House prices here could be overvalued by at least 7%.
The ESRI is warning the property market is likely to see a sharp slowdown in the months ahead, but didn't state if that might lead to falling prices or a price correction.
In its latest quarterly economic assessment, it also described the Irish economy as 'robust' and says it will continue to perform well despite global uncertainty and the cost-of-living crisis.
The think-tank says it expects 'a surplus in the Government Balance for this year and next' as a result of 'substantial recovery in the labour market' and strong growth in taxation receipts.
It says the risk of a recession here is now rising across Ireland’s main trading partners, and expressed concern over the UK economy.
Conor O’Toole, Author of the ESRI's Quarterly Economic Commentary for Autumn 2022, says as inflation continue to erode real incomes in Ireland "targeted policies to address the cost of living crisis is warranted. The commitment to a rainy day fund of a portion of the excess corporation tax receipts is very welcome, especially given the extremely uncertain global context.”
