The continued recovery in house prices is hardly a surprise, or a reason to panic. Average house prices are now at the level they were in 2004. Back then, GDP per capita was about 48,000 USD. Today, it's around 56,000. In the interim, we had a boom and a massive bust, when house prices went up far too high, and then overshot on the way down. The collapse in house prices was a result of a recession, a huge spike in unemployment, and a lack of credit. Add in demographic pressures and the lack of building in the past 10 years, and it's hardly surprising that prices are rising (but are largely being kept in check by the CB rules). In any case, the answer, as we all know, is to increase supply, but that can only happen when prices are above build cost.
YoY growth to September in Dublin is way ahead of nominal inflation, in spite of the CB slamming the brakes on. Elsewhere in the country it is as high as 15%. There is still a chronic mortgage arrears problem and a rental and homelessness crisis. High build costs are due to a combination of government policy, government ineptitude, and a government-supported bubble in commercial property. The mid-2000s collapse in house prices was not the result of a recession, it was the cause of it. Global factors were merely the trigger, contrary to FF revisionism. 20% of employment and 20% of our economy was based purely on selling houses to each other and too much wealth was in fictitious home equity. GDP per capita is, as we well know, the result of Leprechaun Economics, not anything to do with the real Irish economy.
In 2013 the average Dublin house was 8.3 times earnings
, and that was when the "recovery" was only starting to take hold. In 2016, Dublin prices
are rated as "seriously unaffordable". The media have gone back to touting vested interests -- just yesterday prime time RTE news had VIs talking about "healthy price increases" and a "spreading recovery", and Savills' Director of Research (a.k.a. chief tout) predicting 10% rises in Dublin next year. You are right that it's hardly surprising that prices are going up due to demand and market manipulation ... but if there's no reason to panic it's only because you get used to the housing market being a basket case after nearly two decades of it.