The Unassuming Economist

“House prices slipped back reflecting developments outside Dublin. After stabilizing over much of 2012, national residential property prices fell 2.6 percent in the first quarter of 2013, bringing the index to a new low 51 percent below its pre-crisis peak,” according a new IMF report on Ireland. What explains the drop in prices? The report says that “this decline was driven by an almost 4 percent price fall outside Dublin, reflecting divergent market conditions—the stock of property available for sale in Dublin amounts to around 6 months‘ supply, but regional markets face inventories ranging from 20–60 months. Nonetheless, property transaction volumes rose by 14 percent y/y in Q1 2013, and with rents and disposable incomes rising, housing affordability and implied rental yields appear positive by historical standards.”