Standard Home Prices Surge to Eight Times Average Earnings

URGENT UPDATE: A standard house in Ireland is now selling for a staggering €426,000, which is eight times the average annual earnings of €53,000. This alarming statistic comes from the latest report by MyHome.ie, revealing an intense competition for homes even amidst soaring prices.

The report, covering the third quarter of 2025, shows that a remarkable 20% of homes sold in September achieved prices 20% or more above their asking price. Despite a slight slowdown in house price inflation, affordability is becoming increasingly stretched, marking the highest price-to-earnings ratio since 2009.

Conall MacCoille, chief economist at Bank of Ireland, stated, “The average residential property sold in 2025 had a price of €426,000, eight times the average earnings of €53,000. This reflects a troubling trend for first-time buyers who are struggling to find affordable options.”

As competition among homebuyers intensifies, the report notes that the typical property sold in September went for an average of 8% above the original asking price, a new record. With only 13,000 properties currently listed on MyHome, down from 20,000 pre-pandemic, the housing market remains extremely tight.

While asking prices fell slightly by 0.4% over the past three months nationally and remained flat in Dublin, prices are still up by 5.7% year-on-year. This year-on-year increase is driven by a 4.8% rise in Dublin compared to 6.2% outside Dublin. The report indicates that, despite these fluctuations, the number of home completions has reached its highest level since the Celtic Tiger boom, with 32,700 homes completed in the last twelve months.

MacCoille pointed out that while house price inflation is softening, the market remains fiercely competitive. “Reports indicating a contraction in home-building this year have proven inaccurate,” he added. There are currently 22,711 homes under construction in Dublin, reflecting a 27% increase from the previous year.

The government’s initiatives, including a VAT reduction on completed apartments from 13.5% to 9%, as part of Budget 2026, aim to further stimulate supply. MyHome managing director Joanne Geary noted, “It is encouraging to observe that home completions have reached their highest level in nearly two decades, suggesting that the Government’s sustained emphasis on supply is yielding positive outcomes.”

As the housing market grapples with these challenges, first-time buyers are likely to face continued pressure. The trend of increased mortgage debt among new buyers is expected to slow down in the coming year, indicating a potential pause in the market.

WHAT TO WATCH FOR: As the year progresses, the housing market will be closely monitored for further developments. With ongoing high prices and limited supply, the landscape for prospective homeowners remains uncertain.

This urgent situation underscores the critical need for solutions to address housing affordability in Ireland. As the market evolves, stakeholders will be keen to see if government measures can effectively bridge the gap between soaring prices and the average buyer’s earnings.