Yes, Dublin property really is in a (nominal) bubble

I have written a number of times about the usefulness of the Phillips GSADF test for bubble detection.  It has been used extensivly for bubble detection. google “gsadf bubble” if you dont believe me. So…

Well, the bad news is, according to this test, Dublin property IS in a bubble and probably has been since May. I havent deflated these prices by the CPI but recall that inflation has been, to put it mildly, muted over the last while. When the blue line crosses the red line, a bubble is declared.

Supply conditions, plus a resurgent economy, are seen as the main drivers, which makes this different to the last one. Total mortgage credit is still contracting. Supply takes time and there is no way the government in the runup to an election is going to dampen down the economy. So, this one might run for a bit…

Screenshot 2014-09-30 11.11.27

Screenshot 2014-09-30 10.53.37 Screenshot 2014-09-30 10.33.01

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s