nav[aria-label="Primary Navigation"] { padding: 0; & ul { list-style: none; width: 100%; display: flex; flex-direction: row; justify-content: start; align-items: start; gap: 30px; padding: 0; & li { margin: 0; } & ul li { list-style: none; } } }

Child Item

Housing bubble starting to pop?

SimpleSam06

Here in Galway, one of the most expensive places to buy property in Ireland, there are still a lot of real estate agents trying to move 3 bedroom houses at €450,000 or so, but Remax property about a week ago was advertising three bedroom houses in good areas for €320,000, or in a couple of cases, €250,000.

I've been looking at property around town for the last six months, and I have to say this is the first time I have seen property anywhere under the 300k mark. Now with that said, there are still places going for looney tunes money, a two bedroom penthouse apartment for 1.4 million last week, but thats getting pretty rare (probably why it made the news).

Can this be the beginning of the end of the property bubble? And does this mean FTB actually have a chance over the coming year? Should first timers wait until the prices bottom out?

Find more posts tagged with

Quick Links

Comments

Cantab.

CiaranC wrote:

Well...that poll does actually show that the majority of those predicting a crash dont own property, doesnt it?

Look again at the poll and examine the proportion of owners to non-owners who are bulls/bears.

The initial analysis that there is a huge disparity between those who own and those who don't, just doesn't stand up. Granted, there may be a 'bitterness factor', but not the extent stated in the original posting.

ionapaul

ronoc wrote:

Somebody who should be very optimistic about the housing market (since he makes all his money from it.) giving a negative opinion should probably be listened to more so than economists and banks.

Another little story for you so (I'm going to be very cloak and dagger as a family member works in consulting for this person):

A member of the Sunday Times Rich List, a British-based Property Developer whose company employes over 10,000 and has substantial operations in Britain, Europe, Middle East and a very profitable Irish division, is no longer working in the residential property business in Ireland, so worried is he and his board of directors on the shakiness of it. This is from a man who could buy and sell Sean Dunne tomorrow morning (based on his Rich List ranking!). Take from that what you will: I know the bears will believe me and the bulls will ignore me

I should state that my extreme bearishness on this topic was ingrained before my family member gave me this info.

D'Peoples Voice

ionapaul wrote:

A member of the Sunday Times Rich List, a British-based Property Developer whose company employes over 10,000 and has substantial operations in Britain, Europe, Middle East and a very profitable Irish division, is no longer working in the residential property business in Ireland, so worried is he and his board of directors on the shakiness of it.

Interesting but all my doubts over the property market have been eased recently on a trip to the new shopping centre in Newbridge. You see outside was a fine gael convasser giving out flyers. The top two suggestions were, wait for it, to increase the thresholds for stamp duty to make it easier for first time buyers!
Now, I ask you to read any recent report by a property company and indeed the PTSB/ERSI bulletins, and they all suggest that a LARGE part of the re-acceleration of the price in the market has been due to the reduction in stamp duty. The net effect has been that the vendor just pushed up the price more, so instead of the government getting more tax in so as to fund social housing and reduce the demand/supply imbalance, more money has gone to the vendor making it better investment for investors and thus pushing up demand!
So WHEN fine gael get in power next year, expect house prices to rise by another 20%-30%.

Quote from Property Survey 2005 "SURVEY AND INTERVIEWS WRITTEN AND RESEARCHED BY PROPERTY JOURNALIST LINDA DALY EXCLUSIVELY FOR THE IAVI"

Another factor in pushing up prices at the lower end was the increase in stamp duty exemption levels. The increase from €190,000 to €317,500 has actually had the effect of pushing up prices for first time buyers in certain parts of the Greater Dublin Area. Anecdotal evidence from agents confirmed that buyers were using their savings on stamp duty as weapons in the bidding war.

http://www.realestate.ie/news/displayitem.asp?itemnumber=94#overview

Adding to demand are changes in stamp duty rates, which have led to an increase in demand for second-hand homes from first-time buyers.

