House prices up 6.6% as 72% of agents report critically low stock and first-time buyers priced out of family homes
New SCSI data shows affordability gaps of up to €24,500 for standard three-bed homes while completions rise 20% year-on-year
5 February 2026 |Â editor@breakingground.news
Ireland’s residential development market continues to be shaped by rising prices, constrained supply and persistent affordability pressures, according to the SCSI Annual Residential Market Monitor Review and Outlook 2026SCSI_ResidentialMarketMonitor20….
National residential property prices increased by 6.6% in the 12 months to November 2025, significantly outpacing earnings growth of between 4.3% and 5.3% over the same period. SCSI agents expect prices to rise by a further 4% nationally over the next 12 months, driven primarily by undersupply, with 58% of respondents identifying low levels of new housing delivery as the main factor influencing prices.
While housing output has improved, supply remains structurally insufficient. New dwelling completions reached 36,284 units in 2025, up almost 20% on 2024. Q4 completions alone rose by 38.5% year-on-year to nearly 12,000 units. Despite this uplift, 72% of agents report low levels of available stock, underlining the ongoing gap between delivery and demand.
For residential developers, the data highlights a clear mismatch between what the market is delivering and what first-time buyers can afford. Using a benchmark garda and nurse household with a combined income of €112,000, SCSI analysis shows that three-bedroom semi-detached homes remain largely unaffordable in key commuter counties. Funding shortfalls range from €2,000 in Meath and Kildare to €24,500 in Wicklow. Cork is the only county assessed where a modest surplus of €7,000 is recorded for this house type.
Smaller typologies continue to dominate affordability. Two- and three-bedroom terraced homes are consistently the most accessible for first-time buyers, with surpluses reaching €124,000 for two-bed terraced units in Cork and €52,000 in Kildare. The findings reinforce the commercial reality that compact, higher-density schemes remain the most viable route to market absorption under current lending and income constraints.
Market sentiment points to continued friction in transaction delivery. Sales instructions declined to a net balance of -5% in the second half of 2025, while sales agreed but not proceeding rose sharply. The most common causes of failed transactions are non-compliance with planning permissions, non-compliance with building regulations, and delays in accessing title deeds — issues with direct implications for developers, funders and conveyancing timelines.
On the rental side, conditions remain tight and are expected to tighten further. A total of 86% of agents anticipate continued exits by small landlords in 2026, driven by complex regulation, low net rental returns and the extension of Rent Pressure Zones nationwide. Residential Tenancies Board data shows termination notices rose by 35% year-on-year in Q3 2025, with 61% issued due to landlords intending to sell. This trend is already feeding additional stock into the owner-occupier market but is reducing rental availability.
Energy performance is increasingly influencing both pricing and demand. Half of SCSI respondents report that homes with higher BER ratings achieve price premiums of between 5% and 10%, reflecting lower running costs and buyer preference. For developers, this reinforces the commercial value of energy-efficient design alongside regulatory compliance.
Overall, the SCSI concludes that while Ireland’s economic fundamentals remain strong, housing delivery, affordability and rental market stability remain misaligned. For residential developers, the data points to continued demand, but within tightening affordability ceilings that favour smaller units, careful scheme design and accelerated delivery to avoid cost and compliance risks.
