Exploring developments in Ireland's regional rental markets

Fergal McCann ()

No 13/EL/16, Economic Letters from Central Bank of Ireland

Abstract: The Irish rental market has been characterised by rapid price growth in recent years, particularly in urban areas. This growth has occurred at the same time as the lowest levels of supply since 2006 in many areas. In this Letter I present a model in which rents across eight Irish regions between 2006Q1 and 2016Q1 are explained by local employment rates, population, house prices, rental supply and an estimate of the vacancy rate. High unemployment, higher numbers of properties supplied and higher vacancy rates are all associated with lower rents, while higher house prices and a larger population are both associated with higher rents. These effects are robust to modelling in levels and lagged growth rates. finally, I provide estimates of misalignment of rental markets using model residuals, with a focus on the period surrounding the recent introduction of macroprudential mortgage market regulations by the Central Bank of Ireland.

Date: 2016-11
New Economics Papers: this item is included in nep-ure
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