Belfast: slow growth and low cost labour…

Cheap labour is something of an advantage when touting for foreign inward investment. There’s an interesting study out from the Centre for Cities a policy development unit within IPPR. Interestingly Belfast barely features in the news story, but if you dig there is plenty of note. For instance, of 60 cities, Belfast has the slowest growth (-0.8% over ten years). It also has the lowest employment rate at 63.4%. It also has the lowest wages. £395.7 is the average wage in Belfast, a long way behind top earners London which comes in at £675.1, or even number two Cambridge which tops out at £650.1. Along with slow economic growth and a manufacturing output that is 2% down on the 4th quarter last year, our procrastinating ministers clearly have a major job to do at an inopportune point in the economic cycle.

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  • Token Dissent

    Depressing figures. When linked with the insane property prices you get some idea of the bubble we are living in. The report records house price inflation as still being at 40%.

  • Mick Fealty

    Well they’ve been dropping in London for three quarters. It depends on how far this credit crunch bites into the real world economy.

  • Mick Fealty

    Not quarters, months. Doh!

  • No real suprises here. Such an economy as we have is dependent on fiscal transfers from Surrey and Sussex, loose credit, thousands of empty flats that no-one wants to live in and self-delusion.

    God alone knows what will happen when the property market goes tits up; but it won’t be pretty and the people who believe in soft landings would be better off believing in Santa Claus.

    On the plus side, I get the sense that the idea that because we’ve stopped killing each other, the world owes us a living, is taking a bit of a hammering. This is a good thing. It was really quite widespread a few years ago.

  • willowfield

    Why would a reduction in property prices “not be pretty”?

    It would surely mean smaller mortgages for people and more disposable income to spend in the economy.

  • joeCanuck

    Not pretty for speculators willowfield. Great news for first time family buyers.

  • Mick Fealty

    willow,

    Well I guess if interest rates keep lowish it will be okay for most owner occupiers so long as people are happy to sit tight.

  • Why would a reduction in property prices “not be pretty”?

    For me it would be fine (more than fine, it would be delightful). Not so much for the poor craturs who have mortgaged themselves to the oxters to buy crap houses in bad areas.

    Also, not so good for an place where construction is one of the main economic drivers.

  • joeCanuck

    if interest rates keep lowish

    Therein lies a big part of the USA problem, Mick.
    When there was an excess of cash floating about a few years ago, loads of people were given “sucker” mortgages at an extremely low rate for the first few years. Lots of those loans are about to come due at a much higher rate.

  • Turgon

    There does seem to be some sort of correlation between house prices and perceived wealth. Willowfield is of course correct but people do not seem to think that way.

    I frequently explain to people that provided they do not get into negative equity a fall in house prices is only a problem if you own property to make money from the rise and not to live in or if you wish to move to a cheaper house.

    Even negative equity, if you can afford the morgage repayments, and do not need to move is not necessarily a disaster.

    Yet people still seem to feel they are richer if their house if deemed to be worth more. I do find it a rather odd way to view the world.

  • interested

    Mick
    Indeed there is a big job for Ministers here if they are to make any dent in the attempts to turn the economy round.

    Mind you – that wont be helped by the constant whinging by the people who still think that Northern Ireland should be some kind of public sector sponge and that every problem can be solved by throwing Government money at it.

  • steve

    Willow
    the obvious thing for not being pretty is that if you have a mortgage on 150,000 but your house is now worth only 125,000 you are on the horns of a dilemma. Do you continue over paying on a mortgage and hope the prices recover or do you walk away and destroy your credit rating? Neither choice is particularily appetising add to that depends on how your mortgage laws and your mortgage is written the actual interest you are charged can rise 2 or 3 times higher than the prime rate banks advertise.

    For economic growth the most obvious answer is tourism. When I was there tourists were fairly light on the ground especially tourists who spent more than a weekend there. Obviously the world is starting to take notice but every bonfire littered with sectarian bile and every parade riot lowers your potential growth. Thankfully they are becoming less common.

