Ireland recorded one of the lowest rates of house price inflation in the euro zone in the second quarter, Eurostat said.
The agency’s latest owner-occupied housing price index, which excludes homes bought as investments, indicated prices across the 27-member bloc rose by 4 per cent – in annual terms – between April and June this year.
The level of inflation recorded in Ireland was 3.5 per cent.
Only Luxembourg (-1.7 per cent), France (1.5 per cent), Belgium (1.8 per cent), Slovenia (2 per cent) and Finland (2.4 per cent) recorded lower rates.
The highest increases were recorded in Croatia (12 per cent), Bulgaria (11.7 per cent), Lithuania (10.8 per cent) and Portugal (10.6 per cent).
[ What is behind the slowdown in Ireland’s property prices?Opens in new window ]
The quarter-on-quarter increase in owner-occupied home prices in Ireland was 0.7 per cent, half the euro area average of 1.4 per cent.
The findings appear to back up claims that the housing market here is softening.
They come in the wake of a report from property website Daft.ie that indicated house prices, both new and second-hand, rose by 3 per cent in the year to September, about half the rate of inflation seen a year earlier.
That report found prices in Dublin rose by 0.8 per cent in the year to September, the slowest rate of increase since 2020.
The slowdown in price growth has been linked to expectations of higher borrowing costs with the European Central Bank (ECB) in the process of raising interest rates and comes amid the uncertain geopolitical outlook.
A global bond market sell-off is also pushing up borrowing costs in many countries.
In the euro area, loans with an initial fixed-rate period of 10 years-plus rose by 8 basis points to 3.43 per cent in August and the surge in euro zone government yields in recent weeks is expected to push rates even higher.
[ Irish house price growth slows as higher interest rates biteOpens in new window ]
Ireland’s housing has been adversely impacted by a shortage in supply.
The Economic and Social Research Institute (ESRI) recently forecasted that 39,200 new homes would be built in 2026 and just under 40,500 in 2027, while warning that planning permissions had not risen enough to support a sustained increase in construction.
The Government is targeting about 300,000 new homes to be built between 2025 and 2030, a pace of construction that the State has not witnessed since the Celtic Tiger era.
However, several industry leaders here claim the Government has the right policies in place to deliver 50,000 homes a year.
In the past 24 months, it has changed design standards, overhauled the rent rules and reduced VAT on new builds in a bid to entice investors back into the Irish market.