Residential property prices rose by 8% over past year

Prices continue to rise at a higher rate outside of Dublin (up 8.6%) than in the capital (up 7.5%).

Property prices rose by over 8% in the 12 months to January, new figures show, after the Central Bank’s latest forecasts show it estimates the Government will miss its housing targets over the next three years.

The Central Statistics Office’s latest property price index shows that the median price of a home sold in Ireland was €359,999 in the last year with prices now significantly higher than their Celtic Tiger peak.

Prices continue to rise at a higher rate outside of Dublin (up 8.6%) than in the capital (up 7.5%) with double-digit inflation in the regions covering Cork, Kerry, Clare, Limerick, Tipperary, Mayo, Galway and Roscommon and the border counties.

Comparing the movement in house prices in recent years, inflation has accelerated significantly since the county emerged from the covid-19 pandemic.

In the 12 months to January 2021, the median price of a home in Ireland was €261,000. This rose to €305,000 in the 12 months to January 2023 and now stands at just under €360,000.

The median is the middle figure in a row of numbers sorted from top to bottom, as opposed to the average.

Irish Mortgage Advisors chairperson Trevor Grant said the latest figures again show that buying a house has simply become “unachievable” for too many of the country’s young people.

“If house prices are ever to be kept in check, the perennial problem at the heart of the Irish housing crisis — that is, the huge shortage of, and high demand for, housing — needs to be tackled,” Mr Grant said.

“[We need] an exponential increase in the number of new homes being built.  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.” 

Central Bank forecasts

It comes after the Central Bank revised its forecasts on how many homes will be built in the coming years downwards in its latest quarterly bulletin.

It said that housing completions are forecast to be 35,000 in 2025, 40,000 in 2026, and 44,000 in 2027.

These estimates are a significant shortfall on Government targets. Agreed just before the election, the Government had set a target of 41,000 for 2025.

It also comes after just over 30,000 homes were built in Ireland last year, despite claims from Government ministers before the election that the figure would be closer to 40,000.

“Several factors are restraining housing supply including low productivity in the construction sector, delays in utility connection, delays in the planning system and a shortage of zoned and serviced land in high-demand areas,” the Central Bank said.

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It added there was uncertainty over how many of homes commenced over the last year would result in fully-built homes by the end of 2027.

The Irish Examiner previously reported that the Department of Finance has even cast doubts on whether the Government's much touted figures can be used as an accurate measure of how many homes will be built in the coming years.