In all the talk about the banks, bank debt, NAMA, etc, we have lost sight of the core problem.
The elephant in the room is not so much the state of the banks, it's the 325,000 empty houses and apartments lying all over the country. We need to get it straight in our heads that Ireland's property bust is unique.
The degree of oversupply is unprecedented. There has never been a property bust with such a huge overhang. Not in Japan, not in Scandinavia, not even in Spain. We have enough supply for 10-and-a-half years at normal demand.
These houses and apartment blocks look at us every day and tell us that there can be no floor in Irish house prices. We may even find houses transacted for sums as low as €20,000/€30,000 in the next few years.
The only reason that residential house prices have held up at all is that banks have supplied a co-ordinated trickle of mortgages into the market.
Without this, house prices would reach their true market value very fast and the rate of mortgage default would shoot up, as those in severe negative equity would realise the game was up.
Those thinking of buying now should bear this in mind. Property can't be picked up and moved to another market.
This is the reality that we have not faced up to. NAMA was the first attempt at denial. The latest bank bailout is a continuation of that denial.
As long as the surplus house and apartments stay standing, we will be forced to put further monies into the banks.
Athenry, Co Galway