Boom decade sees cost of home loans soar by 370%

HOME-BUYERS who bought at the end of the housing boom had to take out mortgages at more than three-and-a-half times the size of those who got on the property ladder a decade earlier.

The average new housing loan in 1997 was €62,000, but by 2006 buyers were getting in debt to the tune of €229,200 to get in the front door — a rise of 370%. Latecomers benefited from a significant fall in interest rates over the same period but the 42% reduction — from 7.22% to 4.2% — was dwarfed by the increase in the size of their loans.

A look back by the Central Statistics Office at how things improved, or didn’t, since the late 1990s shows an upward trend in most aspects of Irish life — most notably in population which rocketed by some 17% to almost 4.34 million people, the highest rate of growth in all 27 EU member states.

The Measuring Ireland’s Progress report for 2007 also shows we’re living longer, after a decade which saw life expectancy go up by three years and eight months for men and three years for women, so that the average man can now expect to live to his 77th year while women can expect to celebrate their 81st birthday.

We also became firmly established in the internet age, with the proportion of private households having a computer connected to the web, growing from a minority of just 5% in 1998 to a clear majority of 57% last year.

Another remarkable increase was in the proportion of school-leavers getting a third level education. Just over a quarter of girls (27.5%) finishing school in 1999 went on to third-level, but that soared to almost half (47.7%) by 2007. The increase was less for boys — up from 26.7% to 35.1%.

Employment also rose, and although job loss figures announced yesterday will diminish some of the gains, they were significant as the employment rate rose from 59.7% in 1998 to 69% in 2007. The boom decade had more of an effect on women, bringing an extra 12% of them into the workforce, compared with an extra 6% of men.

Health spending — the country’s biggest budgetary concern throughout the decade — also saw a significant rise over the 10- year period, but perhaps not so dramatic in real terms as the cash figures suggest.

Although in money terms the cost of day-to-day healthcare rose from €3.5 million to €11.7 million, an increase of 334%, it didn’t eat into our national coffers quite as rapaciously as that sounds. In fact, we spent 5.8% of our gross national income (GNI) on health in 1997 and 7.8% of GNI in 2006, the proportionate difference being 34.5%.

Spending on overseas aid for developing countries also increased markedly, both in real and money terms. The increase from €157.6 million in 1997 to €814 million in 2006 represented a doubling of the percentage of GNI allocated — up from 0.26% to 0.54%. Substantial though the increase was, however, it still remained below the UBN target allocation of 0.7% of GNI for all UN member countries.

With all this extra activity in the country, it’s not surprising that greenhouse gas emissions also went up.

Under the Kyoto Treaty, we are supposed to get our emissions down to a level that equates with no more than 13% higher than in the pre-boom days of 1990 but the level actually grew from 114% in 1997 to 126.5% last year.

Measuring progress

Where Ireland stands in the EU after 10 years of growth:

* 5th highest Gross National Income.

* 2nd highest literacy rate.

* 5th highest student to pupil ratio in primary schools.

* 2nd highest productivity rate.

* 5th highest percentage of people at risk of poverty

* 2nd highest fertility rate.