First-time buyers relying on their parents 'digging very deep' to help them buy a home
The Central Statistics Office's (CSO) latest Property Price Index for May showed property prices in Ireland rose 7.9% in the last year, as inflation continues at a relentless pace in a market starved of the supply it needs to meet demand.
This is the 21st month in a row of house price inflation, according to the CSO statistics.
The median price of a home bought in Ireland in the last 12 months was €370,000, as prices rose at a higher rate outside of Dublin than in the capital. The median is the middle figure in a row of numbers sorted from top to bottom, as opposed to the average.
Prices in Cork and Kerry (up 8.2%) are also rising at a faster rate than those in Dublin (up 6.9%), with the cost of buying a home now almost 20% higher than the Celtic Tiger peak.
In the last 12 months, the most expensive Eircode in the country to buy a property was A94 Blackrock in Dublin, with a median price of €770,000 while F45 of Castlerea in Roscommon had the lowest, at €150,000.
In each month of the year so far, fewer than 1,000 new homes have been purchased in Ireland, with the majority being second-hand.
In May, 3,824 homes were purchased. Just 911 of them were new homes. And 1,388 of these buyers were first-time buyers, according to the CSO statistics.
With fears essential infrastructure delays will hit the supply of homes, and the strong likelihood of housing delivery being significantly below Government targets this year, industry stakeholders warned home buyers are competing for an 'ever-shrinking pool of second-hand homes'.
"Affordability pressures remain severe,' Irish Mortgage Advisors chairperson Trevor Grant said.
We've also seen properties regularly selling well above asking price, with recent reports stating that one in six or seven now are going 20% over. Many younger buyers are simply being priced out entirely.
He said developers were facing major challenges in delivering housing, such as rising build costs, planning bottlenecks, and labour shortages.
Mr Grant added: 'Without targeted intervention to boost output and streamline the development process, house price inflation will persist.'
Brokers Ireland, meanwhile, said the outlook for prospective buyers and renters alike was 'bleak', given the shortage of supply.
'The latest Economic and Social Research Institute data forecasting just 33,000 units for 2025 and 37,000 in 2026, well below Government targets, is very worrying,' its deputy chief executive Rachel McGovern said.
'It's hard to envisage how any new housing plan by the Government can turn this around in the short term.'
Ms McGovern said a feature of the market in recent times had been ever-growing levels of debt as a consequence of sky-high prices.
'The Central Bank mortgage measures are not, and could never be, sufficient to deal with this situation,' she added.
'Parents are digging very deep into their resources to help first-time buyers to get a foothold in the market.'
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