    For all the claims that the 12th will some day morph into an “Orange Fest” I do not see that happening until the orange order quits insisting it has the right to march where it is not wanted. Derry is a prime example that if the orange orders quit being so militant in their demands for the right to march then the nationalists become less militant about their rights not to have them march. If the Orange Fest is truly going to happen it will take work from both communities not just a couple of bouncy castles and some sugary drinks

    And just as an aside, the place could do with a really comprehensive litter campaign, especially Belfast

  • kensei

    “For all the claims that the 12th will some day morph into an “Orange Fest” I do not see that happening until the orange order quits insisting it has the right to march where it is not wanted. Derry is a prime example that if the orange orders quit being so militant in their demands for the right to march then the nationalists become less militant about their rights not to have them march. If the Orange Fest is truly going to happen it will take work from both communities not just a couple of bouncy castles and some sugary drinks”

    In the first instance, keeping the fucking shops open on the 12th would be a start.

  • willowfield

    Steve

    the obvious thing for not being pretty is that if you have a mortgage on 150,000 but your house is now worth only 125,000 you are on the horns of a dilemma. Do you continue over paying on a mortgage and hope the prices recover or do you walk away and destroy your credit rating? Neither choice is particularily appetising add to that depends on how your mortgage laws and your mortgage is written the actual interest you are charged can rise 2 or 3 times higher than the prime rate banks advertise.

    The vast majority won’t be in that situation. And even for those in that situation, they are no worse off month-to-month as their mortgage payments continue regardless of the value of the house. They’re still going to be paying the same mortgage payment whether or not the value of their house drops. So unless their income also falls they are no worse off.

    So how does that effect the economy?

  • mnob

    These figures say more about Belfast’s council boundaries than anything else. The other cities council areas encompass the suburbs whereas Belfast does not.

    Therefore the inner city flight is represented in greater proportion in Belfast than anywhere else.

    Its also important to note that all the figures associated with Belfast are measured by a different organisation using different methods therefore they must be taken with a pinch of salt.

    What it does show is that Belfasts inner city does need regeneration and how much the suburban development has harmed the city. (As if we didnt know that).

  • Mick Fealty

    I suspect the ‘doo doo’ might be wee bit deeper than that ken!

  • Lots of those loans are about to come due at a much higher rate.

    Same story in the UK and Ireland; also a huge buy-to-let sector just waiting to ruin the financial futures of thousands of amateur Warren Buffets.

    These figures say more about Belfast’s council boundaries than anything else. The other cities council areas encompass the suburbs whereas Belfast does not.

    Not true in an awful lot of cases. Manchester, Liverpool, Newcastle, Leicester, Nottingham, Bristol, Glasgow…

  • willowfield

    “the UK and Ireland”

    Meaning?

    “The UK and the Republic of Ireland”, or “GB and Ireland”?

  • mnob

    Ok sorry I worded it badly – the main disparity seems to be that the figures quoted for the cities is a PUA figure which apparently is a ‘Primary Urban Area’ and is “a measure of the built up area or ‘physical city'” *except* for Belfast which appears to be the city council area only.

    I am surmising this because of the quoted 63.4% employment rate in Belfast. The NI employment rate is rising and was 69% in 2006 (DEL Labour market survey). Belfast city council area includes some of the worst performing areas but the Belfast travel to work area adds in many of the highest. I suspect that there is an anomaly here. I would imagine if the goalposts were the same Belfast would fare better in the survey. Even taking the 69% figure (and I would imagine this would be higher given the greater economic activity in the Belfast travel to work area) then this would take Belfast out of the bottom 10 and into mid pack (compariable with London at 70%).

    Either way because of the differences in surveyed areas and techniques I think any comparison wouldnt stand up which is perhaps why Belfast isnt mentioned much in the press briefings.

  • Meaning?

    “The UK and the Republic of Ireland”, or “GB and Ireland”?

    The same thing. Duh.

    What has this got to with the price of houses anyway? Pedantry is not a substitute for argument.

  • Baudrillard

    mnob: Belfast city council area includes some of the worst performing areas

    Valid point mnob and I think your remarks undermine the validity of this report – particularly the Belfast results.

    There is not much proper economic data gathering at a Belfast urban level – for example, it’s one of the few European cities for which you can’t gather GDP or GVA data.

    This in itself raises a weakness about administration in NI. Policy, planning, data collection, administration are more or less focussed on a regional level and ignore the need to have a different set of aims and objectives for large urban areas. The result? A joined-up approach to Belfast’s urban development is impossible. No one’s in charge of the city or setting a strategy or plan for future development.

    (You could mention the BMAP – but I think it’s sheer rubbishness actually reinforces my point.)

    Manchester has its act together. Its organisations work in unison. Here is Belfast, everything is muddled and half arsed (and the result? John Lewis decision, national stadium decision, the very existence of Castlereagh council, commuting problems, over heated housing market, falling urban population, no Belfast economic strategy, etc.)

