What would really happen if house prices fell substantially?

Kohoutek

What would really happen if house prices fell substantially

Probably the same as what's happened in the US, where house prices have fallen by much more than over here.

From what I understand, banks have already built up a substantial inventory of repossessed homes, which they are only gradually releasing on to the market to avoid further falls in prices.

Lots of people have got away with being in arrears of their mortgage for several months, even over a year, because banks arer hoping that people will eventually be in a position to start paying again if the economy recovers robustly, rather than adding even more repossessed homes to their large inventory.

Lots of small banks have gone bankrupt, there's an issue with the larger institutions about the extent to which they are not accurately valuing their mortgage books. Some analysts are speculating that the big banks will have to go back to the federal govt eventually because the housing market is not rebounding enough to make good their losses on residential mortgages.

housesitter

The US housing market is very different however.
Much like they have in Ireland, they will just abandon entire housing estates and just build somewhere else.
We dont have the space for that.
They can also hand back the keys and walk away. Again, we don't have that option.