The Irish property market presents a complex landscape for first-time homebuyers who find themselves in a perpetual waiting game, as property prices continue their relentless upward trajectory year after year. As you diligently save for that elusive deposit, the moving goalposts can feel both frustrating and overwhelming. The fundamental question looms large: when you finally reach your savings target, should you take the plunge into homeownership or hold off in anticipation of a market correction? This dilemma lies at the heart of current market dynamics, where demand consistently outstrips available supply, creating a unique environment where traditional market signals may not apply. Understanding the expert perspectives outlined in this analysis can provide valuable context for making informed decisions about your homeownership journey, whether you’re a first-time buyer, existing homeowner looking to upgrade, or real estate professional navigating the current climate.
John McCartney, a respected property economics lecturer at TU Dublin and adjunct associate professor at UCD, offers crucial insights into why prices continue to rise despite increased housing construction. His analysis challenges conventional wisdom by suggesting that supply issues aren’t simply a matter of under-building. Between 2011 and 2022, the growth in available homes actually kept pace with household formation, and with population growth slowing and new completions increasing, this balance should theoretically exist. Instead, McCartney identifies “excess demand” as the driving force, stemming from what he terms “the weight of money chasing property.” This fundamental imbalance between available capital and limited housing inventory creates persistent upward pressure on prices, explaining why we’re likely to see house price inflation exceeding 7 percent in 2025 – the ninth time in twelve years that Ireland will experience this level of growth. Understanding this dynamic helps explain why simply building more homes hasn’t solved affordability issues in the expected manner.
McCartney’s analysis delves deeper into the economic factors sustaining high demand despite falling real earnings since 2020. He identifies several offsetting elements that continue to fuel the housing market: the addition of nearly half a million workers to the Irish economy, the relaxation of mortgage lending rules enabling greater borrowing capacity, strategic government subsidy programs, and the expanding role of the state in property acquisition, leasing, and rental operations. These factors collectively maintain purchasing power even as individual financial pressures increase. The professor challenges housing market discourse that focuses exclusively on construction numbers, suggesting that prices will continue rising as long as the labor market remains robust and public finances can support the government’s strategy of “boosting demand to support prices.” His assessment that “nothing suggests that the wheels are about to fall off this wagon” indicates a market with significant momentum, requiring prospective buyers to develop strategies that account for continued appreciation rather than anticipating imminent corrections.
Despite the current market resilience, McCartney identifies several potential economic risks that could disrupt Ireland’s housing trajectory. Some vulnerabilities have been evident for some time without triggering significant housing market disruption, including the volatile U.S. political landscape, ongoing military conflicts in Ukraine and Gaza, government spending overruns, and Ireland’s narrow tax base. The political timing also plays a role, with the next general election still years away and, surprisingly muted public reaction to recent budget measures that sacrificed energy credits and tax band indexation in favor of development incentives. While these vulnerabilities accumulate gradually, McCartney warns that the trigger events for potential economic crisis remain unpredictable. His sobering assessment suggests that when such an event occurs, Ireland could face a dual crisis: the economic downturn itself and a housing crash resulting from the state’s inability to maintain its escalating demand support systems. This perspective emphasizes the importance of risk management for both homeowners and investors in the current environment.
Orla Hegarty, assistant professor at UCD’s school of architecture, planning and environmental policy, offers a complementary yet concerning perspective on Ireland’s housing future. She aligns with McCartney’s assessment that barring some external shock, Ireland will most likely continue experiencing price increases and a deepening housing crisis. Hegartý identifies a fundamental policy misalignment that perpetuates affordability challenges: the government operates under a “mistaken belief” that simply increasing supply and relying on wage inflation will resolve affordability issues. She argues that achieving meaningful affordability at scale for buyers, renters, and the national treasury requires a paradigm shift toward producing homes “at cost rather than at market prices.” This distinction highlights how current market mechanisms may be inherently incapable of delivering the housing Ireland needs, regardless of construction volumes. Her analysis suggests that even with increased output, the fundamental pricing structure of Irish housing may remain inaccessible to significant portions of the population without systemic changes to how homes are developed, funded, and priced.
Mortgage adviser Michael Dowling provides a more tempered outlook on price increases, estimating growth of approximately 3 percent for the coming year. His analysis contains a silver lining for prospective buyers: interest rates are likely to remain stable, with attractive fixed rates available for qualified purchasers. Specifically, Dowling notes that buyers of new homes with BER ratings of B3 and above can secure a fixed rate of 3 percent for three years, providing certainty in an uncertain rate environment. This combination of moderate price appreciation and stable financing creates a more favorable landscape for entry than the previous period of rapid inflation and rising rates. Dowling also predicts an 8 percent increase in mortgage market completions, rising from €14.4 billion to €15.6 billion, indicating growing confidence among lenders and borrowers alike. These factors collectively suggest that while the market may continue appreciating, the pace of increase and financing environment could create more favorable conditions for well-prepared buyers compared to the challenging conditions of recent years.
