Residential property prices in Ireland have picked up markedly over the past few months, supported by rising real incomes (given the fall in CPI inflation) and the expectation that ECB rates will fall this year, with the June policy meeting likely to see the first cut . More mortgage borrowers are certainly of that view, with 26% opting for floating rates in January, a significant change from the 5% or so seen over recent years.
The CSO’s house price index for January confirmed the more buoyant trend, with residential price inflation nationally accelerating to 5.4% from 4.1% in December. The national index has been supported by price gains excluding Dublin but that appears to be changing; Dublin prices were weak in 2023 and last summer were down an annual 1.8% but have picked up strongly of late, rising by 3.5% in the three months to January. Houses in Dublin City have seen the strongest recovery, up by 3.9% in three months, taking the annual increase to the past year to 6.2% from 2.8% in December. In county Dublin the annual change also accelerated strongly to 4.6% from 2.5%. The annual change in Dublin is flattered by base effects (as prices fell in January last year) and this is likely to remain a feature up to mid-year, with even modest monthly gains leading to a 9-10% annual figure.
That base effect will be less of a feature in the rest of the country, albeit still present, and prices have also picked up on a monthly basis, by 2.7% in the past three months. That has boosted annual price inflation excluding the capital to 6.2% from 5.3%. Annual property price inflation is strongest in the Mid-West (Clare, Tipp and Limerick) at 9.5%, followed by 9.3% in the Midlands ( Laois, Offaly, Longford and Westmeath)