September 30th, 2010
04:39 PM GMT
Share this on:

London, England – It’s like food. Some of us have too much. Some of us have too little. Now the housing market is showing the same gaping imbalances.

Take Ireland. At the root of the current banking crisis was a massive property bubble. Irish house price inflation and homebuilding trumped most of Europe in the decade to 2005. Incomes and population were going up, household size was going down. Demand for new homes was rampant. But not permanent.

We might, with some degree of irony, call this the financial version of the Greek tragedy. Inevitably (at least with hindsight) the bubble burst. Now Ireland has more than 100,000 more homes than it needs. Next stop, demolition.

But the problem is equally tragic in reverse. Cross the Irish Sea, or journey to Europe’s easternmost point and you’ll see why. Homebuilding in Britain fell to its lowest level in 87 years last year. The government admits there’s a huge gap between supply and demand, leading to overcrowding.

Over in Russia, Prime Minister Putin said this month that in order to make enough housing for everyone, the country needs to build "100,000 square meters a year."  The budget for this is nearly $14 billion.

It’s a bleak comparison. For those counting the square meters in Moscow’s Khrushchev-era apartment blocks, life in Ireland’s ghost estates might look like heaven. But many of us who are a little luckier would struggle to decide which is worse.

Posted by: ,
Filed under: BusinessQuest Means Business


soundoff (3 Responses)
  1. Ayman El-Filali

    Well clearly, the demand of smaller houses is currently happening in most of the damaged (by the crisis) countries. An example is Spain, one of the most affected countries of Europe, prices going high, and sizes going low. But an example of an undamaged country, is Morocco, because although prices are going high, the demand for houses is going high too, that means that sometimes size isnt the deal, but the current economy of the country. Thats why we will struggle to decide which is worse.

    October 4, 2010 at 1:26 pm |
  2. Nabanga Jeddah KSA

    Congratulation P.M Putin for that amazing housing policy to provide each and very one a housing accessibility.We hope this policy can be adopted.we wish that US can adopt the same housing policy which will help fix the economy ....Good luck PM Putin.......

    October 4, 2010 at 6:39 pm |
  3. icon designs

    Yes, really. And I have facesd it. Let's discuss this question.

    hpixel

    September 22, 2012 at 10:43 pm |

Post a comment


 

CNN welcomes a lively and courteous discussion as long as you follow the Rules of Conduct set forth in our Terms of Service. Comments are not pre-screened before they post. You agree that anything you post may be used, along with your name and profile picture, in accordance with our Privacy Policy and the license you have granted pursuant to our Terms of Service.

About Quest Means Business

Quest Means Business airs Monday to Friday, 1600 New York and 2100 London, and is hosted by Richard Quest.

 

 

 
 
Powered by WordPress.com VIP