Economic, Demographic & Fiscal Influences on Housing

Economic, Demographic & Fiscal Influences on Housing Market Dynamics
Simon Stevenson


The Irish housing market experienced substantial price increases in the late nineties. This paper aims to examine the fundamental factors at play in the Irish market and to see if a speculative element was present in house price dynamics in this period. Fundamental models of both housing supply and demand are modelled and generally provide an accurate depiction of the market. Tests for evidence of speculative behaviour in the market show that substantial premiums over fundamental value were observable in the late nineties. However, in most cases the markets had returned to equilibrium by 2001. Regional differences are also observed, however, this may in some part be due to data bias and these findings should be viewed with some level of caution.