Warning of second housing ‘bubble’

There is a danger of a second “bubble” if house prices fall too far below boom-time peaks, an expert has warned.

Ronan Lyons, an economist with Daft.ie, said that while buyers would welcome falling prices in the short term, the knock-on effect would be to create another boom to bust cycle as prices would eventually start to increase again.

“If the market falls too much, then it will further increase the negative equity of those who bought at the boom and increase mortgage arrears,” he said.