Great expectations: the role of experiences in Irish house price expectations formation

Laura Boyd, Tara McIndoe-Calder and Zivile Zekaite
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Laura Boyd: Central Bank of Ireland
Tara McIndoe-Calder: Central Bank of Ireland
Zivile Zekaite: European Central Bank

No 7/RT/25, Research Technical Papers from Central Bank of Ireland

Abstract: Households’ beliefs about house prices have the potential to impact market and aggregate outcomes. As such, it is important to understand what determines them. Using 2018 data from the HFCS, we show that Irish homeowners extrapolate from their personal experience of own house price growth to date when forming their beliefs about how house prices could change in the near future. In addition, local experience of house prices (captured by the location of the home) and housing acquisition experience (identified by the year the home was acquired) also appear to be important and distinct determinants of house price expectations. Households who perceive higher returns on their home, are located near Dublin or who acquired their home from 2008 onwards are more optimistic about future house prices. Meanwhile, risk aversion, ownership of other property and perceiving household income over the past year to be lower than normal are associated with more pessimistic expectations.

Keywords: expectations; experiences; beliefs; house prices; surveys; household analysis. (search for similar items in EconPapers)
JEL-codes: D84 G5 R2 (search for similar items in EconPapers)
Date: 2025-07
New Economics Papers: this item is included in nep-eur
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