Ireland has built more homes, population growth has remained strong and property prices have recently begun to rise more slowly. Yet buying a home remains extraordinarily expensive by European standards.
The problem is not simply that Irish houses carry a high price tag. It is that housing has become expensive relative to the wider cost of living and, for many households, the income needed to pay for it.
Eurostat’s latest comparison shows just how unusual Ireland’s housing costs have become In 2024, housing costs in Ireland were 87% above the European Union average, the highest level recorded in the EU. Denmark was 86% above the average and Luxembourg 78% above. In 2010, Ireland was only 17% above the EU average.
That raises a straightforward question — why has housing become so expensive in Ireland when other European countries have also experienced major increases in property prices? There is no single answer, but several converging pressures explain most of the gap.
Ireland’s housing shortage is at the centre of the problem
The most obvious explanation is supply.
Ireland’s population has grown substantially while the number of homes available has struggled to keep pace with demand, particularly in Dublin and other areas where employment, universities and services are concentrated.
The effect is straightforward. When more households compete for a limited number of homes, buyers can bid up prices and renters face greater competition for available properties.
Ireland is now building considerably more homes than it was a decade ago. The CSO recorded 7,856 new dwelling completions in the first quarter of 2026, 32.9% more than in the same quarter of 2025 and the highest Q1 figure since the series began in 2011.
But increased construction does not immediately remove an accumulated shortage.
The Central Bank currently expects housing completions of around 40,000 in 2026, 43,000 in 2027 and 46,000 in 2028. It has also warned that those forecasts depend on improvements in infrastructure constraints. At the same time, approximately 42,000 homes with planning permission had not yet commenced construction — a figure that matters because it shows Ireland’s problem isn’t simply a shortage of planning permissions, but a difficulty converting those permissions into completed homes at the required speed and cost.
Building a home in Ireland is expensive
More supply will only bring prices down if homes can actually be delivered at viable prices.
This is where Ireland’s construction economics become important.
A Government-commissioned construction cost study compared Irish residential development with cities including Berlin, Copenhagen, Utrecht and Birmingham.
The study found that direct construction costs accounted for approximately half of overall residential development costs. The other half includes items such as land acquisition, professional fees, finance, VAT, marketing and developer margins.
The comparison also found that the cost of constructing the same apartment was broadly similar across the comparator cities, while the same house was about 15% cheaper to construct in Birmingham than in Dublin.
This means the price of an Irish home cannot simply be explained by developers charging an arbitrary premium.
A large part of the price is determined before a house reaches the market.
Land, planning, infrastructure, finance, construction, professional services, taxes and compliance all have to be paid for.
The Government’s latest work on total development costs continues to examine these factors across Dublin, Cork, Limerick, Galway and other locations.
Infrastructure can hold back homes even when land is available
Ireland has another problem that is easy to overlook: having land is not the same as having serviced land.
A site may have planning potential but still lack the water, wastewater, electricity, transport or other infrastructure needed to support a development.
The Central Bank has repeatedly identified infrastructure as a constraint on housing delivery. Its latest forecast remains conditional on improvements in water, energy and transport infrastructure.
This helps explain why arguments about Ireland having plenty of undeveloped land can be misleading.
The relevant question is not how much land exists somewhere on the island.
It is how much land can be developed where people need housing, at a cost that makes the resulting homes affordable.
Dublin’s economy creates a difficult housing equation
Ireland’s housing shortage is particularly severe around the capital because Dublin is not simply another Irish city.
It is the country’s largest concentration of employment, multinational companies, universities and higher-paid jobs.
That creates strong demand for accommodation.
But Dublin also faces some of the highest development costs and the greatest infrastructure pressures.
The result is a difficult equation: large numbers of people want to live close to employment, but delivering additional housing in those locations is expensive and can take years.
The Central Bank has previously identified particular viability problems for apartment construction in Dublin. Its analysis found that apartments and high-density housing face higher delivery costs, while differences in specifications and unit sizes can also make Irish projects more expensive than some comparator cities.
This matters because a housing system cannot become genuinely affordable simply by building more expensive homes.
It needs enough homes at prices that households can actually support.
Ireland’s homes are expensive even though Irish inflation has been relatively low
There is another useful European comparison.
Eurostat estimates that consumer prices in Ireland increased by about 24% between 2010 and 2024, compared with 39% across the EU.
