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Debt and Taxes: The Sale-Rent Housing Price Ratio in Dublin since 1945

Author

Listed:
  • Richard Keely

    () (Trinity College Dublin)

  • Ronan C Lyons

    () (Trinity College Dublin)

Abstract

The recent Great Recession highlights the importance of housing to the broader economy, yet few reliable long-run series exist for sale and rental prices of housing. Using hedonic methods, frequency conversion techniques, and a detailed dataset of over one million sale and rental listings from newspapers and online, we construct new quarterly indices of sale and rental prices for Dublin, Ireland for the period starting in 1945 and an annual panel for six areas of the city over the same period. The series show four major market cycles, as well as three distinct phases for housing yield, with downward shifts in the early 1970s and again in the late 1990s. There is some evidence of rents converging across markets within the city but sale prices have diverged over the same period. An error-correction econometric analysis confirms the predictions of economic theory, that credit conditions in the credit market and user cost drive changes in the yield over time.

Suggested Citation

  • Richard Keely & Ronan C Lyons, 2019. "Debt and Taxes: The Sale-Rent Housing Price Ratio in Dublin since 1945," Trinity Economics Papers tep0419, Trinity College Dublin, Department of Economics.
  • Handle: RePEc:tcd:tcduee:tep0419
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    File URL: https://www.tcd.ie/Economics/TEP/2019/TEP0419.pdf
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    More about this item

    Keywords

    housing price ratio; housing markets; economic history; user cost.;

    JEL classification:

    • E32 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Business Fluctuations; Cycles
    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • N14 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - Europe: 1913-
    • N94 - Economic History - - Regional and Urban History - - - Europe: 1913-
    • R21 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - Housing Demand
    • R31 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Real Estate Markets, Spatial Production Analysis, and Firm Location - - - Housing Supply and Markets

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