Abstract

Purpose
To examine whether a ripple effect in house prices can be confirmed across Irish, regional, residential, property markets

Design/Methodology
The house price dynamics are examined in the frequency domain using spectral analysis. This entails the estimation of power spectra, cospectrum, coherence, gain and phase of regional and national time series data. They are examined on a region-nation pairwise basis.

Findings
The power spectrum highlights a dominant 6 year cycle, common to all of Ireland’s regional markets. Dublin is the driving market of the Irish housing system. Moreover, Northern Ireland’s housing market appears to follow a hybrid of both the UK and Irish cycles.

Research limitations/implications
Spectral analysis reveals that bonding between housing markets is very strong at the key cycle and there is not much evidence of a ripple in the sense that is understood in the UK. The paper distinguishes between leading and driving regions. Dublin is found to be a driver of other regions’ house prices whilst other Cities lead the national cycle by more time than Dublin.

Originality/value
Spectral analysis could be more widely used in financial economics to reveal the ripple effect, contrasting the outputs with the more conventional error correction model results.