Is Ireland setting itself up for a crash with new housing bubble?

Ireland’s housing market collapsed less than a decade ago, but has lately been experiencing a blistering recovery in prices. They have risen in Dublin by 50% from the trough of 2010. Is Ireland setting itself up for another devastating crash?

The collapse of asset bubbles carries massive financial and social costs. With construction activity and investment spending grinding to a halt, sharp recessions — which cause tax revenues to fall, even as surging unemployment demands increased social spending — are unavoidable.

Taxpayers may even be asked to shore up financial institutions’ capital base. The last time that happened in Ireland, it cost €60bn, or 40% of GDP.

Read the full details in the Irish Examiner

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