Deputy Gilmore says that NAMA is being put in place to protect the ‘toxic triangle of developers, bankers and bad government’, and claims that temporary nationalisation would provide less risk to the taxpayer. He refers to our latest policy paper, The Irish Housing System: Vision Values, Reality:
A recent study of the housing sector by the Jesuit Centre for Faith and Justice provides a picture of how housing policy has developed under this Government. It notes, for example, that between the mid-1970s and the mid-1990s, the price of housing in Ireland broadly tracked the cost of building a house. After the mid-1990s, however, there was a surge in the price of housing, which bore no relation to the cost of the relevant inputs. By 2007, house prices had risen by four times as much as building costs. The average price of a new house in Ireland increased by 344% between the mid-1990s to the peak of the bubble, rising from €73,000 to €323,000. In Dublin there was a 408% increase over the same period. Average second-hand house prices increased by 441%, and by 499% in Dublin. Needless to say, wages were not increasing by the same amounts. In fact, if new house prices had tracked the increase in earnings, that price of €323,000 in 2007 would only have been €124,000.
17 September, 2009