http://www.gunne.ie/admin/news_photos/dublin_bulletin.pdf

"accepting that the recently raised stamp duty rates for the December 2004 budget had an effect in many parts of Dublin in fuelling property prices up to the new Stamp Duty Rate for entry level properties."

http://www.dublincity.ie/Images/Adjourned%20May%20Meeting%2022nd%20May%202006_tcm35-38550.pdf

If fine gael want to reduce prices for first time buyers, make it less advantageous for investors, by giving the Revenue more resources to check up on the landlords who don't pay income tax on their rental income. Investors would quickly leave the market and first time buyers can take their place.

SimpleSam06

D'Peoples Voice wrote:

If fine gael want to reduce prices for first time buyers, make it less advantageous for investors, by giving the Revenue more resources to check up on the landlords who don't pay income tax on their rental income. Investors would quickly leave the market and first time buyers can take their place.

Hrm. You first point doesn't follow on from your second point. If investors are forced out of the market, thats 40% of last year's demand gone into thin air. Or more likely into diversified portfolios. Low demand + more properties being built does not equal a 20% to 30% rise in prices, it indicates a drop in prices of similar or greater amount.

ronbyrne2005

triple stamp duty for investors and watch as prices fall but FTB's can get a home where they want to live.

Pa ElGrande

Just in case you think this bubble is limited to Ireland take a look at Spain

http://babelfish.altavista.com/babelfish/trurl_pagecontent?lp=es_en&url=http%3A%2F%2Fwww.viviendadigna.org%2F%3Fforos%2Fviewforum.php%3Ff%3D23%26sid%3D67fec9fb472d291d6b40535ca610bcddhttp://babelfish.altavista.com/babelfish/trurl_load?lp=es_en&url=http%3A%2F%2Fwww.viviendadigna.org%2F%3Fforos%2Fviewforum.php%3Ff%3D23%26sid%3D67fec9fb472d291d6b40535ca610bcdd

mikemac

ronbyrne2005 wrote:

triple stamp duty for investors and watch as prices fall but FTB's can get a home where they want to live.

Political suicide and not going to happen

It's great that the tax incentives on second homes are being phased out.
In my own village in North Tipperary, there's been an estate of 16 houses built. They're amazingly ugly houses and most likely will never be lived in. THey were built when tax incentives and everyone agrees that they are an eyesore.

As this is a scenic area, it's next to impossible for locals to get planning permission to build on their own land but rich barristers, docters, developers,etc from Dublin can own an ugly house in a beautiful area just to write off tax and get an asset.

Makes no sense to me and unfair to locals as it drives up prices

Well done to Donegal County Coucil on their recent policy change on holiday homes

SimpleSam06

micmclo wrote:

Political suicide and not going to happen

I'd say that depends on how many young people are going to vote this time around... A politically astute party might make that a central issue in the elections, and I good and guarantee you they would get more young people voting than ever before. Ireland is still a fairly young country.

Pa ElGrande

The Japanese property deflation in photos

They had a bubble too.

ronbyrne2005

to encourage long term lanlord investment and not the current speculation which drives prices ever higher investor stamp duty should be increased massively but to encourage a longer term investment say they can write the stamp duty off against any capital gains in future once they hold property for say 15+ years. its just one idea but we need some new solutions to property speculation which is unfair for many in society, housing is akin to a human right.home ownership over speculation shud be the aim of any policies.

SimpleSam06

ronbyrne2005 wrote:

to encourage long term lanlord investment and not the current speculation which drives prices ever higher investor stamp duty should be increased massively but to encourage a longer term investment say they can write the stamp duty off against any capital gains in future once they hold property for say 15+ years.

