Who caused the housing bubble.

Right, few threads recently where people are congratulating themselves on not getting into debt while others are accepting that the debt they got into and the ridiculous things they bought during the tiger were their fault and they accept that.

Then there's the threads where everyone blames the banks, the politicians and the developers for everything that's wrong in the country.. Doesn't tie in at all with the other threads.

My views on the housing bubble are:
Our government were incompetent and yes there were expense scandels etc. but that in no way contributed to the downfall of Ireland compared to how the housing bubble did. Their management of the crisis was terrible but they didn't cause it.
The developers caused huge damage but they were only responding to the huge demand from the public. We were all too happy for these nice housing estates popping up everywhere when we had the money to buy them.
The banks are in no way to blame for the bubble. People take out mortgages of their own free will. That's just a fact.
The people are to blame in my opinion. Buying houses like their candy. everyone wanting to get onto the property ladder, everyone taking out 110% mortgages, everyone thinking that to be successful means having a house or two in Dublin being rented out.

That's my opinion anyway.. It can change but I think the housing bubble that caused such a deep recession can only be the fault of the people creating demand and buying the houses.

Sticky_Fingers

You did OP with your glossy ads and excessive property porn webpages. Soft landing my arse, I wish I stayed with Yahoo:mad:

141_Oscar_Mike

141_Oscar_Mike wrote: »

Are you one of the mentioned above? B(w)anker etc?

No. I make my own opinions though. And you should learn to differentiate between housing bubble and what happened after the recession hit.

No one hated bankers during the bubble so you cant just call them **** in a thread that is specifically looking at the bubble..

DOC09UNAM

The people and the banks.

The idiots at the bank can only approve the mortgages the idiot people ask for.

So really, it's moreso the idiots instead of one group.

Senna

People en-masse are stupid. They are not to blame.
Banks/developers/estate agents etc are all business, they work within regulations. If they are allowed to operate recklessly to increase profits, they will. They are not to blame.
The failure of the Financial Regulator to ensure correct financial services is to blame. The Financial Regulator did voice concerns about the growing debt levels as early as 2000, but Bertie Ahern constantly dismissed them ,because there were "sound fundamentals" unpinning the debt.

the_barfly1

I do believe the European Monetary Union and Euro currency were the main factors. Something to do with borrowing costs being slashed over night, credit becoming cheap, and a subsequent lack of regulation of our financial institutions..

141_Oscar_Mike

141_Oscar_Mike wrote: »

To blame the people is a bit much.

That's two posts where you haven't backed up your point in any way.

Potential-Monke

This is the way i look at it.

The people are sheep. Yes, there are quite a few out there that are well educated and able to make their own minds up, but the majority are sheep (obviously, the numbers represented by the boardsies are not in the sheep category, after all, sheep can't type). So, the sheep were told by..

The banks, that they could get a mortgage now even if you earn tuppence a week, it's ok, we'll accept you anyway. Why? Because...

The Developers, they have told the banks that they will make a fortune because they can build houses for half nothing and they will be sold for 3 times the normal price, as long as the banks give mortgages. And if the banks give the developers x00 million, they'll guarantee through an IOU written on the back of a napkin, that they will pay it back. And why did the developers think they could do this? Well...

The Government, or more specifically FF and Bertie and Co., they told their developer friends to start this because they'd ensure that they got the loans because FF had their hands in so many pockets.

So i blame the Government. It may be a very simplified version, but it's my version, and while it may not be 100% accurate, it's what i believe.

Victor_M

Senna wrote: »

People en-masse are stupid. They are not to blame.
Banks/developers/estate agents etc are all business, they work within regulations. If they are allowed to operate recklessly to increase profits, they will. They are not to blame.
The failure of the Financial Regulator to ensure correct financial services is to blame. The Financial Regulator did voice concerns about the growing debt levels as early as 2000, but Bertie Ahern constantly dismissed them ,because there were "sound fundamentals" unpinning the debt.

Exactly what he said.

We all caused it, but what exactly is the point of the financial regulator? The FR was supposed to be the watchdog put in place to prevent unsustainable/irresponsible lending occurring in the first place, if he was doing his job, many of the people given mortgages wouldn't have been given loan approval in the first place, which would have prevented the rapid increases in the first place.

Thanks to him not having the balls to shout loud enough about the impending disaster (that's giving him the benefit of the doubt, presuming he tried) the lunatics ran the Asylum into the ground unsupervised for 15 years.

