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The Extent of the Mortgage Crisis in Ireland and Policy Responses

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  • Richard Waldron
  • Declan Redmond

Abstract

From the mid-1990s, Ireland experienced a property bubble, fuelled by deregulation in the banking sector and government commitment to expanding home ownership. However, since 2007, the situation has dramatically reversed. The banking system and property market have collapsed and pushed the Irish state into insolvency. National house prices have fallen by 50 per cent from the peak in 2007, whereas incomes have contracted and the unemployment rate has increased. This has produced a serious situation regarding negative equity and mortgage arrears, a problem highlighted by the former U.S. President Bill Clinton on a visit to Ireland in 2011. This paper examines government responses to the mortgage crisis, particularly their emphasis on mortgage forbearance and reform of Ireland's bankruptcy legislation. An overview of the drivers of the bubble and the extent of negative equity and arrears is provided firstly. In conclusion, the paper reflects upon the implications of the crisis for the homeownership model that Ireland has followed for the last two decades.

Suggested Citation

  • Richard Waldron & Declan Redmond, 2014. "The Extent of the Mortgage Crisis in Ireland and Policy Responses," Housing Studies, Taylor & Francis Journals, vol. 29(1), pages 149-165, January.
    • Handle: RePEc:taf:chosxx:v:29:y:2014:i:1:p:149-165
    DOI: 10.1080/02673037.2013.825694
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    References listed on IDEAS

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    1. Philip Lane, 2011. "The Irish Crisis," The Institute for International Integration Studies Discussion Paper Series iiisdp356, IIIS.
    2. Duffy, David, 2012. "Irish Housing: A Role for Loan-to-Value Limits?," Papers EC7, Economic and Social Research Institute (ESRI).
    3. Doyle, Nicola, 2009. "Housing Finance Developments in Ireland," Quarterly Bulletin Articles, Central Bank of Ireland, pages 75-88, October.
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    Cited by:

    1. Michelle Norris & Michael Byrne, 2017. "Housing Market Volatility,Stability and Social Rented Housing: comparing Austria and Ireland during the global financial crisis," Working Papers 201705, Geary Institute, University College Dublin.
    2. Cian O’Callaghan & Pauline McGuirk, 2021. "Situating financialisation in the geographies of neoliberal housing restructuring: reflections from Ireland and Australia," Environment and Planning A, , vol. 53(4), pages 809-827, June.
    3. Richard Waldron, 2021. "Housing, place and populism: Towards a research agenda," Environment and Planning A, , vol. 53(5), pages 1219-1229, August.
    4. Michael Byrne, 2019. "The financialization of housing and the growth of the private rental sector in Ireland, the UK and Spain," Working Papers 201902, Geary Institute, University College Dublin.
    5. Cesare Di Feliciantonio & Cian O’Callaghan, 2020. "Struggles over property in the ‘post-political’ era: Notes on the political from Rome and Dublin," Environment and Planning C, , vol. 38(2), pages 195-213, March.
    6. Carlos Bueno-Suárez & Daniel Coq-Huelva, 2020. "Sustaining What Is Unsustainable: A Review of Urban Sprawl and Urban Socio-Environmental Policies in North America and Western Europe," Sustainability, MDPI, vol. 12(11), pages 1-36, May.
    7. Richard Waldron & Declan Redmond, 2016. "Stress in Suburbia: Counting the Costs of Ireland's Property Crash and Mortgage Arrears Crisis," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 107(4), pages 484-501, September.
    8. Michael Byrne & Michelle Norris, 2022. "Housing market financialization, neoliberalism and everyday retrenchment of social housing," Environment and Planning A, , vol. 54(1), pages 182-198, February.

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