Irish Property Market Forecast For 2025
Current Real Estate Market Trends and Future Predictions for the Irish Housing Market
The Irish property market has been a topic of much discussion and speculation, especially as we
move through 2024 and look ahead to the future. With fluctuating property prices, changing
economic conditions, and evolving government policies, the landscape is constantly shifting. This
blog post delves into the current real estate trends, examines predictions for the housing market,
and explores the potential future of property prices in Ireland. By understanding these factors, you
can better navigate the market, whether you’re a buyer, seller, or investor.
Current Real Estate Trends in Ireland
As of 2024, the Irish real estate market has been characterized by a continued rise in property prices,
albeit at a slower pace than in previous years. According to the MyHome.ie Q2 2024 Property
Report, the national average asking price for homes has increased by 2.4% year-on-year, bringing the
average price to €320,000. While this marks a deceleration from the double-digit growth rates seen
during the pandemic years, it still indicates a robust demand for housing across the country.
One of the key trends influencing the current market is the supply-demand imbalance. The number
of homes available for sale remains below the levels needed to meet demand, particularly in urban
areas such as Dublin, Cork, and Galway. This shortage has been a significant factor in driving up
property prices, as prospective buyers compete for a limited number of homes. A huge emergence
in the Irish property market is the amount of international buyers coming to move and live in
Ireland. These international buyers are further fuelling demand and property prices.
Additionally, rising interest rates have also impacted the market. The European Central Bank (ECB)
has implemented several rate hikes in response to inflationary pressures, which have increased the
cost of borrowing for homebuyers. This has led to a slight cooling of demand, particularly among
first-time buyers who are more sensitive to changes in mortgage rates. Despite these challenges, the
overall market remains resilient, with strong underlying demand continuing to support property
values. Now the ECB have made an announcement that they are going to lower interest rates so this
could further fuel property prices further.
What is the Irish Property Market Forecast for 2025?
Looking ahead to 2025, the Irish property market is expected to continue its gradual growth, but
with some potential challenges on the horizon. Experts predict that the market will see a more
balanced growth pattern, with annual price increases moderating to around 2-3%. This stabilization
is partly due to expected improvements in housing supply, as government initiatives aimed at
increasing the construction of new homes begin to bear fruit. However, one must keep a watchful
eye on the wars in Ukraine, Gaza and now in the middle east and the looming US government
election. This long term could cool the property market with the uncertain world economy and
future.
The Residential Property Price Index (RPPI) for June 2024 published by the Central Statistics Office
(CSO) provides valuable insights into the trajectory of the market. The RPPI indicates that while
property prices have been rising, the rate of increase has been slowing, suggesting that the market is
gradually moving towards a more sustainable growth path. This trend is likely to continue into 2025,
as economic conditions stabilize and the impact of higher interest rates becomes more fully
absorbed by the market.
However, there are potential risks that could affect the forecast. Economic uncertainties, such as
changes in global trade dynamics, Brexit-related impacts, and domestic economic performance,
could influence market conditions. Additionally, any significant shifts in ECB monetary policy could
alter the cost of borrowing, thereby affecting demand. Nonetheless, the overall outlook for 2025
remains cautiously optimistic, with a steady, if slower, pace of growth expected.
Will House Prices Drop in 2024 in Ireland?
One of the most pressing questions on the minds of potential buyers and investors is whether house
prices will drop in 2024. Based on current data and expert analysis, it appears unlikely that there will
be a significant drop in property prices this year. While the rate of price growth has slowed, there is
no indication that prices will reverse direction and decline.
The factors supporting continued price growth include the persistent supply-demand imbalance and
the ongoing economic recovery. Despite the challenges posed by rising interest rates, demand for
housing remains strong, particularly in areas with limited supply. Furthermore, the Irish economy
has shown resilience in the face of global challenges, with strong employment figures and wage
growth helping to sustain the housing market.
However, the market is not without its vulnerabilities. If economic conditions were to deteriorate
significantly, or if there were a sharp increase in interest rates, it could lead to a cooling of the
market. In such a scenario, we might see a slowdown in price growth, but a substantial drop in prices
seems unlikely given the current fundamentals.
Predictions for the Housing Market in Ireland
As we move beyond 2024 and into the next few years, several key predictions for the housing
market in Ireland can be made. First, the market is expected to see continued, albeit slower, growth
in property prices. This reflects the gradual increase in housing supply, coupled with ongoing strong
demand, particularly in urban areas.
Second, the rental market is likely to remain tight, with high demand continuing to outstrip supply.
This will keep rental prices elevated, particularly in major cities. However, government policies
aimed at increasing the availability of rental housing and improving tenant protections may help to
alleviate some of the pressure in this segment of the market.
Third, the impact of sustainability initiatives and energy efficiency standards is expected to become
more pronounced in the housing market. As the government pushes towards achieving its climate
targets, homeowners and buyers may increasingly prioritize properties that meet high energy
efficiency standards. This could lead to a growing divide in the market between older, less energy-
efficient homes and newer, more sustainable properties.
Finally, the ongoing digital transformation of the real estate sector is likely to continue, with more
transactions, viewings, and services moving online. This trend, accelerated by the COVID-19
pandemic, has changed the way people buy and sell homes, making the process more efficient and
accessible.
Conclusion
The Irish real estate market in 2024 presents a complex picture, with strong underlying demand
driving property prices upwards, despite challenges such as rising interest rates and limited supply.
As we look ahead to 2025 and beyond, the market is expected to continue growing, albeit at a more
moderate pace. While risks remain, particularly related to economic conditions and policy changes,
the overall outlook is positive.
Whether you’re a potential buyer, seller, or investor, staying informed about current real estate
trends and predictions for the housing market is essential. By understanding the factors shaping the
market, you can make more informed decisions and better navigate the opportunities and
challenges that lie ahead in the Irish property market.