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Irish Central Bank Warns Of Bubble -- Citizens Skint


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http://www.bloomberg.com/apps/news?pid=206...&refer=home

Irish Mania for Homeownership Squeezes Consumers as Rates Rise

By Dara Doyle
Sept. 5 (Bloomberg) -- Ken McKenzie, a university researcher in Dublin, is shelving his overseas holiday plans this year. He blames the European Central Bank for keeping him at home.
``I had been thinking about Istanbul, Stockholm or maybe Canada,'' says
McKenzie, 30, who now spends 38 percent of his 2,500-euro ($3,215) monthly salary to pay an adjustable-rate mortgage. ``
But with rates going up? Forget about it.''
In Ireland, where almost eight in 10 dwellings are owner- occupied, the frenzy for property is forcing many buyers to scrimp after prices quadrupled in a decade. The Irish central bank is concerned about a potential collapse as interest rates rise, pushing debt costs higher. That may leave western Europe's fastest-growing economy vulnerable to a slowdown.
``
There's a sense of a bubble
,'' says Alan Barrett, senior economist at Dublin's Economic and Social Research Institute. ``
One in eight workers are in construction
.
If there's a wobble, it gives you the potential for a big unemployment increase
.''
Ireland and Spain are likely to be among the hardest hit as the ECB raises rates, according to a February report by JPMorgan Chase & Co. Spurred by record-low interest rates and falling unemployment,
Irish house prices rose 335 percent to an average of 303,247 euros from 1995 to 2005, the fastest growth among 18 countries surveyed by the Paris-based Organization for Economic Cooperation and Development.

Not a very diversified economy in Ireland then. :o

Edited by Realistbear
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"In Ireland, where almost eight in 10 dwellings are owner- occupied, the frenzy for property is forcing many buyers to scrimp after prices quadrupled in a decade"

Have wages quadrupled?

"One in eight workers are in construction. If there's a wobble, it gives you the potential for a big unemployment increase.''

And if there is more than a wobble?

I get so cranky when I think how much our so called "leaders" get paid.

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the 335% raise in 10 years is ......around 16% pa compounded!!!!!!!!!!!!!!!!! :o

so hps can rise 16% a year for that long!.....How much have Paddy's wages risen in this time??

The house building rate per million inhabitants is around ten times ours owing to laxer planning regs....

The problem was the introduction of the low Eurozone IRs just as Ireland needed higher IRs..

Brussels had done so much for the Irish they embraced and still embrace everything European including the Euro....

What the hell's going to happen when the German economy picks up speed and IRs rise just as the Irish economy weakens.....The Irish situation has been an accident waiting to happen and the government's done nothing.....

Edited by Michael
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Ireland:

From rags to riches

....

and back again !

Well maybe that´s an exageration - but the good times are certainly coming to an end soon.

the situation in ireland is not good and hasn't been for a while. but it has made a lot of people very rich, and they have been pouring their property and construction money into safer areas, such as core central london commercial property investment market, so at least they will be protected from a possible downturn at home.

as for the average jo, well, its potatoes for tea again!

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the situation in ireland is not good and hasn't been for a while. but it has made a lot of people very rich, and they have been pouring their property and construction money into safer areas, such as core central london commercial property investment market, so at least they will be protected from a possible downturn at home.

as for the average jo, well, its potatoes for tea again!

and a lot of them haven't and are going to become very poor!

Go back to wan king under your bridge - troll.

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Ave Hp in Ireland is 303k euros..(£216k!). :blink: up from about £50k 10 years ago :o ...ave in Dublin is 409k euros(£292k!) :lol:

Paddy's gone stark raving mad.....I bet even all of the bulls on HPC like Cuckoo and the gang would class this as a bubble.........

way ahead of anything in the uk and London apart from ghastly new build Travelodge-style flats of course.....

Edited by Michael
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