A study in austerity: Irish property values slide further
In 2008, the asking price for this Dublin mansion, the former French ambassador’s residence, was 60 million euros. Wonder what it would cost today?
When it comes to house prices it's as if all of Ireland has stepped into a time machine and gone backwards half a decade.
A house in Dublin now costs 64.2 percent less than it did five years ago,
According to this 2011 year-end report by Irish property firm Sherry Fitzgerald, the figure nationally is 59.8 percent. In much of the country property now costs what it did at the turn of the millennium.
No surprise then that the figures for mortgage lending show a dramatic shrinking as well. Banks are holding on to cash to re-build their balance sheets. Last year, 2.3 billion euros ($3 billion) was lent to buy houses. Ireland is a small country but it isn't that small. The last year of the boom 40 billion euros ($52 billion) was lent.
The result is cash is king in Ireland at the moment. Almost a quarter of properties changing hands were paid for in cash.
The question is, is this a necessary, if painful price correction? or an over-correction that is as irrationally negative as what was happening five years ago was crazy positive?
In any case, this is a paradigm for students of austerity to study.
The story you just read is available for free because thousands of listeners and readers like you generously support our nonprofit newsroom. Every day, reporters and producers at The World are hard at work bringing you human-centered news from across the globe. But we can’t do it without you: We need your support to ensure we can continue this work for another year.
Make a gift today, and you’ll get us one step closer to our goal of raising $25,000 by June 14. We need your help now more than ever!