The part that the collapse in the Irish property market played in destroying the Irish economy has been well documented. The 2007 height of the market now seems like an eternity ago with prices falling by as much as 47% according to the Irish Central Statistics Office (CSO).
The market collapsed, the banks collapsed, the economy collapsed. The EU, IMF and ECB provided loans to Ireland to keep the country running on condition that part of these loans was used to pay back bondholders in Europe, many of whom were based in Germany and France. The punitive rate of interest being charged for these loans is also the subject of ongoing negotiations between the Irish government and the European ‘troika’.
Nevertheless there are signs that 2012 may have marked the actual bottom of the property market. Figures from the CSO have revealed that house prices actually rose in November by 1.1%, despite showing an overall annual decline of just under 10%.
The news that US bank Wells Fargo has located four senior bank officials in London for the express purpose of examining the Irish property market is a further sign that there may still be some life in the housing market in Ireland. Irish banks are very reluctant to lend at the moment to anyone other than the most financially secure. Despite their protestations it has become nearly impossible for young first-time buyers to get a mortgage and buy a property.
A scenario whereby the economy recovers somewhat in tandem with the arrival of a new banking force could cause a significant upwards bounce for the ailing Irish construction industry that has always been one of the country’s biggest employers.