Introduction
The prices of houses in the UK and Ireland are fundamentally affected by an arrangement of supply and demand factors. The circumstances that perpetuate the supply and demand are slightly or completely different in Ireland and the UK but the eventual outcome is the same. Both the UK and Irish economies have been performing comparatively well for the past decade with a constant increase in the number of individuals capable of buying a house. This has led to a consistent increase in the prices of houses since the year 2000 in both UK and Ireland. However, from 2008 there was a significant change in the performance of both economies which greatly affected the prices of houses.
Availability of mortgage is essential if the housing sector is to effectively survive since mortgage is the foremost option for first time house buyers. During the peak of the housing boom between 2003 and 2007, banks in both the UK and Ireland were liberal in giving mortgages. There were for instance self-certification mortgages, interest only, 100% mortgages, mortgages 5 times salary among other creatively constructed products aimed at increasing the number of people to buy houses. After the 2007 to 2008 global credit crunch, the availability of mortgages fell sharply since most financial institutions had incurred significant losses due to bad mortgages. The result was that fewer individuals were in a position to buy thus a decrease in demand and eventually a fall in prices.
Supply
The scarcity of houses in the UK is responsible for rising house prices in particular when the scarcity is persistent for a prolonged period of time. In the UK, long term shortages of supply have increased the house prices and it is expected that a significant increase will prevail. According to Rae & Van den Noord, the long term supply of housing is determined by various socio-economic dynamics as well as legislative factors (25). The availability of planning and construction rights is one of the major factors mainly because planning authorization is difficult to obtain especially in rural areas. Consequently, houses outside the city tend to be expensive since a great number of resources go into acquiring these rights considering the limited supply.
Opportunity cost for builders is also a determinant to long term house prices in cases where investors leave the housing industry because there are improved returns from other forms of investment hence leaving a short supply of houses. An increase in the costs incurred when building a new house will also reduce the number of investors hence reducing the supply (CSO 1). In addition, existing houses which are or poor condition thus rendered unsafe to live in may be knocked down to allow for the construction of new houses(DoE 11). The demolition of the houses leaves a supply gap which together with the costs associated to the previous house be transferred to the current one (Rae & Van den Noord 26).
The short term Supply of housing is constant because new houses need time for them to be ready for occupation. Conversely, house prices can still descend even in cases where there is a shortage of supply. For instance in 1992, house prices in London fell by more than 22%, even though the supply during that period was at a constant low. Therefore, a shortage of supply simply increases the probability of an increase in average house prices but does not guarantee a sustained increase in the prices (CSO 2). There is a considerable scarcity of housing in the UK which has led to a significant increase in house price.
The upsurge in house prices has risen much faster than inflation and earnings. In Ireland, the supply of housing was significantly low up until 2008 when there was an exponential increase in supply since many investors sought the then proficient housing industry. The excess availability of expensive houses and falling demand led to a big fall in demand from mid 2008. As indicated by CSO, the first quarter of 2009 revealed a 23% decrease in house prices, when compared with the second quarter of 2007, and the predicament was further augmented by the 73% reduction in the number of housing loans approved in the same quarter (12).
Demand
The demand for houses is to a greater extent the most potent factor when considering the house prices general direction. Willing consumers are the major determinants of house prices since the consumers have the overall clout to limit the prices depending on income and preference. Demand is therefore a diverse sphere which can be categorized and discussed as follows;
Economic Growth and Real income
A high income will facilitate a consumer to have enough financial resources to spend on buying a house. The conventional consumer practice in the UK was the mortgage ratio of three times an individual’s salary, for instance if a consumer earned £10,000 the building society would lend £30,000. Rising incomes enable house prices to rise since consumers are willing and able to spend more on houses since the financial resources are available (Rae & Van den Noord 25). This is however not constant since the ratio of house prices to income can fluctuate significantly for instance in the years between 1995 and 2007 where the ratio of house prices to incomes increased from 20% to 33%.
The Irish economy on the other hand has advanced through extensive internal investment from the corporate sector since 1994 (DoE 14). The Irish academic standards for instance were viewed as superior when compared to those offered in other English-speaking countries (CSO 2). The high academic levels have been as a result of EU sponsored development in the technical side of education leading to a more highly skilled and advanced human resource in Ireland. Amalgamation of both the high academic standards and high capitalization ratios in the investment projects has consequently brought about significant improvement in employee output in which has led to expansion of the economy all together (DoE 15).
