As of March 2025, the Irish property market continues to evolve, influenced by a combination of economic growth, demographic shifts, and persistent supply constraints. Here’s an overview of the current trends and projections shaping the market this year.
Economic Context
Ireland’s economy is on a rebound, with a projected growth rate of 4.0% in 2025, following a contraction in previous years. This resurgence is supported by a robust labor market, low inflation, and favorable external conditions.
Unemployment remains low, and real wage growth is contributing to increased consumer confidence, factors that traditionally bolster the property market.
Property Price Trends
In 2024, the Irish housing market experienced significant price increases, with some regions witnessing double-digit growth. For instance, counties like Leitrim and Longford saw notable hikes, driven by high demand and limited supply.
The average home price nationwide reached just over €330,000.
Looking ahead, forecasts for 2025 suggest a continuation of this upward trend, albeit at a moderated pace. DNG’s residential market review anticipates house prices could rise by as much as 8% in 2025, following strong growth in the previous year.
Similarly, property experts predict average price growth in the region of 5% for the residential market in 2025.
irishtimes.com These projections indicate sustained, though more tempered, appreciation in property values.
Supply and Demand Dynamics
A critical factor influencing the property market is the persistent imbalance between supply and demand. Despite increased construction activity, the availability of new and second-hand homes remains insufficient to meet the growing demand. This shortfall is exacerbated by population growth, high employment rates, and the continued prevalence of remote work, which has expanded housing demand beyond urban centers.
The western regions of Ireland, in particular, have experienced dramatic price surges due to historically low supply and a lack of new home construction. Counties such as Clare, Donegal, Galway, Limerick, Mayo, Roscommon, and Sligo have seen annual price increases averaging 16%, double the rate of commuter counties at 7.5%.
Government Initiatives and Policy Implications
To address the housing crisis, various policy recommendations have been proposed. These include default planning permissions for compliant applications and reclaiming areas like Dublin Bay to increase the city’s footprint and population capacity. Additionally, tax incentives for larger families and reallocating resources to young families have been suggested to alleviate housing pressures. Improving construction productivity through medium-rise and modular-build dwellings is also under consideration.
Interest Rates and Mortgage Market
The interest rate environment remains a crucial determinant of housing affordability and buyer behavior. While higher borrowing costs may deter some prospective buyers or reduce their purchasing power, the strong economic fundamentals are expected to sustain demand. First-time buyer activity is anticipated to be front-loaded in 2025, as these buyers rush to beat the end of stamp duty concessions in March.
Conclusion
In summary, the Irish property market in 2025 is characterized by sustained demand, moderated price growth, and ongoing supply challenges. Economic resilience and demographic trends continue to drive the market, while policy interventions and interest rate fluctuations will play pivotal roles in shaping its trajectory. Stakeholders should remain attentive to these dynamics to navigate the evolving landscape effectively.
Recent Developments in the Irish Property Market
Irish house values 2025: slower growth expected, but supply woes persist
thesun.ieHome prices in 7 counties soar by €10k in year as buyers battle over lowest supply on record as housing crisis continues68 days agothetimes.co.ukReclaim Dublin Bay and allow smaller dwellings to fix housing crisis7 days ago