If everything was left to the person/individual to make the right choice then chaos would ensue in all aspects of life. That's why we are governed by laws and regulations.

Imagine there was no gun regulation in Ireland, or you could administer prescription drugs to your self as you saw fit etc.

I'm in China at the moment and the rate of inflation here is huge, the govt have intervened and told the banks to reduce their rate of lending to 25% of what it was last year. Can you imagine how different Ireland would be today if the FR intervened and issued a similar lending restriction on the Irish banks in 2003.

Hindsight is a great thing!

cock robin

The Irish buying Ireland from the Irish.

galwayrush

The buck is suppost to stop with the people who are suppost to be in charge,the ones who get astounding wages and expenses to run the country on our the gambling bondholders behalf.

Augmerson

It was me, I did it. And I'd do it again if I got the chance, would have gotten away with it too if it hadn't been for them pesky kids.

Kasabian

Deleted User wrote: »

Right, few threads recently where people are congratulating themselves on not getting into debt while others are accepting that the debt they got into and the ridiculous things they bought during the tiger were their fault and they accept that.

Then there's the threads where everyone blames the banks, the politicians and the developers for everything that's wrong in the country.. Doesn't tie in at all with the other threads.

My views on the housing bubble are:
Our government were incompetent and yes there were expense scandels etc. but that in no way contributed to the downfall of Ireland compared to how the housing bubble did. Their management of the crisis was terrible but they didn't cause it.
The developers caused huge damage but they were only responding to the huge demand from the public. We were all too happy for these nice housing estates popping up everywhere when we had the money to buy them.
The banks are in no way to blame for the bubble. People take out mortgages of their own free will. That's just a fact.
The people are to blame in my opinion. Buying houses like their candy. everyone wanting to get onto the property ladder, everyone taking out 110% mortgages, everyone thinking that to be successful means having a house or two in Dublin being rented out.

That's my opinion anyway.. It can change but I think the housing bubble that caused such a deep recession can only be the fault of the people creating demand and buying the houses.

Liberal use of the word "everyone" doesn't make it such.

Not everyone went out and bought castles in the sky.

Government, the regulator, the developers and their banking buddies are to blame, the mantra was we were going to have if anything a "soft landing".

Dravokivich

cock robin wrote: »

The Irish buying Ireland from the Irish.

to free the irish of their irish overlords...

...anyhow i think its due to a lack of regulation with property value, alnog with people in a panic to buy as prices increased.

and for those with negative equity... stuff is usually cheaper second hand... why should a used house be different?

Pauleta

Gotta blame the peeps. We complain about the nanny state but when the banks treated the people like resposible adults they acted like kids.

Dravokivich

Dravokivich wrote: »

...anyhow i think its due to a lack of regulation with property value, alnog with people in a panic to buy as prices increased.

I believe that's called a free market... How can a regulator control demand for housing?

enda1

People were to blame. Everyone wanted to make a quick buck. I've known all sorts of inadequate people getting into buy to let property. Students, teachers, nurses etc. It was completely ludicrous! The concept of the private state employed person becoming a landlord with no real capability of funding their debt if the cost of maintaining it rose, the income from it fell, their wage fell or all of the above combined, madness.

Banks made bad business decisions to allow 100% mortgages, with 2 years interest free or whatever it came to at the peak. They and their shareholders suffered for their imprudence. Don't say they didn't suffer either, they suffered the most in this situation, shares slashed by 80% which is more than the value of houses has fallen.

Of course the government was very much to blame too, but then the government is just the political mouth of the people, so again it comes down to the people.

pickarooney

A stark example of mass hysteria the likes of which crops up every 10-15 years. The moving statues of Ballinspittle were nothing compared to how millions of people saw an economic miracle that simply didn't exist.

Fallschirmjager

well i answered 'the people' but it is a little more convoluted...but ultimately...you signed on the line that is dotted, hence my vote.

we had a few banks intertwined with govt intertwined with builders, a elitist group feeding off of you. taxes on houses to allow the govt borrow by proxy to pay for social issues, laws allowing builders build anywhere and banks that knew the govt would always bail them out.

all this was done by elitist few who feel you are too dumb to manage yourself and unfortunately this whole affair has just proved the point to them again.

enda1

pickarooney wrote: »

A stark example of mass hysteria the likes of which crops up every 10-15 years. The moving statues of Ballinspittle were nothing compared to how millions of people saw an economic miracle that simply didn't exist.