With an increased output and expanding economy, Ireland has been able to provide increased wage levels in the trade sections of the economy. As a result, working individuals have been able to obtain a gradually increasing income effectively having more money at their disposal for purchasing a house (White 67).
Interest rates
Interest rates indirectly affect the price of houses since the interest rate affects the cost of paying for a mortgage. Interest rates are a key influence to the house prices because mortgage repayments are more often than not the primary costs of a homeowner’s monthly expenditure (CSO 12). A majority of homeowners in the UK have a variable mortgage which allows interests rates to affect the mortgage costs i.e. an increase in rates will cause the cost of mortgages to increase, deterring consumers from buying while a decrease will attract more buyers. On the other hand, homeowners with fixed rate mortgages are shielded from the changeable rates for a period of two to ten years depending on the agreement.
Adjustments of the interest rates can therefore have a time lag of up to 18 months before the demand for housing is fully affected by the changes (CSO 2). The Bank of England is responsible for determining the base rates which alternately usually affect all commercial rates. There are instances where the Bank of England places a reduction on the interest rates, but consumers do not benefit because commercial banks abstain from passing the cuts onto consumers. For example in the first half of 2008, the Bank of England reduced the interest rates from 5.5 to 5.0%, a 0.5% cut, nevertheless the cost of mortgages is still increasing(CSO 4).
Property valuation in Ireland was already growing even before the nation united with other European countries in the preliminary launch of the Euro in 2002 (Rae & Van den Noord 27). The growth in property valuation was large as a result of an exceptionally active traded sector as well as increasing state expenditure. Due to the fact that the Euro interest rates were much lower than the previous Irish interest rates lead to an additional rise in value of the Irish property. With time the amount of housing mortgage obligation increased to dangerously high levels forcing the Irish Central Bank to warn consumers (CSO 18).
The escalating price of housing and the high borrowing rate by consumers seeking to acquire houses in Ireland resulted in a considerable increase in the total level of liability in the private sector as the Irish economy received more investments in the housing sector. This is known as the Business Cycle Theory, in which credit produced through the policies of central banking facilitates the emergence of an artificial boom which is predictably followed by a breakdown of the affected sector which in this case is the housing industry (DoE 16).
This viewpoint argues that the monetary policy created by central banks generates a disproportionate quantity of discounted credit by setting interest rates lower than the normal interest rates that would be set by a free market. The excessive accessibility to credit encourages a large number of investments predominantly on long term developments such as housing which eventually stimulates a consumption explosion as the motivation to save money is weakened. As a consequence, an untenable boom occurs and it is illustrated by overconsumption as well as excessive investments (CSO 4).
Consumer confidence
Individuals have an aptitude to take on high risk and more demanding investments such as mortgages to buy a house during periods of high consumer confidence. In the period 2001-07 for instance, 100% mortgages and interest only mortgages were relatively widespread in the UK. This is because during the period, consumers were highly optimistic with reference to the housing sector and therefore took out mortgages which had a higher debt to income ratio (Rae & Van den Noord 28).
The consumer confidence in Ireland can be illustrated in a different dynamic between the years 2000 to 2006 when there was a steady increase in the price of houses and property appraisal. According to CSO, the steady increase in value created a systematic feedback loop, where the rising prices influenced the mentality of market participants who sought to invest in the housing sector consequently forming a kernel for additional augmentation in the house prices (4). Public sector pay deals akin to the benchmarking program thus the propensity to spread the consumer confidence. This was also evident in the state sector which alleviated the level of competition in the market.
Individuals in state jobs were at a position to compete with the human resources from the private sector even though individuals from the private sector were not as secure about their long term job prospects as individuals working for the state (DoE 17).
As indicated by White, the rising values of the housing sector in Ireland as well as the wealth generated from the buying and selling of houses has been a potent factor, influencing Irish investors to buy houses even in overseas nations like the European countries, the U.S and the UK (63). The central target of such diverse investment has been the European Union, especially the newly acknowledged member countries of the European Union. More housing business interests perpetuated by Ireland have provided significant investment opportunities in major cities such as London, Berlin, Paris and American cities.
