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Saturday 20 January 2018

Parts of capital booming as other areas struggle

Thomas Molloy

Thomas Molloy

FOLLOWING the lead of his counterparts in the US and Britain, European Central Bank governor Mario Draghi began flooding the eurozone with cash towards the end of last year and the results are plain to see in 2013.

The rich are making hay while the rest continue to suffer.

Share prices in London, New York and Frankfurt are close to record highs as people inside the financial services industry borrow money at some of the lowest interest rates in history to invest in stocks and real estate. That has helped push property prices to new highs in the better parts of the world's richest cities. Back in the real world, unemployment continues to rise, pushing down the value of houses outside the bubble.

Much the same thing is happening here in Ireland.

Property prices in Dublin's wealthiest areas, roughly from Sandymount to Killiney, are rising steadily. People living here are often able to borrow from unusual sources overseas or they work for companies such as Google that make most of their money elsewhere and pay well.

That's why the Society of Chartered Surveyors Ireland protested yesterday that the Central Statistics Office data fails to reflect what is happening in parts of the capital.

While parts of Dublin are booming, the rest of the country has yet to benefit from Mr Draghi's largesse. Few people in Leitrim or Longford can borrow from any source other than their local banks and most of those banks are not lending.

While there was a small increase in April, the reality is that prices are down from the same time last year.

The world's central banks and political leaders seem determined to print money indefinitely. That will help those who can get hold of the money but do little for the majority.

While this happens we are likely to see ever greater differences in our two-speed property market with prices in parts of Dublin rising at a clip while prices elsewhere fall.

That may seem unfair but property is merely reflecting a much bigger trend in the 21st Century, which is the growing difference in the fortunes of those at the top and the rest of society.

Irish Independent

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