The Irish property market is probably one of the most talked-about subjects (apart from the weather) at dinner gatherings around the city and in the media. The main debate is whether the property market will crash and if so, when. Property prices in Dublin began climbing steadily with the ‘Celtic Tiger’, the economic boom that began in the late 1990s, transforming the country from being one of the poorest in Europe to one of the wealthiest. During the past 10 years, prices rose on average 15% per year, leading many financial analysts to believe that the market was overheated and over-inflated, predicting a crash. These predictions continue, however some analysts are determined that the economy is strong and that demand for housing is high so they think a crash is unlikely. However in late 2006, price increases began to slow down and in early 2007, prices began to fall, with recorded drops of 1.8% per month at the time of writing.

The Irish have always preferred to own their own home rather than to rent and ‘getting on the property ladder’ is important to many young people once they are earning regular money. For many potential first-time buyers, property prices have been out of reach, with average house prices in Dublin over €400,000 and a new two-bed apartment in the docklands with parking, costing half a million. However many banks and building societies have been offering 100% mortgages. In 2007, there were a number of mortgage interest rate increases, with more predicted before the year’s end, leading to further uncertainty in the market.

Unfortunately, this has had a knock-on effect on rents. With landlords’ mortgages increasing, they are passing these increases onto tenants and with such an uncertain property market, many people prefer to rent, meaning high demand is also raising prices.