Ireland: Seems They Also Have A Housing Problem.
This week being the heart of the St. Patrick's Season we'll take a look both whimsical and serious at Ireland.
Ireland also has an economy put in the tank by home speculation. Here is an excerpt from Saturday's Irish Times & its link. http://www.irishtimes.com/newspaper/opinion/2009/0307/1224242446410.html
When the house fell down
IT IS, as one property developer ruefully observed, “like a tsunami that just keeps coming”. The collapse of the property market in Dublin and throughout the State has been both sudden and devastating, leaving developers, banks and the general body of taxpayers in danger of being engulfed by a tidal wave of toxic debt.
Yet the few who saw this coming, warning us all that there would be no “soft landing”, were contemptuously dismissed as deranged harbingers of doom. For the truth is that we all lost the run of ourselves, believing in the “onward and upward” myth that sustained the property bubble for so long and thinking that there was nothing odd about the fact that, for a few years at least, the price of residential property in Dublin was higher than in Paris.....
.....the developers are chastened men now – and so, indeed, are their bankers. Sites bought in the boom-time that supposedly provided the security for lavish loans have plummeted in value, rendering them unsaleable for several years, other than at sacrificial prices. The banks which indulged in reckless lending on a recidivist basis are now facing their own days of reckoning by making provision in their accounts for loans that will never be repaid...... The Government must recognise and accept its share of the blame. Not only did ministers ignore warnings that the property market was dangerously overheating, they added fuel to the fire by reducing capital gains tax on the sale of development land to just 20 per cent while continuing to dole out highly-lucrative tax incentives.....
When the house fell down
IT IS, as one property developer ruefully observed, “like a tsunami that just keeps coming”. The collapse of the property market in Dublin and throughout the State has been both sudden and devastating, leaving developers, banks and the general body of taxpayers in danger of being engulfed by a tidal wave of toxic debt.
Yet the few who saw this coming, warning us all that there would be no “soft landing”, were contemptuously dismissed as deranged harbingers of doom. For the truth is that we all lost the run of ourselves, believing in the “onward and upward” myth that sustained the property bubble for so long and thinking that there was nothing odd about the fact that, for a few years at least, the price of residential property in Dublin was higher than in Paris.....
.....the developers are chastened men now – and so, indeed, are their bankers. Sites bought in the boom-time that supposedly provided the security for lavish loans have plummeted in value, rendering them unsaleable for several years, other than at sacrificial prices. The banks which indulged in reckless lending on a recidivist basis are now facing their own days of reckoning by making provision in their accounts for loans that will never be repaid...... The Government must recognise and accept its share of the blame. Not only did ministers ignore warnings that the property market was dangerously overheating, they added fuel to the fire by reducing capital gains tax on the sale of development land to just 20 per cent while continuing to dole out highly-lucrative tax incentives.....
Source Irish Times 03.07.09
posted by CR English at 9:44 AM
<< Home