Housing bubble starting to pop?

K_user

To add to my above statement…

There is never a “good” time to get into the property market. There are always risks, there will always be problems, it will always be expensive. But a house, even a family home, is an investment. If you don’t have one, then its you that’s on the back foot, not the guy with the 30 year mortgage…

Sponge Bob

CiaranC wrote:

Yeah, I was kinda factoring in that prices will grow a little and have to drop back a bit to todays prices. Anyway, whats 6 months between friends?

The bubble and the pop from the thread title is NOW Ciaran , anybody who believes its in 6 montsh is deluding themselves ...and the rest of us. By the time the backlog of surveys and stats is published for august / september it will be november or december.

But thats when its official and incontrovertible, its real already

Sizzler

K_user wrote:

To add to my above statement…

There is never a “good” time to get into the property market. There are always risks, there will always be problems, it will always be expensive. But a house, even a family home, is an investment. If you don’t have one, then its you that’s on the back foot, not the guy with the 30 year mortgage…

I disagree there. A 'good time' is different for each person, a good time for you might have been 5 yrs ago but a good time for me might be now for personal circumstances etc etc. The majority of people out there know what they can afford, assess their job stability, happy they want to live there, the property has what they want, are at a mature settling down age etc

So a good time for a buyer can be anytime

jobless

K_user wrote:

For those with no prospect of getting a house, it’s kind of a pipe dream that those that do will suffer and bring the prices down to a manageable level.

Pipe Dream?....have you not seen what happened in japan and it currently happening in the US and Sydney. I'm not saying they are going to come down but to suggest someone is dreaming if they think they can is wrong

K_user wrote:

Housing and land will always be expensive, no matter what the economic situation,

so it will always be expensive if the ecomonmic conditions are bad?.....huh?

K_user wrote:

If there is a crash, as with everything else in life, it will be those that took the highest risks that will suffer. Those that took the “safe” choice, for the most part, will be ok. Those that sat back and waited will still find themselves waiting…

So could you please tell all FTBs what the safest choice is when buying?, when the only option to most is a huge long term mortgage.....their is no safe choice for ftbs.......
and if there is a crash of course those who sat back are still going to sit back and wait.....why would you buy a depreciating asset?

K_user

Sizzler wrote:

I disagree there. A 'good time' is different for each person, a good time for you might have been 5 yrs ago but a good time for me might be now for personal circumstances etc etc. The majority of people out there know what they can afford, assess their job stability, happy they want to live there, the property has what they want, are at a mature settling down age etc

So a good time for a buyer can be anytime

That’s kinda what I meant…

I wasn’t taking about specific years, but individual circumstances. Whether a person bought a house in 1970, or will buy one in 2007, its a huge deal to that person at that time. Purchasing a house has been and will always be a risk, but to those that do it right they tend to be better off in the end.

K_user

jobless wrote:

Pipe Dream?....have you not seen what happened in japan and it currently happening in the US and Sydney. I'm not saying they are going to come down but to suggest someone is dreaming if they think they can is wrong

I didn't say that waiting for prices to drop was wrong. What I said was that waiting for a price crash to solve all your problems is wrong.

jobless wrote:

so it will always be expensive if the ecomonmic conditions are bad?.....huh?

Land is always expensive. If economic conditions are good then its at a premium, if they are bad then no one can afford to buy it. You will never get land at a knock-off price.

jobless wrote:

So could you please tell all FTBs what the safest choice is when buying?, when the only option to most is a huge long term mortgage.....their is no safe choice for ftbs.......

The safe choice is to go with what you can afford and don't pick the first thing that you see. Pick a location that you can tolerate, pick a price range and spend time, even years, looking for what you need. Don't spend 600,000 if you are on a 30K salary, don't buy a 1 bedroomed apartment over a chippy.

Mortgages tend to be huge, they tend to be long term. That doesn't change. It was the same for my parents and its the same for me. For all intensive purposes it should be the same for you.

There is no easy answer, there is no simple choice.

jobless wrote:

and if there is a crash of course those who sat back are still going to sit back and wait.....why would you buy a depreciating asset?

50 years ago my Grandmothers house, which is close to the city centre, wasn’t worth a whole lot. It would have been expensive to buy at the time, but nothing like what its worth now. If there is a crash its value will drop. But in 50 years time it will be worth a fortune again.

