Irish housing market set for steady price growth despite early-year softness

27 May 2026: Ireland’s residential property market is expected to deliver steady price growth through 2026, despite modest price movements at the start of the year, according to Bank of Ireland’s analysis of market data and trends.

Recent Residential Property Price Index (RPPI) data showed a slight decline of 0.3% in February and flat growth in March, following a 0.4% increase in January. While these figures may raise concerns about affordability pressures, early-year softness is typical and does not deviate from seasonal patterns ahead of the summer trading peak.

Properties have continued to sell at a premium in April/May, with median sale prices remaining 6.7% above asking, demonstrating fierce competition among buyers into the summer. Leading indicators point to continued price growth. MyHome asking prices rose by 1% in Q1 2026 to a median of €385,000, representing a 4.7% year-on-year increase. That the average mortgage approval rose to €341,000 in March (+1.7%), supported by rising household incomes, points to house price gains in the months ahead. As a result, a 4% increase in RPPI for 2026 remains the forecast.

Notably, the early year slowdown is concentrated in Dublin, where affordability is particularly stretched. The Dublin RPPI fell for two successive months, by 0.5% in February and 0.3% in March, with annual inflation slowing to 5.6%. MyHome asking prices also point to subdued price gains in the capital. Dublin asking prices rose by just 0.2% in Q1 2026 (up 2.9% YoY), compared with a sharper 6.1% rise in the rest of Ireland. Leading indicators remain positive. MyHome asking prices recorded a 1% rise in Q1 2026 to €385,000 at the median, up 4.7% YoY. Residential transactions continued to settle 6.7% above the original asking price through April/May (see chart below), indicative of fierce competition.

Second, rising incomes should put further upward pressure on Irish house prices. The average mortgage approval was €341,000 in March, up 1.7% YoY. Average weekly earnings rose by 3% in the year to Q4 2025. Homebuyers therefore look set to drive prices higher, utilising higher earnings.

Conall Mac Coille, Group Chief Economist, Bank of Ireland said: “While the early-year RPPI data may appear soft, this is often the case in the first quarter of the calendar year. The moderate 1% rise in MyHome asking prices in Q1, combined with the evidence properties were still selling 6% – 7% above asking in Q2, points to the RPPI measure of transaction prices rising in the coming months. So we are leaving our forecast for 4% RPPI inflation in 2026 unchanged, albeit still indicating stretched affordability will lead to a more sedate rise this year.”

Transactions growth driven by new supply

Market activity is expanding, with residential transactions rising 6.6% year-on-year in Q1 2026 and projected to increase by around 3% in Q2. However, growth is being driven almost entirely by new-build properties, which saw a 30% surge in transactions, while existing home sales declined for a fourth consecutive year. This divergence reflects a structural challenge as existing homeowners are increasingly reluctant to move amid tight supply and competitive buying conditions. Consequently, the expansion of Ireland’s housing market, now estimated at €29 billion in transactions in 2025, continues to rely heavily on new construction.

Rental market changes may support supply

An emerging trend that could support market liquidity is the exit of small landlords from the private rented sector. Data from the Residential Tenancies Board (RTB) show a 50% year-on-year increase in tenancy termination notices, reaching 7,062 in Q1 2026. Over the past three quarters, terminations totalled 17,674, up by more than 5,000 compared with the previous period. Approximately 60% of landlords indicated an intention to sell, suggesting that investor exits could boost housing supply and increase transaction volumes by up to 5% in 2026. This shift may provide short-term relief in the for-sale market, particularly for second-hand homes. At the same time, rental pressures remain elevated. Rents on new tenancies increased by 4.4% in Q1 according to Daft, the largest quarterly rise on record, with annual rental inflation reaching 7.8%.

Homebuilding strengthens

Ireland’s homebuilding sector continues to outperform expectations. Housing completions reached 38,191 in the year to Q1 2026, with 7,856 units delivered in the first quarter alone. Growth was broad-based across apartments (+33%), scheme houses (+35%), and self-builds (+28%).

Encouragingly, 11,000 housing starts were recorded between January and April, reinforcing confidence in future supply. While some of the recent momentum reflects catch-up activity, particularly in apartment construction, the overall trend suggests capacity within the sector is stronger than previously assumed. With these dynamics in play, housing completions could reach as high as 40,000 units in 2026, exceeding earlier projections of 37,500.

Outlook

Although early RPPI data indicate some softness, the underlying fundamentals of the Irish housing market remain robust. Rising incomes, strong demand, competitive pricing and expanding supply all point to continued growth.

The key highlight in 2026 is that supply, particularly new supply, is finally scaling up. However, tight conditions in the second-hand market and strong first-time buyer demand mean price pressures are likely to persist.