  • willowfield

    You’re absolutely right, Baudrillard.

    In NI, our political masters are more concerned with making sure Belfast city council remains under “no overall control” than by creating a local government unit that actually covers the whole city.

    They won’t extend the boundaries because that would mean (gasp!), unionists would be in a majority.

    Pathetic.

  • Garibaldy

    Maybe now the Provos and DUP control everything else they can sort out Belfast City Council.

  • Damian O Loan

    Aside from the understandable concerns over house prices, the question of an absence of economic growth at this point is one of extreme importance. Perhaps our Assembly will get round to debating it? I very much look forward to that.

    An absence of war alone is not enough to attract outward investment – that lesson should be learned by now. Tourism is the industry Ian Paisley has seized upon, and will be a start. However, the biggest problem the North has to face is surely its dire education system.

    High-value jobs (to whom?), such as those which go a long way to explaining why London tops this poll, are created on a basis of a superfluity of talented and highly-qualified individuals. This is not the situation we face. Rather, one in four is illiterate. We cannot, then, trade on our brains.

    Shall we then find another way? How about persuading Gordon Brown to allow NI to match its corporation tax rate with the South? Our devastating negotiators appear to still be working on that front.

    How about encouraging business creation from within? Raising a generation that believes in itself, that its worth is equal to that of any other country? That would take too long, a bit like educating people.

    How about attracting back some of those lost to the brain-drain? A little like America claimed Iraqis were returning home in floods recently, when it persuaded Syria to expel them, having changed their visa requirements? No, similarly, this would require force, or something more than superficial smiles.

    Perhaps we could encourage migrant workers to come here, be paid less than the minimum wage, and serve food to our (under-attack) bus-loads of tourists. To build the houses that the DSD has no money to pay for. To make (Northern) Irish people feel like the bottom rung is below them, and provide a new outlet for our prevalent bigotry, indeed on of our few growth industries.

    How about SF become a socialist party and make (Northern) Ireland a place which says no to ultraliberal financial terrorism, that has plenty of roofs to sleep under in any case? Against the wishes of their rulers in London. Baited breath…

    How about (Northern) Ireland formed an economic policy antagonistic to London and Dublin? To the US, by that token.

    How about we offered tax-cuts to businesses conducting research into new sources of energy, and ways of implementing them? Or indeed paid for this itself. Baited breath…

    I am no economist, but I can see that these are crucial issues. That we will leave it to our civil servants to address, then for the Assembly to take credit for their work. That the future is spectacularly miserable, and the only people for whom it is likely to be bright are

    a) already rich
    b) without seven mortgages
    c) foreign corporations
    d) the British and Irish governments
    e) the South Armagh IRA and Sinn Fein
    f) those who move to London

  • dewi

    Sammy – house price rises are real and have meaning as:
    1) You can borrow against them.
    2) You leave real money to your kids.
    The first point one of thev drivers of economic activity over past decades in countries of Britain.
    Boom in house prices there staggering however.Isn’t it at least partly due to planning restrictions ?

  • Comrade Stalin

    Steve:

    the obvious thing for not being pretty is that if you have a mortgage on 150,000 but your house is now worth only 125,000 you are on the horns of a dilemma. Do you continue over paying on a mortgage and hope the prices recover or do you walk away and destroy your credit rating?

    This is the massive fallacy that people seem to be getting sucked into; that if for some reason your house doesn’t keep increasing in value, that there’s something wrong. The fact that your house may drop to in the short or medium term is utterly irrelevant unless you’re selling it. Provided your job is steady and your income and outgoings balance out correctly, you should be fine. I bought my house two years ago (when things were inflated, but before they got really insane), I have no plans to move anywhere so none of this matters to me at all.

    Anyone who is buying a house should think carefully, and think about all the scenarios. What will they do if they lose their job, or if interest rates go up ? But above all, they must realize they are taking a risk. If you’re not happy with the risk that you might might bankrupt yourself – don’t buy a house, rent instead. If you are happy with the risk, then you lose the right to whine about it if the risk fails to pay off.

    I think there are choppy waters coming up ahead. It’s not the house price drop that scares me; it’s the credit crunch. The rising cost of borrowing means that businesses may face temporary cash problems, which will reduce their capability to invest. The retail sector, upon which much of the economy is based, will be hit as fewer people borrow against their equity, or reign in their own spending doing DIY, furnishing or home improvements.

