Surprise rise in asking prices despite reports of stretched affordability

• Annual asking price inflation rises to 5% nationwide and to 4.5% in Dublin, and slows to 5.4% outside the capital
• Home transactions being settled 7-8% above the original asking price in May and June, signalling continued strong competition amongst homebuyers returning
• Liquidity among existing stock of homes at its weakest rate (just 2% of the 2.2 million homes) since 2014. This implies the average home is sold just once every 50 years
• ‘Notices-for-termination’ of rental tenancies are up 50% in Q1 2026 to 7,062. This trend could add 5% to market liquidity in time
• The official CSO residential property price index (RPPI) for April showed transaction prices have had the softest start to the year since 2020
• Housing completions could reach 40,000 in 2026

7 July 2026 – Annual asking price inflation has risen to 5% nationwide, bucking the trend of recent quarters, according to the Q2 2026 Property Report from MyHome in association with Bank of Ireland.

Despite reports of stretched affordability and softer conditions at higher price points in the market, vendors and estate agents still felt sufficiently confident to raise asking prices just ahead of key summer trading season.

While transactions were being settled for an average of 7-8% over the asking price in May and June, interestingly the official CSO residential property price index (RPPI) for April showed transaction prices have had their softest start to the year, in the first four months of 2026, since 2020. The RPPI index was up 6.2% year-on-year in April but increased by only 0.2% between December 2025 and April 2026.

Key findings:

The MyHome report for Q2 2026 found that annual asking price inflation was 5% nationwide. Annual asking price inflation in Dublin is now 4.5% and the rate is 5.4% in the rest of Ireland.

Meanwhile, the report found asking prices nationally rose by 4.3% on the quarter, were up by 3.8% in Dublin and by 4.7% in the rest of the country.

This means the median asking price for new instructions nationally was €395,000 in Q2. In Dublin it was €495,000 and in the rest of the country it was €350,000.

Other findings include:

• In Dublin, the median premium was 9-10% above the asking price in May/June pointing to strong competition for homes.
• The number of properties listed for sale on MyHome in June was 14,200, up from 12,600 one year ago. Moreover, there have been 18,900 new listings for sale on MyHome so far in 2026, up 1.3% on the same period of 2025.
• The latest mortgage data suggests that stretched affordability is now starting to be felt. In April, the average mortgage approval for house purchase was €345,700, up 2.7% on the year – down from 7.2% in 2025.
• New Central Bank data shows that in 2025 the average first-time buyer with a mortgage had an income of €95,000, up 3.5% on the previous year. The average loan-to-value was 80% (i.e. deposit of 20%) with a loan-to-income ratio of 3.5x.
• It remains to be seen what the impact of the new rental regulation laws will be. Notices-of-termination have picked-up markedly since mid-2025, which may squeeze the availability of rental accommodation.
• Nonetheless, the clear risk to our forecast of 37,500 housing completions in 2026 now lies to the upside, with an outturn of 40,000 looking plausible.

Analysis:

The author of the report, Conall MacCoille, Chief Economist at Bank of Ireland, said that the key question now was whether buyers will actually be able to meet the elevated asking prices we are seeing. “Our data, while surprising, does not suggest vendors are being unrealistic. Through May and June transactions were being settled 7-8% above the original asking price – if anything signalling more intense competition amongst homebuyers.”

Mr MacCoille said that while stretched affordability was becoming more apparent in the mortgage market, wages were still rising in line with house prices. “A key piece of context here is the latest data showing average earnings (AWE) were €56,000 annualised in Q1 2026, up 4.4% on the year. So, the bigger picture is still one in which house prices are rising broadly in line with wages – so that affordability is broadly steady.

“On the activity side, residential transactions in the first four months of 2026 were up 2.9% on the year, but this was entirely driven by homebuilding. A somewhat worrying feature of the market was that liquidity among the existing stock of homes is at its weakest rate since 2014, at just 2% of 2.2 million homes. This implies the average home is sold just once every 50 years.

“The underlying message here is that existing homeowners clearly feel unwilling to consider moving home – for fear of failing to secure another. The elevated cost of retrofitting an existing home may also be another impediment.”

He said that a wild card in the market was the sharp rise in ‘notices-for-termination’ of rental tenancies. “This figure is up 50% in Q1 2026 to 7,062. Given the pick-up in terminations since mid-2025, and that 60% of landlords intended to sell, this could in time add 5% to market liquidity. Clearly, here a temporary improvement in housing availability for homebuyers, would come at the expense of those seeking to rent.”

He concluded by saying that previous predictions regarding asking price inflation for 2026 may have been pessimistic. “In this context, the clear risk to our previous forecast that Irish house prices would rise by 4% looks probably to the upside.”

Joanne Geary, Managing Director of MyHome, said: “The rise in asking prices is tough news for prospective homebuyers, however we are seeing very positive signs on supply. The number of properties for sale on MyHome has jumped by 20% in the last quarter to just over 14,000 properties which should ease the fierce competition in the market.

“Overall, the first-time buyers’ market is still driving activity in the market, with the median mortgage and property value among this cohort rising by a third in the last five years.

Demand remains very strong, but the recent increase in interest rates along with rising inflation will mean affordability may become more stretched.”

ENDS