The Housing Boom
The boom in the Irish housing market began in 1994 and has yet to run its course. Having been born with the Celtic Tiger, it is often taken as emblematic of the social and economic transformation that has happened since the mid-1990s. Surging house prices and expanding residential construction are not unique to Ireland over the past decade but have spread through much of the developed world, including many economies that have a weaker demographic and economic performance than Ireland. Thus the housing boom in this country is but a local variant of a wider international phenomenon. The Irish variant has indeed been bigger than elsewhere but the fundamentals that are driving it, such as the growing population, the rapidly expanding economy and the competitive mortgage market, have also been stronger, so that the Irish experience is in many respects no more difficult to account for than that of other countries.
In any event, the statistics of house prices and housing construction in Ireland since 1994 have been remarkable. In some senses they are positive, not least in the sheer scale of housing output that has been achieved and the substantial rate of new household formation that has been facilitated. But housing trends also cause unease, as they sometimes seem to be careening out of control and to threaten the long-term balance and health of the economy. They are also interpreted by some as epitomising problems of inequality in Irish society. On the one hand, house price rises have made existing home owners rich, at least on paper, but on the other hand, the criticism is made that many poorer people and younger households have difficulty accessing any housing at all – a problem that some have called a crisis of the housing system (see, for example, Drudy and Punch, 2005).
KeywordsInterest Rate House Price Household Expenditure Social Housing Housing Wealth
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