Rural House Prices Surge as Urban Inflation Cools
House price inflation in Ireland’s cities has experienced a significant slowdown, while rural areas continue to see upward trends in house prices, according to the Daft.ie Sales Report for the second quarter of the year. Nationally, prices in June were 1.6% higher than three months earlier and 3.8% higher than a year ago, a stark decline from the previous year’s 6.8% increase.
Urban Markets Experience Slowdown
The supply of housing in urban areas is showing recovery with 13,100 second-hand homes for sale, up 6% year-on-year, though still only half the pre-pandemic norm of over 26,000. The average list price nationwide for a three-bedroom semi-detached house was reported at €445,000, a 44% increase from pre-COVID levels and just 8% below the Celtic Tiger peak.
Trinity economics professor Ronan Lyons highlights the divergence in market trends: “We are witnessing a two-speed market: cooling in cities, where supply is recovering, contrasts sharply with rural regions still grappling with tight availability.”
In cities outside Dublin—Cork, Limerick, Waterford, and Galway—listing prices only saw a modest increase of 1.7% from March to June, culminating in a 0.2% drop year-on-year. Dublin’s list-price inflation halved over the year to 3%, though early signs indicate a slight decline in transaction prices compared to last year.
Rural Areas See Continued Growth
Beyond the cities, inflation remains robust: Munster at 6.3%, Leinster at 4.8%, and Connacht-Ulster at 8.8%. Lyons noted that, “Supply remains acutely tight, and new-build activity, while growing, is insufficient to alleviate pressure in these areas.”
Cork city saw a 5.1% year-on-year rise in listed prices, with a three-bedroom semi-detached house averaging €439,000. In Dublin, similar properties averaged €580,000 with a 3% price increase year-on-year. Limerick’s prices grew 1.9%, Galway’s 4.4%, and Waterford experienced a 6.1% rise, reflecting a vibrant rural market.
In Munster (excluding the cities), just 2,472 second-hand homes were for sale on June 1st, marking a 1% decrease since last year and a 66% drop from the 2015-2019 average.
Need for Increased Housing Supply
The report indicates that a mere 3% increase in homes changing hands was driven by newly built homes, up 17%. Lyons stressed, “New construction is crucial, but the market needs over 60,000 homes annually to rebalance—not just under 40,000. Greater movement among existing owner-occupied homes is vital.”
Until a response from the second-hand market occurs, overall activity will lag below healthy levels, highlighting the urgent need for enhanced housing supply across Ireland.
Source: Irish Examiner
