Crying Wolf In Ireland

[undersupply]

2005: The economics editor of the Economist magazine, Pam Woodall, told a debate in Dublin that house prices in Ireland were “seriously overvalued". Woodall said that house prices in Ireland, and other economies where they were similarly overvalued, could fall by at least 20 per cent over the next five years.

2004: Ireland was one of a number of countries identified by the International Monetary Fund (IMF), as having house price levels between 10 and 20 per cent above values justified by factors such as growth and interest rates.

2003: The IMF warned of a “significant risk'‘ that house prices were overvalued. Robbie Kelleher, head of research at Davy Stockbrokers, said property prices could fall by 20 per cent that year. The Economist warned that Irish house prices could fall by 20 per cent over the following four years. NCB chief economist Eunan King predicted that prices would fall by between 5 and 10 per cent.

2002: The EBS building society issued its strongest warning to date about overheating in the housing market and called on the government to put planning and affordability at the top of its agenda to avert a crisis. EBS chief executive Pat O'Reilly said the building society was gravely concerned about the level of indebtedness within the economy.

2001: Jim Power, chief economist at Friends First, predicted that house prices would fall by 10 per cent in 2002. Speaking at the launch of his Economic Outlook, Power said the house price boom of the past few years made the economy vulnerable if the slowdown turned out worse than expected.

2000: The Central Bank warned: “Experience shows that overinvestment in property has proven to be an unwelcome feature of economic success in many countries.”

1999: Central Bank governor Maurice O'Connell warned lenders in April that they were giving too much towards mortgages and encouraging “excessive'‘ increases in house prices.

The Economist reported: “House prices are looking decidedly bubbly in Ireland. The affordability ratio there has risen from11.3 in 1989 to an estimated 18.2 this year.”

The International Monetary Fund said: “In the light of rapid growth in credit and strong house price increases, a number of directors expressed concern about the risks of an asset price bubble and the potential vulnerability of the banking system.”

1998: The Central Bank warned that the housing market could be heading for a “speculative bubble'‘ and that inflation remained a concern. Assistant director general Dr Michael Casey said: “Bubbles have a habit of bursting.”

1997: Housing economist Annette Hughes of DKM Consultants warned that conditions were “becoming very similar'‘ to Britain in the late 1980s. “If the allegations of over-lending are correct, and if people are including stamp duty in their mortgages, then it does raise warning signals,” she said.

[paradox]

IMHO what happened in Ireland is connected with it joining the Euro. The Irish are property mad, like the British, yet they have got even lower rates than we have.

Unless they have a healthy dose of inflation there will be a lot of debt paid off over a long period of time. I suppose if there is a one off and long term change from high to low interest rates then people become comfortable with large debts and a new equilibrium is formed based on servicing those debts - together with higher nominal house prices.

However if rates should rise!!!

[Flash]

'Crying wolf' or simply giving us plenty of prior warnings, so that we have no excuse when disaster strikes.

You decide.

If you run across a busy road a few times without looking and survive, does that mean you always will?

Does anyone have a link to this? I would so love a copy. This may make 'pride of place' in my House Price Crash file.

[GCS15]

I agree with Flash. In the big scheme of things it won't seem like plenty of warning. It takes time to sell a house and as such you need to plan ahead

[verolution]

Rumours of a possible 50bps hike on thursday in the markets today, bye bye Irish property market if that happens

[The Masked Tulip]

With Eire don't forget:

The Irish American link

Numerous US Technology companies located in Eire in the 90s due to Objective One EU money

Rich and Famous located to Eire for tax purposes

All the above had a huge affect on Irish HPs.

[BandWagon]

Rumours of a possible 50bps hike on thursday in the markets today, bye bye Irish property market if that happens

Yep, completely agree.

Short market rates have suddenly shot up in the last few weeks. I won't be surprised to see a 50bp rate hike.

That will scare the hell out of the Irish market.

[undersupply]

'Crying wolf' or simply giving us plenty of prior warnings, so that we have no excuse when disaster strikes.

You decide.

If you run across a busy road a few times without looking and survive, does that mean you always will?

Does anyone have a link to this? I would so love a copy. This may make 'pride of place' in my House Price Crash file.

http://www.thepost.ie/post/pages/home.aspx...ws-qqqx%3D1.asp

Loads of choice rhetoric in the SBP about bricks and mortar this weekend

Cant see a 50 point raise on thursday myself-think Trichet is all about caution and not being a scrooge coming up to christmas.

[Flash]

http://www.thepost.ie/post/pages/home.aspx...ws-qqqx%3D1.asp

Loads of choice rhetoric in the SBP about bricks and mortar this weekend

Cant see a 50 point raise on thursday myself-think Trichet is all about caution and not being a scrooge coming up to christmas.

Thanks.

I can't see a 50 basis point raise either. Still, I would be quite happy with 25 at this stage. It would send a clear message that the trend has turned upwards.