It did exist.

Unemployment becoming the lowest in the EU, wages soaring. Government surplus etc. It was an economic miracle actually but we managed to fudge it up.

smellslikeshoes

Blaming it on anyone but the government and it's toothless regulator is absurd in my opinion.

The banks will lend to anyone they think they can make a profit from.
The developers are there to make money any way they can.
It's not the job of the average Joe Bloggs on the street to worry about his big mortgage bringing down the country, he is only going to be worrying about his own interests.



The regulator should have been coming down hard on the banks to stop wreckless lending which would in turn stop property developers taking risks building estates in the arse end of nowhere. It would also stop Mr Joe Bloggs spending 500k of the bank's money on a shoe box apartment.

Ultimately the buck stops with the government.
The Government should have thrown cold water on the housing bubble in 2000/2001 and made sure that the regulator was competent enough to pull the banks into line. This would mean no wreckless lending so the developers were made work within their means and Joe Bloggs on the street wouldn't be able to get a massive loan to buy a 500k shoebox.

pickarooney

enda1 wrote: »

It did exist.

Unemployment becoming the lowest in the EU, wages soaring. Government surplus etc. It was an economic miracle actually but we managed to fudge it up.

It was a good run, nothing miraculous, but sure you couldn't tell people that it was just 7 fat cows.

smellslikeshoes

smellslikeshoes wrote: »

Blaming it on anyone but the government and it's toothless regulator is absurd in my opinion.

The banks will lend to anyone they think they can make a profit from.
The developers are there to make money any way they can.
It's not the job of the average Joe Bloggs on the street to worry about his big mortgage bringing down the country, he is only going to be worrying about his own interests.



The regulator should have been coming down hard on the banks to stop wreckless lending which would in turn stop property developers taking risks building estates in the arse end of nowhere. It would also stop Mr Joe Bloggs spending 500k of the bank's money on a shoe box apartment.

Ultimately the buck stops with the government.
The Government should have thrown cold water on the housing bubble in 2000/2001 and made sure that the regulator was competent enough to pull the banks into line. This would mean no wreckless lending so the developers were made work within their means and Joe Bloggs on the street wouldn't be able to get a massive loan to buy a 500k shoebox.

So what you're saying is that if we had been a communist nation, the housing crisis could have been averted.. But we're capitalist so we were feked from the start.

Mr Benevolent

I did. Sorry about that.

smellslikeshoes

Deleted User wrote: »

So what you're saying is that if we had been a communist nation, the housing crisis could have been averted.. But we're capitalist so we were feked from the start.

Are you just trolling? That's not what I'm saying at all.

Dyr

the_barfly1 wrote: »

I do believe the European Monetary Union and Euro currency were the main factors. Something to do with borrowing costs being slashed over night, credit becoming cheap, and a subsequent lack of regulation of our financial institutions..

Boards didn't go to the trouble of hosting a euroshill forum so you could sling that kinda dangerous talk around :mad: How about canning that crazy talk and coming in for the big win with the rest of us eh? Ein reich, Ein currency and all that

smellslikeshoes

smellslikeshoes wrote: »

Are you just trolling? That's not what I'm saying at all.

You're talking about the government regulation of a free market.. Or weren't you? It's one or the other..

The government did not make us buy houses. To suggest that is infinitely more absurd than to suggest they did.

enda1

enda1 wrote: »

People were to blame. Everyone wanted to make a quick buck. I've known all sorts of inadequate people getting into buy to let property. Students, teachers, nurses etc.

You know students who bought property to rent out?

Mike 1972

Wheres the "all of the above (and then some)" option

squod

Brian Lenihan was on tele last night. He blamed low interest rates and a sharp rise in wages over the previous ten years before 2007. Can't argue really.

As an aside, I purchased back maybe nine years ago. At the time I was bidding against others like myself and the city council (I later discovered).
What business did they have starting a bidding war that only they could win?

enda1

RoverJames wrote: »

You know students who bought property to rent out?

A few actually. With a little help from Daddy of course.

Mike 1972

Mike 1972 wrote: »

Wheres the "all of the above (and then some)" option

You can tick more than one answer.. The "then some" is in your comment.

smellslikeshoes

Deleted User wrote: »

You're talking about the government regulation of a free market.. Or weren't you? It's one or the other..

