With reference to ESRI says rapid rise in house prices does not signal new bubble by Eoin Burke-Kennedy 22 June 2017 in the Irish Times.
The Economic and Social Research Institute, ESRI, is stating that even though the housing prices and rents are rising rapidly this does not necessarily mean a new housing bubble. The official house construction may be overestimating the housing activity, according to the ESRI.
ESRI’s latest economic commentary included a section saying that even though new credit is growing in the residential market and small companies, a good credit risk assessment is still in place and seems to provide no risk.
ESRI still believes the housing prices and rent will be rising from the growing imbalance between supply and demand. The predicted the long-run housing demand to increase from 25,000 to 30,000-35,000.
The government supposedly overestimated the level of supply which may have overstated the true level of construction activity. Government estimating the housing supply at 15,000 in 2016 and ESRI at 12,700.
There is a lot of speculations of another housing bubble coming about. If there is we have to be aware of the warning signs from the previous housing bubble to avoid another one. The ESRI could provide relief to those who are speculating, however if there is in fact another one then the ESRI is providing false relief. Overall, with a housing bubble may or may not be in our midst, the housing market should be cautious to avoid another crisis like before.