It seems to me that there are many similarities between the external circumstances facing Ireland today and those of the early 2000s.
Our economy is growing well, we have nearly full employment, there is little emigration, we have immigration.
Interest rates are set by the ECB for the Eurozone as a whole and are therefore lower than they would be if set based on Irelands economic situation alone.
Both then and now the effect of this situation was felt most keenly in the housing market.
25% of the entire existing Irish housing stock was built between 2001 and 2011 (presumably most of that between 2001 and 2008). 2% was built from 2012 to 2017. https://www.irishtimes.com/business/economy/just-2-of-irish-homes-built-in-last-five-years-1.3038929
In the early 2000s the banks borrowed heavily from abroad to fund a housing boom. Huge numbers of houses were built. When the financial crash came all that borrowing was difficult to sustain for many.
In recent years the CB has prevented a recurrence of the borrowing boom. This has meant that far fewer houses have been built. People struggle to find a place to live and rents are very high.
There is no doubt that the policy response is different. There have been winners and losers under both approaches. I feel that personally I have benefitted under both approaches. I was of an age to buy property when that was easy after 2000, I am now a landlord benefiting from a high rental income.
However I do not believe that the country as a whole is benefiting from the present response. There was at least an upside to the boom, we built lots of nice houses. Today I see no upside, there is none at present for people needing somewhere to live, and when a downturn comes people who loose their jobs will not only unemployed but also homeless.
Our economy is growing well, we have nearly full employment, there is little emigration, we have immigration.
Interest rates are set by the ECB for the Eurozone as a whole and are therefore lower than they would be if set based on Irelands economic situation alone.
Both then and now the effect of this situation was felt most keenly in the housing market.
25% of the entire existing Irish housing stock was built between 2001 and 2011 (presumably most of that between 2001 and 2008). 2% was built from 2012 to 2017. https://www.irishtimes.com/business/economy/just-2-of-irish-homes-built-in-last-five-years-1.3038929
In the early 2000s the banks borrowed heavily from abroad to fund a housing boom. Huge numbers of houses were built. When the financial crash came all that borrowing was difficult to sustain for many.
In recent years the CB has prevented a recurrence of the borrowing boom. This has meant that far fewer houses have been built. People struggle to find a place to live and rents are very high.
There is no doubt that the policy response is different. There have been winners and losers under both approaches. I feel that personally I have benefitted under both approaches. I was of an age to buy property when that was easy after 2000, I am now a landlord benefiting from a high rental income.
However I do not believe that the country as a whole is benefiting from the present response. There was at least an upside to the boom, we built lots of nice houses. Today I see no upside, there is none at present for people needing somewhere to live, and when a downturn comes people who loose their jobs will not only unemployed but also homeless.
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