House prices in Ireland have been ranked the second least affordable in the world, behind only Switzerland.
A report published by the Bank for International Settlements (BIS) found that Ireland’s house prices are currently the second-most expensive in the world – relative to income.
The study also revealed that the ratio between prices and rents in Ireland was the third highest in the word, behind the Netherlands and Denmark.
“Among the boom/bust/recovery countries, price/income ratios are above trend in Ireland, the Netherlands and Spain, but below in the United Kingdom and the United States,” said the bank, which is the central bank for the world’s central banks.
Irish property prices have risen by more than any other advanced economy since the end of 2015.
The BIS say that, in general, the high price-to-rent ratio seen in Ireland means that it now makes more economic sense for households to rent and believe that this could spark potential price declines.
The Central Bank of Ireland has imposed tough loan to value and income rules to prevent a re-run of the credit boom which led to the country experiencing one of the biggest economic busts in history. It calculates that, without these controls, property prices would have been 26 per cent higher by the end of March 2019.
Article published 24th February 2020