    I hope a few small time buy-to-let get spiked over this.

    dewi:

    1) You can borrow against them.

    I think borrowing against the equity on your house is an extremely foolhardy and financially risky thing to do. I just cannot get my head around people who are going out and risking the roof over their head in order to have a fancy holiday or buy a swanky new car. I have absolutely no sympathy whatsoever when such people find out that they’re in diffs. It says in big letters on the form “your home may be at risk if you cannot afford to keep up the repayments” – on your own head be it.

    To me mortgages and debt are things that need to be got rid of as quickly as possible. Sure, that doesn’t mean you should live your life as a miser; but you need to get rid of that debt, or risk that it will get you in real trouble.

    2) You leave real money to your kids.

    I’ve got problems with the idea that some kids will find themselves with a windfall that they did not earn. It doesn’t seem fair to me that some people will get a leg up because their parents did well out of the property market, and that others will be penalized on the failings of their parents.

    Aside from that, there are a lot of people who will use their house as their pension. Many people in their 50s and older got their pensions badly screwed by the various scandals in the 80s and 90s. Those people will be looking to unlock the equity in their house to see them through their old age.

  • Dewi

    Joseph – I was not making a point of morality. People have borrowed against rising house values to fuel consumption right or wrong.
    Your point on windfalls applies to any source of wealth not particularly property. Again I make no judgemental observation.

  • IJP

    I think the fact posts like this seem to be gaining attention on Slugger is, in itself, a welcome sign that we are taking the economy more seriously! 🙂

    Basically I agree with all that has been said. I personally view the survey itself as next to useless – as has been mentioned, it depends on what you take into account (not least but also not exclusively where you draw a ‘city’ boundary), how you take it into account, even when you take it into account (a lot of economic surveys in 2007 in practice use data which are already several years old).

    That would explain why other figures look at it another way. Indeed, some of the evidence base for the ISNI indicates wealth per capita in ‘Belfast’ (meaning Greater Belfast) is 57% about the UK average – Greater London’s is only 49%. Plainly Greater Belfast isn’t wealthier than Greater London, I’m just proving my above point.

    I think it’s more sensible to look at it another way. To me, Belfast is obviously considerably more prosperous than it was even, say, three years ago. I have just arrived back from visiting Stockholm and Copenhagen and do not feel I have returned to a third-world country (which I would have done a decade ago). So that’s good.

    I also think Sammy‘s point that people are now reflecting that the world doesn’t owe us a living is relevant.

    However, we remain, fundamentally, an economically backward place. That doesn’t mean we’re poor, it means the way we manage our economy is severely flawed – and by ‘we’ I mean the people of Northern Ireland generally. Much of this has already been referenced, but just a few:
    – ludicrous assumptions that property investment is the only way to go (with the underlying assumption that property prices always rise), not just in Ireland but elsewhere (cf the number of people investing in property in countries they can scarcely find on a map);
    – failure to improve labour mobility (not every ‘community’ needs its own factory, and moving from the City Centre to the Waterfront is NOT ‘moving out of Belfast’!)
    – near-absolute focus on retail;
    – bizarre insistence that to be a successful business you must export (but also that ‘exporting’ includes GB and RoI!); and
    – near-absolute focus on jobs rather than value.

    In short, let’s not knock some of the remarkable progress – 3% unemployment is impressive (if state-sponsored), the highest property prices in the UK* does indicate there’s money about (even if much of it is being misplaced), high immigration does show this is a place worth living in (at least at some level).

    On the other hand, we still have ludicrously high economic inactivity rates, a mad obsession with property investment rather than circulating money, and an assumption of wealth with no real statistical basis.

    As usual, the truth is somewhere in between the two extremes most people promote.

    One final point:

    To me mortgages and debt are things that need to be got rid of as quickly as possible.

    There speaks a wise man.

  • Garibaldy

    IJP,

    Belfast the 3rd world a decade ago? I take it you’ve never been to the Free State then?

  • The Raven

    “How about encouraging business creation from within? Raising a generation that believes in itself, that its worth is equal to that of any other country? That would take too long, a bit like educating people.” wrote Damian.

    It’s the only way. Yes, it will take time. Yes, you WILL have to put up with a top heavy public sector for a while longer. No, it DOESN’T suit the Prime Minister formerly known as Iron.

    But that’s the price you pay for a fledgling private sector starting to go great guns (sorry) after 30 years of being stifled. There are some real success stories out there. Every entrepreneur needs to be encouraged – from the guy who wants a window-cleaning round to the hi-tech start-up.

