Irish Residential Market Review, Spring 2026

Added: 2026-06-01

[00:00:03]Hello. Today we're issing our first report of 2026 where we look at the performance of the Irish residential market over the course of 2025 and the first quarter of 2026. So, it's a mixed bag in terms of the performance indicators. First of all, some positive news in terms of new construction activity. We now know we delivered 36,000 units in 2025, which was a 20% increase on the previous year. So, very positive trend lines there where the stock levels have largely improved. And when you look at commencement data for the first quarter, we saw about 8,400 units commenced in quarter 1 this year versus just over 2,900 in quarter 1 last year. So again, another very positive trend line. In terms of what we would need to be delivering from commencement perspective if we were to be actually delivering the number of units we need in the marketplace, the figure is around 14,000 units a quarter. So a significant improvement of where we were last year, but more to go in terms of actually meeting demand.

[00:00:57]When we look at the secondhand marketplace, there were about 14,000 units available for sale across the entire country uh in January of this year, which is 0.7% of the housing supply. That is an improvement on where we were last year, but well below what the market would require if it was functioning properly. So what has the impact of all of this been in terms of price inflation? Well, for the first quarter this year, we saw average values across the country rising by 1.3% compared to 2.3% last year. So a notable moderation in the pace of house price inflation. However, when you look a bit more deeply, we see average values across the country on an annualized basis growing by 5.8% this year to the end of quarter 1 versus 7.5% last year.

[00:01:39]Dublin values are rising by about 4% now on an annualized basis, but outside of Dublin is still rising very high at 8% on that annualized basis. So, a marketplace where we're seeing rural Ireland really appreciate in terms of value, where we're seeing a moderation in the pace of price inflation in Dublin. And the reason for this lies in that construction activity data. A very high proportion of the units we have delivered over the last number of years have been in Dublin and the eastern corridor with a much lower proportion outside of that in rural Ireland. So last year we delivered over 80% of the market requirement of new stock in Dublin. But when you look at regions like the border region, the Midwest region, the West region, that supply is much lower, coming in at 50% or below market need. And as a result of that, we have this diverging trend where Dublin is now slowing down in terms of the pace of house price inflation, whereas rural Ireland is still remaining a very inflationary environment. And that proves to be very challenging. When we look at the rental sector, that market continues to suffer. So in the first quarter of this year we saw 32% of all the units sold across the entire country by shar landlords leaving the marketplace and only 9% of our purchases were net new investors in that marketplace and once again just like in the home to buy sector the hometo rent sector the challenges are much greater outside of Dublin the Dublin market has had some has enjoyed the benefit of large-scale development in the PRS sector whereas rural Ireland has not. So when private landlords are leaving at that pace, it proves to be much more challenging for the rural rental market where suppliers now at a very very critically low level. So now as we look to the year ahead, can we expect it to be a positive year or a challenging year for the housing sector? We began the year with a lot of optimism because we had had that big increase in stock levels last year and a very uh strong opening quarter in terms of commencements. However, the war in Iran and its impact on building cost inflation is proving to be a challenge for the year ahead. On an optimistic basis, if we see a cessation of that war pretty quickly and the pace of inflation slowing down, we can be optimistic that the stock levels should continue to rise as the year progresses. However, if building cost inflation continues at the pace of growth that it is there now, we could see that the output of of new development this year will disappoint in the second half of the year. So it is a watching brief and it is largely dependent on what happens in in in terms of the geopolitical position. That said, no matter what happens, I think we can expect that the pace of inflation outside of Dublin will remain very elevated for over the course of this year. We're not going to see a significant slowdown in price inflation outside of Dublin until we see the stock be more evenly distributed throughout the entire country.