Ireland’s residential property market is expected to continue recording steady price growth through 2026 despite softer price movements in the opening months of the year, according to new analysis from Bank of Ireland.
The bank said recent Residential Property Price Index (RPPI) data showing a 0.3% decline in February and flat growth in March should not be interpreted as a major slowdown, arguing that weaker activity is typical in the first quarter before the summer trading period.
Alanna Gallagher, editor of HomeandStyle.ie said: “Affordability continues to be an issue, but the weather through February and March also played its part, as did global events. Many vendors paused plans to bring their homes to market, pushing them into April and May listings.”
Bank of Ireland is maintaining its forecast for 4% residential property price inflation this year, pointing to continued competition among buyers, rising incomes and strong demand fundamentals.
The analysis noted that homes continued to sell significantly above asking prices during April and May, with median sale prices averaging 6.7% above initial listings.
Meanwhile, MyHome asking prices rose by 1% during the first quarter of 2026 to a median of €385,000, representing annual growth of 4.7%.
The report suggests affordability pressures are having the greatest impact in Dublin, where price growth has moderated more sharply than elsewhere in the country.
Dublin’s RPPI declined by 0.5% in February and 0.3% in March, while annual inflation in the capital slowed to 5.6%.
Asking prices in Dublin rose by just 0.2% in the first quarter, compared with annual growth of 6.1% across the rest of Ireland.
However, the bank said rising earnings and larger mortgage approvals are likely to continue supporting price growth nationally.
The average mortgage approval reached €341,000 in March, up 1.7% year-on-year, while average weekly earnings increased by 3% in the year to the fourth quarter of 2025.
Conall Mac Coille, Group Chief Economist at Bank of Ireland, said the underlying market remained resilient despite softer early-year data.
“While the early-year RPPI data may appear soft, this is often the case in the first quarter of the calendar year,” he said.
“The moderate 1% rise in MyHome asking prices in Q1, combined with the evidence properties were still selling 6% – 7% above asking in Q2, points to the RPPI measure of transaction prices rising in the coming months.”
He added that affordability pressures would likely keep price growth more moderate than in previous years.
“We are leaving our forecast for 4% RPPI inflation in 2026 unchanged, albeit still indicating stretched affordability will lead to a more sedate rise this year,” he said.
The report also highlighted continued growth in market activity, with residential transactions increasing by 6.6% year-on-year during the first quarter. However, this expansion is being driven largely by new-build homes, with transactions involving newly built properties rising by 30%, while sales of existing homes declined for a fourth consecutive year.
Bank of Ireland said the trend reflects ongoing supply shortages and reluctance among homeowners to move in a highly competitive market.
Housing supply, however, continues to strengthen. Housing completions reached 38,191 in the year to Q1 2026, while more than 11,000 housing starts were recorded between January and April.
The bank said overall completions could reach 40,000 units this year, exceeding earlier forecasts and pointing to improving capacity within the construction sector.
The analysis also suggested that rising numbers of landlords exiting the rental market may boost supply in the second-hand housing sector, with Residential Tenancies Board figures showing a sharp increase in tenancy termination notices as many landlords prepare to sell properties.
Despite this, rental inflation remains elevated, with rents on new tenancies rising 7.8% annually during the first quarter.