Deconstructing the Construction Industry
A recent report detailing the average house prices recently published has yet again raised anger in the media and public forum. The report Cork city is now €173,000, 54 per cent below peak levels, according to new figures. House prices in Cork city in 2012 fell once more compared to 2011, the report from Daft.ie revealed.
Towards the end of 2012 the housing market saw some positive signs of improving mainly in Dublin. While the Dublin market is showing very healthy figures for the time taken to sell a property, the same is not true Nationwide. Looking ahead to 2013, it is clear that the end of mortgage interest relief (Which is basically a tax credit) impacted the market in towards the end of last year, effectively, some of the demand from 2013 was pulled back into 2012.
Arguably the term negative equity is more damaging as an idea to the economy, than it is in reality, home owner’s and landlords must remember that negative equity only effects the individual if and when they go to sell their property. Taking the average industrial working wage during the Celtic Tiger was €28,000, it is incredible to think that people were spending more than twelve times there gross annual income on a property.
While the banks have become a symbol of public hatred, the financial regulator and indeed a government that allowed one sector to make up almost 80% of national GDP are the real criminals, we can’t let people just walk away from their debts without imposing difficult and strict sacrifices to meet their mortgage repayments. Incredibly there are currently over 12,500 people on housing lists in Cork alone, it seems artificially kick starting the construction center now as crazy as it may sound may be the answer to short term unemployment and a preemptive solution to ensuring there is enough affordable housing in the long term, less the country experience a housing shortage in the near future.