Political World with Harry McGee – email@example.com
Some years ago, the UCD economist Morgan Kelly – the man who foresaw the crash of the property boom – made a new prediction. He said that the next big crisis would be caused by mortgage defaults.
He may have overstated the extent of the implications of it – he wrote about almost a full-blown peasants’ revolt – but he was not too far off the money. And unlike his earlier warnings, he wasn’t alone this time.
But there were still doubters who just couldn’t get their head around it that the malaise would spread to Irish homeowners who had a reputation for sacrificing everything just to make sure the mortgage repayments were made.
Just a cursory look at the mortgage arrears statistics confirms the extent of the problem. At the end of 2010, some 44,508 mortgage accounts were in arrears for 90 days or more, in other words problem mortgages. That constituted 5.7 per cent of the total.
Two years later, that figure had more than doubled to 94,500 private dwellings being 90 days or more in arrears. That’s well over ten per cent. What is worrying is that 23,500 of those have been in arrears for over 720 days – that’s two years. Many of those mortgages are essentially beyond recovery.
It’s one of the tortuous realities now coming home to roost as everything deflates after the boom years. Over the past few weeks I have spent a lot of time on the hustings in Meath East for its bye-election.
What’s remarkable about the county is that the biggest towns in the this three-seat constituency from 30 years ago have been dwarfed by small villages in the south of the county that have been transmogrified into big dormitory towns for Dublin.
Ashbourne now has a population of 10,000, while other towns like Dunboyne, Dunshaughlin and Ratoath have also grown into behemoths.
It has made for a kind of hybrid constituency. The south is commuterland, with people living in houses and flats on new estates and developments built during the boom. The north has its fair share of long-distance commuters but it is more rural and more traditional.
You go to country areas of Kells and Nobber and Skryne and you find a much stronger Fine Gael and Fianna Fáil mix than in the south where things are more volatile and shifting.
In the commuter areas, you find droves of people in negative equity, living in starter homes and flats that are unsuitable for their growing families. But they can’t move because they are trapped by negative equity. And then there’s the mix on the same estate.
Those who worked in anything that touched of construction and development during the boom and who are now unemployed and struggling with their repayments.
And then there are the legions of public sector workers (there are a lot of guards, health sector workers, civil servants) who are incandescent with fury over what they consider to be unfair cuts.
I was in the supermarket in Ratoath on Monday to see the extraordinary exchange between an off-duty Garda and Taoiseach Enda Kenny, where the guard railed about the loss of overtime payments.
For more, read this week’s Connacht Tribune.