HOUSE PRICES IN Ireland were around 17% higher than they should be as of Q3 last year, according to a new report released by the Economic and Social Research Institute (ESRI).\u00a0<\/p>\n
The report found a \u201csignificant degree of overvaluation\u201d in the\u00a0Irish residential property market, which it attributes largely to an \u201caffordability\u201d issue.\u00a0<\/p>\n
This can be contrasted to the peak of overvaluation at the end of 2006, when prices were 45% higher than they should have been.<\/p>\n
Now, however, overvaluation is \u201cstructurally different in nature\u201d, and can be attributed more to imbalances in housing supply as opposed to high levels of borrowing.<\/p>\n
Demand for houses is higher than the number being built, with prices significantly higher than people\u2019s incomes.\u00a0<\/p>\n
Middle-income households are the hardest hit as house prices are typically much higher than income, and incomes have not kept pace with the rate of increase of house prices.\u00a0\u00a0<\/p>\n
Dr Paul Egan of the ESRI said: \u201cOur analysis shows that Irish house prices are significantly above what economic fundamentals would suggest, driven by prices rising faster than incomes and higher mortgage rates, with middle-income households bearing the greatest burden.\u201d<\/p>\n
While house prices have been steadily climbing since mid-2013, Irish households on the whole are carrying less debt and borrowing more cautiously than they did before the 2008 crash.<\/p>\n
High house prices were previously driven by excessive credit growth and loose lending standards, but now high prices are not accompanied by excessive levels of credit, indicating a financial system that is in a stronger position than it was during the financial crash.<\/p>\n
However, rising interest rates are pushing up monthly repayments and squeezing how much people can afford to borrow or repay.<\/p>\n","protected":false},"excerpt":{"rendered":"HOUSE PRICES IN Ireland were around 17% higher than they should be as of Q3 last year, according…\n","protected":false},"author":2,"featured_media":671840,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[3],"tags":[26727,9,10,18,38419,13,14,6,27101,8752,19,17,11,12,15,16,5,7,8],"class_list":["post-671839","post","type-post","status-publish","format-standard","has-post-thumbnail","category-headlines","tag-affordability","tag-breaking-news","tag-breakingnews","tag-eire","tag-esri","tag-featured-news","tag-featurednews","tag-headlines","tag-house-prices","tag-housing-crisis","tag-ie","tag-ireland","tag-latest-news","tag-latestnews","tag-main-news","tag-mainnews","tag-news","tag-top-stories","tag-topstories"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/117211559476166507","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/671839","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=671839"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/671839\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/671840"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=671839"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=671839"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=671839"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}