Minister for Finance denies there is a Dublin property bubble

Residential property prices are still 47 per cent lower nationally than at their highest level in September 2007, Minister for Finance Michael Noonan said, as he rejected concerns about the development of a property bubble.

He told Independent TD Richard Boyd Barrett that during the previous housing bubble there was a dramatic increase in mortgage lending, but a large percentage of current house sales were cash purchases.

Mr Noonan also said rents rose nationally by 6 per cent last year from an increase of 2.5 per cent in 2012, but this followed a fall of over 25 per cent between 2008 and late 2010.

"On that basis private rents are now at approximately the same level as in January 2003."

'Flawed'
Mr Boyd Barrett, however, described the Government's approach to housing and the property sector as "dangerous and flawed" and said it was leading to an emergency in the area of homelessness and the social crisis. The Dún Laoghaire TD said the policy also represented "a serious threat to the macroeconomic health of the economy".

Dramatic increase
He said his concerns were not just about absolute levels of property prices or rents, but the dramatic increase in prices over the past few months.

Highlighting increasing levels of homelessness he said six people declared themselves homeless every day and this was indicative of the dramatic rise in rents in Dublin. He said the Government was incentivising speculation in property, leading to the housing crisis.
The Minister said there was pressure on rents partly because of growth in the economy. "The vulture capitalists the deputy deplores so much are the ones who are helping to solve the problem."

They bought blocks of apartments and upgraded them.