To encourage long term landlord investment, prices need to drop by 40% or more, in order that rent can cover mortgage repayments. I think we should be encouraging single home ownership to the detriment of all other forms of investment in property.

ronbyrne2005 wrote:

its just one idea but we need some new solutions to property speculation which is unfair for many in society, housing is akin to a human right.home ownership over speculation shud be the aim of any policies.

Home ownership actually is a basic human right, as defined in the Universal Declaration of Human Rights:

Article 17.

(1) Everyone has the right to own property alone as well as in association with others.

Now while no one is legally forbidden from buying property, the extraordinary and artificial prices of houses equate to the same thing, and the onus is on the elected government to rectify the situation.

Pa ElGrande

http://abcnews.go.com/Video/playerIndex?id=2252370

What happens when the top end of the market collapses in the US.
High end property prices (McMansions) are on the way down Stateside.

luckat

A small point, not on the larger issues but just on the matter of the economics of paying back a loan:

If you bought a three-bed semi in a nice area at the beginning of the 1990s, you would have paid around €60,000 - about three times your year's wage of around €20,000 if you were in a good middle-class job.

Even at that stage this was regarded as a huge, dangerous commitment.

The same house today would sell for around €900,000, but the wages for the job have risen only to about €50,000.

The gap between salaries and prices is the thing that puts people in real danger. And if the market slides badly, it will result in job losses there won't be any wages to pay back those huge loans.

Pa ElGrande

SimpleSam06 wrote:

Home ownership actually is a basic human right, as defined in the Universal Declaration of Human Rights:

Article 17.

(1) Everyone has the right to own property alone as well as in association with others.

Now while no one is legally forbidden from buying property, the extraordinary and artificial prices of houses equate to the same thing, and the onus is on the elected government to rectify the situation.

Property does not refer to housing in the context of Article 17. The government is a representation of the people of this country's interests. The majority are very happy to see property prices rise as long as they are on the ladder and the government supports this. My view is this is not in the long term interests of this country and the increasing debt acquired must be paid out of future labour, thereby limiting our scope for future development and social security.

Article 25.

(1) Everyone has the right to a standard of living adequate for the health and well-being of himself and of his family, including food, clothing, housing and medical care and necessary social services, and the right to security in the event of unemployment, sickness, disability, widowhood, old age or other lack of livelihood in circumstances beyond his control.

At the end of the day, you can only eat three meals a day, wear one set of trousers at a time, sleep in one bed, you need to interact with the community and provision for your dependants and the future. Does it matter whether you own a house or rent as long as the goals in article 25 can be achieved?

SimpleSam06

Pa ElGrande wrote:

Property does not refer to housing in the context of Article 17.

Oh really, I don't recall seeing an "except for housing" clause written under that. I'm not going to get into a debate about the declaration of human rights, however. Although I could, particularily regarding the word "resident" and its meaning in international law.

Pa ElGrande wrote:

The government is a representation of the people of this country's interests. The majority are very happy to see property prices rise as long as they are on the ladder and the government supports this.

Who said the majority are on the ladder? And even if it is, is it right to disenfranchise 20% of the people to suit the other 80%? I believe they tried that not too long ago in the north, that went well. Not to mention those figures will reverse within a generation.

Edit: Number of private households: 1,287,958. Total number of registered voters: 3,077,726.

Pa ElGrande wrote:

At the end of the day, you can only eat three meals a day, wear one set of trousers at a time, sleep in one bed, you need to interact with the community and provision for your dependants and the future. Does it matter whether you own a house or rent as long as the goals in article 25 can be achieved?

Survival is for animals. I think we can do a little better than that. If you happen to be a student, young single professional, or transient immigrant, I am certain that renting would be a fabulous idea. However the minute you take on more responsibilities, like a family, that picture changes drastically. Also, and I'm going to repeat this again, the price boom is artificial. There is only 4 million people in this country, we have a gigantic amount of land sitting there (approximately 4 percent of land is covered by urban development).

Christ, I have offices in cities with three times the population of this nation. Most people don't feel like spending their entire lives in penury just to fill the coffers of the banks, and the arse pockets of weekend speculators.

