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.
- mortgage crisis
- mortgage market expansion
ASJC Scopus subject areas
- Environmental Science (miscellaneous)
- Sociology and Political Science
- Urban Studies