The government did not make us buy houses. To suggest that is infinitely more absurd than to suggest they did.

I would suggest whipping out a dictionary on the definition of communism.
Having a strong financial regulator to prevent wreckless lending is not even close to being part of communism.

Fratton Fred

Low interest rates, which the government could have off set by increasing tax on second mortgages and high wages caused by the government upping minimum wage to a ridiculously high level and recruiting thousands of over paid public servants.

In short, the government.

smellslikeshoes

smellslikeshoes wrote: »

I would suggest whipping out a dictionary on the definition of communism.
Having a strong financial regulator to prevent wreckless lending is not even close to being part of communism.

Yea, I know.. I'm making a point about how regulation is a reaction to a problem.

You're logic is laughable.. The government should have stepped in to regulate a problem being caused by the banks. Therefore, it is absurd to blame anyone but the government.

PK2008

https://www.youtube.com/watch?v=koY6kXhQDQo

snubbleste

This topic has never come up before :rolleyes:

We're all to blame collectively. We voted in successive governments that we knew would turn a blind eye to 'improper practices'
We were and still are imho greedy as a nation
No one forced anyone to buy property.

smellslikeshoes

Deleted User wrote: »

Yea, I know.. I'm making a point about how regulation is a reaction to a problem.

You're logic is laughable.. The government should have stepped in to regulate a problem being caused by the banks. Therefore, it is absurd to blame anyone but the government.

You call my logic laughable but you are the one calling financial regulation communism

The problems being caused by the banks was there because of lack of regulation. A competent regulator would have stopped the problems with the banks even arising.

moceri

I laugh at Tommy Barker's effusive descriptions of overpriced property in the Irish Examiner each Saturday. I don't think he has realised that the Glory days of the CELTIC TIGER are well and truly over.

His consistently over-egged descriptions are so far fetched; during the boom days may have provoked a wry smile, but in present conditions are a parody.

I feel sad that this is what a failed journalist is reduced to in order to earn a crust.

Snazzy_Chazzy

I bought a heap of apartments using the one before as leverage on the next. My broker bent the rules.... I said I earned more than i Did.......
I am 100% to blame for my part and Im caught now with 3 worthless shells you couldnt swing a cat in. It wasnt blatant greed, I "thought" i was being entrprenerial. It was "simples" . At one stage i could say "ah yeah millionaire on paper have made it woohoo"
It Was all fake and now I paying the price but im 100% to blame and as such I wont blame anyone only Mise.
Such "investors" as myself did pump up the market and I got stung and im sorry I ever got involved. Multitude of factors.

ciagr297

smellslikeshoes wrote: »

It's not the job of the average Joe Bloggs on the street to worry about his big mortgage bringing down the country, he is only going to be worrying about his own interests.

yeah, but Joe Bloggs didn't think about what happens if the cost of lending goes up and his interest rates hit the sky and he wouldn't meet his repayments

as someone else said earlier, he signed on the dotted line. the minute he did that, it became his responsibility to pay back the stupid amount of money he had borrowed from the idiots who made it available to him

smellslikeshoes

smellslikeshoes wrote: »

You call my logic laughable but you are the one calling financial regulation communism

The problems being caused by the banks was there because of lack of regulation. A competent regulator would have stopped the problems with the banks even arising.

If you tell the banks how to lend, you're telling non-state bodies how to do business.. How could this ever be tolerated during a boom?
If you think the interest rates should have been artificially raised, then that also is completely unacceptable.

What regulation should have been enacted?

enda1

enda1 wrote: »

A few actually. With a little help from Daddy of course.

Presumably Daddies name was on all of the paperwork, I can't see a student being given a buy to let mortgage or anyother mortgage for that matter.

lucylu

Your Poll is forgetting:
The media.. ie Newspaper Property Supplements. TV programs, property expos..

The unregulated Auctioneers - pulling prices out of their arse..

One group of people who are never mentioned are the unregulated Mortgage brokers who would get you the "best" mortgage ie the biggest so the bigger their commission.

Mike 1972

snubbleste wrote: »

We're all to blame collectively. We voted in successive governments that we knew would turn a blind eye to 'improper practices'.

Few (if any) governments in the history of the state have been elected on a majority of the popular vote. None of them have been elected on a unanimous vote so this "we are all to blame" mantra is a crock.

