As we all know, Ireland’s property market has become nearly unaffordable, driven by relentless demand and record-low supply. But recent commentary from the MyHome.ie Q1 2025 report, in collaboration with Bank of Ireland, presents a new twist in the story – the threat of a US-EU tariff war could dampen housing demand and cool price growth. (Irish Examiner, Breaking News)
I know this sounds rather strange, as the typical tariff logic goes like this:
US-EU tariff war = higher prices of both imports & exports = higher prices of imported building materials and labour = higher cost of houses.
Makes sense, right?
So imagine my surprise when the articles claimed otherwise. So I had to read further and go digging and I was quite surprised with what I found. But before I present my findings, please allow me to summarise some interesting numbers from the report.
Interesting Numbers from the MyHome Q1 2025 Report
| Category | Details |
|---|---|
| Annual Asking Price Inflation | 8.1% nationally 6.2% in Dublin 9.2% in the rest of the country |
| Median Asking Price | €375,000 nationally €450,000 in Dublin €315,000 outside Dublin |
| Average Mortgage Approval | €318,400 in January 2025 (up 7% YoY) |
| First-Time Buyer Activity | Highest drawdown levels since 2007 |
| Homes for Sale (Mar 2025) | 10,800 homes available (record low) |
| Completions (2024) | 16,200 scheme houses 21,600 total including one-offs |
| Time to Sale Agreed | 11 weeks (near historic low) |
| Over-Ask Sales | 1 in 7 properties sold for 20% over asking price |
The Q1 2025 MyHome.ie report paints a revealing picture of Ireland’s current housing market.
- The national annual asking price inflation of 8.1% — with even higher growth outside Dublin — highlights how strong demand continues to drive prices upwards, particularly in regions perceived as more affordable.
- The median asking price of €375,000 reflects the national average, but stark regional contrasts persist, with Dublin’s median at €450,000 compared to €315,000 elsewhere.
- Mortgage data shows that first-time buyers remain active, with mortgage approvals hitting a 7% year-on-year increase — reaching levels not seen since the Celtic Tiger era. However, this surge is taking place in the context of a severe supply shortage. Just 10,800 homes were available for sale on MyHome.ie in March 2025, the lowest ever recorded.
- Despite this scarcity, homes are selling at record speed — within 11 weeks on average — and one in seven is fetching 20% over the asking price. This points to fierce competition among buyers, further fuelling price pressures.
In essence, the table suggests that while housing demand and buyer activity remain strong, Ireland’s housing market is increasingly fragile, vulnerable to supply shocks and external economic risks — such as a potential US-EU trade war — that could suddenly alter demand and affordability.
How a Tariff War ‘Could Stabilise‘ House Prices in Ireland.
At first glance, the idea that a US-EU tariff war could slow down house price inflation in Ireland might seem counterintuitive. After all, as I mentioned previously, wouldn’t higher import costs push prices up?
That logic makes total sense. But it overlooks a key factor driving the Irish housing market
🔑 The key issue isn’t just costs, it’s demand – and who is driving that demand.
Ireland’s housing market especially in high-demand areas like Dublin; is heavily influenced by high-income earners working in multinational sectors (think tech and pharma). Many of these sectors are closely tied to US companies and the US market.
If a US-EU tariff war breaks out, it could:
- Hurt Ireland’s exports to the US
- Disrupt US-based multinational companies operating in Ireland (e.g., layoffs, reduced hiring, halting new projects)
- Reduce investment in Ireland from US tech/pharma firms
- Lead to job losses or salary stagnation in high-paid sectors
🧠 So what happens when demand from high-income buyers drops?
If Google, Meta, Pfizer, or Apple were to scale back Irish operations due to US-EU trade tensions, then the hundreds or thousands of employees they support in the housing market might hold off on buying, or leave altogether – reducing the pool of active buyers.
Even if building costs go up, if fewer people can afford to buy homes, or if companies downsize or leave, demand falls; and that puts downward pressure on prices or at least slows the pace of growth.
In short:
| My Thinking | Report’s View |
|---|---|
| Tariffs = higher costs = house prices rise | Tariffs = risk to jobs/income in top sectors = lower demand = price growth slows |
Other Reasons Why a Trade War Could Slow Down House Prices.
At first glance, it may seem like a trade war, which could drive up the cost of imported materials, might increase house prices. But here are other reasons why that logic may not quite hold up in the current Irish context.
- An economic shock that affects US multinational companies in Ireland could also lead to:
- Job cuts or hiring freezes amongst other non-US companies in Ireland that deal directly with US multinational companies on a daily basis
- Decline in high-value home purchases, as there will be fewer high-salary individuals than usual
2. Even without direct layoffs, consumer sentiment may weaken. Many households may delay large financial commitments like buying a home due to fears about:
- Economic instability
- Rising unemployment
- Slower wage growth
This would temper the demand side, even if supply issues remain.
Some Implications Going Forward.
- Short-Term – If the trade war happens, we could see slower home price growth in 2025, possibly staying around the 5% mark or even lower in urban areas.
- Long-Term – If the multinational sector rebounds or if the EU negotiates trade arrangements that can reduce the shock, pent-up demand could return strongly by 2026.
- Policy Response – Joanne Geary, Managing Director of MyHome emphasises that the government must continue increasing housing supply while preparing buffers (like job support schemes or investment incentives) in case the economic shock becomes severe. But I’m afraid to admit this is easier said than done.
Final Word
While national supply and demand are still the main drivers of Irish housing prices, external geopolitical and economic events can no longer be ignored.
As the MyHome Q1 2025 report outlines, Ireland’s reliance on high-income earners in a few key sectors is a structural weakness. Policymakers and investors alike should be alert to these risks, even as the broader market remains strong.
SOURCES
