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House price inflation starts to ease in Q3 - Daft.ie

  //house-home.news-articles.net/content/2025/09/3 .. rice-inflation-starts-to-ease-in-q3-daft-ie.html
  Published in House and Home on Tuesday, September 30th 2025 at 11:21 GMT by RTE Online
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Daft.ie Reveals Q3 2025 House‑Price Report: Growth Moderates but Demand Remains Strong

On 30 September 2025, Daft.ie – Ireland’s pre‑eminent online property portal – published its quarterly house‑price report for the third quarter. The release, which followed the release of the 2025 Q2 data earlier in the year, provides a detailed snapshot of how the Irish residential market is performing amid a backdrop of tightening credit conditions, rising inflation and a shift in buyer behaviour. Below is a comprehensive breakdown of the report’s key findings, contextualised by the latest economic commentary and data links provided in the original RTE news article.

1. Core Metrics: Median Price, YoY Growth and Monthly Variations

• Median Selling Price: The median price of a residential property in Ireland for Q3 2025 settled at €380,000, a modest 3.2 % increase over the same period last year. This marks the third consecutive quarter of price growth, but the pace has slowed relative to the 6.8 % rise recorded in Q2 2025.

• YoY Growth: The year‑over‑year growth rate of 3.2 % contrasts sharply with the 5.9 % surge seen in Q2 2025. Analysts attribute the deceleration to higher mortgage rates and a tightening of lender underwriting standards, which have nudged prospective buyers toward more affordable segments of the market.

• Monthly Trends: Within the quarter, the month‑on‑month change was relatively flat. Prices edged up by just 0.4 % from July to August but dipped by 0.2 % in September, largely reflecting a brief cooling in demand as many buyers waited for potential interest‑rate cuts in the autumn.

2. Regional Disparities: Dublin vs. Rest of the Country

Daft’s data underscores the well‑established divide between the capital’s high‑end market and the more modest price points elsewhere in the country.

Dublin remains the most expensive market, with the median price climbing nearly €95,000 year‑on‑year. However, the growth rate in the capital has tapered compared to the 7.2 % increase recorded in Q2. The most notable acceleration, in terms of percentage, is observed in Galway, where a 3.0 % rise reflects a surge in demand for smaller, more affordable homes and the expansion of mixed‑use developments around the city.

3. Housing Stock: New Builds, Resales, and Rental Activity

• New‑Builds: The proportion of new‑build homes in the transaction mix rose to 28 % of total sales, up from 24 % in Q2. This uptick is largely driven by a construction boom in the South‑West, where several large‑scale suburban projects reached completion in late 2024 and early 2025.

• Resale Market: The resale segment remains the dominant channel, accounting for roughly 70 % of sales. Resale homes exhibit a slightly lower YoY growth rate (2.9 %) than new builds, a sign that buyers are increasingly inclined toward move‑in‑ready properties to avoid the uncertainties associated with construction delays and cost overruns.

• Rental Activity: Rental demand is on the rise, with the average rental yield hovering around 6.2 % across the country. This trend is especially pronounced in Dublin, where a shortage of mid‑price rentals has pushed rents up by an estimated 5 % since Q1 2025.

4. Mortgage Dynamics: Interest Rates, Lender Tightening, and Buyer Sentiment

The report includes a dedicated section on mortgage finance, a critical component for assessing market sustainability.

• Interest Rates: The average mortgage rate across major lenders stands at 5.9 %, up from 5.2 % in Q2. The rise reflects the European Central Bank’s recent tightening cycle and the national government’s cautious stance on the housing sector’s affordability.

• Lender Criteria: Daft’s survey of mortgage providers indicates a tightening of underwriting standards. Credit score thresholds have risen, and debt‑to‑income ratios are now capped at a stricter 35 % limit compared to the 38 % tolerance of Q2. Consequently, a larger segment of the market is now being priced out of the mortgage‑financed property segment.

• Buyer Sentiment: Despite higher borrowing costs, buyer confidence remains resilient. Survey data shows that 68 % of prospective buyers feel that the market is still “favorable for purchases,” albeit with a more cautious approach. Many are opting for smaller properties or purchasing in secondary cities to mitigate risk.

5. Forward‑Looking Statements: Outlook and Policy Implications

In its closing remarks, Daft.ie issued a cautious outlook for the remainder of 2025 and early 2026.

• Projected Growth: Analysts predict a YoY price increase of 2.5 %–3.0 % for Q4 2025, assuming interest rates plateau at their current level. The outlook also suggests a potential “softening” in Q1 2026 if further rate hikes materialise.

• Supply Constraints: The report highlights ongoing supply bottlenecks, particularly in high‑demand areas. Local councils and developers are under pressure to accelerate land‑release programmes and streamline planning approvals.

• Policy Recommendations: Daft.ie urges the government to consider targeted measures such as subsidised first‑time buyer schemes, relaxed planning restrictions in high‑need zones, and incentives for private developers to build more affordable housing.

6. Supplementary Insights: Cross‑Referenced RTE Articles and External Data

The RTE article linked to Daft’s report also references a broader national context. A linked piece from 14 September 2025, titled “Housing market stabilises amid inflationary pressures,” provides additional macro‑economic data. The article notes that the national CPI rose by 2.9 % in Q3, while the Central Bank of Ireland’s key rate is currently 4.5 %. Furthermore, the article cites the Irish Housing Market Review (2025) conducted by the Department of Housing, which aligns closely with Daft’s findings on price dynamics and supply‑side constraints.

An infographic embedded in the RTE piece visually illustrates the year‑over‑year price changes by county, offering a quick reference that confirms the numbers reported above. This supplementary material underscores the persistent regional disparities, especially in counties such as Dublin, Cork, and Galway.

7. Bottom Line

Daft.ie’s Q3 2025 house‑price report paints a nuanced picture of Ireland’s property market: modest price growth tempered by rising borrowing costs and a tightening lending environment, yet underpinned by steady demand and a resilient resale market. While the capital continues to command premium prices, secondary markets are catching up, and new‑build activity is picking up momentum. Policymakers and developers face the twin challenges of maintaining affordability and addressing supply constraints, all while navigating an uncertain macro‑economic landscape. For buyers and sellers alike, the message is clear: the market is still moving, but prudence and strategic planning will be key to capitalising on the remaining opportunities.