Pa ElGrande

SimpleSam06 wrote:

However the minute you take on more responsibilities, like a family, that picture changes drastically.

Yup, it sure does - lots more bills, stress and no scope for downtime.
It does have its pluses though

There is plenty of land, but how much of it is released for development each year?
How much is serviced?
How much housing is built near where people want to live (Near to work and schools)
As you already pointed out Article 17 allows people to buy property, the government can't just seize the land bought by speculators years ago to build cheap housing. This is part of the price we pay for the brown paper bag culture.

The people reponsible for this mess are your parents and grandparents generation, they are the ones who benefit when you take on increasing debt and transfer the money to them. You will hear them express superficial "concern" about the huge mortgages young people take on these days, and you will get lots of encouragement from them to get on the ladder "sure it will always go up, look at me".

You may even get a deposit from them (How did they manage to save that money?), to compete against others in the same boat as you, driving up the prices further. You also have to compete against flippers, speculators (see investors) and the tactics of underhanded estate agents (the phantom bidder).

The housing business has come to exist not for the buyer and seller, but for itself. The dream of home ownership has become hollowed out by the people who run the business of houses: Agents, builders, banks, and finally, even us. We, ultimately, put down the money we don’t have, to buy the pokey houses we can’t afford.
And that is why we have busts and recessions!

SimpleSam06

Pa ElGrande wrote:

There is plenty of land, but how much of it is released for development each year?
How much is serviced?
How much housing is built near where people want to live (Near to work and schools)

How hard would it be to free up 1% more land? God knows they are making enough on VAT and stamp duty... But oh no, we need more civil servants...

Pa ElGrande wrote:

As you already pointed out Article 17 allows people to buy property, the government can't just seize the land bought by speculators years ago to build cheap housing.

Actually they can...
Eminent domain (US), compulsory purchase (United Kingdom, New Zealand, Republic of Ireland), compulsory acquisition (Australia) or expropriation (Canada, South Africa) in common law legal systems is the lawful power of the state to expropriate private property without the owner's consent, either for its own use or on behalf of a third party.

Pa ElGrande wrote:

The people reponsible for this mess are your parents and grandparents generation, they are the ones who benefit when you take on increasing debt and transfer the money to them.

I agree completely, but I would qualify that by saying that the banks and large developers are the biggest villains of the piece. I mean they stand to make the most, seconded only by the government, and they represent a focused source of action in the market. Speculators and investors come next, although they are a more diffuse source of action.

Pa ElGrande wrote:

The housing business has come to exist not buyer and seller, but for itself. The dream of homeownership has become hollowed out by the people who run the business of houses: builders, banks, and finally, even us. We, ultimately, who put down the money we don’t have to buy the pokey houses we can’t afford.
And that is why we have busts and recessions.

Blaming FTBs for the state of the market may be slightly justifiable, but I wouldn't go so far as to say that a large amount of the blame lies with them. Basically, I think tripling stamp duty for investors and specualtors is the best idea I have heard all year. The bank problem will take care of itself with rising interest rates. If that got put in place along with a planning permission overhaul, we might see some changes for the better.

Pa ElGrande

SimpleSam06 wrote:

How hard would it be to free up 1% more land? God knows they are making enough on VAT and stamp duty... But oh no, we need more civil servants...

not that hard - Dublin area rapidly running out of water.
Then there are the NIMBY's such as an Taisce and the type of people who would even object to kids building sand castles on the beach. Thanks to them developers can't build large family sized apartments because of height restrictions and are forced to fit as many apartments in a limited area as possible to make a profit.

SimpleSam06 wrote:

Actually they can...
Eminent domain (US), compulsory purchase (United Kingdom, New Zealand, Republic of Ireland), compulsory acquisition (Australia) or expropriation (Canada, South Africa) in common law legal systems is the lawful power of the state to expropriate private property without the owner's consent, either for its own use or on behalf of a third party.

