They had never imagined this could happen to them, but it had. Both grandmothers were gossiping about another neighbour�s house that had been sold for a small fortune down the road, and both had been paid a visit by a smarmy estate agent who had, there and then, �valued� their homes at over �1 million.

For the two, who had moved in more than 40 years ago, this apparent windfall was a source of bemusement, rather than a financial opportunity. So now it�s official: the centre ground of the country is divided into two distinct middle classes – those who bought their houses before the boom and those who are increasingly chasing an exploding housing market.

The divide is demographic. The first group, mainly any homeowner over 45 or 50, is getting rich by doing nothing. The other, the under-30s, are pinned to their collars having to find ludicrous amounts of cash, simply to put a roof over their heads.

Figures released last week put our wealth at around �700 billion, as soaring house prices make millionaires of thousands of home owners. These people are Ireland�s accidental millionaires – people who never thought that they would become wildly rich when they bought their semi-d in the 1970s and 1980s.The rate of increase in their wealth is doubling every year, as house prices continue to soar.

Even after mortgages of �100 billion are deducted, the country�s housing stock is worth �400 billion, equivalent to �100,000 for every man, woman and child in the country.

For most middle-aged workers, their wealth is far outstretching their income, because their now one million euro houses are rising in value by over �150,000 a year. Meanwhile, their wages rise by single digits. Why work, when your wealth rises without you doing anything?

This is precisely what the owners of Roches Stores were rumoured to be doing last week. An unconfirmed newspaper report suggested the family were thinking of selling the business.

The suggestion was that they might sell the retail arm and keep the property. If true, the Roche family – no slouches – would be selling the hard part of their businesses to a retail competitor, while keeping the apparently easy part – the property part – which, as if by magic, rises in value without them doing anything.

None could question the Roche family for considering getting out, but they may be getting out of the business at a time when we are spending more in shops than ever before. In short, they would be leaving a booming business.

If they are deciding to get out now to make more money in the property market, what hope have other industrialists involved in businesses that are being squeezed by international competition?

Think about it. One of the best retailers we have may not be bothered retailing any more, even though the business is booming. But why is it booming? Because all this housing wealth is prompting us to borrow enormously to buy stuff we don�t need.

For example, this month we will splash out millions on decks and barbecues, so that we can poison each other with undercooked chicken drumsticks in the rain.

Take a trip to your local Woodies this morning to see what I am talking about. The home improvement boom is driven by thousands who can�t afford to trade up. Instead, they are ripping out bathrooms, kitchens and sitting rooms, installing Italian slate showers, Danish kitchens and Finnish minimalist furniture.

In April, according to the latest CSO figures available, we spent nearly 10 per cent more on electrical goods for the house than we did last year. That�s a lot of plasma screens, Neff double-door fridges and Viking barbeques. Tellingly, guess what was the only category of spending to experience a fall? It was the sales of books and newspapers. So much for the well educated workforce.

How is this consumer inferno being financed? By borrowing from other people. Again, April is the latest month for which we have figures. Borrowing rose by 29.6 per cent in the fool�s month. This is the highest rate since March 2000, surpassing the previous peak of 29.4 per cent in October 2005 and February 2006. It brings the total indebtedness of the nation to �276.2 billion.

So let�s take stock. We are all borrowing like drunken sailors because the rise in the housing market makes us feel rich. So, rather than working, adding value and generating profits, we are borrowing easy money. We are mortgaging our future on the illusion of housing wealth today.

Even some of the best retailers in the country are said to be getting out of real businesses – which they were extremely good at – to kick back on their sun loungers and allow someone else to do the work.

The financial assumption underpinning all this is that the yield on property will continue to rise indefinitely. If this is the case, why were only 22,524 planning permissions granted in the first quarter of this year, compared with 25,350 units for the same period in 2005, a drop of 11.1 per cent?

Why did permissions for first time houses fall to 16,454 new houses from 18,913 in the same period last year – a decrease of 13 per cent? Or permissions for apartments fall from 6,437 last year to 6,070 in the first quarter of 2006 – a 5.7 per cent fall?

In short, why are builders building considerably fewer places this year if the market is booming, the industry at full stretch and prices forecast to rise even more? Your guess is a good as mine! Unless of course, you take these as the first signs that the building boom is peaking. If it is, we are in for quite a ride. Now getting back to our under-30 Stakhanovites – the worker bees who drive the economy, commute, stick their kids in creches at 7am and collect them at 7pm.These are the very educated workers that Enterprise Ireland drones on about, but whose standard of living is compromised by the housing scam which enriches our soon-to-be-retirees and impoverishes our most productive workers.

How will they pay for ever-rising house prices? More importantly, what business will pay them to keep up with the housing market? What level of productivity will they have to achieve simply to allow their wages to match the 15 per cent increases in property prices? Yeah, you guessed right, it won�t happen.

So they will ultimately price themselves out of the labour market by wage demands that are ridiculous in any other context, but legitimate in the Ireland of runaway house prices.

So either we will experience widespread unemployment, a fall in real wages or falling property prices or – more probably – a combination of all of these. Economically, there is no other option. We can continue in our heavily-borrowed dream world for a bit longer, but with global interest rates on the way up, that avenue will soon be closed off.

In any event, the more we postpone this economic eventuality by hyper-borrowing, the worse the end game will be. All the while, our grey market expands and Ireland�s Jagger generation continues to live it up. Meanwhile, the ones who pay for it all – the under-30s Stakhanovites – toil away in the bowels of the boom.

Our political class (the vast majority of them over 50) doesn�t seem to care. Is it any wonder that the under-30s don�t vote?

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