What has changed? The house? No. The site? No. Just the relative value compared on an economic scale, that you and I have no control over. In the end I’d rather spend 30 years paying off a house then spend 30 years complaining about the price of them…

Sponge Bob

K_user wrote:

What has changed? The house? No. The site? No. Just the relative value compared on an economic scale, that you and I have no control over. In the end I’d rather spend 30 years paying off a house then spend 30 years complaining about the price of them…

Good point well made but does your preference for serving a 30 year financial sentence extend to the shoebox in Athy or the semi in Ballivor or is it a good idea in 'certain' areas only ?????

SimpleSam06

K_user wrote:

The safe choice is to go with what you can afford and don't pick the first thing that you see. Pick a location that you can tolerate, pick a price range and spend time, even years, looking for what you need. Don't spend 600,000 if you are on a 30K salary, don't buy a 1 bedroomed apartment over a chippy.

Erm you won't get qualified for €150,000 on a 30k salary. What sort of house will that buy you? The property ladder is dead.

K_user wrote:

Mortgages tend to be huge, they tend to be long term. That doesn't change. It was the same for my parents and its the same for me. For all intensive purposes it should be the same for you.

There is no easy answer, there is no simple choice.

The big difference between your parents and you is that housing was more like 3-4 times average wage. And back then that was considered a serious risk. Now its 10-12 times average wage. Seeing the difference there?

K_user wrote:

50 years ago my Grandmothers house, which is close to the city centre, wasn’t worth a whole lot. It would have been expensive to buy at the time, but nothing like what its worth now. If there is a crash its value will drop. But in 50 years time it will be worth a fortune again.

There was an analysis done in another thread of house prices ON AVERAGE versus inflation. Houses are generally a poor financial investment, except in boom periods.

K_user wrote:

What has changed? The house? No. The site? No. Just the relative value compared on an economic scale, that you and I have no control over. In the end I’d rather spend 30 years paying off a house then spend 30 years complaining about the price of them…

Yes, if you don't buy now, you will have to live out of a suitcase and beg for the leavings of your betters.

Sigh.

K_user

Sponge Bob wrote:

Good point well made but does your preference for serving a 30 year financial sentence extend to the shoebox in Athy or the semi in Ballivor or is it a good idea in 'certain' areas only ?????

Surely that’s a personal choice?

If you are willing to spend the next 30 years in a shoebox in Athy then off with you. I wouldn’t.

Buying a house is like any other purchase. You have to decide on whether you can afford it. You then have to decide if its suitable. You then have to decide if its an investment that you can live with, if so go for it, if not don’t. No one can force you into a mortgage.

K_user

SimpleSam06 wrote:

Erm you won't get qualified for €150,000 on a 30k salary. What sort of house will that buy you? The property ladder is dead.

The property ladder isn't dead. There are houses coming on the market every day. All it takes is a little compromise and a lot looking.

SimpleSam06 wrote:

The big difference between your parents and you is that housing was more like 3-4 times average wage. And back then that was considered a serious risk. Now its 10-12 times average wage. Seeing the difference there?

A risk is just a risk.

If you are broke it doesn’t matter if its 4 or 12 times average wage. If you are earning you are paying the bills and again it doesn’t matter.

SimpleSam06 wrote:

There was an analysis done in another thread of house prices ON AVERAGE versus inflation. Houses are generally a poor financial investment, except in boom periods.

Then don’t get one as a financial investment, get one as a home

SimpleSam06 wrote:

Yes, if you don't buy now, you will have to live out of a suitcase and beg for the leavings of your betters.

Sigh.

Or buy and live in a home - work for your future - not sigh about how unfair the world is...

SimpleSam06

K_user wrote:

The property ladder isn't dead. There are houses coming on the market every day. All it takes is a little compromise and a lot looking.

If by compromise you mean a 40-minute commute every day, I'm afraid a lot of people aren't willing to compromise that much.

K_user wrote:

A risk is just a risk.

If you are broke it doesn’t matter if its 4 or 12 times average wage. If you are earning you are paying the bills and again it doesn’t matter.

That just makes no sense at all. Some risks are much higher than others. Thats like saying a bet is a bet is a bet. Not true at all.

K_user wrote:

Then don’t get one as a financial investment, get one as a home

Yes! Thats what I have been saying all along.

K_user wrote:

Or buy and live in a home - work for your future - not sigh about how unfair the world is...

Who is doing that? The market will sort out the house prices shortly now, to bring them back to more historical norms. And on the note of working for your future, interest on a mortgage is just as dead as rent money. The difference is, you can get a far nicer house far nearer to urban centres to rent more cheaply than even the interest portion on a loan for the same house. Makes sense to me. When that changes, so will my advice.

