House price inflation rose at an annualised rate of 7.6 per cent in September as ongoing supply shortages continued to fuel demand.
Property price inflation has hovered between 7 and 8 per cent for most of the year, down from the double-digit growth in prices seen last year. However, the headline rate is still ahead of average wage growth, meaning the purchasing power of buyers continues to be eroded.
The latest residential property price index, compiled by the Central Statistics Office (CSO), indicated that house prices in Dublin rose by 5.3 per cent in the 12 months to the end of September, down from almost 11 per cent in September last year.
House price inflation outside the capital was 9.4 per cent in September, marginally up on the 9.3 per cent recorded in September 2024.
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The median (or middle value) price of a home purchased nationally in the 12 months to September was €380,000. Dún Laoghaire-Rathdown had the highest median price – €675,000 – while the lowest was €190,000 in Donegal.
The CSO’s monthly barometer of prices comes in the wake of publication of the Government’s latest housing activation plan, which promises to lift supply by 300,000 units between now and the end of 2030, a challenging target given the recent slowdown in homebuilding.
The plan promises 90,000 starter homes over five years.
The CSO’s index notes prices of new homes in the third quarter were 5.5 per cent higher than in the corresponding quarter of 2024. This compared with an annualised increase of 4.3 per cent in the previous quarter.
Prices of existing homes were 8.1 per cent higher than in the corresponding quarter of 2024, down from an annualised increase of 8.8 per cent in the second quarter.
“Increasing house prices mean borrowers are taking on ever steeper levels of debt,” Rachel McGovern, Deputy Chief Executive at Brokers Ireland, noting that some of the now extended commuter areas like the Midlands were seeing price increases of 13.3 per cent. “While that is all fine while the economy is thriving, it would be a concern in a slowdown.”
“The uptick in the rate of house price growth will only add to the concern of aspiring buyers as it means houses are becoming even more unaffordable for them,” Trevor Grant, chairman of Irish Mortgage Advisors, said.
“With just over a month now to go until the end of the year, many prospective buyers will be accepting begrudgingly that 2025 has become yet another year in which they’ll have been unable to realise their dreams of home ownership,” he said.
