Editorial

Tuesday 22 July 2014

Editorial: Have we learned nothing from curse of the bubble?

Published 21/05/2014|02:30

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According to those who responded to the survey, three out of four people wanted to buy a house in the next six months. Picture posed by models. Thinkstock
According to those who responded to the survey, three out of four people wanted to buy a house in the next six months. Picture posed by models. Thinkstock

Are we on the verge of property mania? It would seem so if research carried out by a leading estate agency is to be believed. The survey shows that the ubiquitous "property ladder", broken and discarded in the weeds for the last number of years, has been dusted down and is back in action. There is little doubt that as a people we are obsessed with property. It is hard not to give credence to the old theory that this stems from the folk memory of landlordism and dispossession, which has left us with a native yearning to own our own little patch of land.

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According to those who responded to the survey, three out of four people wanted to buy a house in the next six months, although half of the respondents had a budget of just €350,000 and less than one-third had between €350,000 and €549,000. The problem is that the houses are just not there, and certainly not at that price. For well over 12 months property experts have been pointing out that the right houses – three-bedroomed family homes – are not there in numbers or in the right locations.

This is mainly a failure of planning, as our planners all went off to international conferences and came back believing they could shoehorn the Irish family into apartment living, like our European neighbours. Maybe this is a desirable outcome, but Paddy and Mary, still want a house on its own plot and its own back or front garden. Unfortunately when the policy-makers did get around to thinking about Paddy and Mary in recent weeks, their answer was to incentivise demand rather than encourage supply.

The effect of the recent set of government measures will force wannabe home owners to compete harder – in other words pay more – for the diminishing supply of housing out there. What we urgently need is a range of measures to free up housing that is already available. These could include the renovation of boarded up council houses, a stiff tax on thousands of empty houses and a scheme to encourage older people to 'trade down'. Such measures would be an adequate stopgap while awaiting new builds and much-needed social housing to come on stream.

Despite Finance Minister Michael Noonan's pronouncements to the contrary, if it looks like a bubble and feels like a bubble then it is a bubble, and as we all know a bubble is a dangerous thing in Irish hands.

Irish Independent

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