I now want to look at another
major property crash that happened at the same time as Ireland’s. The USA had
what many consider to be a massive property crash resulting in the Sub Prime
crisis, leading to many financial institutions worldwide being exposed to the US
property crash, leading to many being partly nationalised. However my focus is
not the subprime crisis, my focus is simply the fall in US house prices since
their peak in the 2nd quarter of 2006, in the latest S&P Case
Shiller report from the 28th of February 2012 they state “The National
Composite fell by 3.8% in the fourth quarter alone, and is down 33.8% from its
2nd quarter 2006 peak. It also recorded a new record low.”
This shows that the fall in US house prices has only been roughly one third from their peak values. This would be a normal fall for a major property crash. please look at the first link below to see the graphs on the US crash.
This shows that the fall in US house prices has only been roughly one third from their peak values. This would be a normal fall for a major property crash. please look at the first link below to see the graphs on the US crash.
In the United Kingdom there was much less of a
property crash, with values falling by 15% from peak by the middle of 2009.
However in the middle of 2009 prices started to rise again, this can all be
seen in my link below to the UK land registry. Please look at the second link to the UK land registry below to see graphs on the UK crash.
However in Ireland the fall has been much more dramatic,
in the CSO’s latest report in December 2011 it shows that property prices are
still in decline, for prices in Dublin, house prices are down 54% from their
peak in early 2007 and apartments down 58% in the same time period. The rest of
Ireland is down 43% from peak, and overall Ireland including Dublin is down 47%
since peak value. Please look at the link to the CSO below to see graphs on the Irish crash.
I think the numbers above speak for themselves and show how dramatic the fall in the Irish market has been. In my next blog I will talk about why I think the fall in Irish property prices has been so severe and why I think it is largely due to Ireland’s membership of
the Euro, from initially ensuring Irish property prices increased to
astronomical levels by having interest rates low to appease Germany and France
and to now ensuring the prices continue to fall by once again focusing Monetary
policy almost solely on the Eurozone’s two largest economies.
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