An economist has taken issue with a report from credit rating agency Moody's yesterday, which argued that there were economic reasons for the housing boom, and it was not just a result of low interest rates.
Moody's said there may be 'some correction' in house prices, but demographic factors, income growth and catching-up effects would continue to support demand for housing. It said real incomes after debts had risen and no bad debts had been recorded.
Speaking on Morning Ireland, NUI Galway lecturer Dr Alan Ahearne described the Moody's report as displaying 'circular thinking', saying the growth in incomes was mainly coming from the property boom, and not the other way round.
He said the property boom was being driven by low interest rates and positive sentiment, adding that cutting stamp duty was simply blowing more air into a bubble.
