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Recalling the Celtic Tiger

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Edited By Eamon Maher, Eugene O'Brien and Brian Lucey

This book looks at various effects, symptoms and consequences of the period in Irish culture known as the Celtic Tiger. It will trace the critical pathway from boom to bust – and up to the current beginnings of a similar, smaller boom – through events, personalities and products. The short entries offer a sense of the lived experience of this seismic period in contemporary Irish society.

While clearly not all aspects of the period could realistically be covered, the book does contain essential information about the central actors, events, themes, and economic trends, which are discussed in a readable and accessible manner. Each entry is linked to the overall Celtic Tiger phenomenon and its immediate aftermath.

The book also provides a comprehensive account of what happened in this period and will be a factual resource for anyone anxious to discover information on the areas most commonly connected to it. All entries are written by experts in the area. The contributors include broadcasters, economists, cultural theorists, sociologists, literary critics, journalists, politicians and writers, each of whom brings particular insights to some aspect of the Celtic Tiger.

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Buy-to-lets (Karl Deeter)

Extract

Karl Deeter

Buy-to-lets

In the Celtic Tiger, everybody seemed to have a buy-to-let, even the taxi drivers who would pick up the young, drunk version of me at the time, and they would tell you all about their gaffs in far-fetched places like Cape Verde and Bulgaria. In Celtic Tiger vernacular, this was the Irish version of ‘Joe Kennedy’s shoe shine boy’ moment, which relates back to the moment when JFK’s dad got a stock tip from a shoe shine boy one morning. He said ‘you know it’s time to sell when shoe-shine boys give you stock tips, the bull market is over’. The buy-to-let sector is a vital part of any housing market; in Ireland, it tended to be primarily owned and operated by non-professional landlords who owned two or fewer homes.

They were also very unprepared, in the same way as ‘accidental landlords’, for a crash which would see their equity evaporate, while the rents that supported their repayments rapidly fell. The investors tended to do their best to hold out, a subject that was empirically analysed by Brian Lucey, Marie Hunt and Karl Deeter in their 2013 paper, ‘Why do investors not sell underwater buy-to-let property?’ This was for several reasons: in many cases, the loans were manageable because they were financed with trackers on an ‘interest only basis’, which meant that the loans were sustainable. As an example, if you had a loan for €500,000 on interest only,...

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