Prices are a moot point when there are no homes

THE past shows us starkly that we have not been well served by property reports. Either we have misinterpreted them or they have misinterpreted us, either way the results speak for themselves. So when we are told today by the Central Bank that property values have hit the limits that people can afford to pay, some may wonder.

True, the ardour of buyers may well be dulled by Central Bank lending limits. But a predicted sharp slow-down in property price rises is a bit dif ficult to swallow given the scarcity of homes and the dismal failure of Government to provide new ones in line with demand.

That is not to say that a cooling-off is not inevitable and even desirable. As Kenneth Boulding explained: “Anyone who believes that exponential growth can go on forever in a finite world is either a madman or an economist.”

The Central Bank survey anticipates prices to rise by just 5pc over the next few months. Meanwhile, recent figures show property prices up by 12pc this year.

According to the report: “The availability of bank credit was deemed to be the primary factor behind the anticipated price changes both nationally and in Dublin.”

No doubt, too, access to credit is a factor. But the failure to deliver new homes will keep pressure on prices as the population rises. The growing presence of international investment funds in the apartment sector is also having a major impact.

Whether people are able to afford to buy is something of a moot point when there are so few homes to be bought.