House Price Increases Show Signs Of Slowing In Ireland

House prices in ireland have tripled in the last decade or so, without a sign of a slow down......until now.

Around about the start of the 1990s, unprecedented economic growth began in Ireland. This phenomenon was christened 'the Celtic Tiger'. And rightly so, when one takes into account the ferociousness of this growth.

During this extremely prosperous time, Ireland went from being one of Europe's poorest countries to being perhaps its' most wealthy; indeed, the Economist magazine deemed it the best country in the world in which to live, based upon a wordwide "quality of life" assessment.

At the end of this meteoric economic period, suddenly everyone discovered that they had more money that ever before, and the property gold rush was born.

Since 2000, when the first signs of a property boom were first noticed, house prices in Ireland have tripled. As a consequence of this, public sector debt has reached new levels, as buyers rush to get a foot on the property ladder. 12.6% of the Irish workforce earns their living in the construction industry, and 23% of Irish GNP is reliant on the construction indusrty.

A housing collapse would have catastrophic implications on the country's economy, in much the same way as experienced in the UK in the late 1980s.

The fact that most estate agents are reporting a slowing of capital growth could result in investors buying more property abroad, which would compound the problem in Ireland.

Sources in the property market are noticing price reductions for the first time in years, with the most noticeable downturns being seen at the higher end of the market.

So does this mean that the property bubble is about to burst? Probably not. What Ireland is experiencing is a cooling off period. Capital growth will return, but at more sustainable levels. And this economic episode will serve as a reminder to many financially overstretched people; there is no such thing as economic certainty.