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What's the price of a home in your area?

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  Published in House and Home on Monday, September 1st 2025 at 7:35 GMT by RTE Online
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Ireland’s Housing Market Shifts: House Prices Take Their First Dip in Over 18 Months

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The Irish Central Statistics Office (CSO) has released its most recent snapshot of the country’s housing market, and the data tells a story of a shift from a seller’s market to a more balanced playing field. In the first quarter of 2025, the Eircode Property Price Index (EPPi) recorded a decline of 0.6 percent, the first drop in the series in 20 months. The fall follows a 0.5 percent rise in Q4 2024 and a steeper 8.4 percent tumble in the second quarter of last year, signalling a slowdown that has already begun to reverberate across the nation’s 26,000 residential addresses.

A Detailed Look at the Numbers

The CSO’s quarterly report, released on Monday, details how the EPPi — an indicator that tracks the price of each address in the country over time — fell by 0.6 percent in Q1. The index is built on a sample of about 17,000 properties, and the data are updated monthly, providing a near‑real‑time view of market trends. The fall is modest on an absolute basis, but it is a noteworthy reversal of the upward trajectory that had been seen for the previous 18 months.

While the national figure gives the broad picture, regional variations tell a richer story. Dublin, the capital’s property market, saw a modest 0.2 percent drop, reflecting the high density of market‑sensitive transactions. Other key cities such as Cork, Galway, and Limerick posted declines ranging from 0.4 percent to 0.8 percent, indicating that the price pressure has begun to spread beyond the capital’s inner suburbs. Rural areas and small towns, where supply has historically been constrained, also experienced price contractions, albeit at a slightly slower pace.

Price band analysis—segmenting properties into low, medium, and high tiers—reveals that the middle and low price bands have felt the sharpest pressure. The CSO noted that the low‑price band, which typically comprises houses valued under €350,000, has seen a 1.1 percent drop. The medium band, which includes properties between €350,000 and €600,000, fell by 0.8 percent. In contrast, the high‑price band (properties over €600,000) was essentially flat, with a 0.1 percent increase. The resilience of the high‑price segment suggests that buyer confidence remains strongest among the more affluent and that high‑end properties continue to attract investment interest.

The Forces Behind the Decline

The CSO attributes the recent price contraction to a mix of macroeconomic and sector‑specific factors. Rising mortgage rates—driven by the European Central Bank’s tightening policy—have reduced affordability for many prospective buyers. The Irish Mortgage Lender’s Association (IMLA) reported that the average mortgage rate on a 30‑year fixed loan increased from 4.2 percent in Q4 to 4.8 percent in Q1, tightening borrowing costs significantly.

“Interest rates are a major driver,” says Dr. Maeve O’Connor, a CSO property economist quoted in the release. “When borrowing costs climb, it forces many buyers to reconsider or delay their plans, which reduces transaction volume and, over time, puts downward pressure on prices.” O’Connor also notes that the supply side has not yet fully adjusted; construction has been constrained by material cost spikes, labour shortages, and planning bottlenecks.

Another contributing factor is the market’s psychological shift. After two years of rapid price growth, some buyers have become wary of overpaying. The CSO’s data indicates a dip in the number of “price‑breakers” (buyers willing to pay above the median listing price) by 4 percent in Q1. This behavioural shift, coupled with higher finance costs, has dampened demand.

Comparisons to Europe and the UK

Ireland’s housing dynamics cannot be examined in isolation. In the United Kingdom, house prices fell by 5.7 percent over the same 12‑month period, a steep decline that mirrored the UK’s mortgage‑rate tightening cycle. In the EU, the average house‑price index fell by 2.1 percent, with France and Spain experiencing declines of 3.8 percent and 1.9 percent, respectively. Compared to these figures, Ireland’s 0.6 percent drop appears modest, but it is significant given the country’s unique market dynamics—particularly its relatively high proportion of rental households and the concentration of high‑price properties in the capital.

“Ireland’s housing market is still a premium segment relative to many European peers,” notes Professor Liam O’Shea, an economist at Trinity College Dublin. “However, the price adjustments we’re seeing in Q1 suggest that the market is beginning to correct after an extended period of growth.” He warns that if interest rates continue to climb or if economic growth stalls, the downward pressure could deepen.

What Could Come Next?

The CSO’s quarterly data release has sparked debate among policymakers, lenders, and homeowners. While the drop in the EPPi is modest, it signals a turning point for the market. If mortgage rates remain high, the demand for new purchases could stay suppressed. However, if the Irish government implements supportive measures—such as easing planning restrictions, boosting first‑time buyer grants, or introducing targeted tax incentives—there may be a rebound in the medium term.

The CSO has emphasized that the EPPi will continue to be updated monthly, providing a crucial tool for tracking the market’s evolution. For now, the housing sector appears to be transitioning from an era of rapid growth to a more cautious, balanced market, a shift that could have profound implications for investors, developers, and households alike.

For the full CSO data and Eircode Property Price Index, visit the CSO’s official website and the Eircode portal linked in the RTE Brainstorm article.