How did scary property prices become so frighteningly normal?
Cantillon: things have got so toxic we now accept double-digit inflation as unavoidable
The Central Bank’s pronouncement on the shambles is that price growth is in line with economic fundamentals – this from the institution that predicted a soft landing back in 2007. Photograph: Matt Kavanagh
Imagine how Germans perceive Ireland’s quasi-relief this week that property price inflation cooled from 12.1 per cent to 11.6 per cent.
Germans have been fretting about property prices for several years – with the Bundesbank warning of overheating markets and real estate bubbles since 2013 – on foot of annual price rises which the Irish market seems to generate on a quarterly basis.
Faced with the Irish numbers, our German cousins might well take to the streets in fright, but not us.
It’s a measure of how toxic things have got here that we seem to take double-digit property-price inflation in all regions of the State bar the midwest – which limped in at 8.9 per cent – as unfortunate but perhaps unavoidable.
Ditto the masses of young people stuck in unsuitable rental accommodation and on social housing waiting lists that will probably never be adequately addressed.
The days of 80 per cent property ownership are gone, real estate agency JLL announced in a report yesterday, as if we didn’t know, before going on to predict that the market of the future would see 40-50 per cent of people renting.
And our one chink of light is the 1,000 or so first-time buyers who managed to scrape on the ladder last year courtesy of the Government’s help-to-buy scheme. Cold comfort for the tens of thousands of others railroaded out of the market or forced into paying ludicrous prices.
The Central Bank’s pronouncement on the shambles is to say that price growth is in line with economic fundamentals – this from the institution that predicted a soft landing for the market back in 2007.
It is perhaps naive to think the hyper-commoditisation of property, which has transformed housing from an infrastructure into a financial asset over the last four decades, can be rolled back, but surely we can do better than this?