Banks in Ireland are hurting bad, after a mega property bubble blew-out and knocked them for six. Sadly, there is still much room for property prices in Ireland to fall after such a meteoric rise in the last decade, in some areas eclipsing even what was seen in London for example on a percentage basis, and the losses continue to get worse on the bank balance sheets as more and more people get into arrears before ultimately having to hand back the keys and walk away. These are people that won't be buying a property again any time soon, partly because they will carry the black mark of loan default with them so few will give them a loan anyway, but also because once bitten, twice shy.
It's a chicken and egg situation with banks and property. People can't bid up the prices of properties, residential or commercial, unless they can get cheap mortgage finance from the banks. The banks can't and won't extend cheap credit again until there is concrete evidence that property prices have hit bottom and commenced a sustainable rebound. That won't happen until people once again believe property prices only ever go up.
Even if banks start to get free'n'easy with their loans again, a LOT of people have been reminded once again that property is not a one-way bet. You can lead a horse to water, but you can't force it to drink.
One day all of the horses will be thirsty again. But not for some time, and water will by then probably be considerably cheaper and more abundant.
http://news.bbc.co.uk/1/hi/northern_ireland/8544756.stm
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