Yet Irish housing costs moved in the opposite direction relative to the European average. Ireland went from housing costs 17% above the EU average in 2010 to 87% above it in 2024.
That is a significant divergence.
It suggests that Ireland’s housing problem cannot simply be dismissed as a consequence of general inflation.
Housing has become a much larger outlier.
The same Eurostat data shows that EU house prices increased by 53% between 2010 and 2024. Irish rents increased by 108% over that period, compared with 25% across the EU.
Ireland’s experience is therefore unusual not because no other European country has experienced a housing boom, but because the cost of housing has moved so far away from the European norm.
More homes are being built, but the shortage has a long history
Ireland’s current supply problem also has to be viewed through the aftermath of the financial crash.
The collapse of the property market after 2008 was followed by a prolonged period of very low construction.
The consequences lasted well beyond the crash itself.
Housing demand did not disappear while construction capacity was being rebuilt. Population growth eventually accelerated, employment recovered and migration increased, while the housing stock had not expanded sufficiently.
That created a structural imbalance.
The increase in construction in recent years is helping, but it is dealing with both today’s demand and the accumulated shortage from previous years.
That is why a record first-quarter completion figure does not automatically translate into cheaper houses.
The market is not simply being driven by construction costs
It would also be wrong to conclude that high building costs alone explain Irish house prices.
The Government’s own development-cost work separates construction costs from other costs involved in delivering a home. Land, finance, professional fees, taxation and other expenses can make a major difference to the final price.
There’s also a difference between the cost of producing a home and what someone is willing to pay for it — in a shortage, market prices can rise above the underlying cost of construction because buyers are competing for scarce properties. Reducing construction costs can make more projects viable and improve affordability, but it won’t solve the problem by itself if the number of homes remains below demand.
Ireland’s housing model is different from much of Europe
Ireland also has a distinctive housing pattern.
Eurostat found that 90% of Ireland’s population lived in a house in 2024, the highest share in the EU. The Netherlands and Belgium followed at 77%. Across the EU as a whole, 51% of people lived in houses and 48% in flats.
That matters because the type of housing a country builds affects both land use and construction costs.
A system dominated by houses requires considerably more land per household than one in which a larger proportion of people live in apartments.
Ireland therefore faces a difficult choice in its high-demand cities.
It can continue trying to accommodate demand through low-density development, which consumes more land and requires extensive infrastructure, or increase the supply of well-designed apartments and higher-density housing in suitable locations.
Neither approach is cost-free.
Why Ireland can feel more expensive than the headline house price suggests
The affordability problem becomes clearer when housing is considered alongside other household expenses.
Eurostat’s housing-cost measure includes more than the purchase price of a property. It includes costs associated with housing such as mortgage interest, rent, insurance, maintenance and utilities.
In 2024, EU households spent an average of 19% of disposable income on housing.
This is why saying that a house in Ireland costs a particular number of euros does not tell the whole story.
Two countries can have similar property prices but very different levels of affordability depending on wages, taxes, mortgage costs, rents, energy bills and the availability of alternative housing.
Ireland’s housing problem is therefore better described as a cost-and-supply problem than simply a house-price problem.
What would actually make Irish housing cheaper?
There is no single policy capable of fixing the problem.
More construction is necessary, but it needs to happen at sufficient scale and in the places where demand is strongest.
Planning processes need to allow viable developments to move forward without unnecessary delays, while infrastructure must arrive in time to support new communities.
Construction costs need to be controlled without reducing the quality or energy performance of homes.
The supply of serviced development land needs to increase.
And Ireland needs a larger supply of affordable and cost-rental housing so that households are not entirely dependent on either an expensive private rental market or purchasing a home.
The European comparison also suggests that Ireland should look beyond the headline price of a house.
The country’s housing costs have moved from 17% above the EU average in 2010 to 87% above it in 2024. At the same time, Irish rents more than doubled over that period.
That is the deeper reason Irish housing feels so expensive.
Ireland is not the only European country where property prices have risen sharply. Several countries have experienced much larger percentage increases in house prices since 2010.
But Ireland has developed a particularly difficult combination of high housing costs, limited supply in high-demand areas, expensive development and a long period of underbuilding.
Until those pressures are tackled together, building more homes will increase supply without necessarily making Irish housing genuinely affordable.