Yes they could, and the government (ultimately you the taxpayer) have to pay market rates.

SimpleSam06 wrote:

Blaming FTBs for the state of the market may be slightly justifiable, but I wouldn't go so far as to say that a large amount of the blame lies with them.

Fair point, but they are the ones paying the mortgage, they should not be blind to prudent financial management and risk assesment. I had a rather alarming conversation with a woman recently who is paying an IO mortage on her apartment, but has no capital repayment plan. Turned out all she was looking at was the low monthly repayments, I don't believe the broker explained the capital repayment part, or maybe he did and she chose to believe what she wanted.

SimpleSam06 wrote:

Basically, I think tripling stamp duty for investors and specualtors is the best idea I have heard all year. The bank problem will take care of itself with rising interest rates. If that got put in place along with a planning permission overhaul, we might see some changes for the better.

No need to triple the stamp duty, A lot of these so called investors are going to be taking a bath over the next few years. As you say, the bank interest rates rising will reduce the amount of money people can borrow, once this happens house prices will stop rising and start falling. With no more capital appreciation, the speculators will be forced to jump to preserve whats left of their capital.

Cantab.

Pa ElGrande wrote:

Yup, it sure does - lots more bills, stress and no scope for downtime.
It does have its pluses though

There is plenty of land, but how much of it is released for development each year?
How much is serviced?
How much housing is built near where people want to live (Near to work and schools)
As you already pointed out Article 17 allows people to buy property, the government can't just seize the land bought by speculators years ago to build cheap housing. This is part of the price we pay for the brown paper bag culture.

The people reponsible for this mess are your parents and grandparents generation, they are the ones who benefit when you take on increasing debt and transfer the money to them. You will hear them express superficial "concern" about the huge mortgages young people take on these days, and you will get lots of encouragement from them to get on the ladder "sure it will always go up, look at me".

You may even get a deposit from them (How did they manage to save that money?), to compete against others in the same boat as you, driving up the prices further. You also have to compete against flippers, speculators (see investors) and the tactics of underhanded estate agents (the phantom bidder).

The housing business has come to exist not for the buyer and seller, but for itself. The dream of home ownership has become hollowed out by the people who run the business of houses: Agents, builders, banks, and finally, even us. We, ultimately, put down the money we don’t have, to buy the pokey houses we can’t afford.
And that is why we have busts and recessions!

Why don't you just wait for the house fairy to come along and give you a 3 bed house in Rathmines?

Sizzler

Far from it

http://www.breakingnews.ie/2006/07/31/story270134.html

Afuera

Sizzler wrote:

Far from it

http://www.breakingnews.ie/2006/07/31/story270134.html

Same story, different spin:
http://home.eircom.net/content/irelandcom/breaking/8580522?view=Eircomnet

D'Peoples Voice

SimpleSam06 wrote:

Hrm. You first point doesn't follow on from your second point. If investors are forced out of the market, thats 40% of last year's demand gone into thin air.

That's true, but there are an incredible ampount of first time buyers just waiting in the wings should there be any fall in price. Hence any fall will be cushioned!

ronbyrne2005 wrote:

triple stamp duty for investors and watch as prices fall.

I know you're being flippant but even such a crazy suggestion might not necessarily work. You see if stamp duty, which is now 9% for investors, was tripled to say 27% of 30%, this may seem off-putting initially BUT it all depends on the encouragement given to first time buyers. Assume you have 9 FTBs lookin at a house. Now assume Fine Gael (as Cllr Richard Daly says) abolish all stamp duty for first time buyers on properties less than EUR 400k, each of these 9 FTB have 3% x EUR 400k more in their pockets now becos they have no stamp duty. Hence each of them will be willing to up their Max bid by this amt. The net effect is that the house will be sold at a far higher price. for an investor who knows how this works, he can bet that this shock to the system will lead to prices rising higher year by year for years to come. The investor will take the punt on paying 30% extra now on stamp in the hope of earning 10% cap appreciation over 3-4yrs to make a profit.
But yet I believe you are along the right road, and that is, don't give FTBs money, else they will only outbid each other with the extra cash, the same way as they did with the first time buyers grant. Instead take money away from investors by introducing CGT of 60% fpr houses sold within 2yrs of purchase, 40% within 5 yrds, and 20% thereafter. This will get rid of/reduce the process of investors flipping houses.

