How EU made a fundamental error when determining Irish house prices are not overvalued

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How EU made a fundamental error when determining Irish house prices are not overvalued
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How the European Commission made a fundamental misstep when determining that Irish house prices are not overvalued (via IrishTimesBiz)

The finding will leave many here scratching their heads particularly when we know average house prices nationally, in Dublin and in Dún Laoghaire-Rathdown, the most expensive local authority area, are seven, 10 and 14 times the average full-time income here.

The think tank modelled where house prices should be on the basis of various economic and demographic factors such as income, population, credit and interest rates. “That doesn’t necessarily mean that house prices are going to fall by that amount, but what it does suggest is that the substantial increases in house prices that we’ve witnessed cannot continue into the future and you’re likely to see a significant moderation in terms of house price growth in the coming quarters and over the next year,” he said.

In the commission’s post-programme surveillance report, also published last month, it assesses the performance of Ireland’s economy while flagging some risk factors related to the housing market here. “In the case of Ireland, our indicators point that housing price increases are not as high as we have seen in other member states. Prices have been increasing, but the pace of increases have not been as high as elsewhere,” they said.

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