While the monthly mortgage debt creation figures are breathtaking, the rate at which this debt is growing is mind-boggling. As house prices rise the amount of debt required to buy increases. In 2002 the rate of growth was 11%; in 2003 12.9% , in 2004 23%, in 2005 26% and the latest figure for this year is 29.4%. As the debt rises ever higher the trajectory steepens more and more.
Saturday, April 29, 2006
Credit Where It's Due.
The rate of expansion in residential mortgage debt in Ireland is astounding. Figures from the Central Statistics Office show that the rate of growth reached 29.4% in February, with €2.91 billion borrowed. However this is not a record that honour falls to the month of December last, when €3,500,000,000 was borrowed, in one month. That's a hard figure to get your head around, so think about it terms of one Euro coins. A one Euro coin weighs 7.5 grams and has a diameter of 23.25 mm. If the banks doled out mortgage debt in coinage they would have had to transport 26,250 tonnes of it last December alone; enough to fill nine hundred three axel trucks. Laid side to side 3,500,000,000 Euro coins would stretch around the globe a little over twice.