WE SUCCESSFULLY SOLD A HOME (at left) in Kilkenny five years ago because we wanted to move into a bigger house located closer to work. We sold in the middle of the Irish property bubble and listened to estate agents and mortgage brokers try to lead us down a pathway along with others who were much more likely to borrow to buy a house than to buy any other kind of asset. When we sold, we were receiving letter box promotions for credit cards and every national television station carried advertising for mortgage top-ups. Those were heady times in 2005, heady for the local councils who were getting more money than ever before to build paths, playgrounds and town plazas. The Irish government, and specifically the Minister for Finance Brian Cowen, stayed well clear of the hypergrowth in housing. Government policies encouraged people to take out bigger mortgages to turn capital gains into cash. This was a dangerous pro-cylical stance by the Irish government. We live with the fall-out now. The Irish property bubble popped and Ireland faces at least a generation of prolonged economic weakness. Only blind politicians missed the Irish property bubble. Those politicians remain in power today. They don't read my blog but they do read The Economist where "a study by the IMF found that output losses after house-price busts in rich countries have, on average, been twice as large as those after stockmarket crashes, and usually result in a recession". From where I sit, the foundations are sinking.
Stephen Kinsella -- Quotes from the Irish Property Bubble, 18 September 2010.
Previously "Home as ATM" on Irish Eyes, 20 June 2005.
Bonus Link: "Stephen Kinsella talks economics" in an Irish Debate, 8 June 2010.
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