Planning and Availability of Mortgage Finance
There were several strict precincts in relation to the availability of finances during the mid twentieth century both in UK and Ireland. With deregulation of the banking sector though, amplified competition has led to an increase in the quantity of mortgage offers. For instance products like interest only, self certification mortgages and mortgages up to 6 times income have created a venture into which individuals can get more mortgages and in so doing, the demand for housing has increased (CSO 2). The credit crunch of 2007- 2009 was however detrimental since the diverse variety of mortgage products on offer reduced in number mainly because finance was scarce in the money markets hence investors and consumers alike were more apprehensive on high risk investments such as houses.
In 2004, The Irish government initiated the Decentralisation Plan for the Civil Service which was fundamentally similar to the model formerly put into practice in Denmark (Rae & Van den Noord 29). The main aim was to decrease the percentage of Irish state investment in Dublin to ease the difficulty faced by first time house buyers in the city of Dublin. Due to fact that the average age profile of state employed workers is higher than that of employees working in Ireland’s private sector, the Decentralisation Plan for the Civil Service would effectively lead to older people paving way for younger people in Dublin (CSO 18).
Another result would be a general diminution in the operational and transactional business costs in Dublin and this manner conserves the city’s appeal as a scene for direct investment. This was however merely successful to a moderate extent, with Trim being the initial locality to load its allocated proportion considering it is nearest to Dublin. As indicated by CSO, numerous civil servants have articulated their intentions to be located in other urban centers that have adequate third level institutions, for instance a city like Galway (20). Execution of the Decentralisation plan is noticeably progressing at a slower pace than expected and the complete results are yet to be identified.
The Irish planning policy on housing has been the centerpiece of extensive disagreements involving academics and political parties. Various schools of thought regard the Irish Planning Policy as one that lacks any form of logical preparation, insufficient in its compilation and is significantly distant from the vested interests as well as the national needs (White 65). The prices of houses have been unpredictable through out the nation with the most prominent factors in most cases being the buoyancy of the Irish labor market together with the availability of adequate capacity of examined development property (CSO 3).
The metropolitan districts have for the most part developed, with the housing boom being further outstanding in Dublin than in other cities in particular in the region adjacent to Dublin Bay where planning is for the most part controlled and the level of accrued wealth is at the peak.
The Irish Planning Policy has not succeeded in constructing high concentration residential housing schemes in close proximity to transport infrastructure, except for the Adamstown and Ashtown schemes located within the Western suburbs of Dublin (CSO 2). Dublin takes up a similar metropolitan outlook to that of Berlin holding one third the nation’s population. Both cities in addition have dedicated equivalent space to parkland providing an ideal paradigm of the dominance of low density housing. Consequently, problems arise when attempting to offer satisfactory reasons for the intense usage of public transport infrastructure.
With an increase in property prices, an undesirable result has an increase in the prices of development land which is experienced by the investors. The prices of houses are highest in Dublin because the house prices are being affected by consumer confidence brought about by the increased salary rates in the Irish economy as well as the intense pressure caused by the direct investment of the US private sector (DoE 22). House prices are also more distinct in places which are considered to be trendy residential locations and as a consequence, there has been accelerated redevelopment of many locations to put up apartment complexes most notable being the developments in the Dublin 4 district. The house prices in the Dublin 4 district are currently the most costly in Ireland (Rae & Van den Noord 26).
There are several documented cases of the elevated prices at which houses sell in Dublin 4 district. For instance the transaction pertaining to the Veterinary Surgeon site which was sold by University College Dublin (UCD) in 2005 for a price of more than one hundred and fifty million Euros. Through straightforward calculation, it can be determined that one acre was sold at approximately eighty five Million Euros which translates to two hundred and fifteen Million Euros per hectare(Rae & Van den Noord 32).
By all means such property was excessively overvalued yet in 2006; the University College Dublin (UCD) once again sold another piece of their property in Dublin 4 district for thirty six Million Euros. Unlike the previous property, this one was estimated to have cost to about ninety four Million Euros for every acre, which equates to more or less two hundred and fifty Million Euros for every hectare (CSO 32).
Dublin 4 district has become widely known for the property value in the district with one acre averaging about sixty million Euros. More often than not, the investors and the developers are forced to engage the residents to seek approval and consequently the preparatory course of action for redevelopment is considerably delayed. Therefore most of the proposed development ventures regarding mass housing schemes in such locations will become difficult for the investors to pursue and get approval and developers may also find impossible to initiate the projects (CSO 3).
