How you can stop a property bubble from bursting
Bad planning and over-building in the wrong places are how we got into mess before
In the bad old days, before banking crashes, it was difficult to get a mortgage even if you had managed to put together a deposit equal to 15 per cent, or even 20 per cent, of the purchase price.
And it even mattered if you had a steady job into the bargain. Then along came 100 per cent mortgages, parental guarantees, fictional income statements and, hey presto, everyone with a pulse became a plausible credit risk. The banks lent into both sides of the market, financing both the no-money-down purchasers and, it now appears, developers, many of whom had little or no skin in the game either.
There was then, as there is now, excess demand in Dublin and a shortage of zoned and serviced land in the right areas. Builders decamped for the midlands, many of whose towns and villages are now disfigured with vandalised and unsaleable ghost estates. The builders chose these locations not to meet local demand but because they could get planning permission in these areas. The demand was expected to come from Dubliners expected to commute.