micmclo wrote:

Political suicide and not going to happen

Spot on.
you see fine gael like Fianna Fail before them are trying to burn the candle at both ends. they want to benefit first time buyers while NOT harming investors as they depend on votes from both!

redspider

The staggering House Price growth in this country hasn't halted and reversed as yet. Its as fast as it ever was, if not ever:
http://www.rte.ie/business/2006/0731/houses2.html

But there are a couple of figures out today which give a dimension as to how big the 'frenzy' has become.

According to this:
http://www.rte.ie/business/2006/0731/houses.html
90,000 homes will be built this year, up more than 10% on last year and also another record year.

Last year (2005), 108,000 mortgages were paid out (a record) and a record amount was taken out on loan, 21.5 billion. The forecast for 2006 is a rise to 120,000 mortgages resulting in total new mortgage lending of €26.5 billion. Thats a 5 billion 23% increase.

Our economy is about (edit: 136) billion pa in GNP terms. So, nearly a fifth of the economy iis propped up by mortgages (residential) loans, and more is propped up by other credit facilities not to mention commercial mortgages. So the country/people are benefitting now with cash that is borrowed and will have to be paid back!

Although this country may be in a property asset frenzy, less and less of it is actually paid off (percentage wise) and our loan ration is getting larger and larger on a per capita basis. And as our population ages and the demographic trend swings to an aging population that must be supported, the 'game' may change.

But would we live anywhere else ????
http://www.economist.com/theworldin/international/displayStory.cfm?story_id=3372495&d=2005

And also as mentioned, Ireland isnt the only place where property prices have increased substantially. If you look at in global terms and over a long time, property prices have been increasing ever since the end of the 2nd world war. Looking back even further, 1850 was not a good time to buy, or was it 1820, as property prices remained stagnant and dropped in Western Europe for most of 80 years during a long period of deflation. Global deflation may happen again at some point, although as the planet is 'enjoying' a population growth boom, it may not happen.

They may not be making land anymore, as is oft quoted, although in Dubai and in Holland that is of course possible, but the property on that land and the land itself is not always a sure fire bet for investment, no matter what everybody is saying in Ireland and down the pub or the Taoiseach. However, the markets in short cycles (5-10 years) move in certain ways, as they do in 50-100 year cycles.

But we are in uncharted territory. Whilst we can look at the lessons from the past, and from other countries, each time and place and economic situation, each day even, is unique, and what we all do as a society/economy which has a 'mind of its own', is unknown.

Signs are not looking good though, and there is a lot of blind optimism out there, and people buying, and borrowing, and lending, etc .... ie: frenzy ! All we can do is sit and watch and observe whilst 3-bed semi-D's that cost 150k to build (in terms of resources) are selling for 1 million in Dublin, and the same house if built say in the middle of a mountain a bog or a field somewhere would only cost 160k. That is a sign of a land/property bubble if ever there was one, an imbalance.

redspider

SkepticOne

No party looking for votes is going to deliberately take action to lower house prices. An attempt at stabilisation is the most you could expect, imo, but I think the market has gone beyond the point where this is possible due to the numbers of people in the market for speculative reasons so I don't think this will happen either.

If you really wanted to collapse the market quickly (this is totally politically unrealistic, of course) then a pre-announced raise in capital gains tax six months in the future would cause a dumping of investment properties onto the market as speculators try to take profit prior to rise.

