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Irish property slump branded an all-out crash as house prices fall 30 percent

Sunday Times says crash much worse than Britian's in the 90s

KELLY FINCHAM

IrishCentral.com Editor

Published Sunday, October 25, 2009, 2:54 PM

Updated Sunday, October 25, 2009, 3:22 PM

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Read more: Dublin, Ireland

The price of the average Irish home has plummeted by 30 percent in just 12 months

The worsening property slump in Ireland has been branded an all-out crash.

A report in the Sunday Times says the value of Irish homes has fallen by up to 30 percent over the past 12 months.

In comparison, the paper points to the property crash in British during the 1990s where prices took 10 years to fall 30 percent.

They say the worst-hit areas are in Dublin which is home to one-third of the Irish population.

The capital city has seen price falls of between 25 percent and 35 percent with apartments the biggest losers.

Investors have fled from the buy-to-rent market with the results that some new one-beds in Dublin’s city center have dropped by about €100,000 ($140,000).

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Irish business was so strong during the 1990s that this period of rapid economic growth became known by the term Celtic Tiger. This period continued into the next century, slowing in 2001 before picking up again and finally slowing down in 2007. The provision of subsidies and investment capital by Irish state organizations encouraged major American tech firms like Microsoft, Intel and Dell to set up shop in Ireland. After 9/11, the Celtic Tiger slowed, but regained steam in 2003, ushering in a period some called Celtic Tiger 2. Dell had its major European manufacturing plant in Limerick. Irish business produced 25% of all European PCs. Google opened an office in Dublin. A new state body, Science Foundation Ireland, was created to help new science companies share in the Irish business boom. The building of the International Financial Services Centre in Dublin led to the creation of 14,000 jobs in the Irish business sectors of accounting, legal and financial management. The Irish business boom transformed one of Europe’s poorer countries into one of its wealthiest. Some of the causes of the Celtic Tiger are believed to be state-driven economic development, social partnership between employers, government and unions, more women in the workforce and a low tax rate for corporations, all of which had a positive effect on Irish business. The time zone difference between Ireland and the United States also helped Irish business, since Irish employees could start their work day while U.S. workers were still asleep. Unemployment had been 18% before the Celtic Tiger. By the end of the Irish business boom, unemployment was down to 3.5%. The success of Irish business created wealth that resulted in large investments in modernizing Irish infrastructure and cities.

Irish property slump branded an all-out crash as house prices fall 30 percent

Sunday Times says crash much worse than Britian's in the 90s

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