I dont believe the 25% price increase in the last year amounts to a bubble I think it represents a bounce off the bottom of the market which had overshot. As others have already said, for a bubble to exist, an abundant supply of credit is needed and this is not the current situation
I think this latest move by the central bank will hold back prices but probably wont stop them completely. Certainly a lot of would-be buyers are out of the game in terms of "SCD" but there are plenty still in the race to mop up available supply through support from the "bank of mom and dad" The ones that are now locked out of the SCD market will inevitably look further afield and this will help to kick start the housing market in the outer environs and outside of Dublin.
I remember as a young buck living in Dublin in the early 90s and earning 22000, Irish punts (a decent salary back then !!) that I didnt have a hope of buying a decent house in SCD. A decent 3 bed semi in Rathfarnham was 75,000 and the building societies adopted a strict 2.5 times earnings and a 20% deposit. This was outside of the means of most people but yet the housing market was functioning normally. You will always have certain people who can come up with the bucks. Those people were around in 1990 and they are still around.
So if this is a crisis about young people not being able to buy nice houses in good suburbs of Dublin, then its nothing new I'm afraid. That's the way it always was before the tiger. Same also in London, New York, Paris, Munich etc etc. Property ownership in choice parts of big cities has always been the domain of the rich.
I can't see that changing any time soon.
The big question is Should the banks become more trenchant in their enforcement proceedings. i.e. if you can't afford your mortgage then you are evicted from the property! This would definitely free up many properties but are we prepared to live with the consequences for the evicted families? Not too bad if alternative social housing was available. But it's not!!!
We know there is a supply problem, ....
Though I do find one thing odd about the supply problem. About 3 weeks ago, there was a 'queue' in Swords to buy houses, yet all the houses were not sold and as 3 bed semi d's go they looked the business. So is it actually true there is a supply issue.
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