Introduction to Dublin's Housing Market

The Irish housing market, particularly in Dublin, has seen significant price inflation in recent years. According to the latest data, the average price of a second-hand home in Dublin has approached €600,000, a milestone that reflects the city's persistent housing supply shortage and robust demand. This substantial increase is part of a broader trend in Irish real estate, where housing prices have risen across the country due to factors like low housing inventory and economic growth.

Rising Prices in Dublin

The average cost of a resale property in Dublin was reported to be €593,936 as of early 2025, marking a significant increase from the previous year when it was around €550,000[5]. This rise is consistent with broader national trends, where second-hand home prices increased by 8.4% in 2024, almost double the growth rate of 2023[2]. The increase in Dublin's housing prices is notably higher than in other major Irish cities, reflecting the city's strong economic environment and limited housing supply.

Factors Driving Price Increases

Several factors are driving the price increases in Dublin's housing market:

• Supply Shortage: The most significant factor is the severe shortage of housing supply. As of early 2025, fewer than 9,300 second-hand homes were available nationwide, a 17% year-on-year decline and the lowest total since records began[1].
• Interest Rates and Mortgage Market: Rising interest rates have led many homeowners to lock in fixed mortgage rates for extended periods, reducing liquidity in the second-hand market and contributing to higher prices[1].
• Economic Growth: A strong economic backdrop, coupled with real wage growth, supports demand for housing, further driving up prices[2].

Regional Price Trends

While Dublin is experiencing the highest price increases among major cities, other regions in Ireland are also witnessing notable growth:

• Galway and Limerick: These cities have seen significant price inflation, with Galway experiencing a 13.2% increase and Limerick at 13.8% in early 2025[1].
• Cork and Waterford: Although growth in these cities is slower than in Dublin, Cork recorded a 9.2% price increase, while Waterford saw a 11.2% rise[1].

Outlook for 2025

Industry experts predict that housing prices will continue to rise in 2025, albeit potentially at a slower rate than in recent years. Factors contributing to continued price growth include:

• Housing Supply Constraints: Despite an increase in new home construction, the supply remains insufficient to meet demand[2].
• Economic Conditions: Positive demographic trends and the prospect of further falls in interest rates are expected to support demand[2].
• Government Initiatives: Efforts to boost the supply of new homes could help stabilize the market eventually, but it is unlikely to reverse current price trends in the short term[2].

Strategies to Address Affordability Challenges

To address the increasing unaffordability of housing, particularly for first-time buyers, experts suggest several strategies:

• Increase Housing Supply: The key to stabilizing prices is increasing the number of new homes built. Achieving over 40,000 annual completions could begin to alleviate supply constraints[3].
• Market Regulations: Pro-competition measures in the mortgage market could help improve liquidity in the second-hand segment[3].
• Rental Market Support: Addressing the imbalance in the rental sector through incentives for landlords could help maintain a functioning rental market, reducing pressure on the purchase market[2].

Conclusion

The rise in Dublin's second-hand home prices to nearly €600,000 underscores the ongoing challenges in Ireland's housing market. While economic growth and low interest rates continue to drive demand, the core issue of insufficient housing supply remains a significant barrier to affordability. As the market evolves, strategies to increase supply, stabilize prices, and support the rental sector will be crucial for sustainable growth.