This table shows Irish house prices would have risen if they had kept to their historical growth rates of inflation plus .04% (per Robert J. Shiller's research on U.S. house prices going back to 1890). While it is based on the US market, it is relevant for Irish prices and gives some interesting results. Although picking a starting point is subjective, 1996 is roughly when house prices went out of synch with inflation (see graph***) so it does put into perspective house price rises here in recent years.
(Year, House Price EUR, CPI Inflation*, CPI Adjusted Price, Additional House Price Inflation**, Total Adjusted Price)
1996 75,000.00 1.60% 76,200.00 0.04% 76,230.48
1997 76,230.48 1.50% 77,373.94 0.04% 77,404.89
1998 77,404.89 2.40% 79,262.60 0.04% 79,294.31
1999 79,294.31 1.60% 80,563.02 0.04% 80,595.24
2000 80,595.24 5.60% 85,108.58 0.04% 85,142.62
2001 85,142.62 4.90% 89,314.61 0.04% 89,350.33
2002 89,350.33 4.60% 93,460.45 0.04% 93,497.83
2003 93,497.83 3.50% 96,770.26 0.04% 96,808.97
2004 96,808.97 2.20% 98,938.76 0.04% 98,978.34
2005 98,978.34 2.50% 101,452.80 0.04% 101,493.38
2006 101,493.38 4.00% 105,553.11 0.04% 105,595.34
2007 105,595.34 4.90% 110,769.51 0.04% 110,813.81
2008 110,813.81
* [broken link removed] ** http://www.businessweek.com/magazine/content/08_06/b4070044774504.htm
*** house prices/general inflation graph
The Celtic Tiger was just starting to have an effect on incomes around 1996, so if a very generous assumption is made that house prices were 50% undervalued and additional house price inflation should be 1% in Ireland the end result is a 2008 house price of €186,000, still substantially below current prices.
(Year, House Price EUR, CPI Inflation*, CPI Adjusted Price, Additional House Price Inflation**, Total Adjusted Price)
1996 75,000.00 1.60% 76,200.00 0.04% 76,230.48
1997 76,230.48 1.50% 77,373.94 0.04% 77,404.89
1998 77,404.89 2.40% 79,262.60 0.04% 79,294.31
1999 79,294.31 1.60% 80,563.02 0.04% 80,595.24
2000 80,595.24 5.60% 85,108.58 0.04% 85,142.62
2001 85,142.62 4.90% 89,314.61 0.04% 89,350.33
2002 89,350.33 4.60% 93,460.45 0.04% 93,497.83
2003 93,497.83 3.50% 96,770.26 0.04% 96,808.97
2004 96,808.97 2.20% 98,938.76 0.04% 98,978.34
2005 98,978.34 2.50% 101,452.80 0.04% 101,493.38
2006 101,493.38 4.00% 105,553.11 0.04% 105,595.34
2007 105,595.34 4.90% 110,769.51 0.04% 110,813.81
2008 110,813.81
* [broken link removed] ** http://www.businessweek.com/magazine/content/08_06/b4070044774504.htm
*** house prices/general inflation graph
The Celtic Tiger was just starting to have an effect on incomes around 1996, so if a very generous assumption is made that house prices were 50% undervalued and additional house price inflation should be 1% in Ireland the end result is a 2008 house price of €186,000, still substantially below current prices.
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