House prices across Ireland rose by an average of 3.7 per cent during the first three months of 2025, with inflation reaching its highest level in eight years.
Latest data from Daft.ie shows typical listed prices have reached just over €346,000, a level 11.6 per cent higher than a year previously and 35 per cent higher than at the beginning of the Covid19 pandemic.
Price inflation has been aggravated, too, by a substantial decline in the number of second-hand homes available for purchase.
“The current rate of inflation in the market is the second-highest seen in the 10 years since mortgage market rules were introduced, exceeded only by the spike in prices seen in early 2017,” the property website said, publishing its latest Daft.ie House Price Report on Tuesday.
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Perhaps unsurprisingly, the surge in inflation is being driven by Dublin and Leinster – in the capital it is now running at 12.2 per cent, and at 13.4 per cent in the rest of the province.
Prices have continued to mushroom in other urban areas too – by 13.2 per cent in Galway and 13.8 per cent in Limerick, both far above the national average, and at rates of 11.2 per cent and 9.2 per cent in Waterford and Cork cities respectively.
“As before, the sharp increases in prices around the country are happening at a time of very tight supply,” it said.
Trinity College Dublin economist and report author Ronan Lyons said with prices increasing at a faster rate than almost any other time since mortgage market rules were introduced a decade ago, the lack of second-hand supply is a clear problem.
“Even as transactions of newly-built homes increase, the second-hand market is at its tightest in [this report] series going back almost two decades,” he said.
The number of second-hand homes available on March 1st stood at fewer than 9,300, a 17 per cent year-on-year reduction and the lowest total, ever recorded in the Daft.ie series dating back to January 2007.
The beginning of 2025 marks the only three months since then where there have been fewer than 10,000 second-hand homes available on the market.
“The latest surge in inflation is due, at least in part, to the well-flagged increase in interest rates, which saw existing homeowners fix their rates, often for many years, with consequences for liquidity in the second-hand market,” Mr Lyons said.
However, aside from upward movement in interest rates, he said the continuing housing deficit remained the primary issue.
“The mortgage market rules were introduced a decade ago to prevent a repeat of the loose lending that drove Ireland’s Celtic Tiger bubble and crash,” he said. “Nonetheless, prices are up 75 per cent since then, not because of too much credit but because of too few homes.”
Since 2012, house prices have grown in nominal terms by 126 per cent.
On Monday, Central Bank of Ireland governor Gabriel Makhlouf cast doubt on the Government housing policy while suggesting planning was the “number one” challenge.
Responding to reports that the Government was considering a move to ease lending restrictions on developers so they can invest more in housing, Mr Makhlouf said the Government should consider whether its many policies and interventions in the housing market were “mutually supportive” before introducing new ones.
“It’s obviously up to the Government to decide what policies it wants to put in place,” Mr Makhlouf said.
“My very strong advice to Government is that there are many interventions that they have already made, and are making, in the housing market, and my advice would be to take stock of all of those interventions, make sure they’re all mutually supportive of each other before introducing new ones,” he said.
