OECD Irish warning from 2006 resonates

The last time the OECD warned about the possibility of a housing bubble in Ireland was on the eve of the financial crash, in June 2006.

In a 26-page report on Ireland’s housing boom, economists David Rae and Paul van den Noord investigated what was driving this country’s surging residential property price market. They asked whether prices had already overshot. Their warning was ignored. The OECD was subsequently one of the international organisations that came under fire for not ringing the alarm bells loudly enough.

The 11-year-old report resounds to this day. It echoes most of the concerns about current housing supply and prices here raised by the Irish Fiscal Advisory Council and the European Commission, even though in its report two weeks ago the commission found “no evidence of overvaluation” in house prices.