Ground Floor: This is my favourite time of the year. The apple tree is covered in blossoms and the bare branches of winter are just a memory. The days are longer, which means there's no more getting up in the dark, writes Sheila O'Flanagan

The weather is improving but hasn't yet managed to disappoint because our expectations are still low. And the Premiership has finally come to an end. (I like soccer, but the amount of coverage it gets in the media is blisteringly boring. And if, like me, you support a dismal team such as Aston Villa, it becomes positively painful.)

The market mantra when we get to this stage in the year is "sell in May and go away", which is fairly understandable since traders are beginning to think about the summer months and plan their holidays around the big sporting action.

They'll have a lot to keep them from their desks. Soccer, of course, pushes its way in again with the World Cup. The French Open and Wimbledon tennis tournaments will mop up other sporting enthusiasts. And the Ryder Cup will be the ultimate corporate sporting event. So it'll hardly be surprising to discover that the trading rooms of Europe will probably see a downturn in turnover from the end of this month.

In other trading assets, the peak property trading season has probably passed us by, but when it comes to Irish property, "sell in May and go away" isn't exactly the mantra.

It's more like sell in May and hope that you've traded up quickly enough. I was listening to a report the other day in which people who had done just that were being interviewed about their €1 million-plus mortgages and the concept made my eyes water.

Quite honestly, the idea of loading myself up with additional debt after paying back a significant portion of my mortgage is far too much like hard work. But the Irish consumer continues to have a love affair with borrowing and nobody is prepared to shout stop.

While there isn't a significant sea change yet, I have met one or two people doing the unthinkable and downsizing!

One of my acquaintances has decided that enough is enough as far as the Irish property market is concerned. She has therefore decided to sell her house and move to Spain, where she is planning to live a pared-down lifestyle in a villa with a pool.

Paring down still further are my own Spanish neighbours. Having seen the price of their property rocket over the past 10 years, they have now decided to cash in their chips and move to Hungary. (They considered Berlin, but decided Hungary offered a better lifestyle.)

Perhaps, when the paperless office finally arrives and when nobody needs to be physically at a desk anymore, Irish workers will reconsider living in housing developments in the commuter belt and head off to central Europe, where they can work from a house bought at a fraction of the cost.

The other factor that might make European traders decide to follow the "sell in May and go away" maxim is the potential of further tightening in interest rates to slow down market advances.

The European Central Bank (ECB) hiked rates in March and is expected to raise them again quite soon. The president, Jean-Claude Trichet, recently said the council was unanimous in its overall analysis of the euro zone, but Otmar Issing, the chief economist, commented that as yet the bank had "no fixed target and no fixed calendar" for rate increases.

In the US, however, the cycle of tightening rates may be drawing to a conclusion. Federal Reserve chairman Ben Bernanke is trying to walk the fine line of tightening just enough without pushing too far and causing the economy to collapse. Fed watchers admit that it's a difficult task because the sharp increase in oil prices over the past year has pushed up inflation and made consumers more cautious.

Excluding food and energy costs, the US consumer price index has risen by 2.8 per cent in the first quarter of the year, while last year's rise was just 2.2 per cent.

The housing market in the US is quite a different story to Europe. House prices have started declining, making Bernanke's decisions even more difficult. Of concern to him will be the fact that almost a quarter of the jobs created in the past four years have been in the construction and housing sector, and if the market continues to weaken, those jobs will come under threat.

In analysis that will surely resonate here, US economists are concerned about the way in which many house purchases have been financed. They are particularly worried about interest-only mortgages and "pay option" adjustable-rate mortgages, which allow a principal repayment holiday for three to five years. This option means borrowers can see 50 per cent increases or more in their monthly repayments after the "holiday" ends.

Economists puzzle to know why people are borrowing money when they are also taking on the risk of potentially higher interest rates. It's because they still believe the capital appreciation of their property will be enough to insulate them. But declines in house prices are leaving them in a very risky situation and rental income from property in many areas is below the cost of servicing the debt.

The asset appreciation concept is still fuelling house price action in Europe, whether you're looking at Dubrovnik, Doncaster or Dublin, but at some point, it will make more sense to rent than to buy.

Hopefully, both the Fed and the ECB will keep the dark clouds away from the summer skies.

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