    It’s the only way.

    Someone made the point above about labour mobility. You’re right – not every “community” does need its own factory – but there should be nothing to stop them looking for their own workspace to allow fledgling start-ups space to grow, contribute to, and expand in their own communities.

    Folks, this isn’t easy stuff to do. To start, run, grow and make money from your own business is hard; you’ve got to want it really badly to make a decent stab at it, and perhaps even be ready for two or three failures along the way. The Yanks don’t count you as a business person until you’ve had three failures – here, when you fail the first time the system isn’t so forgiving. We need to grow a culture of entrepreurship.

    And that’s going to take the generation.

  • The Dubliner

    “I think the fact posts like this seem to be gaining attention on Slugger is, in itself, a welcome sign that we are taking the economy more seriously!” – IJP

    Is the proverbial penny dropping on economic reality at long last? No, it’s more to do with a sullen realisation that few pennies were dropped into the begging bowl when the Chuckle Brothers passed it around America. Never underestimate the ability of northerners to avoid facing reality.

    In a few weeks they’ll resort to thinking that the state is responsible for satisfying their financial needs because the state has systematically inoculated that belief into NI citizens by Pavlovian conditioning (with a public spending to GDP ratio of 71.3%, for example) and because a plethora of ne’er-do-well socialist agitators have made state-financed careers for themselves by indoctrinating their voters with socialist dogma, convincing them that the state is responsible for their welfare and the state alone and that all others who don’t hold that parasitic view but seek to create wealth and employment through enterprise are the de facto creators and exploiters of the underprivileged class rather than its benefactors.

    The Republic is the least socialist country in Europe. It is also the most successful country in Europe. The two are not unrelated. Creating an enterprise culture is crux part of NI’s future if indigenous enterprise is to be a part of it. That means counteracting the culture and legacy of socialist state-dependency dogma with a message of self-sufficiency and a laissez-faire view that is abhorrent to socialists. That’s a lot easy said than done when your ‘government’ is hog-tied by consensus and when one of the major parties in the Executive in seeking to make the socialist state mandatory in your proposed Bill of Rights by injecting socio-economic dogma into it under the guise of ‘human rights.’ Given the talent of northern people, creating an indigenous enterprise culture is the route to go.

    “As usual, the truth is somewhere in between the two extremes most people promote.” – IJP

    Spoken like a true Alliance Party member!

    “Belfast the 3rd world a decade ago? I take it you’ve never been to the Free State then?” – Galibaldy

    Well there you go: Northern Ireland nationalists had greater opportunity than their southern counterparts. Shame they fucked it up, wasn’t it?

  • The Dubliner

    “How about encouraging business creation from within? Raising a generation that believes in itself, that its worth is equal to that of any other country? That would take too long, a bit like educating people.” – Damian O Loan

    Well, unless you can convince Warren Buffett to change his mind about donating his wealth to the Bill & Melinda Gates Foundation, donating it to NI instead, you don’t have a choice, do you?

    The simple reality is that wealth has to be created, not donated, if you want to be independent. Success isn’t instant. With a few exceptions, it takes a decade or more to build a successful company. And the reality for NI is that a successful economy will take a generation to build.

  • willowfield

    a public spending to GDP ratio of 71.3%

    What exactly does this mean?

  • Mick Fealty

    Dub,

    To be fair NI has always understood what was required to grow a modern economy. In the 60’s, O’Neill and Lemass had a common understanding about the importance of FDI. The first with NI’s failing heavy industries and fading agricultural sector. The second in his previous life as Finance minister knew just ruinous Dev’s ‘indigenous’ growth strategy had been.

    High reliance on public money has generated great ‘gaming skills’ for cash. But to be fair (again) it is not that popular a game in NI. It’s a patch-it strategy that was never intended to make up for the fact that 30 years of low level war actually did what it was intended to: destroy the economy. Those with the capacity, the arguments and insider trust that comes from successive rounds of bidding have prospered, though I suspect none of them are rich in any conventional sense.

    The tight fiscal squeeze on spending that’s been so visibly sponsored by Sinn Féin (at least for sectors like housing and health that it has no responsibility for), should pay off in the medium to longer term. It’s not as though people don’t want greater fiscal independence either. Tax varying powers are not part of the devolutionary settlement, but according to a survey cited by Roger McGinty of the ESRC back in 2003, some 47% were in favour.

