The recent Central Bank report on a property market that has ‘overshot’ is front page news on the broadsheets. This phenomena has been well observed in other jurisdictions and the question now is whether we will be more ‘European’ in our property market or if we’ll turn Japanese.
A key issue pointed out consistently is the role of credit. Cheap credit is often cited as one of the drivers of the property bubble, an NBER paper suggests it is only a component of about 20% of prices. The absence of credit is equally being seen as a downward driver of prices.
One of my minor hobbies is the history of Irish banking from an operational perspective, and on rare occasions it offers a nugget of insight.
In the late 1970’s Irish banks were not involved in mortgages, and only a few years before that they were not involved in hire purchase, they didn’t …