Sunday, 30 November 2008

Irish Property Prices In Freefall - The Daft Property Scene In Ireland...

How Low Dare You Go?

...With few property deals being done and prices in freefall, many vendors are wondering what their bottom line should be to get a sale...

House prices are sliding – and fast. Yet while most vendors now accept that they have to cut prices in order to tempt buyers, despite all the potential bargains on the market, statistics suggest that buyers are still deterred.

Lack of liquidity, the prospect of further price falls, job losses and a worsening economic climate are taking its toll.

In 2007, 158,000 people drew down mortgage loans. Frank Conway of the Irish Mortgage Corporation suggests this is down by as much as 36% this year – so far.

According to Sherry FitzGerald's latest House Price Index prices have fallen by 26% since their peak in June 2006, with prices down by as much as 32.8% in Dublin.

At the lower end of the market, vendors slashing €60,000, €70,000, €80,000 off the price of their property is common. High-end homes have been reduced by hundreds of thousands of euro and in some cases millions.

Website, which lists price drops of hundreds of properties all over Ireland, shows the price of one home in South Dublin slashed by 47%, another property in Westmeath has been reduced by 40%

In Kildare, Moyglare Manor, a 17-bed house hotel on 13 acres went to auction last year quoting €10m. It was subsequently reduced and was presented for auction again this year at €4m. It didn't sell and is now quoting €3.75m.

"The property has had no offers as yet," says Robert Hoban of Savills, adding that the vendors are open to negotiating with a cash buyer. "The reality is that people aren't willing to commit to paying high price tags in this market until they know for certain what is going to happen."

In south Dublin, a detached five-bed, 2,400sq ft house at 6 Richmond, Newpark Avenue, Blackrock went on the market earlier this year at €1.6m. It's been reduced several times and is now selling for €895,000.

Agent Andrew Allen of Allen & Jacobs Estates reports that the property has had viewings but no firm offers. "Based on price per square footage, it's certainly a good buy and possibly the cheapest in Blackrock," he says.

Reports abound of vendors who have had their property on the market for over a year without a single viewing. While others who have reduced the price of their property four and five times are still failing to attract a buyer.

No-one wants to undervalue their home, but many are now wondering just how low do they have to go to get a sale?

Some optimistic estate agents are predicting a 'bottoming out' soon. Other experts say that prices will continue to fall by a further eight to 10% next year, while commentators on property blog sites are predicting an Armageddon scenario and price drops of 80% – although they've little evidence to back this up.

Estate agent Owen Reilly believes that prices are close to bottoming in Dublin city centre but that prices in the suburbs still have a while to go.

He says many vendors reacted far too late to price reductions and are now being forced to make even bigger cuts.

"Prices are only now at a stage where estate agents advised them to be six months ago," says Reilly who's expecting a lengthy period of inactivity in terms of transactions with only those who have to sell or have to buy doing business next year.

On a more optimistic note he adds that when the market does pick up, prices could spike by as much as 5% in some areas, then level off.

A recent report on the economy by Davy Stockbroker says 'real progress' will not be made in the property market until property prices fall to a clearing level and mortgage availability improves.
Rossa White, economist at Davy's believes prices will fall a further 11.5% next year, and possibly more.

He says that there's still a lack of realism in the second-hand market. "Some people still expect their house to sell for 2006 prices," says White.

Dermot O'Leary chief economist, Goodbody Stockbrokers, expects prices to drop by a further 10% next year, adding that the rate of decline is very much a regional issue and that property prices will be affected by location and type of property.

"There is a huge oversupply of property in rural areas, particularly the midlands.

"A lack of liquidity and jobs losses means these areas can expect further price drops," he says,

With so many conflicting reports as to just how far prices will fall next year, Paul Murgatroyd, economist, Douglas Newman Good is perhaps most accurate when he says: "it's anyone's guess."

"No-one really knows when the bottom is until after it's passed," says Murgatroyd, adding that vendors who really want to sell will have to continue to reduce the price until someone buys.

He advises that all offers be considered, no matter how ridiculous.

Report by Roisin Carabine - Tribune Property

Saturday, 29 November 2008

Ireland - Boom To Gloom - Average House Price Drops €46,000

THE average house has lost almost €46,000 of its property-boom value. Prices fell in October for the 20th month in a row.

House prices are now down 15pc from their peak of January/February 2007, according to the latest figures from the Permanent TSB/ESRI house price index.

Over the past year prices are down 10.2pc after average prices nationally showed a fall of 0.8pc in October, a marginally smaller drop than in the previous two months.

