“Your house will be worth 20pc more by 2017 – ESRI” read the headline of an article in the Irish Independent last week referring to a paper released by the Economic Social and Research Institute (ESRI) entitled Bubble, Bubble Toil and Trouble? An Assessment of the Current State of the Irish Housing Market.
The paper is worth a read with the author making the case, based on four fundamental house price models and other comparative analysis, that residential property prices “overcorrected”. With residential property now undervalued, according to their models, the ESRI is forecasting real Irish house prices to grow by 8% in 2014, 9% in 2015, 4.9% in 2016 and 3.9% in 2017.
The ESRI is simply forecasting a price rise so it’s an ambitious use of the word “will” by the author of the Irish Independent article, but perhaps another sign that the Irish love affair with property is being reignited. The ESRI even noted on page 16 of the report “This is not to say that increasing house prices are either inevitable or desirable”; but I guess that wouldn’t have made much of a headline.