THIS WEEK THE banking inquiry heard how property turned into a ‘national obsession’ during the ‘boom times’.
And speaking of the boom times, new figures from Euro Stat showed that last year Ireland had the fastest rising house prices in Europe.
This is a trend that is unlikely to continue this year however – with new mortgage rules from the Central Bank taking hold.
‘National obsession’
Speaking to the banking inquiry this week, Klaus Regling, an economist with the European Central Bank, said that property had become a “national obsession” in Ireland in the lead up to the 2008 financial collapse.
Regling co-wrote a paper in 2010 detailing the steps that led to the banking crisis.
In the course of his appearance, the now CEO of the European Financial Stability Facility said how he found it “surprising to have heard so many personal anecdotes from ordinary people about property investment.”
Fastest rising house prices in Europe
New figures from the EU’s statistics database Eurostat this week showed Ireland to have had the fastest rising house prices in Europe.
In the 12 months between September 2013 and September 2014, house prices in Ireland grew by 15%. This was much higher than the 2.3% EU average increase. Ireland also saw the highest quarterly rise – with an increase of 6.8% between the first and second quarters of 2014.
These rises are not expected to be as extreme this year with new Central Bank mortgage rules coming into effect.
Stopping another boom
It was predicted this week by estate agents that the new rules from the Central Bank could help stop another housing bubble but may also contribute to rent increases.
The Real Estate Alliance called upon the Central Bank to make adjustments for Ireland’s ‘three-tier market’ – something that is divided up by geographical location.
There has been some talk this week that consideration has been given by the Central Bank to offering different rules to first-time buyers.
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