However, many economists feel that price declines have been more severe, with a number of estate agencies estimating that prices are already 30pc off their peak.

And new figures out yesterday from the Central Bank seemed to back this up. They showed that residential mortgage lending is at its lowest level in 22 years.

Permanent TSB executive Niall O'Grady yesterday defended the accuracy of the house price index. "The index remains as valid as it was when house prices were rising," he said.

However, he admitted that there was a three-month time lag in the figures. Economists have said the house price index is based on mortgage transactions put through by Permanent TSB and stress that the volume of business Permanent TSB is doing is down relative to its competitors. Mr O'Grady said the latest version of the index has picked up a sharp drop in Dublin house prices, which fell by 2.6pc in the month -- compared with 1.4pc outside Dublin.
If the decline stayed at that level for a year it would translate into an annualised fall of around 30pc, he said.

Across the country prices have fallen by 7.8pc in the first 10 months of 2008, leaving the average price at €265,364. Prices in the commuter counties around Dublin dropped by 1.9pc.
Prices for first-time buyers fell 2.1pc and those for second-time buyers were down 0.4pc. New house prices were 0.5pc lower.

Also yesterday, new figures from the Central Bank said mortgage lending figures for October were "exceptionally weak".

The annual rate of growth in October fell to 7.6pc, the lowest figure since 1986.

The amount of money lent for mortgages rose by just €26m during October, compared with the average monthly increase of almost €2bn at the height of the housing boom in 2006.

Mortgage lending had recovered a little in September after a very quiet August, but the Central Bank says the October figures reflect banks' tightening credit rules for households.

Overall private sector credit grew at an annual rate of 9pc, compared with 10.7pc in September.

Report by Charlie Weston Personal Finance Editor -Irish Independent

Friday, 28 November 2008

How Bad Can It Get?..Recession In Ireland Strikes Fear...

25pc afraid of losing jobs as confidence hits a record low...

MORE than a quarter of workers fear that they are about to lose their jobs, while one in five thinks their personal financial circumstances will worsen in the next year.

But the number of people who fear redundancy in the private sector is likely to be even higher as the survey did not distinguish between public and private sector workers.

The Ipsos Mori poll, seen exclusively by the Irish Independent, reveals that consumers' confidence in their personal finances is at its lowest level since the survey was first conducted in 1999.

Recessionary times are striking fear into workers with more than a quarter of workers afraid that they are about to lose their jobs.

Younger people are more insecure about their jobs than older workers, the survey conducted among 1,500 people between July and September shows.

More than a third of those aged between 16 and 24 are concerned about the possibility of being made redundant.

Almost three-quarters of people think their general economic circumstances will worsen in the next year.

But the fall in economic confidence seems to have halted temporarily.


Research director of Ipsos Mori Kieran O'Leary said: "While the decline in confidence that was seen earlier in 2008 has stabilised in the third quarter, this is most likely only temporary."

Mr O'Leary said the worsening economic climate during the last three months of the year meant that further declines in confidence can be expected.

"However, certain developments such as the falling price of fuel and reductions in interest rates may offset some further falls in personal confidence."

The pollster added that the gap between those thinking their personal financial circumstances will get better and those thinking they are going to worsen is now the narrowest since they started measuring it in 1999.

"It is more than likely that this gap will be eliminated during the fourth quarter and we will shortly see a situation where there is a higher proportion expecting their financial circumstances to worsen than expect things to get better," Mr O'Leary added.

Older people are particularly concerned about their personal standard of living.

Just 8pc of those over the age of 60 think their personal economic circumstances will improve in the next 12 months.

Report by Charlie Weston Irish Independent Newspaper.

Thursday, 27 November 2008

Irish Property - "No Bargain, No Buy" - Sign Of The Times In Ireland...

Talking Property...

Give them what they want - a bargain...

THE TIME has come to swallow your pride and scream from the rooftops. "WE NEED TO SELL - AND URGENTLY"

Just as last season's designer garments fail to excite the fashionistas, your home, regardless of how highly it may once have been rated, will not now excite the chattering classes.

Why? Because property is no longer considered a fashionable topic of conversation.

In fact, it's a topic to be avoided at all costs these days. It is, as they say, a sore subject.

However, on the bright side, the property website Daft has noticed a 35 per cent increase in browsers to their internet site this September compared with September 2007.

Now, perhaps they are all nervous homeowners, checking daily to see by how much their property has dropped in value. Or perhaps there are a lot of window-shoppers out in cyberspace at the moment. But along with the above mentioned, I suspect that there may also be a number of potential purchasers watching and waiting in the wings for any signs that we have reached rock bottom.