    One thing raised earlier in the thread though that needs to come first is the need to tighten up on planning and capacity for departments to work together to be able to make tough, smart and most importantly robust long term decisions that give rise to sustainable human and business growth.

    Dublin is both a business miracle and human and environmental disaster. The great lesson for Northern Ireland is that private economic growth, if it ever comes, in Northern Ireland should be planner rather than developer led. We have time not simply to look at and learn the business lessons of high standards of education across the system, and the benefits of consensus on (a la FG’s Tallaght Strategy) fiscal control offered by the Republic, but also from what they got wrong.

    The trouble is our guys are still amateurs, some of them more acclimatised to blocking than building for the future. I suspect some individual ministers are more aware than others of the urgency of the need to get Northern Ireland fit for business, and at the same time building the means to enjoy the accompanying rise in living standards.

  • Damian O’Loan

    Dubliner,

    That was intended as sarcasm. I’m not in favour of not educating people, or discouraging creativity in any sphere. And tried to suggest some ways of encouraging it.

    “And the reality for NI is that a successful economy will take a generation to build.”

    That’s what I said about education, and that’s why I drew the comparison.

    I think this raises an interesting question about policies that are designed to ensure re-election over a four to six-year period, and that systems impact on the potential of socialism. Though I’m not suggesting dictatorships.

  • steve

    Mick
    No economy that is planner lead is ever successful, unless you are talking about loosely planner lead like establ;ishing economic zones and then allowing the developers freedom to exploit the zones as they see fit

  • Mick Fealty

    Steve,

    Good planning regulation should be able to deliver smart decisions in a timely fashion sufficient to allow development to take place intelligently and sustainably. A bit more focus on getting outcomes right rather than milking divisive and totemic issues to death would do more to enhance the status of politicians and politics than all the public diplomacy in the world.

  • I am the House Price Crash

    “Quote Steve… the obvious thing for not being pretty is that if you have a mortgage on 150,000 but your house is now worth only 125,000 you are on the horns of a dilemma.”
    Willowfield… “The vast majority won’t be in that situation. And even for those in that situation, they are no worse off month-to-month as their mortgage payments continue regardless of the value of the house. They’re still going to be paying the same mortgage payment whether or not the value of their house drops. So unless their income also falls they are no worse off.

    So how does that effect the economy?”

    Willowfield – given that NI has suffered rampany house price inflation over the last couple of years – we are now in a situation where houses can be rented for half the cost of the interest on a mortgage (that mortgage is for 25 years).

    People were lured into buying property – outbidding eachother at the frothy Q4 last year – and are now stuck with negative equity.

    So where’s the problem – well people were mis-sold property.
    There are no jobs being created in NI, wages are not rising, inflation is rising, the economy is dead.
    There are two ways to look at this – either head-on i.e. accept that NI is a failed economy or to surrender all reason and accept what we are told about “the economy is growing”

    Willowfield – do you actually know the number of jobs that are reliant on contuious and everlasting house price inflation.

    What will happen when developers cannot get the funds from banks to build new houses/flats, to create jobs?

    The South is suffering from a housing crash and it will reduce GDP growth.

    And Dewi – house prices being real?
    House prices are a matter of speculation whereas debt is real (a quote from M. King – if you’ve heard of him)

    And to thouse who think that there is a shortage of houses – have a look at how many ghost developments there are in NI.

    House prices will drop here – and it will have a devasting result on the economy.

  • willowfield

    I am the House Price Crash

    Willowfield – given that NI has suffered rampany house price inflation over the last couple of years – we are now in a situation where houses can be rented for half the cost of the interest on a mortgage (that mortgage is for 25 years).

    So?

    People were lured into buying property – outbidding eachother at the frothy Q4 last year – and are now stuck with negative equity.

    A very small number of people are “stuck with negative equity”. Over time, the number will reduce as house prices will eventually rise again.

    So where’s the problem – well people were mis-sold property.

    Nonsense. People chose of their own free will to offer large sums for property.

    There are no jobs being created in NI, wages are not rising, inflation is rising, the economy is dead.

    And therefore a drop in house prices will be good for the economy. If wages are low and inflation rising, then high house prices are not good.

    Willowfield – do you actually know the number of jobs that are reliant on contuious and everlasting house price inflation.

    No. Do you?

    What will happen when developers cannot get the funds from banks to build new houses/flats, to create jobs?

    I don’t know, but I suspect that is very unlikely.

    House prices will drop here – and it will have a devasting result on the economy.

    How?