Friday 23 February 2018

There's no bubble, but housing crisis will take time to fix

Dan O'Brien

Dan O'Brien

Housing and property are rarely out of the news. Over the past week, the latest figures on residential prices were published; the Royal Institute of the Architects of Ireland set out what it believes is the absurdity of the recent change to regulations on minimum apartment sizes; and the banking inquiry, which is so centred on property issues, was published (my column in the main section of this newspaper discusses that report).

Let's start with the good news. The panic about another bubble in Dublin house prices is well and truly over. Last Wednesday's figures showed that the price of homes in the capital fell for the second consecutive month in December. At year's end they were a mere 2.6pc higher than at the end of 2014.

You may recall the hand-wringing in 2014 about another bubble inflating as residential prices in the capital soared by 40pc in just 16 months to October of that year. There was never any risk of a bubble - you can't have a bubble during a credit crunch - but such a high rate of inflation was bad.

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