Property
Double-digit growth in property prices could “end badly” for mortgage applicants who “overstretch themselves” if there’s a global recession, a leading mortgage broker has warned.
The pace of property inflation widened to 10.1pc in the year to August from 9.6pc in the year to July, the Central Statistics Office reported earlier this month.
Michael Dowling, managing director of Dowling Financial in Dublin, expects prices to continue growing in the short term.
“I’m concerned,” he said. “I’m 30 years in the business and the prices now are eye-watering.
“Borrowers are prepared to go that extra yard to get that property, whether it’s adding more of their savings, cashing in shares from their multinational employer, or tapping mammy and daddy for a gift.
“It could end badly. I don’t think it’s going to be as a result of (a specific issue related to) Ireland but world issues, like if there’s a recession.
“This leads to multinationals getting nervous and has an impact on foreign direct investment. During the last crash, you might have two borrowers in a couple where one lost their job with a multinational. That puts them under pressure with mortgage repayments.”