I think I see what you are saying though, its that if you can afford a decent place to live and don't want to move for the next 20-30 years, go ahead and buy a house, assuming you have also covered bases like childcare, fuel costs, job security, interest rate rises and so on. I can agree with you completely on that.

My point is that the market is savagely out of balance, and paying for a burden of 35 years for two people on an average wage is a bit mad to put it mildly. If the prices were going to go on forever, or even level out, yes, I'd be advising to buy now.

I just don't see that happening.

belly

SimpleSam06 wrote:

If by compromise you mean a 40-minute commute every day, I'm afraid a lot of people aren't willing to compromise that much..

go out and stand at any major road coming into galway at 8am and see just how many are willing to make that compromise

SimpleSam06 wrote:

And on the note of working for your future, interest on a mortgage is just as dead as rent money.

you pay interest on the money the bank give you to buy your house which when its repaid gives you outright ownership of your property rent on the other hand never gives you title to the property.

SimpleSam06 wrote:

The difference is, you can get a far nicer house far nearer to urban centres to rent more cheaply than even the interest portion on a loan for the same house. Makes sense to me. When that changes, so will my advice.

well if thats your plan then good luck with it

SimpleSam06 wrote:

My point is that the market is savagely out of balance, and paying for a burden of 35 years for two people on an average wage is a bit mad to put it mildly. If the prices were going to go on forever, or even level out, yes, I'd be advising to buy now.

the burden as you call it is the price people are willing to pay to own there own house. i'd say you'd find it hard to find many couples today that arent striving to get on the property ladder and have no intention of waiting to see what will happen with prices.

in relation to 35 year mortgages people are living longer thus the likely hood is retirement ages will most likely rise well above 65 which would mean that your ftb atm in the late 20s early 30s will still have there mortgage out of the way before they retire[/QUOTE]

CiaranC

jobless wrote:

So could you please tell all FTBs what the safest choice is when buying?, when the only option to most is a huge long term mortgage.....their is no safe choice for ftbs.......
and if there is a crash of course those who sat back are still going to sit back and wait.....why would you buy a depreciating asset?

Indeed. It would seem that the only 'safe' way forward for people of our generation is to abandon the idea of owning their own home altogether.

SimpleSam06

belly wrote:

you pay interest on the money the bank give you to buy your house which when its repaid gives you outright ownership of your property rent on the other hand never gives you title to the property.

in relation to 35 year mortgages people are living longer thus the likely hood is retirement ages will most likely rise well above 65

Sorry but thats as polite as I am likely to get in response to a post like that.

Edit: More "expressive" pic found

Pa ElGrande

HashSlinging wrote:

simple question from a FTB, I am mortage approved to 410k do I buy or wait. looking around north wicklow.I have depoist in hand.

I'm curious what motivated you to ask this question on this thread where the overriding sentiment towards continued house price inflation is negative?

If you want a particular opinion read Adam Lackie's thoughts.

Only you can decide what criteria forms value for you when buying a house and weigh up the advantages and disadvantages of that decision.

All the best.
Pa.

Pa ElGrande

CiaranC wrote:

Indeed. It would seem that the only 'safe' way forward for people of our generation is to abandon the idea of owning their own home altogether.

Not necessarily, there are disadvantages and risks to not buying as well.

1. Being subject to sudden termination in tenancy if renting (lack of security of tenure)
2. Being subject to rackrenting. On the flipside renting requires little capital investment on the part of the tenant.
3. Not being able to change your environment to suit your requirements. e.g. sudden disabilty.
4. As an example: the heating breaks getting it fixed may not be so easy if the landlord is not there or takes his time. This is something people who part subsidise the landlords mortgage don't think about, when landlords are not making profit, they are less inclined to fix something that's broke.
5. In event of a downturn it will be harder to get a mortage as the banks won't lend against a depreciating asset.
6. No sense of belonging to a community or permanent home.
7. No pets

bounty

yea Pa ElGrande, but its not that bad, someone could make a similar list for buying (bad neighbours etc)

belly wrote:

you pay interest on the money the bank give you to buy your house which when its repaid gives you outright ownership of your property rent on the other hand never gives you title to the property.

on a typical €300,000 mortgage, over 35 years at 5%, it costs ~€300,000 in interest

