ESRI is saying there is no housing bubble

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. …

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The ESRI and the Central Bank butt heads.

This headline appeared in the Indo today. We agree with the idea of a safer market, but also agree with the ESRI on this, that it was badly timed, inappropriate and will actually cause more problems than it fixes due to being badly timed.

We would agree, our submission on the subject was one of the few that articulated the problems, why the moves wouldn’t prevent boom-bust and gave empirical evidence supporting same. Meanwhile many others were falling over themselves to commend Patrick Honohan and the Central Bank for being such good regulators.

They may have insulated the banks, but it’s at the expense of a market that will not provide for all of the people that need housing, in doing this it also helps to encourage speculation as one by-product is higher yields which re-attract investors into a market.

The ESRI have articulated this better than we did, and we support their findings. Oddly, the person behind the statements was the best economist the Central …

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Property Crash, Where to Now? RTE 1

We were delighted to take part in the making of Richard Currans documentary ‘Property Crash, Where to Now?’. It is the follow up to 2006’s ‘Future Crash’ in which he predicted the demise of the Irish property market.

The full version is available on the RTE player, we just posted the clip that we took part in (showing off for our loved ones basically!)

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