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Are you thinking of investing in property in the land of Shamrocks? Are you unsure when would be the best time to proceed?
People have different thoughts about market timing. Your Irish friend might suggest that now is the worst time to buy property, whereas your relative who actually lives in Dublin may have a different opinion and suggest waiting for better opportunities.
At Investropa, when we create articles or update our pack of documents related to the real estate market in Ireland, we base our work on verifiable facts and concrete data rather than subjective opinions.
We have gone through official reports and government website statistics in great detail. As a result, we have created a reliable database filled with valuable information. Here's what we found, which can help you decide whether it's the right time to buy real estate in Ireland.
Ready? Let's go!
How is the property market in Ireland these days?
Ireland is, today, one of the most stable countries in the world
Positive
When evaluating real estate opportunities, prioritizing stability is essential as it fosters investor confidence and attracts sustainable development in the country. It is an information you need as a foreigner buying a property in Ireland.
You probably already know that Ireland is incredibly stable. The last Fragile State Index reported for this country is 18.6, which extremely high.
Ireland's stability today can be attributed to its robust economic growth driven by a strong technology and pharmaceutical sector, alongside its strategic position within the European Union that attracts foreign direct investment. Additionally, Ireland's commitment to social policies and political neutrality has fostered a cohesive society and minimized internal and external conflicts.
Investors can definitely rely on the country's stability for investment. Let's review the economic outlook.
Ireland is poised for strong growth
Positive
You have to check the country's economic health before making a property purchase.
As indicated by IMF projections, Ireland is likely to finish 2024 with a growth rate of 1.5%, which is positive. Regarding 2025, the experts say 2.5%.
The pace will even accelerate since Ireland's economy is expected to increase by 10.3% during the next 5 years, resulting in an average GDP growth rate of 2.1%.
The expected sustainable growth rate in Ireland indicates a stable and growing economy, which can lead to increased demand for real estate as more people and businesses seek to live and operate there. This growth can drive property values up over time, making it a potentially profitable investment for real estate investors.
However, GDP growth is not the only metric to look at.
Irish business owners project resolute confidence in the economy
Positive
GDP growth is important, but may not reflect business community views on property market. Thankfully, in Ireland there is an official metric that is regularly reported. It's not the case for every country, so we're lucky.
The metric called the Business Consumer Index (BCI) assesses business leaders' confidence in the current and future economic conditions, based on surveys and assessments.
Based on The Global Economy's findings, the Business Confidence Index is currently at 23 for Ireland. For interpretation, this score is strong.
This trend is sound - optimism was already present 12 months ago. The score, back then, registered at 20.
When local businesses in Ireland exhibit strong confidence about the future, it signals promising prospects for property investors. This robust sentiment reflects a thriving economy with expanding job opportunities and rising incomes. As a result, the demand for properties increases, creating an advantageous environment for investors to earn rental income and potentially benefit from long-term property value appreciation.
Ireland is dispensing a lot more building permits
Positive
When determining whether it's a favorable time to purchase property in a country, it's helpful to take into account the quantity of construction permits issued. Increasing building permits indicate a positive outlook for the property market, instilling confidence.
We have excellent news to share with you: the number of building permits delivered is booming in Ireland.
Over the course of the past year, according to Central Statistics Office Ireland, the number of building permits granted by Irish local institutions rose by 12%, from 8,815 to 9,870 units.
Definitely, the data tells us that many people believe it's a favorable time to invest in real estate.
Keep in mind, however, that the domestic market will see an increase in the availability of real estate. Taking this into account, there is a chance that property prices will drop in Ireland in 2025.
House prices in Ireland reach a plateau after a period of growth
Positive
Ireland's home prices have increased by 28.4% in 5 years according to Central Statistics Office Ireland.
It means that if you had bought a cottage in County Kerry for $650,000 five years ago, then it would now be worth around $835,000.
In recent times, there has been a period of growth in house prices in Ireland, but now they are stabilizing
This is a clear positive sign. Property prices have been consistently rising, now they're more stable. It's a good time to consider an investment before the next phase of growth.
You can find a more detailed analysis of the real estate prices in our property pack for Ireland.
