It will be '20 years' before property prices bounce back
PROPERTY prices may not return to boom levels for another two decades, a Central Bank research paper has concluded.
The house price collapse in this country is the most expensive of 147 property crashes examined by researchers.
It has cost taxpayers €63bn to recapitalise our broken banks.
The economists at the Central Bank, headed up by Prof Patrick Honohan, said it will take two to three years for economic growth to recover, but unemployment was likely to "remain elevated for some time".
Separate figures out yesterday showed 435,200, or 14.8pc of workers, on the Live Register.
The academic paper looked at property crashes in three Nordic countries and Japan to estimate how much longer the Irish crisis will continue.
They found that it could take between 11 and 22 years for prices to recover to their boom levels. The property crisis here is already five years old.
However, mortgage specialists said the current indications were that prices had stabilised and that people did not want to see prices return to the highs of the boom, when people over-borrowed to buy a house.
Property prices have fallen by 50pc from their peak in early 2007.
Economists at the Central Bank Maria Woods and Siobhan O'Connell said the crash in property values was so severe it could take four to five years for banks to return to profit.
Their report concluded that the clear lesson from international experience was that "early loss recognition and swift policy responses" were vital to remedy a dysfunctional banking sector.
Their study suggested both residential and commercial property sectors may take a significant number of years to fully recover, ranging from 11 years to 22 years.