Abstract
In housing markets, cyclical patterns of growth and correction often occur due to the imperfect knowledge of shifting supply and demand trends related to changing economic conditions. Important factors in such patterns include the availability of finance, changing planning and policy parameters and the time lag between development initiation and completion. For an owner-occupier dominated housing market such as in Ireland, the combination of housing space demand with investment attributes and market sentiment creates a complex mixture of demand driven by housing needs and demographics, housing preferences and investment considerations. This chapter reviews the factors which underlay the major expansion of the residential development sector in Ireland from the mid-1990s and those factors which drove it into a situation of massive over-supply and subsequently a collapse in development activity from 2008 to 2013. This development pattern is examined in the context of the key drivers of the speculative property bubble and the relationship of housing-market trends to economic and property cycles. It explores the Irish experience from the 1990s to 2006 where a classic boom to bust cycle was greatly exacerbated by a largely unregulated banking sector injecting a vast amount of finance into the market. The consequences of the collapse include unfinished housing developments and financial stress for both the state and mortgage holders.
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© 2014 Brendan Williams and Declan Redmond
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Williams, B., Redmond, D. (2014). Ready Money: Residential Over-Development and Its Consequences. In: MacLaran, A., Kelly, S. (eds) Neoliberal Urban Policy and the Transformation of the City. Palgrave Macmillan, London. https://doi.org/10.1057/9781137377050_7
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DOI: https://doi.org/10.1057/9781137377050_7
Publisher Name: Palgrave Macmillan, London
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