Like the boy who cried wolf, the frequency of the Central Bank's previous interventions is now acting to dull the edge of its latest warning about the state of the property market.
Those interventions become less effective as they become more necessary. The reassurance and relief of last summer's slowing market have turned to uncertainty and concern. The OECD last year claimed house prices here are overvalued, a view from which the Central Bank did not demur when given the opportunity in a private meeting with OECD officials. House owners want prices to rise while prospective buyers want them to fall. But everyone's interests are served in a market in which they are stable. House price growth of low single digits would allow any overvaluation - if it exists - to unwind in a gradual manner.
But a prolonged renewal of house price growth heightens the chance that any needed adjustment will be drastic, sudden and less easy to control. And the possibility is strong that this renewal of house price growth will continue. SSIAs will give their beneficiaries sufficient extra leverage to make demand grow by significantly more than it would under normal circumstances.
By ignoring the pleadings of the IMF and Central Bank, the Government has chosen to inject further demand into the economy, increasing public spending growth to a double digit rate comparable to that witnessed in the last pre-election year of 2001. Partnership talks will begin a process leading to additional increases in demand pressure. This week the Government can make a significant contribution to stability in our housing market and economy. The Finance Bill could see the Government implement recent recommendations of the Pensions Board to incentivise SSIA holders to redirect their windfalls into PRSA accounts.
A crossroads has been reached. The housing market is diverging, rather than converging towards a soft landing. Demand in the economy is accelerating. And Ireland's productivity and external competitiveness are declining, not improving. Such circumstances will cause any responsible policy maker to stop and think. Mistakes made now - whether in relation to the housing market or pensions policy - will not be forgotten in years to come.
As Germany begins to share the recovery seen across the euro zone, the ECB is losing its inhibitions about raising interest rates. The ECB will increase interest rates by three quarters of a per cent this year, it is predicted. This will have a needed cooling effect on our housing market. In spite of so much economic growth and development, we still need Europe to save us from ourselves.