€500,000 price tag for ‘average’ Dublin property

Property price inflation surges to pandemic high of 14.4% amid supply squeeze

The price of an average house in Dublin topped half a million euro last year as buyers scrambled to purchase a limited number of new and secondhand homes.

Property prices surged by 14.4 per cent across the State in 2021, according to the Central Statistics Office, the strongest level of growth in the market for nearly seven years.

The figures come amid a sharp pick-up in inflation generally. Property price inflation was running at just 2.2 per cent in 2020.

A number of factors – including the ongoing shortfall in supply, increased savings and remote working – have triggered an acceleration in prices since the start of the pandemic.


Dublin prices – where the average price was €506,667 – compare with a national sales figure of €326,457 last year.

First-time buyers need to have income of over €130,000 to qualify for a mortgage to buy in Dublin at that average price under Central Bank rules. Existing homeowners, who require a larger deposit, are looking at an income threshold of close to €116,000.

Homes in Dún Laoghaire Rathdown continue to be the most expensive, with the average price in that council area breaking through the €700,000 level at €701,956. South Dublin was the most affordable of the city’s four local authority areas, with an average price of €404,936.

Outside of Dublin, the Mid-East was the most expensive region, with a mean price of €339,157. Wicklow was the most expensive county, with a mean price of €433,364.

The Border region was the cheapest place to buy a home, with an average price of €167,485. Longford (in the Midland region) was the least expensive county in the State with a mean price of €145,815.

Price rises

Headline price inflation in Dublin, where supply pressures are most acute, was 13.1 per cent; outside the capital, prices rose even faster – up by 15.4 per cent.

Stockbroker Goodbody noted that while prices rose strongly across the board, the increase in sale prices for existing homes (+16.7 per cent year-on-year) far exceeded those for new homes (+5.2 per cent) in the last three months of the year.

“There has rarely been a better time to be a seller in Ireland,” Goodbody economists said.

The figures come as a senior figure in the European Central Bank (ECB) said it had to consider the “unprecedented” rise in house prices when assessing inflation across the euro zone and deciding how fast to tighten monetary policy.

Isabel Schnabel’s comments to the Financial Times are some of the most “hawkish” by an ECB executive board member ahead of next month’s meeting, when it will decide when to withdraw its stimulus in response to record inflation in the trading bloc.

“If this [rise in the costs of home ownership] were included, it would have a substantial effect on measured inflation, in particular on core inflation, where the weight of owner-occupied housing is larger. It has to be part of our general considerations,” she said.

Rise in transactions

The CSO also reported a sharp rise in the number of transactions completed in December, up by 13.2 per cent on November to 5,170. They were valued at €1.8 billion.

Property prices nationally have increased by 114 per cent from their trough in early 2013, while prices in Dublin have risen 119.6 per cent from their February 2012 low.

"The impact of inflation is being felt across a broad spectrum of goods and services, and property prices are no different," said Trevor Grant, chairman of the Association of Irish Mortgage Advisors. "However, while the growth in property prices remains strong, we would expect this to slow as the year progresses.

“This is due to the anticipated increased supply coming on stream, and the Central Bank’s macroprudential rules kicking in, as exceptions potentially diminish or become harder to obtain, and borrowing power is reduced accordingly,” he said.

Umbrella group Brokers Ireland said prices are now well into double-digit growth in all 20 market cohorts captured by the CSO’s index, with very high levels of increases in areas like the Border (23.7 per cent); the south-east (19.1 per cent); the midlands (16.9 per cent) and the south-west (15 per cent).

“We need to see more supply of homes to dampen this level of growth which is largely confining home ownership to the better off or those with family support,” the group’s director of financial services Rachel McGovern said.

Eoin Burke-Kennedy

Eoin Burke-Kennedy

Eoin Burke-Kennedy is Economics Correspondent of The Irish Times