Skip to main content

Irish Property Crash 2008 - Ireland's Property Market To Tumble Even Further...

Homeowners left reeling as 30pc price fall predicted...



HOME owners are reeling from a double-whammy of bad news, after both an international broker and one of Ireland's leading economists warned house prices could plummet even further over the coming months.

In a statement announcing the predictions, international broker Credit Suisse said that Ireland's property market is continuing to tumble, with house prices potentially falling by another 30pc over the coming months.

The internationally-respected firm has made the comments because it says the market is only reacting to the credit crunch now.

The upshot is that the impact of the credit crunch has yet to filter through to the Irish housing market, with any weakness already experienced down to a drop in demand rather than tighter credit.

"As a result, we see mortgage affordability decreasing and house price declines accelerating. What is more, the housing market has been underpinned by strong immigration and rental demand, but it now seems likely that immigration trends will reverse and landlords may start to sell," the international broker warned.

As a result of the situation, Credit Suisse says that house prices could now be slashed by a third or more, a claim the broker says is supported by the International Monetary Fund.

"Housing completions are running at an annualised 50,000-55,000 units, but we think a further slowdown in the housing market could trigger a more pronounced contraction in the residential construction industry," it said.

For the banks, the broker said that such a fall in house prices would result in a big jump in arrears, which could rise fourfold, leading to a substantial 40pc increase in "mortgage impairment" or bad debts.

DIRE

The dire forecast is contained in a review of the outlook for the big banks, with the negative reaction plainly visible in the 6pc fall endured on the market by Bank of Ireland and AIB.
And it comes on the back of yesterday's comments by leading Irish economist Jim Power that homeowners could see up to €140,000 wiped off the value of their properties -- with prices expected to fall 45pc from their peak.


Jim Power, chief economist with financial services firm Friends First, said house prices are already down about 25pc from their February 2007 peak.



Report by Caroline Crawford at herald.ie

Popular posts from this blog

Ireland's Celtic Tiger Excesses...

'Bang twins' may never get to run a business again... POST-boom Ireland is awash with cautionary tales of Celtic Tiger excesses, as a rattle around the carcasses of fallen property developers and entrepreneurs will show. Few can compete with the so-called Bang twins for youth, glamour and tasteful extravagance. Simon and Christian Stokes, the 35-year-old identical twins behind Bang Cafe and exclusive private members club, Residence, saw their entire business go bust with debts of €9m, €3m of which is owed to the tax man. The debt may be in the ha'penny place compared with the eye-watering billions owed by some of their former customers. But their fall has been arguably steeper and more damning than some of the country's richest tycoons. Last week, further humiliation was heaped on them with revelations that even as their businesses were going under, the twins spent €146,000 of company money in 18 months on designer shopping sprees, five star holidays and sumptu

I fear a very different kind of property crash

While 80% of people over 40 own their own home just a third of adults under 40 do. This is disastrous for social solidarity and cohesion Changing this system of policymaking requires a government to act in a way that may be uncomfortable for some. Governments have a horizon of no more than five years, and the housing issue requires long-term planning. The Department of Public Expenditure and Reform was intended to tackle some of these problems. According to its website its remit is to “drive the delivery of better public services, living standards and infrastructure for the people of Ireland by enhancing governance, building capacity and delivering effectively”. So how is the challenge of delivering homes for people in 2024 and beyond going to be met? The extent of the problem is visible in the move by companies, including Ryanair, to buy properties to house staff. Ryanair has, justifiably, defended its right to do so. IPAV has long articulated its views on how to improve supply an

Property Tycoon's Dolce Vita Ends...

Tycoon's dolce vita ends as art seized... THE Dublin city sheriff has seized an art collection and other valuables from the Ailesbury Road home of fallen property developer Bernard McNamara. The collection will be sold to help pay his debts. The sheriff, Brendan Walsh, is believed to have moved against the property developer within the past fortnight, calling to his salubrious Dublin 4 home acting on a court order to seize anything of value from his home to reimburse his creditors. The sheriff is believed to have taken paintings from the family home along with a small number of other items. The development marks a new low for Mr McNamara, once one of Ireland's richest men but who now owes €1.5bn . The property developer and former county councillor from Clare turned the building firm founded by his father Michael into one of the biggest in Ireland. He is the highest-profile former tycoon to date to be targeted by bailiffs, signalling just how far some of Ireland's billionai