Irish Property Bubble? Central Bank Governor Denies Is Bubble
Central Bank of Ireland governor Philip Lane yesterday rejected suggestions of an Irish property bubble and that the economy is on the brink of another housing bubble and said the recent increase in house prices is not indicative of a property bubble forming.
Minister for Finance Noonan & Governor of the Central Bank Lane. Source: RTE
However, this optimism is not shared by a large part of the Irish people as there are very high levels of concern about the risk of another property bubble and property crash according to the latest Sunday Independent/Kantar Millward Brown poll:
“A quite astonishing 38pc of people believe that the housing market is destined to collapse as it did during the last recession. That is a much larger share than those who believe the contrary.
Growing fears about another property crash are reflected in another question put by the pollsters – “Is this a good time to buy a house?”
Five years ago, when the recovery hadn’t got going and property prices were on the floor, an overwhelming majority thought it a good time to buy. Now less than half do.
The fear of history repeating itself with another crash in house prices could well explain why, despite high and rising levels of optimism, spending in the shops is not rising at the same pace.”
The risks of a new Irish property bubble and another housing bubble comes at a time of considerable economic uncertainty due to the increasing likelihood of a ‘Hard Brexit.’ There are also the considerable risks from continuing uncertainty due to the Trump Presidency and contagion in the Eurozone.
Separately, news today comes that Irish executives increasingly expect a ‘Hard Brexit’ and are preparing accordingly.
The news comes on the same day that one of the largest retailers of food and meat in the UK, the Co-op, has announced it will sell only British beef and meat.
It publicly called on other UK retailers to “back home-grown goods” from the UK. Sainsbury and Tescos are major sellers of Irish beef and any knock-on change of policy would be hugely damaging to Irish farmers and the wider Irish economy.
The Dublin housing market is showing real signs of over heating and becoming a bubble again – particularly at the middle to higher end of the market.
Real diversification and an allocation to physical gold will protect from another new Irish property bubble and property crash.
Sources
(RTE)
(Irish Times)
(Irish Independent)
(Irish Times)
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