Who caused the housing bubble.

08-02-2011 05:17AM #1

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 · 08-02-2011 05:24AM

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

08-02-2011 05:25AM

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 · 08-02-2011 05:31AM

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 · 08-02-2011 05:36AM

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 · 08-02-2011 05:37AM

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..

08-02-2011 05:44AM

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 · 08-02-2011 06:10AM

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 · 08-02-2011 07:42AM

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 · 08-02-2011 09:34AM

The Irish buying Ireland from the Irish.

galwayrush · 08-02-2011 09:36AM

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 · 08-02-2011 09:37AM

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 · 08-02-2011 09:37AM

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 · 08-02-2011 09:39AM

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 · 08-02-2011 09:44AM

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

08-02-2011 09:49AM

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 · 08-02-2011 09:57AM

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 · 08-02-2011 10:04AM

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 · 08-02-2011 10:05AM

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 · 08-02-2011 10:15AM

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 · 08-02-2011 10:22AM

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 · 08-02-2011 10:22AM

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.

08-02-2011 10:24AM

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 · 08-02-2011 10:27AM

I did. Sorry about that.

smellslikeshoes · 08-02-2011 10:27AM

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 · 08-02-2011 10:27AM

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

08-02-2011 10:31AM

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.

08-02-2011 10:36AM

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 · 08-02-2011 10:37AM

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

squod · 08-02-2011 10:37AM

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 · 08-02-2011 10:39AM

RoverJames wrote: »

You know students who bought property to rent out?

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

Who caused the housing bubble.

Who caused the bubble? 181 votes

Comments