In the equity markets, share prices track the growth in earnings over the long-haul. It's the same with property. First and foremost, property prices track the growth in rental income over the long-term. The growth in rents reflects the growth in corporate earnings and personal incomes in society. After all, a business can only afford to pay higher levels of rent if its earnings are growing over time. In residential property, rents and prices should follow the growth in personal incomes. After all, a key affordability metric in housing is average incomes in society.

David Fuller's view I have good memories of participating in a very lively and entertaining seminar in Dublin during the late 1990s. At an informal meal following the event, the main topic of conversation among the local investment managers was Dublin's incredible boom in residential property prices. My successful host owned three of them. My premature bubble question was of little concern because the number of willing buyers with access to substantial credit from generous banks was increasing far faster than the supply of homes in desirable areas. Then Ireland joined the euro in January 2002 and the property boom was propelled higher.

It is a cyclical story that has been repeated in most countries, often several times over the centuries, although Ireland's last property bubble was certainly one of the biggest in Europe. You know or can guess what happened and charts of Dublin's commercial property in Rory Gillen's report have followed a similar cycle.

I am not surprised to hear that Irish commercial property prices are firming because the country has what I believe is currently Euroland's best performing stock market, as you can see from these charts for Ireland's ISEQ Overall Index (monthly , weekly & daily). It reached a new recovery high today, moving further above the June peak. The action since April has been choppy and that may continue. The first sign of short-term weakness would be a break in the rising lows shown on the sensitive daily chart. However, over the medium term I would give the overall upward bias the benefit of the doubt, provided the April to June lows are not broken by a close beneath 3760