Modelling Irish Rents: Recent Developments in Historical Context

In recent years Ireland experienced strong growth in residential rents. To characterise current conditions in this market, this paper investigates the dynamic behaviour of real Irish rents by applying two models to data from... [ view full abstract ]

In recent years Ireland experienced strong growth in residential rents. To characterise current conditions in this market, this paper investigates the dynamic behaviour of real Irish rents by applying two models to data from the 1980s/1990s. First, employing a univariate non-linear approach, average quarterly growth rates are benchmarked relative to historical trends. The results show that national rents move between high-growth and low-growth periods from the 1990s. From 2013 to 2016Q1, Irish rents are found to be in a high-growth regime. This paper also models national real rents using quarterly data from 1985Q1 to 2016Q1. Employment and housing stock per capita are found to influence long-run rents over the sample. From end-2013,  rents are found to be higher than would be expected by these long-run relationships.