House prices rose by an average of 3.7 per cent across the country during the first three months of the year, according to the latest Daft.ie House Price Report, released on Tuesday.
The typical listed price nationwide in the first quarter of the year was €346,048, 11.6 per cent higher than a year previously and 35 per cent higher than at the onset of the Covid-19 pandemic.
The current rate of inflation in the market is the second highest seen in the 10 years since mortgage market rules were introduced, exceeded only by the spike in prices seen in early 2017 – 11.7 per cent year-on-year then versus 11.6 per cent year-on-year now.
The surge in inflation is being driven by Dublin and the rest of Leinster.
Inflation in the capital is now running at 12.2 per cent, the highest rate in eight years, while in the rest of Leinster the annual increase in prices is 13.4 per cent, also the highest since early 2017.
Galway, rising by 13.2 per cent and Limerick cities, by 13.8%, are also seeing rates of inflation above the national average, while the rate seen in Waterford (11.2 per cent) and Cork cities (9.2 per cent) is slower.
As previously, the sharp increases in prices around the country are happening at a time of very tight supply.
The number of second-hand homes available to buy nationwide on March 1 stood at less than 9,300.
This is down 17 per cent year-on-year and also marks the lowest total ever recorded in a series extending back to January 2007.
The three months since the start of the year mark the only three months since 2007 where there have been fewer than 10,000 second-hand homes available to buy.
Ronan Lyons, author of the report and economist at Trinity College Dublin, said: “This latest Daft.ie House Price Report shows that the surge in inflation is not yet over.
“The ultimate solution remains unchanged from that which was needed a decade ago: a lot more homes need to be built so that the country’s housing is adequate for its households.
“But the entire housing system seems reliant on government funding and subsidies, an unfortunate circumstance at the best of times but of greater concern given wider economic uncertainties.
“Meanwhile, changes in the wider regulatory set-up seems to have delivered confusion, rather than clarity, about how the country will build the homes it needs.”
He added: “Housing prices are now increasing at a faster rate than almost any other time since mortgage market rules were introduced a decade ago.
“The increases are clearly linked to the lack of second-hand supply. Even as transactions of newly built homes increase, the second-hand market is at its tightest in a series going back almost two decades.
“The latest surge in inflation is due, at least in part, to the well-flagged increase in interest rates, which saw existing homeowners fix their rates, often for many years, with consequences for liquidity in the second-hand market.
“But while the increase in interest rates has played a role, the underlying issue remains the housing deficit.
“The mortgage market rules were introduced a decade ago to prevent a repeat of the loose lending that drove Ireland’s Celtic Tiger bubble and crash.
“Nonetheless, prices are up 75 per cent since then, not because of too much credit but because of too few homes.”
Average list price and year-on-year change in major cities, in the first three months of 2025:
Dublin: €460,726, up 12.2 per cent
Cork city: €358,676, up 9.2 per cent
Limerick city: €300,253, up 13.8 per cent
Galway city: €409,482 up 13.2 per cent
Waterford city: €260,657, up 11.2 per cent
Rest of the country: €296,346, up 11.2 per cent.