Deleted User wrote: »

You can tick more than one answer..

But the poll is based on percentages therfore my vote for all of the above equates to not voting at all.

(Unless Im totally screwing up the maths here ?)

Mike 1972

Mike 1972 wrote: »

But the poll is based on percentages therfore my vote for all of the above equates to not voting at all.

(Unless Im totally screwing up the maths here ?)

Well if you say they all caused it equally, then yea.. Your vote shouldn't count for anything. How else could it be.

Monty Burnz

Deleted User wrote: »

My views on the housing bubble are:
Our government were incompetent and yes there were expense scandels etc. but that in no way contributed to the downfall of Ireland compared to how the housing bubble did.

How can you make a distinction between the the governance of the country and the property bubble? That's bizarre.

That would be like saying 'yeah, I know the teacher was corrupt and incompetent, but that in no way damaged the students as much as them all killing each other with crude weapons fashioned out of seats'. WTF was the teacher doing?? WTF was our government doing?

They appointed the regulator of the banks (a moron), they created the tax incentives that encouraged the building bubble, they cut taxes to the bone so we were running the state on unsustainable bubble income, they blew all the cash instead of saving it for the inevitable bust. They ignored every warning. They did every single thing wrong.

They will be teaching our case in universities around the world in the coming years as an object lesson in how bad government can destroy prosperity.

Sanjuro

You cant just point the finger at one group and say they're to blame. The whole debacle is too complicated for that. At the core of the problem are a combination of banks, developers, the government and public service. There is no way any single group could have created the bubble by themselves. They need the collusion of the other groups to keep the bubble inflating.

Are the people to blame? To some extent, yes. But saying 'it's your fault for buying into this shit' is very unfair. Giving the last government a mandate for 15 years, and allowing their criminality continue unchecked is the fault of the people. You get the government you deserve. But there's also a level of trust the people give to their elected representitives. That trust was abused by the government, and for that reason, the people are excused to some extent.

So it's everybody's fault. The banks for crapping money on everyone without question. The developers for borrowing extortionate amounts beyond their means. The government and public service for allowing the situation to go on without regulation. The ECB for showering money on clearly insolvent, or on the road to insolvency banks. And the people for buying into the whole massive lie.

Fighting Irish

Victor_M wrote: »

Exactly what he said.

We all caused it, but what exactly is the point of the financial regulator? The FR was supposed to be the watchdog put in place to prevent unsustainable/irresponsible lending occurring in the first place, if he was doing his job, many of the people given mortgages wouldn't have been given loan approval in the first place, which would have prevented the rapid increases in the first place.

Thanks to him not having the balls to shout loud enough about the impending disaster (that's giving him the benefit of the doubt, presuming he tried) the lunatics ran the Asylum into the ground unsupervised for 15 years.

If everything was left to the person/individual to make the right choice then chaos would ensue in all aspects of life. That's why we are governed by laws and regulations.

Imagine there was no gun regulation in Ireland, or you could administer prescription drugs to your self as you saw fit etc.

I'm in China at the moment and the rate of inflation here is huge, the govt have intervened and told the banks to reduce their rate of lending to 25% of what it was last year. Can you imagine how different Ireland would be today if the FR intervened and issued a similar lending restriction on the Irish banks in 2003.

Hindsight is a great thing!

FF would have been fooked out of gov

Snazzy_Chazzy

Snazzy_Chazzy wrote: »

I bought a heap of apartments using the one before as leverage on the next. My broker bent the rules.... I said I earned more than i Did.......
I am 100% to blame for my part and Im caught now with 3 worthless shells you couldnt swing a cat in. It wasnt blatant greed, I "thought" i was being entrprenerial. It was "simples" . At one stage i could say "ah yeah millionaire on paper have made it woohoo"
It Was all fake and now I paying the price but im 100% to blame and as such I wont blame anyone only Mise.
Such "investors" as myself did pump up the market and I got stung and im sorry I ever got involved. Multitude of factors.

Well in fairness, it now seems you fecked up but at least you had the balls to go out there and try it anyway, nothing wrong with that, in 5 or 10 years time you may well be laughing again Chin up anyway as difficult as that may be.

Wibbs

The government. A government has to legislate for idiots. On both sides of the financial sector. Suppliers and customers. They didn't.