IHT: Inflation in Ireland rises to 4.4%

“DUBLIN, Ireland: Inflation in Ireland rose last month to 4.4 percent chiefly because of more expensive home mortgages, the government’s Central Statistics Office reported Thursday.”

iht.com/articles/ap/2006/12/ … lation.php

4.4% is key … keep that in mind when reading reports in the articles being published now predicting between 3 and 5% growth in the property market next year. 5% would mean property growth in real terms (i.e. propery grows faster than inflation) and would be a “happy soft landing” with growth just above inflation where as less than 4% would mean that property in real terms is going down in value and would be an “unhappy soft landing” with property “investments” being negative in terms of their capitol return when compared to general price increases.

Either way, predictions of a slowing market, just like there were towards the end of 2005.

We wait and see.

Blue Horseshoe

Good point,but I’m sure there are many people who will dismiss inflation as irrelevant providing their salaries increase by the same amount and they can cover the cost of servicing their mortgage without effecting their standard of living.Any increase in house prices above zero will be seen as money banked.

ERSI are forecasting that inflation will reach 6% early next year, the highest level in six years. This will but more pressure on Ireland’s competitive position.

rte.ie/business/2006/1221/esri.html

IMO Ireland’s competitiveness is the single most important element in the entire economic mix. More important than our reliance on construction or property prices or inflation or IR’s or regulation or fiscal policy or governement initiatives or whatever.*

Digital Labs partly explained the scaling-down of their West Dublin operation the other day by saying they were going to a lower cost location…India? China? Brazil? Nope…Holland.

Not good. Not good at all.

(* although of course all these elements dictate competitiveness)

I agree Chomp, I don’t think interest rates, etc matter a continental damn if we cant maintain the semblance of an industrial base. :frowning:

Some Interesting statistics in the Irish Bankers Federation/Price Waterhouse Coopers Mortgage Market Profile (third quarter 2006).

It seems that Top Up(Equity Release) mortgages form the largest segment of the market (numerically). The average value of these loans is a whopping €92,000; in the first three quarters about 52,000 of these ‘products’ were sold. Goes some way to explain why Ireland is the most indebted country on Earth and why inflation is gathering pace.

ibf.ie/pdfs/ibf_pwc_mortgage_q3.pdf (4 page PDF)

Borrowing money to pay for over inflated goods & servcie economy wide - oh no!.. but oh yes, a soup of our making, a soup of destruction. Yum yum…