Simple answer, No.
I have done a lot of research on this topic and in my view, several experts who cover this topic are choosing not to take a real stance on this. In the years following the global financial crisis of 2008, Irish property markets experienced one of the most dramatic crashes in modern memory.
Understandably, many Irish residents today, including myself, still carry that trauma and memories of ghost estates (which I believe might have contributed to the government’s decision to stop funding social housing in the 2010s). So we frequently ask: are we heading for another housing market crash?
Given current circumstances, the most likely outcome over the next 5 years is for a mild recession to happen or for house prices to stabilise. But they are unlikely to crash as significantly as they did in 2008.
Here is why:
1. STRUCTURAL UNDERSUPPLY OF HOMES.
Ireland continues to experience a major supply shortage. In previous blog posts, we already mentioned that Ireland needs around 50,000 new homes per year, but has only managed about 30,000 per year during the last 2 years. It is already guaranteed that the required targets will be missed again this year.
This imbalance between strong demand and limited supply acts as a price floor, and keeps values from falling sharply.
2. STRONG REAL DEMAND.
Just as the supply is limited, there is very strong existing demand that makes a housing crash very unlikely.
With rising population figures, demand remains resilient. Unlike in 2008, where demand was grossly inflated by financial speculators, today’s average home buyer mostly need somewhere to live.
3. TIGHT MORTGAGE LENDING RULES.
In 2008, prices were propped up by a credit bubble, loose lending, and speculative building. When the bubble burst, oversupply and massive mortgage defaults followed. Ireland’s big banks had to be bailed out and they learned not to lend to just anyone.
Unlike the pre-2008 era of risky lending, mortgage approvals today undergo strict mimimum requirements by most banks. These approvals are governed by strict Central Bank rules on deposit sizes and income multiples. This also means that buyers are less likely to default in very large numbers, like they did in 2008.
4. NO OVERSUPPLY IN SIGHT.
In 2008, Ireland had an excessively abundant supply of housing due to speculative overbuilding. Today, the opposite is true. A good indicator is that second-hand listings remain lower year on year.
Until this changes significantly, a correction (never mind a crash) is highly improbable.
5. INSTITUTIONAL OWNERSHIP & MARKET CONTROL
A growing share of Irish homes is owned by large institutional investors and Real Estate Investment Trusts (REITs), who are less likely to panic-sell during downturns. This stabilises the market and reduces the kind of price volatility seen in previous crises.
If there is going to be a reduction in house prices, it will not be significant enough for a crash. The reduction in prices will only be a stabilising mechanism, as house prices cannot rise indefinitely – since a large number of average buyers cannot afford to pay for them, and are also dealing with rising prices of other commodities.
6. INFLATION + CONSTRUCTION COSTS
Even if demand reduces, the rising cost of building (labour, materials, land) will keep developers from slashing prices significantly. It simply wouldn’t work. That acts as another brake on falling prices.
What’s the Most Likely Outcome?
In my opinion, it will be Stabilisation or a brief recession, but not collapse.
Over the next 3–5 years, we may see price stagnation in parts of the market (especially in Dublin), modest growth in other regions, or occasional short-term dips.
But a full-blown crash like 2008 where property values fell 40–50% is highly unlikely – not without a global financial shock or systemic local collapse.
