The rise in Dublin city house prices: bubble, fad or just fundamentals
AbstractThe recent dramatic rise in house prices in Dublin has been regularly discussed in the media. An obvious question is whether the seemingly ever-increasing house prices are driven by market fundamentals or by speculation? While the observed increase in house prices is due to excess demand for housing, it is the nature of this excess demand that we investigate in this paper. We decompose house prices in Dublin into fundamental and non-fundamental components using a variety of measures. A regime-switching model is estimated and tested to explore whether speculative bubbles, fads or just fundamentals drive house prices in Dublin. Our main findings suggest that there may be a speculative bubble in the Dublin house prices.
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Bibliographic InfoPaper provided by Department of Economics, Finance and Accounting, National University of Ireland - Maynooth in its series Economics, Finance and Accounting Department Working Paper Series with number n920799.
Length: 18 pages
Date of creation: Jul 1999
Date of revision:
Regime-switching; House prices; Bubbles; Fads;
Find related papers by JEL classification:
- C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models &bull Diffusion Processes
- G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
- R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
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- Fitzpatrick, Trevor & McQuinn, Kieran, 2004.
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- Trevor Fitzpatrick & Kieran Mcquinn, 2007. "House Prices And Mortgage Credit: Empirical Evidence For Ireland," Manchester School, University of Manchester, vol. 75(1), pages 82-103, 01.
- Mc Quinn, Kieran, 2004. "A Model of the Irish Housing Sector," Research Technical Papers 1/RT/04, Central Bank of Ireland.
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