Value hikes: good or bad news depending on your situation
THE latest house price data from the CSO makes for gleeful or dreadful reading, depending on which side of the property equation you happen to find yourself today.
Householders in negative equity, investors, the Minister for Finance, the banks and Nama will be mightily buoyed by the fact that prices are rising so quickly - by 1.3pc in a month outside the capital and by 2.7pc in Dublin - or by 13.4pc nationally in the year to July.
However, that Dublin prices have risen by almost a quarter in the year to July - adding €8,000 to the price of a €300,000 family home in just four weeks - will have the capital's first-time buyers pulling their hair out. With prices rising so quickly, a deposit that took five years to save, can evaporate in months.
Outside of Dublin where the July hikes represent an increase of €2,600 extra on a €200,000 property, the news will be more widely welcomed.
Until recently much of rural Ireland's market was utterly stagnant with vendors unable to sell and banks unwilling to lend.
But how far and how fast is "normal" or desirable when it comes to property price inflation?
The use by the CSO and others of comparisons to property boom "peak" level prices for reassurance on recent hikes (they're still 40pc below peak) has to be questioned given that boom era prices were inflated beyond ridiculousness. And the speed of increase in Dublin should be of particular concern given the lack of housing stock and the rising population.
Consider that the British press last year expressed concerns that a "bubble" was emerging in London after prices added just 7pc over a 12-month period.
Nationwide, prices are now increasing at rates comparable to those seen during the boom and rapid increases based on artificial shortage are as unnatural as rapid hikes based on artificial credit levels.
It wasn't just artificial credit that created the last property boom in Dublin.
It was also founded on the housing shortage that emerged in the capital in the mid- to late-1990s and a similarly fast-increasing population.