Industry leaders from major property firms offer additional perspectives on market direction, with Sherry FitzGerald CEO Marian Finnegan predicting price increases of 6 to 8 percent, while DNG CEO Keith Lowe anticipates more moderate growth of 3 to 4 percent. This range of expert forecasts highlights the inherent uncertainty in market predictions while suggesting continued appreciation regardless of exact percentages. Finnegan observes that transaction activity remains effectively constrained due to new completions failing to keep pace with demand, with year-to-date sales remaining broadly consistent with the previous year despite price growth. This phenomenon indicates a market where demand exists but is limited by supply constraints rather than buyer reluctance or financing challenges. Lowe’s comprehensive perspective identifies Ireland’s housing market as being defined by three core elements: constrained supply, strong underlying demand, and gradual policy-driven increases in output. These interconnected forces will continue shaping price dynamics for years to come, requiring market participants to develop strategies that work within rather than against these prevailing conditions.
The constrained supply situation that Finnegan identifies creates unique market dynamics where even modest increases in inventory can have disproportionate effects on transaction volumes and pricing power. When new completions fail to meet demand, the existing housing stock becomes increasingly valuable, as buyers compete for limited available properties. This dynamic explains how relatively small increases in supply can significantly impact market behavior, particularly when combined with favorable financing conditions. The transaction constraints also create ripple effects throughout the broader economy, affecting everything from housing-related employment to consumer spending patterns. Understanding these supply limitations is crucial for buyers who must develop realistic expectations about property availability and competition levels, as well as for investors who need to account for these structural constraints when evaluating potential returns and time horizons for their investments.
Government policies and incentives represent a significant, if often overlooked, factor in shaping Ireland’s housing market trajectory. As McCartney noted, the state’s strategy of “boosting demand to support prices” has created a complex interplay between market forces and public intervention. This approach includes various incentives, subsidies, and regulatory changes designed to stimulate both supply and demand sides of the market. The effectiveness of these measures has varied, with some successfully increasing construction volumes while others have had more limited impact on affordability. The government’s focus on development incentives over direct affordability measures reflects a particular policy approach that has significant implications for how the market evolves. Understanding these policy motivations and potential outcomes helps market participants anticipate regulatory changes, evaluate their likely impacts, and position themselves strategically within an environment where government intervention plays a substantial role in market mechanics.
Keith Lowe identifies several specific policy developments that could significantly impact the housing market in the coming months. Legislative changes scheduled for March regarding buy-to-let properties are expected to accelerate the trend of small landlords exiting the market, potentially increasing the supply of second-hand homes available to owner-occupiers. This represents a significant shift in the rental landscape that could benefit both buyers and tenants depending on how the market adjusts. Additionally, the reintroduction of bridging finance provides another mechanism for property transactions, potentially enabling more flexible purchasing strategies and facilitating quicker movement through the property chain. These policy changes, combined with government support for apartment delivery and affordable purchase schemes, constitute a comprehensive approach to addressing market imbalances. While Lowe suggests these measures will gradually increase new homes output, the timing and magnitude of their effects remain uncertain, creating both opportunities and challenges for market participants who must adapt to this evolving regulatory environment.
Looking toward the medium term, experts anticipate that the current combination of factors will gradually shift the market toward more balanced conditions. Lowe’s forecast suggests that house-price inflation will “begin to ease to more sustainable increases over the coming years” as the market slowly moves toward “a more balanced equilibrium between supply and demand.” This perspective offers a cautiously optimistic view of market evolution, suggesting that while significant challenges remain, the trajectory is toward greater stability rather than continued acceleration or dramatic correction. The concept of “sustainable increases” implies price appreciation aligned more closely with economic fundamentals rather than the exceptional growth rates seen in recent years. This gradual rebalancing could create a more predictable market environment that benefits all participants, from first-time buyers to established homeowners and investors. Understanding this medium-term perspective helps market participants develop longer-term strategies that account for both current conditions and anticipated evolution of the Irish property landscape.
For market participants navigating these complex dynamics, several practical strategies can help position advantageously in the current Irish property market. First-time buyers should consider accelerating their purchase timelines in a market of continued appreciation, particularly given the favorable interest rate environment. For those already on the property ladder, evaluating equity release options or strategic upgrades could make financial sense given current valuation levels. Investors should focus on properties with strong rental yields and long-term appreciation potential, mindful that rapid capital appreciation may become less consistent. Regardless of position, prospective buyers should secure mortgage approvals in advance to position themselves competitively in bidding situations. For all market participants, staying informed about policy changes, particularly those affecting buy-to-let properties and financing options, remains crucial. The Irish property market’s unique dynamics require tailored approaches that account for both current realities and medium-term projections, with professional advice increasingly valuable in what remains a complex and evolving landscape.
