In reference to No evidence of another Irish housing bubble, IMF says by Peter Hamilton on 26 June 2017 in the Irish Times.
The answer is no but close monitoring is needed. A Washington-based company, the International Monetary Fund (IMF), has confirmed there is no housing bubble in Ireland. Even with the quickly rising prices of property and an increase of mortgage approvals, IMF realizes this is significant but it is not a housing bubble… yet.
There is no statistics to show there is an imbalance of the pricing of houses. However, there is an increase demand for housing that could lead to an imbalance, especially with the Central Bank’s mortgage lender rules and the help-to-buy scheme for first timers. IMF has recommended close monitoring of the market to make sure a bubble is not formed.
The likeliness of this increase of housing demand should continue because of labour markets and reduction of debt among families.
The IMF has also taken a stance for the Irish government to create a sensible budget for the future. This means to build buffers and decrease government debt to mitigate if a housing bubble forms or even with the risks of Brexit. Especially when Brexit might have a significantly negative response in Ireland. After Brexit, Ireland will be affected by labour, trade, and financial markets but might see some relocating of UK companies to Ireland. To help, the IMF’s report gave advice to save extra revenue especially with the AIB stock market release.
Despite all this, the Irish economy is doing fairly well recovering after the financial crisis. If the government takes the necessary precautions to this heighten demand and the risk of Brexit, Ireland should come out okay.