A negative consequence of high urban house prices is the gradual shift of people into rural areas to live in lower cost housing. The greater Dublin area has experienced such a migration drift on an extensive scale for example in counties such as Carlow, Kildare, Meath, Louth, and Wicklow (CSO 4). The eventual outcome is the rapid development in rural villages and provincial towns since the rate of residential developments go beyond infrastructural development as well as the services necessary to sustain an urban population which may form social and ecological setbacks in rural areas in the long run. Local rural residents may also face problems as housing prices rise at a rate greatly exceeding that of local wages making it difficult for the locals to live in their area due to rising house prices (DoE 24).
Another effect of the development is the increased commuting activities for individuals living in remote places that are far from the large employment regions such as cities and industrial areas. The outcome is an increased demand on the transport infrastructure, which has led to the demand for increase in output from CIE, the Irish public transport company which was provided with a limited time frame for upgrading (White 70). This has conversely increased carbon dioxide emissions from Ireland because of the transport activity. The increase in the harmful gas emissions has as a result led Ireland to violate the Kyoto Accord which Ireland had initially agreed to adhere to. Violation of international treaties is usually accompanied by hefty fines which Ireland will have to pay resulting in direct cost to the Irish tax payer.
Ireland was also forced to incur additional costs for conservation and harmful gas emission control with the Irish state budget for the2007 financial year having a number of programs and incentives aimed at improving energy efficiency in highly polluted areas and reducing the overall cost of potential conservation programs (CSO 19). According to DoE, the Irish government was compelled to begin the National Spatial Strategy to tackle the apparent lack of planning which was affecting most of the Irish state organizations (21). The government was also forced to initiate centers of growth in the region to extend urban development to region centers.
However, most of the initiatives contained in the National Spatial Strategy were not feasible at a practical level as well as economically. Residents were also not pleased with some of the initiatives disputing them adamantly which resulted in a standstill (CSO 4).
Demographic factors
The number of households is capable of increasing more rapidly than the population when there is a fall in the average family size and there are more individuals who are single and live alone. This is the reason why there has been an increased number in the quantity of households in the UK. Ireland on the other hand experienced a population boom in the mid twentieth century which was further augmented by the recession which affected the UK in the 1970s, resulting in an exponential rise in the number of recorded births in Ireland from 1965 and beyond. 1979 was the year when the highest number of births was recorded in Ireland and the population boom was gradually channeled into the labor market from the late 1980s (Rae & Van den Noord 20).
During periods of high unemployment between 1984 and 1993, youthful Irish graduates and laborers moved into other European countries and in the US in rare cases in search of work. Improving economic prospects in Ireland however enticed a large number of the Irish human resource in other countries to return from 1994 and beyond (CSO 4).
This return migration peaked in 1999 and beginning 2001, individuals migrating back to Ireland from other countries have been a progressively a more prominent factor that determines the demand for residential housing. In addition, the mid 1990s saw an increasingly difficult labor market for graduates in continental Europe and the improved economic conditions in Ireland created various job opportunities. Numerous companies with growing capacity meant a high demand for graduates with language skills, which resulted in an inward migration of human resource from European countries such as France, Germany, and Spain (Rae & Van den Noord 30). The accession of various nations as new members in Eastern Europe, such as the Czech Republic, Lithuania, Latvia, and Poland also increased the number of graduates from these nations being actively involved in the Irish labor market (CSO 27).
Eastern Europe workers unlike the Western European labor force, are inclined to work in jobs that necessitate a broad assortment of lower level skills which is brought about by the different standards and aptitude of the English language. Shortage of workers in the health sector has also increased the demand for trained personnel from various parts of the globe including South Africa, India and the Philippines (CSO 28). As the labor market in Ireland expands, the demand for houses increases since there are more individuals both local and foreign seeking houses.
Speculation
A growing number of property investors acquire houses in an attempt to generate either capital gains through selling or income from renting. Some houses are therefore not bought to live in rather they are procured as a form of investment bearing future income. The investors dealing in tradable houses are in general more unpredictable and the investors will normally buy when prices of houses are increasing and sell when the prices of houses start to fall thus making a substantial profit. Speculators thus make the house prices more unstable since they will buy and sell in almost a similar timeline. Therefore, when speculators perceive the prices of houses will rise, they buy driving up the house prices and conversely when they sell, the prices of houses fall relatively fast (CSO 2).
Speculators have increasingly flocked the UK housing market, with about 42% of all houses being bought for speculative purposes (Rae & Van den Noord 34). There is however relatively high set costs about the sale of houses in the UK, for instance the stamp duty as well as estate agent fees. Therefore, speculative investors do not trade in houses on a short term basis rather it is a long term investment of twenty to thirty years.