€300,000 dead money :eek:


i pay less renting each month than a mortgage, so i can save until the inevitable bubble bursts (or i could use my savings to buy in a cheaper country), the risk is minimal compared to potential negative equity with a mortgage

thats why rent isnt dead money, while also getting a place to live closer to work, you are paying to remove the huge risks involved when getting a mortgage at possibility the peak of a property bubble

belly

bounty wrote:

yea Pa ElGrande, but its not that bad, someone could make a similar list for buying (bad neighbours etc)

bounty wrote:

on a typical €300,000 mortgage, over 35 years at 5%, it costs ~€300,000 in interest300,000 dead money :eek:

are you persuming that the property you buy for that amount makes zero gain in real terms over 35 years?

bounty wrote:

i pay less renting each month than a mortgage, so i can save until the inevitable bubble bursts (or i could use my savings to buy in a cheaper country), the risk is minimal compared to potential negative equity with a mortgage thats why rent isnt dead money, while also getting a place to live closer to work, you are paying to remove the huge risks involved when getting a mortgage at possibility the peak of a property bubble

well everyone to there own i guess

kam3qnwvebf4jh

Riley Victorious Tie wrote:

2 months ago, out of interest, I decided track a particular house type(3-bed semi, no extension) in a particular estate(just off the M50 near Dundrum shopping centre) in South Dublin. On the 16/5 a sample house matching the description above was guiding at 535K. On the 17/7 another house on the same estate with the exact same characteristics was guiding 595K!! Thats an increase of 12% for 2 months !

Whats the last thing that an engine does before it blows up ? It overheats..

Cant quite believe this thread is still going but......

Checked the price of a house on the same estate (and no, its not the original one) today, and its quoting 595K.

What happens when you reach the top of a hill ? You level out...

galah

Pa ElGrande wrote:

Not necessarily, there are disadvantages and risks to not buying as well.

1. Being subject to sudden termination in tenancy if renting (lack of security of tenure)
2. Being subject to rackrenting. On the flipside renting requires little capital investment on the part of the tenant.
3. Not being able to change your environment to suit your requirements. e.g. sudden disabilty.
4. As an example: the heating breaks getting it fixed may not be so easy if the landlord is not there or takes his time. This is something people who part subsidise the landlords mortgage don't think about, when landlords are not making profit, they are less inclined to fix something that's broke.
5. In event of a downturn it will be harder to get a mortage as the banks won't lend against a depreciating asset.
6. No sense of belonging to a community or permanent home.
7. No pets

Not necessarily...
1) There is renter's protection, you have notice periods, so you won't end up on the street straight away.
3) If the house does not suit your needs, you move.
4) Again, there's laws. And you can always move.
6. Why? Integration is what you make of it. I feel very much part of the community, and I'm only renting...
7. Not necessarily - it depends on the landlord.

Look to other countries - my grandma for example has been renting her apartment for the past 60 (yes, sixty) years. And in Germany, for example, when you rent a place, you can make changes to the interior (put your own floors is, etcetc - you will rent unfurnished places, and have to bring all your own stuff anyway (including all whitegoods etc). Then again, in Germany, a lot of apartments are let through some sort of semi-private housing organizations that manage housing - not private landlords, and rents/tenancies are heavily regulated.

But this is moving away from the housing bubble discussion...

ronbyrne2005

http://www.unison.ie/irish_independent/stories.php3?ca=35&si=1687460&issue_id=14637

http://www.unison.ie/irish_independent/stories.php3?ca=184&si=1687282&issue_id=14637

Requires free registration.

The game is up.

Sponge Bob

The Indo is a bit like me, once they realised there were 275000 empties nationwide (that was back in June) they knew the game was up and started to manage public expectations

Instead of uncritically quoting Dan and Austin and their spin on how everything could only go up or soft land they started to mention the rather obvious .

finnpark

Thats not all. Anyone hear today fm's news today?:eek:

jesus_thats_gre

Can anyone post up those unison articles?

What was on today fm?

GeorgeBailey

finnpark wrote:

Thats not all. Anyone hear today fm's news today?:eek:

Don't just ask if we've heard, explain!

K_user

SimpleSam06 wrote:

If by compromise you mean a 40-minute commute every day, I'm afraid a lot of people aren't willing to compromise that much.

Ever lived abroad? 40 minutes is nothing to the commute in other countries.

It takes a good hour to get from Rathfarnham to the centre of Dublin.

40 minutes is nothing...

SimpleSam06 wrote:

That just makes no sense at all. Some risks are much higher than others. Thats like saying a bet is a bet is a bet. Not true at all.

Actually it is true. You only bet what you can afford.

