No bubble says 'Industry leader'...and printed in the Irish Times no less. So thats that...time to sell up now !!!
The opening paragraphs are powerful and contain some bold statements/terminology which may make your blood boil!
Pat Davitt, chief executive of IPAV, the Institute of Professional Auctioneers & Valuers
Fears of another property bubble are unfounded and misleading
. Lately one senior academic stated in the media: “when you have a return to very generous credit, it effectively pushes prices significantly higher.”
But where is the evidence of a return to “very generous credit”? Figures compiled by the Banking & Payments Federation Ireland show that €3.9 billion in new mortgage lending was issued in 2014, less than half of what could be considered normal and a mere 10 per cent of that issued in 2006.
Lending in 2014 was on an upward trajectory because property prices had finally lifted off the floor and a seven-year Capital Gains Tax incentive, designed to encourage people to buy properties, was about to run out in December of that year.
Property prices fell, on average, by 54.9 per cent from 2007 to 2012. To reach 2006 levels again, not that anyone would want that, prices would have to increase by an average of 110 per cent, not the
20 per cent levels that now prompt headlines of “soaring”, “surging” or “bubble” property prices.
At a time when property prices were beginning to recover
, having sank to 1980s levels, the Central Bank panicked and moved rapidly to restrict lending making it virtually impossible for first-time buyers and those wishing to move house
– many who had bought at the height of the market – to buy when interest rates were and are at historical lows. Property prices are now well past the low point and thousands have missed the best values.The rules stymied a market in recovery, robbed entrepreneurial confidence and spun the wheel of fortune in favour of cash buyers and investment funds
.Had it been otherwise we would now have a healthy cohort of young first-time buyers with valuable homes, contributing to their personal wealth over the longer term
. Instead they are consigned largely to renting
, and incredibly, at prices greater than the cost of servicing a mortgage. With such great value in the market these people should have been facilitated with a zero deposit requirement
, once they had affordability over the medium- to long-term....