Ireland has in particular been influenced by speculation which plays a major role in driving the house prices. For instance during the peak of foreign and domestic migration into Ireland, most of the houses were constructed, bought and sold on a speculative basis. From 2000 to 2006 for example, speculations lead to increased demand for houses which consequently led to an increase of house prices during same period (CSO 24).
Inherited wealth
It has been observed that several people use inherited wealth to buy houses either as a form of investment or as a place to live in. the practice of parents providing money for their children who are leaving home to buy a house or as a down payment to assist acquire their first house is also becoming more common (Rae & Van den Noord 18).
It is of unique interest to observe that there have been rising ratios of house price to incomes which means if applied in this context, inherited wealth can indeed increase the ratio of house price to income. Higher house prices in the UK are therefore not discouraging people from buying a house since people have come up with alternate means of acquiring money aside from salary which puts them in a position for the purchase of a house (DoE 21). This is the same case in Ireland where an increasing number of young individuals are receiving parental aid in acquiring a house and thus house prices have remained relatively high due to a sustained demand.
Unemployment
A rising demand for houses and hence an increase in the house prices are in most cases also linked to Low unemployment. When employment is at its peak, individuals can spend more since they are confident of future income. In cases where unemployment is high, individuals tend to save more and spend less and thus high capital investments such as houses are not in demand (Rae & Van den Noord 21). As a consequence, the prices of the houses will fall considerably due to the low demand. In both Ireland and the UK, the 2007 to 2008 recession led to a large number of job losses and rampant unemployment. The individuals who had lost their jobs were less optimistic about the future and therefore saved most of their income (CSO 3). As a consequence, house prices in the UK and Ireland dropped significantly during and after the recession.
Recession
Recessions can be considered to be the most potent determinant of house prices though they occur less often. They are usually caused by decreased spending habits among the public and are typically accompanied by a fall in the prices of houses. Recessions in the housing sector in most cases greatly affect the mortgage lenders where the lenders get bad mortgages because individuals fail to fulfill their obligations due to financial constraints (CSO 4).
Even though mortgage lending in the UK has over the recent years lifted some of the restrictions, they are still more stringent and have more controls in place when compared to Ireland. The 2007 to 2008 recession inevitably affected the prices of houses in the UK, but worst affected was Northern Rock which had a high percentage of uncertain loans and in addition had the highest percentage of loans funded through reselling in the capital markets (CSO 23).
During the recession there was a crash in the capital markets and Northern Rock could no longer accumulate an adequate amount of funds through the capital market. The institution was left with a large deficit which was later covered by the Bank of England through provision of emergency funds. Soon after the publication of the borrowing of funds by the institution, clients began withdrawing their savings in anticipation to the institution’s collapse, though the banking sector of the institution was not affected. Consequently, mortgages have become more expensive in the UK due to the recession and all risky mortgage offers such as the 125% mortgages have been removed from the market through the mortgage squeeze (CSO 4).
Access to mortgages has become difficult to obtain and as a consequence, the demand for houses has decreased and therefore the prices of houses have also decreased. Recessions mean that numerous individuals face negative equity hence banks get more mortgage defaults leading to more costs for the banks since the initial loan cannot be recovered. The underlying problems caused by the recession have caused several problems for the UK Banks (CSO 20).
HBOS for instance which also Halifax had difficulties when it tried to finance its balance sheet because it funded the expansion of its lending capacity through borrowing (CSO 3). Since the money markets went into a credit crunch, the institution was unable to raise the sufficient amount of money required to sustain liquidity. The case was similar in Ireland where the house prices declined significantly after a six year increase. Banks were observed to be too flexible in their lending practices resulting in a significant drop in property prices in 2009 as well as increasing the debt load of the Irish taxpayer since the banks needed public funds to be bailed out (CSO 20- 21).
Slow House Construction
Ever since 1995, the supply of new homes has failed to satisfy the demand for new property in the UK and this has been the case in Ireland since 1999. The overwhelming difference in demand and supply is essentially the most significant and fundamental macro economic dilemma currently facing the UK housing market. The Government introduced the brown field housing policies that were implemented to guard greenbelt lands making greenbelt land inaccessible to house builders aiming to meet increased demand and as a result, the UK faces the challenge of inadequate housing for its population (DoE 28).
