Readers like you keep news free for everyone.

More than 5,000 readers have already pitched in to keep free access to The Journal.

For the price of one cup of coffee each week you can help keep paywalls away.

Support us today
Not now
Dublin: 11°C Thursday 11 August 2022
Advertisement

Economic study says Dublin house prices are 25% overvalued

The Economist magazine’s latest house price index suggests that Dublin prices are way out of kilter with residents’ income.

1Source: Rollingnews.ie

A NEW REPORT suggests that property prices in Dublin are 25% overvalued against the incomes of those living there.

The latest house price index by The Economist magazine focuses on the property marked in '22 of the world's most vibrant cities'.

The study suggests that before the economic crisis city and national prices broadly rose in tandem in the studied cities. Since the crash, prices in those cities have risen on average at twice the rate of their respective countries.

Dublin's housing crisis was outlined in stark terms by the most recent Daft.ie rental report, which reported that the city's rental prices are now €500 per month higher than at the height of the boom  in 2007.

The Irish capital's position in the study however, with house prices rated 25% over household income, is actually relatively benign compared with some of the figures seen in other cities.

'Supply and demand'

Amsterdam for example is running at 49% overvalued property compared with incomes, with Hong Kong and Vancouver a striking 94% and 65% respectively.

The report outlines the reasons for what's going on with house prices in the studied cities as being 'demand, supply, and the cost of money'

Making a difference

A mix of advertising and supporting contributions helps keep paywalls away from valuable information like this article.

Over 5,000 readers like you have already stepped up and support us with a monthly payment or a once-off donation.

For the price of one cup of coffee each week you can make sure we can keep reliable, meaningful news open to everyone regardless of their ability to pay.

However, the study also states that the global market may be at a turning point, with house price inflation slowing over the past 12 months, with sky-high prices, a curtailment on the ability of foreigners to buy property, and planning restrictions and local objections to same all combining to slow the rapid growth of prices.

It rates London as a bellwether (that is, indicative of trends generally and an indicator of where things will go) for the global housing market, given its vulnerability as a result of Brexit. "Prices seem to have climbed high enough to encourage new supply," it states. "London added 40,000 homes last year - the most for decades."

This is not totally out-of-kilter with Ireland, where the number of new homes constructed jumped this year by 30%, nearly two-thirds of which were in Dublin.

Read next:

COMMENTS (56)

This is YOUR comments community. Stay civil, stay constructive, stay on topic. Please familiarise yourself with our comments policy here before taking part.
write a comment

    Leave a commentcancel