Dublin house prices fall for first time in two years as rural market continues to surge
Daft report finds a widening urban-rural divide, with transaction prices in Dublin down 2.3% year-on-year while asking prices in Connacht and Ulster rise by 8.8% amid persistent shortages of second-hand homes.
23 June 2026 | 📧 editor@ipropertyradio.com
Ireland’s housing market is showing increasingly different trends between urban and rural areas, according to the latest Daft.ie House Price Report, with Dublin recording its first annual decline in transaction prices since 2023 while asking prices continue to rise strongly across much of rural Ireland.
The report found that selling prices of homes in Dublin were 2.3% lower in June 2026 than a year earlier. While Daft notes this figure may be revised as additional transactions are registered, it marks a significant shift in the country’s largest housing market.
Nationally, house price inflation continues to slow. Selling prices rose by 3.2% in the year to June, the weakest annual increase since 2023. Average asking prices increased by 3.8% year-on-year to €445,000, down from an annual inflation rate of 6.8% at the same point last year.
According to the report, Ireland is increasingly experiencing a “two-speed” housing market. In Dublin, asking-price inflation has slowed to 3%, approximately half the rate recorded a year ago. Across the other major cities, asking prices were effectively unchanged, falling by 0.2% on average.
Outside urban centres, however, price growth remains considerably stronger. Asking prices rose by 4.8% in Leinster outside Dublin, 6.3% in Munster and 8.8% across Connacht and Ulster.
The report attributes much of this divergence to differences in housing supply. While the number of second-hand homes available for sale nationally increased by 6% over the past year to just over 13,100 properties, availability remains only around half the pre-pandemic norm of more than 26,000 homes.
Supply improvements have been concentrated in urban markets. Dublin’s stock of homes for sale is now approaching pre-Covid levels, while availability remains severely constrained elsewhere. Supply in Munster outside the cities remains 66% below the average recorded between 2015 and 2019, while Connacht and Ulster continue to operate with supply levels 64% below that benchmark.
Professor Ronan Lyons, economist at Trinity College Dublin and author of the report, said supply remains the key factor shaping market performance.
“The defining theme of the second quarter is a broad-based slowdown in price inflation, but it is far from uniform,” he said.
“We are seeing a genuinely two-speed market: cooling in and around the cities, where supply is at last recovering and competition between buyers is easing, but still running hot across much of rural Ireland, where availability remains acutely tight.”
The report also found evidence that competition among buyers is easing. The gap between asking prices and final selling prices narrowed to 5.5% nationally, down from 6.8% a year ago.
Longer-term trends reveal how affordability pressures have influenced buyer behaviour. Since the beginning of the Covid-19 pandemic in early 2020, house prices in Dublin have risen by approximately 30%. In contrast, prices across Connacht and Ulster have increased by 73%, reflecting growing demand in traditionally lower-cost regions as remote and hybrid working arrangements have expanded housing search areas.
The average asking price of a three-bedroom semi-detached home now stands at €580,000 in Dublin, €626,000 in Galway city, €439,000 in Cork city, €379,000 in Limerick city and €308,000 in Waterford city.
Despite the moderation in price growth, Daft’s analysis highlights continuing structural supply challenges. In the year to March 2026, the number of residential property transactions increased by just over 3%, but all of that growth came from newly built homes, where sales rose by 17%.
Professor Lyons said the second-hand housing market remains largely stagnant.
“The second-hand market – still by far the largest potential source of supply – is effectively stuck,” he said.
“New construction is hugely important, and the country needs to be building well above 60,000 homes a year, not under 40,000. But new-builds alone cannot rebalance the market.”
He argued that a healthier housing market would require greater movement among the country’s approximately 1.4 million owner-occupied homes, particularly as more homeowners come to the end of fixed-rate mortgage periods agreed during the interest rate shocks of the early 2020s.
The report also highlights the scale of house price growth over recent years. National asking prices are now 44% higher than before the pandemic and sit just 8% below peak Celtic Tiger levels.
Responding to the report, Tánaiste Simon Harris said the Government is seeking to increase housing supply in rural Ireland through proposed changes to rural planning policy. He said revised rural planning guidelines are expected to come before Cabinet shortly and would aim to make it easier for people from rural communities to build homes within their local areas.
The findings reinforce the growing importance of supply in determining market outcomes. While urban markets appear to be entering a period of stabilisation, constrained availability in many rural counties continues to place upward pressure on prices, creating increasingly different housing experiences depending on location.
