Considering the statistics cited above, it is clear that the Irish propertycrash has likely impacted the lives of thousands of Irish property owners.As of yet, relatively little is known about the specific effects the propertycrash may have had on these individuals.
Chapter 2: Literature Review
It has been suggested that the Irish property crash has affectedresidential property owners, particularly those who purchased theirproperties during peak price years. Apart from several speculativeaccounts of the potential problems facing those living in ghost estates(see Lyons, 2010; Kitchin et al, 2010), most of the existing literaturefocuses on the effects of ‘negative equity’.Negative equity occurs when the value of a property falls below theoutstanding balance of the mortgage used to purchase the property(Brawn, 2009; Duffy, 2010). Kitchin (2010) cites two estimates of theproportion of mortgage holders that may be in negative equity. NCBstockbrokers (2010, quoted in Kitchin, 2010) estimate that as many as50% of all mortgage holders may have been in negative equity by June2010. A Bank of Ireland report (2010, in Kitchen, 2010e) estimated that21.5% of their own residential mortgages were in negative equity. Kitchin(2010) suggests that the true figure probably falls somewhere betweenthese estimates.Duffy (2010) gives an account of who is most likely to be in negativeequity. Using the mortgage statistics published by the Department of theEnvironment, Heritage and Local Government (2008, in Duffy, 2010) heconcludes that buyers who bought near the peak of the market, first timebuyers, buyers with high initial loan to value ratios, buyers with interest