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Modelling Irish Rents: Recent Developments in Historical Context

Author

Listed:
  • Kennedy, Gerard

    (Central Bank of Ireland)

  • Sheenan, Lisa

    (Central Bank of Ireland)

  • Woods, Maria

    (Central Bank of Ireland)

Abstract

In recent years Ireland experienced strong growth in residential rents. To characterise current conditions in this market, this Letter 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 Letter 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 that would be expected by these long-run relationships.

Suggested Citation

  • Kennedy, Gerard & Sheenan, Lisa & Woods, Maria, 2016. "Modelling Irish Rents: Recent Developments in Historical Context," Economic Letters 14/EL/16, Central Bank of Ireland.
    • Handle: RePEc:cbi:ecolet:14/el/16
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    File URL: https://centralbank.ie/docs/default-source/publications/economic-letters/economic-letter-vol-2016-no-14.pdf?sfvrsn=6
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    References listed on IDEAS

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    2. Patric H. Hendershott & Bryan D. MacGregor & Raymond Y.C. Tse, 2002. "Estimation of the Rental Adjustment Process," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 30(2), pages 165-183.
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    5. McCann, Fergal, 2016. "Exploring developments in Ireland's regional rental markets," Economic Letters 13/EL/16, Central Bank of Ireland.
    6. Joshua Gallin, 2008. "The Long‐Run Relationship Between House Prices and Rents," Real Estate Economics, American Real Estate and Urban Economics Association, vol. 36(4), pages 635-658, December.
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    Cited by:

    1. Maria Jose Doval Tedin & Violaine Faubert, 2020. "Housing Affordability in Ireland," European Economy - Economic Briefs 061, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. McCann, Fergal, 2016. "Exploring developments in Ireland's regional rental markets," Economic Letters 13/EL/16, Central Bank of Ireland.

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