Search ForexCrunch

Ireland is seen as the success story concerning bailouts. The country’s economy has enjoyed some growth and saw its bond yields falling. A return to the markets could be even brought forward.

However, the relative recovery is quite jobless. In addition, new figures show that the housing sector is far from recovering – declines in house prices have accelerated, and are perhaps the worst in Europe.

Prices have fallen by 5.19% between Q4 2011 and Q1 2012. On a year over year basis, the fall is nearly 19%. Ireland is still suffering the bust following the real estate boom, and a bottom isn’t in sight.

The fall in prices adds pressure on the banks, which adds pressure on the state which took over them. Will Ireland really get back to bond markets soon? Not so fast.

Global Property Guide brings the data, and shows that Spain’s housing is also far from reaching a bottom: prices fell by 3.76% in Q1 and 9% year over year. All the figures are inflation adjusted.

As Irish officials already said, a Greek exit of the euro-zone will add pressure and will keep Ireland further away from the markets.

See how to trade the Grexit with Euro/Dollar.

Spain is just behind Greece in the current round of the debt crisis. Like Ireland, Spain had a housing boom and bust. And like Ireland, Spain’s finances were quite alright. Contrary to Ireland, Spain didn’t take over the banking system.

But with more and more ┬ánationalizations, especially of Bankia, Europe’s fourth largest economy could certainly follow Ireland. But contrary to Ireland, Spain might be too big to bail.