Editorial: The growth in house prices must be orderly
We were warned more than three years ago that when house prices re-bounded they would do so like a rubber ball – it was a prophetic warning which we all conveniently ignored, because at the time it seemed quite unbelievable. Not so now. The shortage of homes in the Dublin area has led to a surge in asking prices, with the cost of a houses in the capital and its environs rising by a staggering 25pc in the past year.
Now David Duffy, the chief executive of AIB, has predicted that it could take up to four years for supply to catch up with demand, with the clear implication that the present buying frenzy in certain parts of Dublin could continue for that period.
The jury is still out on whether what is happening in the Dublin market – and in some other urban areas – is a bubble, or merely a correction after six successive years with little construction activity and a devastating drop in property prices all over the country.