...echoes of the 1930s Midwest in the sorry mortgage belt tales of our estate agents...
"And there on the Texas plains right in the dead centre of the dust bowl, with the oil boom over and the wheat blowed out and the hard-working people just stumbling about, bothered with mortgages, debts, bills, sickness, worries of every blowing kind, I seen there was plenty to make up songs about. . ." Woody Guthrie
IRELAND is increasingly becoming a 21st century mirror of America's Midwest in the 1930s, a region that became known as the Dust Bowl after a series of devastating droughts, windstorms and economic depression tore out its very soul. In Ireland today, however, we have no Woody Guthrie, no one to sing us through this mess, no one who can somehow lift us out of the worst of times.
And who tells these tales of sorrow better than those in the Irish property market? Once the jewel in the Irish economic crown, it now lies forlorn, a victim not only of its own success but of the greed of all who fed off it and the unforgiving global economy who cared not a jot for our proud Tiger. The last week has been like so many others in this regard.
The country's largest estate agency chain, Sherry FitzGerald, has announced that it has cut nearly 8 per cent of its staff and shaved the working hours of several more in an effort to halt losses. Lisney slashed all staff pay by 10 per cent earlier in the year and more than 20 people have resigned from the company in the last six months. Even The Irish Auctioneers and Valuers Institute (IAVI), which represents over 2,000 estate agents, is freezing subscriptions for agents who are in difficulty and who have to drop out temporarily. To top a bad property week, last week one of the country's largest developers, Taggart Holdings, saw its Irish business units placed under administration and on Thursday it was revealed that luxury homes in north Dublin have had their price slashed in half from €1.4m in a bid to attract buyers. The horsemen of the property apocalypse have truly arrived and they are bearing gifts of woeful hue to one and all.
Yet amidst the proprietorial wailing and gnashing of teeth come stories if not of joy then ones of survival. Tales of true grit and tenacity in a world gone mad. Colliers Jackson-Stops have just sold No 5 Brighton Avenue in Monkstown, Dublin, after auction for a rumoured €1.9m. The house was bought for €2.5m in recent years and since then some €150,000 is said to have been spent on renovations. The home is a very spacious two-storey, garden-level, end-terrace period residence tucked away in a small, private, leafy street a short stroll from Monkstown Village. Two years ago punters would have paid just to view it.
Yes, €750,000 is a hit in anyone's language, but the amount paid is real cash money, and real cash is a rarity nowadays. It is the type of money that will buy you a fine house in the capital today and if you're lucky, without recourse to the begging bowl and the banks.
Robert Hoban, Associate Director of Savills tells the Sunday Independent of other such stories of survival. In the commuter belt he cites a large period house on a parcel of land which was bought within the last four years in poor condition but restored well so that it sold in 2007 for what seemed like a substantial profit. The purchaser then pulled out because of the market concerns. It was re-marketed in 2008, and sold for a sum equalling what the project cost the vendor. "No profit, but no loss either," says Hoban. "A good example of survival."
Yet for every tale of survival comes another two of submission. In the first eight months of 2008 average national prices fell by 6 per cent and overseas property tells an even sorrier tale. In the US the planned Chicago Spire, which has gained worldwide acclaim for its record-breaking height and twisting design, received a new moniker from American wags. "The Lien-ing Tower of Chicago" when it was revealed that the project now has three claims totalling $16.7m against the Spire's developer, Ireland-based Shelbourne Development Ltd. One prominent Dublin overseas agent told the Sunday Independent that they have received calls from clients who purchased property in Bulgaria two years ago for €65,000 and were now pleading with them to sell the apartments for as little as €45,000 -- a 30 per cent drop.
Was the Dust Bowl of 1930s America really that different from Ireland today? "It was terrible," said Nettie Featherston, who was spoken of by newspapers at the time as the matriarch of a Dust Bowl family. "We was living in a little old two-room house. And we cooked with black-eyed peas until I never wanted to ever see another black-eyed pea."
Black eyed peas? We're surely not there yet. Or are we?
Report by John O'Keeffe - Sunday Independent Newspaper.