Despite a surprise spike in house price inflation, Bank of Ireland chief economist says competition is easing.
Irish house price inflation accelerated to 7% in January, catching analysts off guard during what is usually a subdued period for the market.
Fresh figures from the Central Statistics Office’s Residential Property Price Index showed prices rising 0.3% in the month, a stronger start to the year than seen in 2025.
“We are not yet seeing any marked uplift in supply that would meaningfully shift the balance of the market”
Conall Mac Coille, group chief economist at Bank of Ireland, said the data showed “more momentum in transaction prices than we have seen elsewhere in the housing market,” but he added that the bank still expects growth to cool as the year progresses.
“Our view remains that price inflation will slow towards about 4% through 2026,” he said.
The headline increase in January was split between a 6% rise in Dublin and 7.7% across the rest of the country. Yet several forward‑looking indicators are pointing towards more moderate conditions.
Improved liquidity
Asking price inflation on property platform MyHome slipped to 5.4% in the final quarter of 2025, with advertised prices barely moving in the period. Competition among buyers also appears to be easing, even if demand remains strong.
Bank of Ireland estimates that homes sold in February settled at a median of 6.5% above their asking price, compared with an 8.5% premium during the summer peak last year.
Mortgage approval trends suggest a similar shift. Banking Payments Federation Ireland figures show the average first‑time buyer approval in January was €320,000, up just 1.9% on the year. “Prospective buyers do not appear to be stretching themselves financially to the same extent,” Mac Coille noted.
There are also tentative signs of improved liquidity. The Property Price Register indicates around €3.5bn of residential transactions have been recorded so far in 2026, amounting to 7,248 sales at an average of €487,000. Bank of Ireland estimates this represents a 3% increase year on year, a welcome change after three consecutive years in which activity contracted.
Still, overall supply remains tight. MyHome recorded 4,223 new listings in the six weeks to 3 March, up just 2% on the year. Total properties listed on the platform reached 11,571, a 7% annual rise but still considered low by historical standards.
Many owners remain reluctant to put their homes on the market amid concerns they will struggle to find suitable replacements after selling. Despite recent policy changes aimed at private landlords, there is little evidence so far of a significant increase in investor‑driven listings.
“With liquidity still relatively subdued, would‑be vendors remain cautious,” Mac Coille said. “We are not yet seeing any marked uplift in supply that would meaningfully shift the balance of the market.”
Overall, the early months of 2026 reveal a housing market still characterised by strong demand but with pressure gradually easing. While January’s headline inflation surprised, the broader set of indicators suggests that price growth is likely to slow as the year progresses.
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