ESRI plays down fears of property bubble

June 19, 2018 MyHome.ie by MyHome.ie
ESRI plays down fears of property bubble

The Economic and Social Research Institute has played down fears of a bubble in housing prices by arguing that the strong growth in prices was supported by fundamentals “at this point in time”.

In its latest quarterly economic commentary, the think tank expects house prices to continue to rise, due to supply remaining below “structural demand”.

While new mortgage lending is “rapidly increasing” – rising by 13.5 per cent in the first quarter of the year – the ESRI said it is not yet “unsustainable”.

However, it warned that “careful monitoring is required” with house prices expected to continue to increase, and rising average loan sizes.

“This reinforces the importance of having [Central Bank] macroprudential limits in place,” Conor O’Toole said.

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Research from the ESRI also indicates that house price increases are more significant at the lower end of the market. Having fallen by most in the bust, “cheaper” houses have now rebounded much more rapidly, suggesting a further burden on affordability for lower income cohorts.

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Uncategorized Economic and Social Research Institute ESRI housing bubble property prices

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