There is a website called All About Money. I used to contribute to it, then they got antsy about property price discussions, I got bored with constant exhortions not to talk about the future movement of property prices, got invited to to the Property Pin.
All about Money is run by Brendan, who was Chairman of the Consumer Panel during the bubble.
See this post here.It relates to a report suggesting the regulators were asleep on their job in terms of protecting consumers, those people who overbought mortgages, are sitting in negative equity, debt and financial black holes right now. And Brendan was chairman of the Consumer Panel.
Today, discussion that report, he had this to say:
I just don’t agree that we had a “highly visible property bubble”. The majority view from economists at the time awas that there would be a soft landing. That was certainly the view of the Governor of the Central Bank which would have been the most important view as far as the Financial Regulator would have been concerned.
I was Chairman of the Consumer Panel during the bubble. We raised a lot of issues with the Financial Regulator. We raised the impact of sub-prime mortgages on the consumer. We raised the issue of the increase in unemployment and very high house prices on mortgage arrears.
I am open to correction, but I don’t think we ever said “There is a highly visible property bubble and you should take dramatic steps to deflate it”.
In 2006, property price growth had massively outstripped salary inflation, itself already uncompetitively high. Average property prices were 10 times median salary. 11-13 times in Dublin depending on whose figures you were reading. Banks were handing out 100% mortgages, extending mortgage loan terms, increasing salary multiples all in a bid to enable more people to afford property because at a time of historically low interest rates, FTBs could not afford to buy property. People were moving further and further out into the suburbs and commuting zone because they could not afford to live near work.
And the Chairman of the Consumer Panel didn’t seem to realise that this was evidence of a huge, huge bubble in property prices?
We didn’t know. Sorry, no one realised that this was all kinda bad.
I guess the dog ate their homework then.
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