Pearse Doherty (Donegal, Sinn Fein)
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When we talk about a property bubble, we remember the scars of the past. The bubble of the past was very much credit-fuelled. However, a bubble does not necessarily have to be credit fuelled and obviously this one is not.

Some would argue we are seeing artificially high values that have risen significantly over a short period of time, which is a type of bubble. A bubble would mean that this will bust and those values will come down. The factors that caused that in the past include credit. Now it could be that the factors causing it include cash buyers, that is, non-debt buyers, in the market, who are buying 50% of homes, and some of the larger funds, including pension funds, which are snapping up commercial property. That is perhaps the reason we do not need to be as concerned as we were in the past about the debt that underpinned it. However, 50% of the market are relying on debt and the other 50% are cash buyers. If people are taking out mortgages or entering into debt with banks and they are in a game where the prices have been artificially increased, when the pin comes out and the bubble bursts they will see themselves in a worse situation. The bank will probably be okay given the loan to value ratios are on average about 79%. They can absorb it. However, I am thinking from a customer point of view. Does Mr. Byrne believe that house prices and commercial property prices are artificially inflated at this point in time and that they would not be at these levels in a normally functioning market?