"WHEN BUBBLES burst it takes time for society to recover its financial nerve. Before this can start, there must be some degree of certainty that all losses have been accounted for.
There are persuasive arguments for believing that this point has not yet been reached in Ireland. A key priority for the State must be to get house prices back in line with their long-term value, and consequently with incomes, and keep them there in order to underpin competitiveness.
There are other issues to be dealt with such as the parallels in the commercial and retail property sectors.
As last week’s report by Finnish banker Peter Nyberg showed, Ireland got carried away with the availability of easy money. The result was we blew much of the gains made earlier in the Celtic Tiger period. Irish house prices increased between 1996 to 2007 by around 330 per cent – a bubble extreme in scale and duration but a classic nonetheless, matching the criteria in the extensive literature on bubbles"...........read it here
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