There are two types of mortgages. One that you can afford, or one that puts you in debt up to the neck with no leeway. If you have the latter, get out, get out now. Any shift in the economic balance and you are f**ked. If you are in the first group, it makes no odds, a debt is a debt.

SimpleSam06 wrote:

Who is doing that? The market will sort out the house prices shortly now, to bring them back to more historical norms. And on the note of working for your future, interest on a mortgage is just as dead as rent money. The difference is, you can get a far nicer house far nearer to urban centres to rent more cheaply than even the interest portion on a loan for the same house. Makes sense to me. When that changes, so will my advice.

Who says the market will sort itself out?

Like in cities all around the world once houses become too expensive apartments become the norm - its happening here now. The price of a one bedroomed flat is comparable to a house a few years back. This forces people to search for homes further a field. Which in turn leads to development in the out lying towns, boosting the local economy, improving infrastructure and creating jobs that didn't exist previously. Just take a look at cities across the globe. Over time they simply expanded.

Also a mortgage is not dead money. Owning a car is dead money. Renting a flat is dead money. No matter how much money you throw at a car you will have to replace it within a few years. No matter how long you are in a rented house, no matter how much money you spend making yourself comfortable, the structure isn't yours - it never will be.

A Mortgage is going to the bank though. But its paying back the biggest loan you will ever get. Its paying for a structure that you can keep for the rest of your life, that you can pass onto your kids. It may take 30 years to pay for, but by the time you are 60 you will have something that no one can take from you. A home. And most importantly its a valuable asset.

Rent for 30 years and all you’ve done is paid someone else’s mortgage.

SimpleSam06 wrote:

I think I see what you are saying though, its that if you can afford a decent place to live and don't want to move for the next 20-30 years, go ahead and buy a house, assuming you have also covered bases like childcare, fuel costs, job security, interest rate rises and so on. I can agree with you completely on that.

Exactly - a house is first and foremost a nest for your life.

SimpleSam06 wrote:

My point is that the market is savagely out of balance, and paying for a burden of 35 years for two people on an average wage is a bit mad to put it mildly. If the prices were going to go on forever, or even level out, yes, I'd be advising to buy now.

I just don't see that happening.

The market is something that we, the average joe, have no control over. The market will go one way or another, either way you have to live with it.

There is a saying that you should "always paddle your own canoe", which is to say that there is only one person that will look after your interests, you. Waiting on a market to change in your favour is waiting for someone else to do your work for you. And if there is a market upheaval there is no guarantee that you’ll be any better off. The only advice a person can give to another, that is to do their own maths, never invest in something that they can’t cope with and don’t depend on others to make life better. That advice doesn’t change based on an individuals situation, or how the market is going.

finnpark

Fine Gael TD has warned than next government has to find alternetive employment for construction workers as the construction industry will collapse over the next 5 years. Quite shocking. Ive contacted the estate agent to put one of my properties up for sale.

L5

Desmond warning on property bubble
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Dermot Desmond sold property play Greencore

Financier notes Ireland tops OECD price rise league

DERMOT Desmond, who is one of Ireland's top financiers, has warned of a bubble in the Irish property market.

The fourth-richest man in the country said growth in the fastest-expanding economy in the euro region may have helped create "a little bubble" in real estate prices.

Irish house prices have increased by 335pc between 1995 and 2005, faster than anywhere else across the 30-nation Organisation for Economic Development.

"There's no doubt about it; it's a bit frothy, certainly in the property sector," Desmond said. "There's just so much wealth generated, it's created that little bubble. I think that will settle out in time."

Prices in Dublin are now higher per square metre than those in London, Zurich and Paris, the OECD says, estimating that Irish housing may be overvalued by as much as 20pc.

New York

"Residential property is as expensive here as in London or New York," said Desmond, who is reported to be worth $1.8bn.

"While I'm very proud of Dublin as a city, I still don't think on the global map it's as important as London or New York as far as buying residential property."

As house prices surge, developers are gobbling up vacant land, hotels, pubs and sports stadia across the country. About 86,000 houses were built last year, equal to 21 dwellings for every 1,000 people, or four times the European average.

In July, Desmond sold his 22pc shareholding in Greencore to property developer Liam Carroll.

Greencore sale

Greencore owns former sugar-processing sites with a market value of as much as €187m, according to a valuation carried out for the Irish Farmers Association in June.

Property prices have risen as the Irish economy expanded at an annual average of 7.5pc since 1996, compared with 2pc growth in the euro area as a whole.

Irish inflation accelerated to 4.5pc in August, a 3½-year high, from 4.2pc in July.

