Irish house prices stall as salary requirements soar across counties

The Irish housing market hit a pause button in the third quarter of 2022. Between June and September, average asking prices across the country rose by just 0.1 per cent—a near-complete standstill after years of relentless climbing. The median asking price settled at €311,514 nationally, according to data from property website Daft.ie, marking a moment of unexpected stability in a market that had seemed to move only upward.

What changed was supply. The number of homes available for purchase on September 1 reached 15,500, a jump of 22 per cent from the same date a year earlier. This influx of listings, particularly noticeable in Dublin where new inventory matched pre-pandemic levels, began to ease the pressure that had driven prices skyward. Ronan Lyons, an economist at Trinity College Dublin who authored the report, noted that improved stock on the market had helped reduce inflationary pressures in the sales market. The mechanism was straightforward: more homes to choose from meant less desperation, which meant less willingness to overpay. Year-on-year inflation in housing prices had fallen from 9.2 per cent three months prior to 7.7 per cent by September, a meaningful deceleration driven largely by this supply improvement.

Yet the pause in price growth masked a deeper problem. While the market had stopped accelerating, the barrier to entry had not fallen. Across the 32 counties, the salary required to purchase an average-priced home varied wildly, reflecting Ireland's stark regional divides. In Leitrim, the least expensive market, a buyer needed an annual salary of roughly €45,076 to afford the average listed home at €175,296. In South County Dublin, where average prices exceeded €654,000, the required salary climbed to €109,840—more than double. Dublin as a whole demanded €109,840 in annual income to purchase the average property at €427,158. For context, the national median industrial wage in Ireland at that time was substantially lower than these figures in most counties outside the capital and its commuter belt.

The county-by-county breakdown revealed how unevenly the market had moved. Donegal saw prices rise 16.8 per cent year-on-year, the steepest climb outside the capital region. Roscommon jumped 14.4 per cent, and Leitrim climbed 13.8 per cent—smaller markets where even modest absolute price increases translated to large percentage gains. Meanwhile, Meath and Kildare, both within Dublin's orbit, saw more modest growth of 5.4 and 5.8 per cent respectively, though their absolute prices remained high enough to demand salaries in the low-to-mid €80,000 range. Cork, Ireland's second-largest city, required €70,700 annually for the average home, up 5.6 per cent from the previous year.

Lyons acknowledged that weaker demand—driven by inflation in other living costs and rising interest rates—had helped stabilize prices. But he was clear that stabilization was not solution. The true remedy, he argued, required significantly increased housing supply sustained over years and decades. A single quarter of improved listings, however welcome, could not address the structural shortage that had built up over years of underbuilding. The market had caught its breath, but the underlying crisis remained intact. Young people were still calculating whether they could afford to stay in Ireland, and the salary thresholds required to buy a home in most counties remained far beyond what entry-level workers could command.