I think this bubble is going going to burst naturally without intervention in the next few years. Whatever political party holding power when that happens is going to be in trouble. If I was running FF, I would be looking to have the opposition in power for the crash itself.

TheBigLebowski

SkepticOne wrote:

I think this bubble is going going to burst naturally without intervention in the next few years.

That's assuming there is a bubble. A bubble is only a bubble if it bursts, otherwise it's just a steep rise. Of which there have been plenty in the world that turned out not to be a bubble.

faceman

TheBigLebowski wrote:

That's assuming there is a bubble. A bubble is only a bubble if it bursts, otherwise it's just a steep rise. Of which there have been plenty in the world that turned out not to be a bubble.

I totally agree dude, but cue the amount of pessimists who will roll in their points about bubbles bursting, holding grudges against property owners. :rolleyes:

SkepticOne

TheBigLebowski wrote:

That's assuming there is a bubble. A bubble is only a bubble if it bursts, otherwise it's just a steep rise. Of which there have been plenty in the world that turned out not to be a bubble.

I agree with this. If it is not a bubble then it won't burst. However, the evidence suggests that the current rise is unsupported by fundamentals and is being driven by unsound speculative investment and therefore will burst. The question being asked here is whether the pop is starting to pop now or sometime later. The optimistic view would be that the burst will occur sooner rather than later.

SkepticOne

faceman wrote:

I totally agree dude, but cue the amount of pessimists who will roll in their points about bubbles bursting, holding grudges against property owners. :rolleyes:

That's a terribly cynical point of view.

Pa ElGrande

Nonetheless, we also retain our view that the market will slow in price terms in the latter part of the year and in a more pronounced form in 2007, as affordability deteriorates in the wake of higher interest rates - we still expect the ECB repo rate to rise to 3.5% by March 2007. The cost of servicing a new mortgage on our affordability model will then rise to over 37% of average earnings, from 31.5% in 2005 and 35% this year. The impact of higher interest rates can be softened to some degree by extending the loan term, but eventually the ECB’s monetary tightening will bite, and so we reiterate our price forecast for 2007, which envisages prices rising by 3% over the course of the year.

The Irish Property Review A Quarterly Analysis – August 2006
http://www.bankofireland.ie/html/gws/includes/corporate/pdfs/global_markets/review_aug06.pdf

Think everyone's missed the big story in this report he's predicting growth will slow from 12% to 3%. And whats this extending the term loan? Intergenerational mortgages in the pipeline perhaps! :eek:
And what about the CPI currently pegged at 3.9%, I don't see that measure reducing next year since energy prices are also increasing later this year. The investors are not going to like this one bit since the value of their investment is decreasing and the rental yields are already poor.

Credit card debt is a very small part of borrowing in Ireland, accounting for some €2.3 billion out of total borrowings of €289 bio but it is worth watching for any indication of emerging difficulties. In this regard the acceleration in credit card debt from a 17.6 per cent pace of increase in May to 18.0 per cent in June is of some significance in part because it represents the fastest pace of increase since August 2003. This figure reflects the gap between new borrowings and repayments. Both of these elements can be very volatile from month to month. However, it is notable that the increase in credit card debt in June reflects the fact that while new borrowings and repayments both increased at a slower pace in June than in May, the slowdown in credit card payments was greater than the easing in new borrowing.

Strong Growth and Stubborn Inflation point to Higher Borrowing Costs - - Austin Hughes, IIB Bank
http://www.finfacts.com/irelandbusinessnews/publish/article_10006783.shtml

Above every silver lining is a dark cloud.

seamus

Of course there's a property bubble - most of the prices are built upon borrowed capital, and the value of the property is mostly based upon what people think it's worth.

For anyone who points to a record year as proof of no slowdown, remember that it must peak before it begins to drop. Records prices this year doesn't mean continued growth next year. However I do believe that it looks much more likely for there to be a slow drop, probably down to a more reasonable growth level of 3% - 5%.