Irish property market set for steady growth in 2026 as supply constraints dominate outlook
Lisney expects rising prices across most sectors, stronger investment volumes and persistent delivery bottlenecks
28 January 2026 | 📧 editor@irishrealestate.news
Ireland’s property market is expected to remain resilient through 2026, with demand holding firm across residential and commercial sectors despite ongoing global uncertainty and entrenched supply constraints, according to the Lisney Property Market Outlook 2026.
Lisney forecasts that pricing will trend upward in many segments this year, underpinned by strong underlying demand, high employment levels and easing interest rates. However, constrained supply, particularly of prime, sustainable and well-located stock, is expected to remain the defining feature of the market and a limiting factor on overall activity.
Residential market faces slower but continued price growth
In the residential sales market, Lisney expects buyer activity to remain strong but more cautious, with purchasers increasingly price-sensitive after more than a decade of growth. National house price inflation is forecast to moderate to around 5% in 2026, down from 7% in 2025 and 11% in 2024, reflecting affordability pressures in certain price brackets.
Demand is expected to remain concentrated on turnkey homes with strong energy efficiency credentials, particularly properties with A or B BER ratings. Coastal locations, established suburbs and areas within key school catchments are forecast to continue outperforming the wider market.
Supply deficits remain acute. Housing completions in 2025 are estimated at approximately 32,000 units, well below the 50,000–60,000 homes per annum widely cited as necessary to meet demand. Population growth of around 1.5% per annum is expected to exacerbate this imbalance. Lisney notes that the introduction of bridging finance by one pillar bank may improve market liquidity by enabling more right-sizing transactions, particularly in established suburban areas.
The rental market is forecast to remain exceptionally tight. Demand continues to outstrip supply across all major urban centres, with upward pressure on rents persisting. Lisney highlights a widening gap of up to 20% between rents on new and existing tenancies, driven by rent regulation, and expects further exits by small landlords in 2026 despite planned legislative reforms.
Development land and housing delivery remain constrained
Activity in the development land market is expected to improve modestly in 2026, supported by greater policy certainty following the publication of the Government’s new housing plan and ongoing planning reforms. Annual turnover in the Greater Dublin Area has averaged around €500 million in recent years, with demand strongest for ready-to-go residential sites.
However, Lisney warns that construction indicators remain materially below required levels. Commencement notices fell sharply in 2025 following the expiry of temporary development contribution waivers, and while planning permissions have improved, they remain below earlier peaks. High-density apartment delivery continues to face viability challenges, although the reduction in VAT on new apartments to 9% announced in Budget 2026 is expected to provide some support.
Investment volumes forecast to rebound
Ireland’s commercial real estate investment market is expected to strengthen in 2026. After recording approximately €2.5 billion in annual turnover in each of the past two years, Lisney forecasts that investment volumes could exceed €3.25 billion this year, with the potential to reach €3.75 billion in the absence of external shocks.
International investors are expected to dominate larger lot sizes, while domestic private investors remain active in smaller transactions. Sustainability credentials are increasingly central to investment decisions, with asset quality and upgrade pathways directly influencing pricing and liquidity.
Yield compression is anticipated across most sectors, particularly offices, where prime yields have already tightened by around 35 basis points in 2025 after sharp outward movement earlier in the interest rate cycle.
Office, retail and industrial markets shaped by quality and scarcity
Office take-up in 2025 returned to the long-term average of approximately 240,000 sq m, a level Lisney views as sustainable over the medium term. While Dublin’s overall vacancy rate remains elevated at around 14%, prime city centre stock is tightening, with a shortage of Grade A+ space anticipated by mid-2026. This is expected to drive rental growth and accelerate refurbishment of secondary buildings.
Retail property activity is forecast to remain strong, following two of the busiest years in almost two decades. Limited supply in prime locations, particularly in Dublin’s core retail streets and established shopping centres, is placing upward pressure on rents. The reintroduction of the reduced 9% VAT rate for hospitality from July 2026 is expected to support food and beverage operators, although cost inflation remains a significant headwind.
In the industrial sector, demand for logistics and warehousing space is expected to remain healthy but constrained by supply. Vacancy rates have hovered around 2% since 2022, well below functional levels. New development is limited, with only around 110,000 sq m currently under construction nationwide, reinforcing upward pressure on rents.
Living sectors supported by long-term demographics
Lisney identifies strong structural demand across the living sectors, including nursing homes, student accommodation and hotels. Ireland’s population aged over 80 has increased by 41% over the past decade and is projected to grow by a further 60% by 2035, underpinning sustained demand for nursing home beds. Despite projects under construction, Lisney estimates an immediate shortfall of more than 10,000 beds.
Student accommodation demand continues to be driven by rising enrolments and growth in international students, who now account for more than 15% of higher education enrolments. While supply has expanded significantly over the past decade, delivery delays and regulatory constraints are expected to keep pressure on the sector.
Overall, Lisney concludes that 2026 will reward informed, long-term decision-making, with supply constraints continuing to shape pricing, investment strategies and development activity across Ireland’s property market.
