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Hard Brexit threatens housing prices – warns the Central Bank


(Stock image)
(Stock image)

Hard Brexit could see how Irish housing prices are falling due to firefight sales by cousins ​​of funds that invest heavily in property, but may fall and fall into crisis.

The central bank yesterday warned that Brexit could create a double blow to real estate prices due to rising unemployment among homeowners and the potential for quick sales at the expense of cuckoos that disassembled a huge number of real estate properties.

The bank's financial stability report yesterday said that the collapse of the UK with the EU without a deal would prepare six percent of economic growth for two years.

"The main prominent source of risk to financial stability and the economy as a whole is a larger than expected macroeconomic shock in the disruptive Brexit," the report said.

In addition to the risk of falling house prices caused by Brexit, the report noted that there are warning signals in the sector of investment funds of 2.5 million euros. These funds have 18 billion euros in property, and in the event of a financial shock, they can get into the local market if they are forced to get rid of their portfolios in a hurry because of the consequences of Brexit.

Despite the fact that data from the Central Statistical Office showed that the economy continues to grow strongly, the Central Bank report warned that Brexit could also affect banks by providing loans to many small companies whose export markets in Great Britain are at risk of significant tariffs as well as from direct loans to the UK, which accounts for a quarter of their total exposure.

Philip O & # 39; Sullivan: Chief Economist at Investec said growth was strong

Philip O & # 39; Sullivan: Chief Economist at Investec said growth was strong

Sharon Donneri, executive director of the Central Bank, warned that Ireland is still "more sensitive to changes in the global cycle," and is more vulnerable to economic shocks due to high debts and export dependence.

Severe warnings came when CSOs sharply raised their estimates of economic growth by 2018 to the watering eyes of 8.2pc, compared with 6.7pc. This is compared to an increase of 1.8pc registered in the eurozone as a whole.

According to new CSO calculations, the economy costs EUR 321.4 billion, which is EUR 12 billion more than expected. This figure is overstated due to the financial engineering of multinational companies that have made the most of their growth due to increased exports.

Using measures that give a better estimate of real activity – called the GNI star – the economy cost 184 billion euros, which is 134 billion euro less than the main figure, the difference that is equivalent to all economic outputs of the EU member state of Hungary twice more than the population of Ireland.

However, according to Philips O & # 39; Sullivan, Chief Economist of Investec, this year's strong growth remains strong.

He said that the 6.3pc expansion in the first quarter of the year was far ahead of its 4.3pc forecast for the whole year, although he said that Brexit and a variety of "trading whores" could hit hard later this year.

Post-emergency recovery was also beneficial to workers, unlike many other wealthy economies, where wage growth was negligible, despite a significant increase in employment. Retirement of wages was the result of a fall in real incomes in 2009 as a result of the accident at 7%.

"The real income of households after taxes in the economy has increased by one quarter in just over ninety years," said Gerard Brady, chief economist at Ibec Group of Companies. "This does not correspond to any other economy in the developed world."

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Irish Independent

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