Justin Doran
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CSO Property Price Index

10/24/2012

6 Comments

 
The latest release from the CSO on property prices indicates that residential property prices in Ireland have risen by 0.9% in the month of September.  This has led to a report in the ‘Irish Independent’ that there are “hopes the worst is over” (available here).  While a slight increase in September was indeed observed, as can be seen in Figure 1, there are more details which need to be considered.
Picture
Source (CSO 2012 – click image for link to report)
For instance if we look at the regional disaggregated statistics we can see that while prices rose by 2.4% in Dublin, residential property prices in the rest of the country actually decline by 0.1%.  As would be expected the largest urban concentration in Ireland has seen the largest rise in prices.  What the ‘rest of the country’ statistics likely hide is a similarly large urban rural divide.  The rest of the country includes Cork City, Galway City, Limerick City etc. In these large urban areas we might expect that property prices to also recover relatively quickly, as there is a concentration of demand for houses.  However, more rural areas are likely to suffer more, especially in instances where there is a lack of local employment to draw people to an area.  Given the level of disaggregation available in the CSO statistics it is not possible to be definitive about this; however, research into house prices in the UK conducted by various academics would suggest this to be the case.  Therefore, caution should be urged when considering these statistics and we should note that there is likely to be substantial regional variation in the extent to which locations recover, with an oversupply of houses in some locations which will have a downward effect on prices.
6 Comments
Robbie
10/24/2012 06:48:21 pm

Do you think there might be a "mortgage interest relief effect"? MIR is set to end at the end of 2012. Some people might be buying to avail of this. Could we see a 'double-dip' following in the New Year?

Reply
Justin Doran
10/25/2012 03:54:39 am

Hi Robbie

It is indeed possible that there is a mortgage interest relief effect. Indeed if we look at recent Irish history we can see a similar effect with the car scrappage screen. Whereby people front loaded their purchases in order to avail of the discounted real costs of cars. Rationale investors in property may well be doing the same.

Justin

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Windows Vista help now link
5/7/2013 10:09:50 pm

Thanks for writing this article about residential property prices in Ireland. I never had this knowledge before I visited your blog. The description is simple and it is easy to understand. Thank you so much for your effort and educating the readers about the property value.

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rdokoye link
9/2/2013 11:38:52 pm

Wow, I'm surprised there's been any positive movement in the Irish economy, especially when you consider how indebted it is.

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10/17/2013 05:38:53 pm

Nevertheless, plus provincial provinces are probable to tolerate also, especially in precedents where there is a absence of native job to drag persons to an district. Given the even of disaggregation accessible in the CSO statistics it is nay feasible to be decisive about this; nevertheless, experiment toward home fares in the UK conducted by various didactics would recommend this to be the case.

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Uche_Nerd link
4/20/2014 11:38:37 pm

The Irish economy still needs to battle with a ridiculously high external debt profile, which I don't think they are doing much about. Greece and Portugual are what lies in wait for Ireland if they don't get their economy in order.

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    Justin Doran is a Lecturer in Economics, in the Department of Economics, University College Cork, Ireland.

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