House prices rise at lowest annual level since early 2024

House prices in Ireland rose at their lowest annual rate since early 2024, according to data released by the Central Statistics Office (CSO). The Residential Property Price Index (RPPI) recorded a 6.2% increase in the year to May, marking a continuation of the modest upward trend observed in the previous month. This rate of growth stands as the slowest annual increase in over a year, reflecting a cooling market despite continued pressure from limited supply and persistent affordability challenges. The CSO's findings reveal that the median price of a home purchased in the year to May reached €395,000. This figure highlights the growing cost of homeownership, though it masks considerable variation across regions. In Dún Laoghaire-Rathdown, the median price hit €689,325, the highest among all counties, while Longford recorded the lowest median price at €198,000. These disparities underscore the uneven nature of the housing market, with urban centers experiencing higher price pressures compared to rural areas. Within the Republic of Ireland, Dublin saw a 4.7% annual increase in property prices, whereas regions outside the capital witnessed a sharper rise of 7.3%. The Midlands region, encompassing Laois, Longford, Offaly, and Westmeath, led the charge with a 13.2% surge, driven by tight inventory and strong demand. Conversely, the South-West, including Cork and Kerry, recorded a more moderate 4.2% increase. These regional differences reflect broader economic and demographic factors influencing local markets. Social Democrats Housing Spokesperson Rory Hearne pointed out that current prices are 25% above the peak levels recorded in April 2007, during the height of the property boom. He emphasized that national prices have surged by 180% since reaching their lowest point in 2013 following the property crash. Hearne criticized the government for its failure to deliver affordable housing, arguing that reliance on the private sector has exacerbated price inflation. He advocated for a shift toward state-led initiatives to build social and affordable housing at scale. Trevor Grant, chair of the Irish Mortgage Advisors, acknowledged that the steady growth in house prices offers some comfort to first-time buyers. However, he cautioned that prices remain on an upward trajectory, even if the rate of increase has slowed. Grant highlighted seasonal trends, noting that summer typically sees a decline in activity, and warned that any temporary slowdown could reverse quickly as the autumn selling season approaches. He also described a two-tier market, where Dublin has shown signs of softening, while regional areas continue to experience robust price growth due to inventory shortages. Brokers Ireland, representing mortgage brokers, expressed concern that the gradual price increases do little to alleviate the financial strain on prospective buyers. Rachel McGover, deputy chief executive at Brokers Ireland, stated that affordability remains severely constrained for many. She noted that while there is a positive trend in new housing starts and completions, these efforts fall far short of meeting existing demand. McGover highlighted the stark contrast between high salaries in Dublin and lower wages elsewhere, contributing to the widening gap in housing costs. She also raised concerns about potential fluctuations in interest rates amid heightened geopolitical uncertainty, warning that recent stability may be short-lived.