Demand for cost-rental homes soars as house prices rise 6.5% in a year

The latest property price index from the Central Statistics Office shows that property price inflation reached its lowest level since February 2024 in March with households paying a median price of €390,461 for a home in the last 12 months. File picture

The cost of buying a home in Ireland rose 6.5% in the last year, new figures have shown, as prospective buyers were warned that sky high prices will remain despite inflation easing.

The latest property price index from the Central Statistics Office shows that property price inflation reached its lowest level since February 2024 in March with households paying a median price of €390,461 for a home in the last 12 months.

However, the rise still means first-time buyers have to raise larger deposits with the average cost of a new build home rising almost €20,000 in the last year.

The figures show prices continuing to rise at a faster rate outside of Dublin, at 7.2% compared to 5.7% in the capital. In the south-west area, covering Cork and Kerry, prices rose just 3.6% but surged by 13.4% in the Midlands while apartments everywhere are increasing at a higher rate of 9.1%.

Compared to historical trends, house prices are now 25% above their Celtic Tiger peak while they are a huge 178.8% up on the low reached in early 2013.

The national Residential Property Price Index increased by 6.5% in the 12 months to March 2026https://t.co/K9a4k0k5zl#CSOIreland #Ireland #Housing #HousingConstruction #HouseBuilding #NewDwellings #PropertyPrices #HousePrices #PlanningPermissions #IrishBusiness pic.twitter.com/CfM1wpRBbQ

— Central Statistics Office Ireland (@CSOIreland) May 13, 2026

“Respite from high prices would not appear to be on the horizon, given the fact that demand is still way out of sync with supply, and the risk of rising inflation is further hampering supply,” Brokers Ireland deputy chief executive Rachel McGovern said.

She said that many who have purchased could not have done so without the aid of State schemes like help-to-buy or family support while tenants are in a “catch-22” with the cost of rent exceeding what they would be paying back in a mortgage.

Ms McGovern added: “Government measures to bring down the cost of building homes is the only realistic prospect even if it means embracing politically unpalatable tax breaks.” 

Trevor Grant, chair of Irish Mortgage Advisors, said the ease in inflation was welcome and comes as the number of homes being built is already on the rise this year.

“If this momentum in house building continues, house price inflation should continue to ease and homes should hopefully become more affordable for the many who have been priced out of the market so far,” he said.

Cost-rental homes

It comes as an approved housing body said on Wednesday that demand for cost-rental homes is surging across the country as the numbers sought significantly exceed supply.

Figures from Tuath Housing showed that there were 30,868 applications made for just 135 homes delivered to date this year, which is over 200 applicants per home.

“A continued focus on reducing delivery costs across the sector — including among developers, contractors and all stakeholders — will be essential if we are to deliver cost-rental at the scale that is needed,” Tuath Housing chief executive Sean O’Connor said.