Property Bubble In Ireland Developing Again

Budget 2017: “Good Work To Halt Second Property Crash Undone In A Day”

David McWilliams has pointed out in two of his most recent articles how Budget 2017 and the latest mortgage tax grant risk creating a “second property crash”:

“We are faced with similar concerns on the horizon now. Unlike 2008, when this country went bust, or in 2012, when the euro as a currency was in real danger of falling apart, there is no serious internal threat. In 2012, the world’s central bankers cutting interest rates to zero prevented the disintegration of the euro. This may have saved the currency then, but it means that today central bankers have no ammunition left if there is another downturn. Interest rates are as low as they can go.

Unfortunately, the trading economies that Ireland depends on have not responded to zero interest rates with any real gusto. They are sluggish at best. This sluggishness means that the average guy feels left behind and sees real gains going to the very rich. As a result, the mainstream political players are now being rejected in favour of populists. This is happening everywhere, particularly in the UK, the US and France.”

The stupidity of this latest populist government gimmick and tampering in the property market was further underlined in an article published today:

“I have no problem with paying civil servants well. But I do have a problem with rewarding stupidity. These mandarins are trained economists who should explain to politicians what is likely to happen in a dysfunctional housing market when you introduce tax breaks for first time buyers.

On Friday, it was widely reported that many developers automatically increased the price of starter homes in response to the budget. They didn’t even wait for the Finance Bill to be enacted, prices all over the country simply jumped overnight.

This is exactly what I would have expected a decent ordinary level Leaving Cert economics student to have replied in answer to the opening question.”

Another property bubble in Dublin is gradually forming. Prices at the high end of the market have surged in recent years and some areas are back at record levels seen in 2007/2008. Already, there have been sharp falls of 15% to 20% in the leafier suburbs of Dublin – in Dublin 4, Dublin 6 and high end Killiney and Foxrock-Carrickmines as reported in detailed analysis by the Sunday Business Post recently.

The government’s latest measure will add to the overheating that is already being seen in the lower end and the mid end of the Dublin market. There is a real risk that another generation of young people are saddled with massive debts and we see another “negative equity generation”.

Another property crash would further devastate our banks and have an attendant impact on Irish assets – from property to stocks, bonds, Irish bank deposits and government “guaranteed” savings products.

McWilliams recent articles on the latest property madness can he found here and here

Gold and Silver Bullion – News and Commentary

Singapore makes another bid for Asia to help set gold price (Reuters)

Asian shares fall, dollar at 7-month high after Yellen comments (Reuters)

Gold to Sell Off, Then Rebound to $1,350 Next Year, TD Says (Bloomberg)

ICE Will Start Gold Futures for Clearing London’s Daily Auction (Bloomberg)

Gold drops on dollar rise as U.S. data supports rate-hike prospect (Reuters)

Video: Is It Over For Gold? No (Forbes)

US Debt Soars To $19.7 Trillion (ZeroHedge)

Standard & Poor’s warns on UK reserve currency status as Brexit hardens (Telegraph)

Tiny Startups Revamp Gold Market After Besting Big Exchanges (Bloomberg)

Tangible and intangible factors will support the gold price (MineWeb)


Gold Prices (LBMA AM)

17 Oct: USD 1,252.70, GBP 1,029.59 & EUR 1,139.58 per ounce
14 Oct: USD 1,256.15, GBP 1,028.79 & EUR 1,140.08 per ounce
13 Oct: USD 1,258.00, GBP 1,029.93 & EUR 1,141.76 per ounce
12 Oct: USD 1,255.70, GBP 1,024.53 & EUR 1,139.05 per ounce
11 Oct: USD 1,256.40, GBP 1,021.58 & EUR 1,130.76 per ounce
10 Oct: USD 1,262.10, GBP 1,016.62 & EUR 1,129.71 per ounce
07 Oct: USD 1,255.00, GBP 1,012.91 & EUR 1,127.62 per ounce

Silver Prices (LBMA)

17 Oct: USD 17.40, GBP 14.30 & EUR 15.83 per ounce
14 Oct: USD 17.47, GBP 14.28 & EUR 15.86 per ounce
13 Oct: USD 17.59, GBP 14.40 & EUR 15.95 per ounce
12 Oct: USD 17.44, GBP 14.23 & EUR 15.83 per ounce
11 Oct: USD 17.48, GBP 14.26 & EUR 15.78 per ounce
10 Oct: USD 17.78, GBP 14.31 & EUR 15.92 per ounce
07 Oct: USD 17.33, GBP 14.01 & EUR 15.55 per ounce

Recent Market Updates

– “Gold Is A Great Hedge Against Politicians” – Goldman
– Sell Gold Now – Time To Liquidate Gold ETF, Pooled and Digital Gold
– Gold In GBP Up 43% YTD – “Massive Twin Deficits” To Impact UK Assets
– Ron Paul Says “Gold Going Up” Whether Trump Or Clinton Elected
– Gold Trading COT Report “Means Lower – Then Much Higher – Prices Coming”
– Currency Shock Sees Sterling Gold Surges 5% In One Minute “Flash Crash”
– Top Gold Forecaster: “As Quickly As Gold Fell” May “Rally Back” on Global Risks
– Gold Buying ‘Opportunity’ After Surprise 3.4% Drop
– Deutsche Bank “Is Probably Insolvent”
– GBP Gold Rises 1.3% as Sterling Slumps On ‘Hard Brexit’ Concerns, Up 36% YTD
– Why Krugman, Roubini, Rogoff And Buffett Hate Gold
– ECB Refused “To Answer Questions” – Deutsche Bank “Systemic Threat” Is “Not ECB Fault”
– Euro “Might Start To Unravel” If Collapse Of Deutsche Bank

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