent Housing Commission and the ESRI warned significantly more homes will be required in the coming years.

The Housing Commission estimated Ireland is short up to 256,000 homes, while the ESRI said up to 53,000 homes would be needed each year but that did not even count pent-up demand in the market.