"We have to be cautious that we don't inflate the economy too much," said Desmond.

"Otherwise, there could be a severe recession, but we have a very good finance minister and a competent government, and I don't see that really happening."

See Daon €30m deal, p2

L5

All eyes are on the property market and the emerging signs of stress and strain - a surfeit of sellers, nervous buyers, rising interest rates, and weakening prices

IS the great Irish property party finally coming to an end? The question has been prompted by a number of recent indicators that appear to suggest early signs of a slowdown in the property market.

Irish house prices have risen 270pc since 1996, rising at average of 14.9pc for each of the last ten years.

But last week unexpected results in a new survey of mortgage lending published by the Irish Bankers Federation appeared to show a dramatic slowdown in homeloan lending in the second quarter of this year.

The amounts borrowed for trading-up and topping-up were actually lower than the same period of 2005. Only 13 more first-time buyers took out loans than last year.

The survey seemed to indicate that the rapid rate of growth in the mortgage market has begun to tail off as interest rate hikes begin to bite.

The number of homeloans issued continues to increase, but the rate of increase has fallen back significantly.

The indications of a slowdown in mortgage approvals tallies with recent house price figures. In July, house prices rose just 1.1pc - a reduction in the rate of growth for the third successive month, according to Permanent TSB/ESRI.

And a recent report from internet property site Daft.ie showed that the annual rate of house price increase had more than halved in June to 6.2pc.

The popular personal finance website Askaboutmoney.com has 190 pages of 200,000 posts under the title 'Current public sentiment towards the housing market'. Much of it is negative about property prices.

Mortgage brokers have also detected early warning signs of a slowdown in the housing market.

The Independent Mortgage Advisers' Federation, which represents the country's brokers, has predicted a major slowdown in the housing market.

President of the IMAF Michael Dowling said his members were beginning to see signs that prices might have reached a plateau.

Higher interest rates, along with sharp rises in energy costs, and the need for lenders to stress-test mortgage applicants to ensure they can cope with higher interest rates, were dampening the market, Mr Dowling said.

By next spring he expects house price increases to fall back to around 3pc on an annual basis.

Mortgage rates have increased four times in the past nine months, with another two rate rises expected before the new year.

The rises have so far added 1pc to interest rates.

The last rise was in August, but experts say the cumulative effects of the previous ones are beginning to have an effect on the mortgage market.

Economist Pat McArdle has also detected tentative signs of a slowdown, but he stresses it is too early to be definitive.

The Irish Bankers Federation statistics, the Permanent TSB/ESRI figures, the Daft.ie report, and anecdotal evidence seem to be pointing to a slowing in the property market, the Ulster Bank economist said.

"Here we have four straws in the wind, and if you add them all together it does indicate a slowdown. But we are still waiting for confirmation."

However, he said last month's lending figures from the Central Bank did not give any hint of a tailing-off in mortgage lending, so he would be closely watching the end of the month's lending figures from the Central Bank.

Since the start of this year the mortgage market may have been sustained by the move to longer-term mortgages of 35 or even 40 years.

But that effect may now have run its course, and even longer loans would make little difference to repayments, even if they were on offer from the banks, some commentators argue.

Last week, the German Bundesbank, the biggest central bank in the euro system, signalled that ECB rates might continue rising next year, which could bring them to 4pc.

"Recent developments have been positive but the inflation risks are such that . . . further action over and above that envisaged in our main scenario could be warranted," Axel Weber said.

He was responding to a question about the prospect of rates hitting 4pc in 2007.

Despite the rates rises, there is no evidence of a lowering of interest in buyers wanting to acquire property, according to Hooke & MacDonald managing director Ken MacDonald.

"If it keeps up like this, the whole year is going to be dramatically up on last year."

However, higher rates are operating to stabilise prices in the new house/apartment market.

"Developers are not increasing prices. They are responding to interest rates. Developers want a flow of business; they don't want a slowdown."

Mr MacDonald said he was hopeful prices would slow to single-digit increases.

Property prices last fell in Ireland in 1994 soon after the currency crisis two years previously, according to Department of Environment figures. Property price rises peaked in 2000, when they rose by 22pc. At present, they are rising at an annual rate of 15.5pc.

It remains to be seen if mortgage lending and housing prices start to ease back. But the early indications are that there is a slowdown.

After 12 years of double-digit growth, even single-digit growth would be a welcome relief in a raging market.

Sponge Bob

This lot seems a bit reasonable by recent not historic standards in Kinnegad