Everything you need to know is included in our United Kingdom Property Pack
Ireland's population is growing and getting a lot richer
Positive
When you're looking to buy real estate, population growth and GDP per capita deserve careful consideration because:
- a growing population means more people needing homes
- a higher GDP per person means people have more money to spend on housing (which can lead to increased property value over time)
In Ireland, the average GDP per capita has changed by 36.2% over the last 5 years. Almost no other country has achieved a higher level of success. Furthermore, the Irish population is growing (+8% in 5 years).
This means that, if you purchase a cozy cottage in the Irish countryside and rent it out, you will find that each year, you'll attract more tenants with sufficient funds to cover the rent.
If you're considering purchasing and renting it out, this trend is a good thing. Then, the demand for rentals is predicted to increase in Irish cities such as Dublin, Cork, or Galway in 2025.
Rental yields are really attractive in Ireland
Positive
Rental yield is a common measure used to determine the returns of real estate investments.
It represents the annual rental income generated by a property divided by its purchase price or market value. For instance, if a property in Ireland is purchased for €300,000 and generates €18,000 in annual rental income, the rental yield would be 6%.
According to Numbeo, rental properties in Ireland offer gross rental yields ranging from 5.3% and 8.0%. You can find a more detailed analysis (by property and areas) in our pack of documents related to the real estate market in Ireland.
Yields like these are rare to come by.
Also, as we have seen before, there might be a fall in housing prices (because of more available properties) and potential tenants are getting wealthier. Consequently, gross rental yields are very very likely to soar in Ireland in 2025.
Everything you need to know is included in our United Kingdom Property Pack
In Ireland, inflation is expected to be minimal
Neutral
In two words, inflation is when prices rise.
It's when your customary pint of Guinness in Dublin costs 6 euros instead of 5 euros a couple of years ago.
If you're considering investing in a property, high inflation can bring you several advantages:
- Property values tend to increase over time, leading to potential capital appreciation.
- Inflation can result in higher rental rates, thereby increasing the cash flow from the property.
- Inflation reduces the real value of debt, making mortgage payments more affordable.
- Real estate can act as a hedge against inflation, preserving the value of the investment.
- Diversifying into real estate provides stability during inflationary periods.
As indicated by IMF projections, over the next 5 years, Ireland will have an inflation rate of 1.0%, which gives us an average yearly increase of 0.2%.
This data means that Ireland will likely experience almost no inflation. If you buy a property now, you may experience lower appreciation potential and reduced returns on investment.
Is it a good time to buy real estate in Ireland then?
Now it's time to draw our conclusions.
2025 is shaping up to be a fantastic time to consider buying property in Ireland, and there are several compelling reasons for this. First off, Ireland is currently one of the most stable countries in the world, which is a huge plus for anyone looking to invest in real estate. Stability often translates to a safer investment environment, and with Ireland's economy expected to grow by 10.3% over the next five years, the country is on a solid path. This growth, averaging a GDP increase of 2.1% annually, suggests a robust economic future that can support a thriving real estate market.
As Ireland's economy continues to expand, the demand for real estate is likely to increase. A growing economy often means more people and businesses are looking to settle in the area, which can drive up property values over time. This makes buying property in Ireland not just a stable investment, but potentially a very profitable one. With more building permits being issued, the country is preparing to meet this demand, ensuring that there will be a variety of options available for potential buyers.
Moreover, house prices in Ireland have reached a plateau after a period of growth, which could mean that now is a prime time to buy before prices start to climb again. Coupled with a growing and increasingly affluent population, the real estate market in Ireland is poised for a positive trajectory. As more people gain wealth, the demand for quality housing is likely to rise, further supporting the potential for property value appreciation.
Finally, the rental market in Ireland is also quite attractive, with gross rental yields ranging from 5.3% to 8.0%, according to Numbeo. This makes it a great opportunity for those looking to invest in rental properties. Additionally, with minimal inflation expected, the purchasing power of your investment is likely to remain stable, making 2025 an ideal time to dive into the Irish property market.
We genuinely hope this article has provided you with helpful information.. If you need to know more, you can check our our pack of documents related to the real estate market in Ireland.
-Will real estate prices go up in Ireland?
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.