Pre 2008 when was the last Irish property crash?

bono_v

Hi folks Pre 2008 was there ever a property crash in Ireland? I’m trying to find out. Certainly property always rose since at least the 1950s as far as I can see??

Brussels Sprout

It looks like there was a prolonged decline in house prices from 1978-1987



The crash from 10 years ago distorts the graph above but if you look at the prices it looks like they fell by about 35% over that period. Of course that time period was back when we had our own currency and I believe that interest rates were extremely high during that period (>10%).

L1011

The rate of change was lower but the eventual % could be quite significant. I know that people who bought the same houses as mine new (1972/3) were often only just at breakeven equity wise in the 80s and anyone who had to go interest only for any period was under water. New houses were selling for roughly the same price ten years later (and were built out of cardboard in comparison)

Arthur Daley

Be very telling to see an update of that graph

Borzoi

Brussels Sprout wrote: »

. Of course that time period was back when we had our own currency and I believe that interest rates were extremely high during that period (>10%).

I recall 17per cent for a short while in the 80s. But more generally 10-13. It be interesting to see rates Vs house price

mariaalice

You would need lots of other information to make an overall assessment of the situation for example income in relation to the mortgage costs proportion of income going on a mortgage how that has changed over time.

Bubbaclaus

Brussels Sprout wrote: »

It looks like there was a prolonged decline in house prices from 1978-1987



The crash from 10 years ago distorts the graph above but if you look at the prices it looks like they fell by about 35% over that period. Of course that time period was back when we had our own currency and I believe that interest rates were extremely high during that period (>10%).

That graph looks like it is adjusted for inflation. I'm not sure what the inflation rate was for that period but it could be the case that house prices were still slowly creeping upwards (however losing 'real' value as inflation was outpacing it).

Claw Hammer

There was a stall at the end of 2002 for a few months, there was a stal in 1992-1993 due to the currency crisis. There was a lengthy slowdown from 81-87. Inflation was much higher then than now so when that is factored in the slowdowns are more severe. In one case a hose which sold in 1982 for £64k in Rathmines sold for £46k 5 years later. If inflation is considered the loss is far more than the £18k difference between the 2 prices. There was massive inflation in the mid 70s, sometimes running at 25% p.a. so declines in prices are masked with selling prices being higher than the purchase price but when inflation is taken into account there was really a fall.

audi5

Brussels Sprout wrote: »

It looks like there was a prolonged decline in house prices from 1978-1987



The crash from 10 years ago distorts the graph above but if you look at the prices it looks like they fell by about 35% over that period. Of course that time period was back when we had our own currency and I believe that interest rates were extremely high during that period (>10%).

This is HPI in real/inflation adjusted terms. Prices did not decline 35% in nominal terms during that period. They were actually up more than 100% based on the source below. You can see nominal price chart here for Ireland and few other countries https://infographics.economist.com/2017/HPI/index.html