The Irish property market in the first quarter of 2025 has experienced notable shifts, characterized by rising property prices, constrained housing supply, and evolving dynamics in both the residential and commercial sectors. This comprehensive overview delves into these trends, offering insights into the factors influencing the current landscape.
Surge in Property Prices
Nationally, property prices have seen a significant uptick. The Central Statistics Office (CSO) reported an 8.1% increase in the Residential Property Price Index (RPPI) in the 12 months leading up to January 2025. Dublin experienced a 7.5% rise, while areas outside Dublin saw an 8.6% increase during the same period. The median price for a dwelling nationwide was €359,999, with Dún Laoghaire-Rathdown recording the highest median at €662,349, and Leitrim the lowest at €180,000.
Further emphasizing this trend, the latest Daft.ie House Price Report indicated that housing prices rose by an average of 3.7% in the first quarter alone, culminating in an 11.6% year-on-year increase. Dublin’s average house price reached €460,726, marking a 12.2% rise, while Limerick City saw the highest annual increase at 13.8%, bringing the average price there to €300,253.
Constrained Housing Supply
A critical factor driving these price increases is the limited housing supply. As of March 1, 2025, fewer than 9,300 second-hand homes were available for purchase nationwide—a 17% decrease compared to the same period in the previous year and the lowest level since records began in 2007. This shortage has intensified competition among buyers, further propelling price escalation.
Regional Disparities
The impact of these trends varies across regions. In Wexford, for instance, house prices have surged by 14% compared to the same period in 2024, with the average home now priced at €314,000—54% higher than at the onset of the COVID-19 pandemic. This significant acceleration contrasts with the previous year’s modest 4% increase.
Challenges in Housing Development
Efforts to address the housing shortage have encountered obstacles. In 2024, the number of homes built in Ireland fell by 7% to just over 30,000. The Central Bank forecasts that the government’s targets to increase supply to 50,000 homes annually over the next three years will not be met, citing planning regulations as a primary barrier. Central Bank Governor Gabriel Makhlouf emphasized that “the number one issue on housing is not financing. The number one issue on housing is planning; it’s absolutely planning.”
Rental Market Dynamics
The rental market continues to grapple with challenges. Despite the introduction of rent pressure zones in 2016, which cap annual rent increases at 2%, supply constraints persist. Eddie Byrne, CEO of Irish Residential Properties REIT (IRES), criticized these rental caps for limiting property supply, as the government considers reforms to tie rent increases to rates of comparable properties in the region.
Commercial Property Sector
In contrast to the residential sector, Dublin’s office market is showing signs of resurgence. Major companies are seeking substantial office spaces, with State Street pursuing 70,000 square feet and Meta Platforms finalizing deals with new tenants at its Fibonacci Square development. This renewed interest suggests a recovery in the commercial property sector, with prime rents in the central business district reaching €65 per square foot.
The first quarter of 2025 underscores the complexities within Ireland’s property market. Rising property prices, driven by a persistent housing shortage, highlight the urgent need for effective policy interventions to enhance supply. Addressing planning challenges, reconsidering rental regulations, and fostering sustainable development are critical to achieving a balanced and accessible property market for all stakeholders.