Rising Irish house prices in June neared €370,000 median cost, with inflation at 7.8%
In the Irish real estate market, a significant increase in house prices has been observed since 2013, with national property prices rising by 166.9% from their early 2013 trough. This trend continues to escalate, causing concerns among industry experts and would-be home buyers.
Trevor Grant, chair of Irish Mortgage Advisors, has expressed his disappointment at the continued uptick in the rate of annual house price inflation. He believes that this increase is making houses increasingly unaffordable for many potential home buyers. In the second quarter, a 35% increase in housing completions is encouraging, but housing completions are still far from where they need to be, according to Grant.
The driving force behind Irish house price inflation, as per Grant, is the shortage of homes coupled with pent-up demand for housing and an expanding population. The Institute of Professional Auctioneers and Valuers (Ipav) chief executive, Genevieve McGuirk, shares this sentiment, expressing doubts about the Government's target of reaching 41,000 new homes this year.
The Central Statistics Office's (CSO) latest barometer indicates that prices in Dublin rose at an annual rate of 6.6% in June. Dublin prices have risen by 162% from their February 2012 low. The highest median price for a dwelling was €675,000 in Dún Laoghaire-Rathdown, while the median or middle price paid for a home in the 12 months to June was €370,000.
Goodbody economist Dermot O'Leary has pointed out that inflation between new homes and second-hand homes is different. Second-hand home prices are growing by 8.8% year-on-year compared to 4.2% for new homes in the second quarter. This trend suggests that the inflation trends overall are heavily influenced by the second-hand market due to the share of total transactions.
The current Minister for Housing in Ireland is Darragh O'Brien. The Central Bank expects at least one more rate cut in 2025, despite pausing its year-long policy easing cycle in July. In June, there were 4,029 dwelling purchases made by households at market prices, an increase of 13.1% on the same month last year. However, just 937 of these purchases were new builds.
Irish house prices have increased by 51% since 2020, according to Geowox data. The lowest median price for a dwelling was €190,000 in Leitrim. The headline rate of house price growth was unchanged from the previous month but down from over 10% last year.
The continued uptick in the rate of annual house price inflation is turning the hopes of home ownership into a pipe dream for many, according to Trevor Grant. As the Irish real estate market continues to evolve, it remains to be seen how the Government and industry stakeholders will address the challenges posed by soaring house prices.
