House prices are expected to rise by around 4% this year, according to the latest analysis from Bank of Ireland.
That would represent a moderation on the 7% inflation in housing prices last year.
Properties have continued to sell at a premium in April and May, the bank noted, with median sale prices remaining 6.7% above asking, "demonstrating fierce competition among buyers into the summer".
MyHome asking prices rose by 1% in the first three months of 2026 to a median of €385,000, representing a 4.7% year-on-year increase.
Softer growth "is often the case in the first quarter of the calendar year", said BOI's Chief Economist Conall McCoille, adding that properties where selling 6-7% above asking price points to prices rising further in the coming months.
However, many borrowers are reaching the top of their affordability, while more moderate wage growth is tempering the amount they can spend.
Market activity is expanding, with residential transactions rising 6.6% year-on-year in the first three months of the year with a further increase of around 3% projected by BOI in the second quarter.
Growth is being driven almost entirely by new-build properties, which saw a 30% surge in transactions, while existing home sales declined for a fourth consecutive year.
This divergence reflects a structural challenge as existing homeowners are increasingly reluctant to move amid tight supply and competitive buying conditions, according to the BOI's analysis.
When it comes to the delivery of new homes, BOI described the country's homebuilding sector as "outperforming expectations".
Housing completions reached 38,191 in the year to the first quarter of 2026, with 7,856 units delivered in the first three months of the year alone.
Despite some if it reflecting catch-up activity, these dynamics could lead to completions of 40,000 units in 2026, exceeding earlier projections of 37,500, BOI said.
In its outlook, the lender said that new housing supply "is finally scaling up", but "tight conditions in the second-hand market and strong first-time buyer demand mean price pressures are likely to persist".
