The current boom in property prices could trigger another housing bubble, even though it is not being fuelled by a boom in credit, a leading housing expert has warned.

University College Dublin academic Michelle Norris said a feature of the current market had been the influx of big investment funds and foreign buy-to-let firms, which had bought up a huge segment of the market.

These “internationally mobile” funds “could disappear in the morning” if conditions changed, potentially sending prices crashing, she said.

Dr Norris, who is head of UCD’s School of Social Policy and chairwoman of the Housing Finance Agency, said in these circumstances “you could have a bubble without very significant credit availability”.

Her comments echo a similar warning last month by the Organisation for Economic Cooperation and Development (OECD), which raised the possibility of “another property bubble” if house price inflation – currently at 13 per cent – continued.

The warning also comes as new figures from the Economic and Social Research Institute (ESRI) revealed the full extent of the Republic’s previous boom and bust. They showed house prices here rose by a dramatic 431 per cent between 1995 and 2007, more than previously thought.

The rapid acceleration in prices during the boom was followed by an equally precipitous fall during the crash, with prices dropping by nearly 50 per cent in the five-year period between 2007 and 2013.

Most volatile

Since 2013, prices have risen again by 57 per cent. The rise and fall and rise again of Irish house prices was more pronounced than any other country, the ESRI study indicated, making Ireland’s property market the most volatile in the world.

In the UK, the next most volatile market, house prices rose by 240 per cent during the boom, but fell by only 7 per cent during the downturn. In Spain, which has similar housing problems to the Republic, prices rose by nearly 200 per cent in the boom and fell by 30 per cent during the crash.

In Germany, which avoided the boom and bust seen in other countries, house prices actually fell by 5 per cent during the boom and rose by 13 per cent during the downturn.

The findings, part of an ongoing three-year research programme by the ESRI in conjunction with the Department of Housing, were revealed at an ESRI-hosted conference on housing.

The think tank’s Kieran McQuinn said even by the “very volatile” circumstances of international house price developments “we really do stand out”.

Nonetheless, he played down the possibility of another bubble, noting the current level of price growth was consistent with underlying fundamentals.