New Research Shows Irish House Prices 'Still Undervalued'

Prices likely to increase further unless significant supply created

Bubble, Bubble, Toil and Trouble, by Dr Kieran McQuinn, shows that Irish house prices (as of December 2013) were still somewhat undervalued, and in the absence of a significant housing supply response, are likely to continue to increase in the coming years. Speaking about the research, report author Dr Kieran McQuinn said “Assessing the state of the property market has arguably never been more important - it has massive implications for those in negative equity, for household consumption, and for our overall financial stability.” Commenting on the state of the housing market, he continued “Since 2013 rising house prices have prompted concern about another price bubble emerging. The economy has sustained a prolonged correction with house prices falling dramatically and housing construction coming to a near complete halt. Almost inevitably, prices have overcorrected and recent developments in the Irish housing market must be seen in that context.” “This is not to say that increasing house prices are either inevitable or desirable. Indeed as the economy continues to emerge from the recent recession, keeping key cost of living factors affordable, such as housing, is imperative as the economy seeks to maintain the competitiveness advantage that has been gained in recent times.”

Notes for Editors

1. "Bubble, Bubble Toil and Trouble", by Kieran McQuinn, is a Special Article* in the Quarterly Economic Commentary, Summer 2014.

2.This research is part of an on-going research programme focussing on the residential property market, jointly funded by NAMA and the IBF. *Articles are published in the QEC in order to foster high-quality debate on various aspects of the Irish economy and Irish economic policy.