On the likely extent of falls in Irish house prices

Looking at house price cycles across the OECD since 1970, we find a
strong relationship between the size of the initial rise in price and its subsequent
fall. Were this relationship to hold for Ireland, it would predict falls of
real house prices of 40 to 60 per cent over a period of 8 to 9 years. House
price falls tend not to have serious macroeconomic consequences, but the
unusually large size of the Irish house building industry suggest that any significant
house price fall that does occur could impose a difficult adjustment on the economy.