For example, London had 4.2% fewer properties than households in the year 2000 and approximately 2% fewer houses than households in the South East. By 2001, household had increased by 220,000 but only 162,000 houses were constructed within the same timeframe (Rae & Van den Noord 23). Therefore, the demand for houses surpasses the supply and thus the house price index in the UK is always rising.
Ireland has the same predicament with the population increasing exponentially due to the arrival of foreign and domestic workers who are attracted by the opportunities brought about by the expanding economic prospects in Ireland (CSO 20). Unlike the UK, Ireland has a limited number of construction free zones, though approval of construction application can be lengthy.
Increase in Single or Divorced Households
Heightened desire for independence means there is an increasing number of single person households since a growing population of individuals are single parents while a significant number of people also get divorced (CSO 4). The average age of the first time buyers has also decreased significantly in the recent years. The age of First time buyers is at the lowest since 1971 with individuals as young as 16 years old buying houses with the help of their parents (DoE 37). Single person households have increased exponentially since 1991 with the UK hitting the one million single household mark in 2007 while Ireland reaching a similar target in 2008. As a result of these immense demographic transformations, the demand for houses perpetuated by single or divorced individuals will persist to augment radically (White 63).
Ageing and Increased Population
Due to enhanced medical care, life expectancy in both the UK and Ireland has increased and the population has been on an increase since 1968 (DoE 35). There is also an increase of illegal immigrants into the UK who have brought about a high demand for housing. The increase of the general population will continue to increase the shortage of housing especially in urban centers and industrial towns and hence emphasize the house price inflation. The demographics will therefore revolutionize as the population increases considering people are living longer (CSO19).
Social preferences
During the 1980’s home ownership was a social ambition and individuals were generally inclined to buy houses. Currently, renting a house is capable of satisfying the social standard due to a continual change in attitudes more especially in terms of goals, lifestyles and values (DoE 28). According to CSO, middle income professionals have brought about an increase in the number of properties to let with the rental housing improving in quality when compared to rental houses in previous decades (3).
Changing Working Patterns
The increased demand in the contract market has led individuals to travel to different locations away from their ideal home location both in the UK and Ireland (CSO 23). Consequently these individuals are compelled to rent the houses near the urban or industrial cities where they work and thus creating more demand for rented property. The rented homes provide the workers with the flexibility of renting to ensure that they are free to travel as projected in their contract.
Regional Prices
House prices in the UK and Ireland are also dependent on the house prices of other nearby nations especially countries in the European Union (CSO 2). In most cases, a steep decline in the house prices in the UK is principally due to a strong performance by the pound when compared to European currencies as well as excessive importation of cheaper Far East building material (White 69). The overvaluation of pound has the potential to increase manufacturing unemployment in the Midlands further still, which will reduce the consumer local spending and hence lower demand for housing consequently bringing down the house prices (DoE 33).
Ireland is not dependent on the UK for price comparison though it relies on the European Union to determine the exchange rate of the Euro with respect to foreign currency. A cheap Euro attracts foreign investors who purchase property thus increasing the house prices (Rae & Van den Noord 37).
Conclusion
The accessibility of affordable housing in the United Kingdom declined drastically as of the late 1990s and beyond, where house prices were seen to be rising faster than the average population earnings. This led to fewer individuals being in a position to buy a house and thus the average age of first-time homebuyers increased. The UK government acknowledged that the supply of houses was low and the high prices of houses were identified as a social, economic and political dilemma which saw a series of measures put in place to manage the scarcity and exponential price increase. On the other hand, Ireland underwent a property bubble from 2000 to 2006 which saw an increase in the number of houses being constructed as well as rapidly rising prices.
In 2007 for example, the uptrend was controlled and the prices evened out before the bubble burst in the year 2008. House prices had decreased by 23% by the end of the first quarter of 2009 relative to the second quarter of 2007 which exposed the vulnerability of the housing sector in Ireland. The subsequent fallout was a banking crisis which was solely caused by the sharp fall of domestic and commercial property prices.
Works Cited
Central statistics office (CSO). Quarterly national accounts: Quarter 3, 2009. Web.
Central statistics office (CSO). Construction and housing in Ireland 2008 edition. 2008. Web.
Department of the Environment (DoE). Review of the Construction Industry 2004 and Outlook 2005-2007. 2005. Web.
Rae, David and Van den Noord, Paul. Ireland housing boom: What has driven it and have prices overshot? 2006. Web.
White, Rossa. Davy on the Irish economy. 2006. Web.