If you have been trying without luck to sell your property, perhaps it's now time to pull out all the stops and go for it. Dignity, self respect, snobbery and pride must be cast aside for this gruesome task.

Treat your house as if it were a designer dress, which is now being sold on the store sale rail. Create supersized (laminated) garment swing tickets in day-glo colours of orange, red and that particularly vicious shade of luminous green and let them swing gaily from your chimney pots, TV aerials, trees and lamp posts.

Mark them with details of the size (square metres) and style (ie 1880s Victorian, 1970s renovated or whatever). Make it absolutely clear that the original asking price has been slashed to the considerably lower price which you are now hoping to achieve.

Or given the festive time of the year, wrap your house up in seasonal bright red ribbon as if it were a Christmas present. (Let's be honest - you are practically giving your property away anyway.)

Tie the fabric in a big bow and add a large gift tag with the original and reduced price details. Make sure your "gift" looks enticing enough for potential purchasers to want to "open".

You might even consider giving your home a glamour girl look by outlining the features of the house with twinkling white fairy lights, and lit candle lanterns in every window. Swathe the house in a Barbie pink beauty queen satin sash printed with: "How could you resist coming home to a girl like me? And, I could be all yours for only €XXX."

Or you could pitch for the sympathy vote by having backlit posters positioned in every window with details of your dilemma clearly stated in black and white. "HELP! IF I DON'T SELL MY HOME FAST I'LL END UP IN COURT."

Ideally, have your entire family distribute basic leaflets in your area with details of the dates and times your house will be open for viewing. Having each child rattle a collection box marked "please help save my Dad from the debtors prison" might be effective but possibly illegal.

Or, if all else fails, you could try appealing to people's sense of humour by positioning large, gaudy handwritten signs in every window in your property with "HOUSE FOR SALE. To include all fixtures and fittings; my flashy car; the wife's banger; my nearly new set of golf clubs; five container loads of Ikea furniture; two bright kids (likely to get scholarships); the missus herself (a bit tired looking now but a great cook); and my (very accommodating) secretary. ALL half reasonable offers will be considered."

And estate agents could become more adventurous and provide guided bus tours of properties for sale in their areas, with stops to view the individual properties.

This would encourage viewings, reduce the number of estate agents required on Saturday afternoons and condense the numbers viewing any one property into a tighter timeframe, which would make life easier for the vendors.

Those wishing to purchase a property would apply to the estate agents for property tour tickets and would request a tour based on their preferred area and their budget.

Buses would be numbered according to same - ie D4 Over 3 (Dublin 4, over €3 million).

Obviously some buses would be more elitist to be seen on than others.

You think I am joking? Believe me, I am not.

The reality is that until the banks start lending again and the world resumes turning, we will have to resort to any marketing method, which has even the remotest chance of working.

So, it's up to the vendors to tell prospective purchasers what they're getting - A BARGAIN.

After all, these days, their mantra is "No Bargain, No Buy".

Report by Isabel Morton - Irish Times

Wednesday, 26 November 2008

Ireland's Property Crash...Irish Property Spend Plunges €40bn...

Property spend plunges €40bn...

Irish spend on property has crashed by 60pc in 2008 compared to last year, with expenditure down by a crushing 73pc -- or around €40bn -- since the market peaked in 2006.

Our property spend is forecast to fall to €15bn this year -- down from €45bn in 2007 and a heady €54.4bn in 2006, according to the latest 'Property Outlook' from Savills.

Joan Henry, head of Research at Savills Ireland says that all sectors of the property market have been affected -- most obviously the new homes area. The total spend on new homes is expected to fall from an estimated €23bn in 2007 to just €6bn this year.

Spend in the Irish investment market is expected to be down as much as 75pc from last year's €2bn.

Spend on domestic land is expected to fall by a staggering 80pc.

In the new homes as in the second hand market, prices have fallen by as much as 30pc this year and maybe more if looked at on an individual basis.

"Successive price reductions this year, coupled with the fact that the development of new homes has come to a virtual standstill, lead us to expect that supply and demand factors have pushed prices close to the bottom and that by mid-2009 prices will have stabilised," the Savills expert elaborates.

Commenting on the development land market, Ms Henry says that "the value of land has dropped by as much as 50pc depending on the location, with sites in secondary areas being the worst affected.

The value of properties on offer in the domestic investment market has also fallen, with considerable upward pressure on yields.

"Although investment transactions remain limited, it is widely accepted that prime yields should now have shifted out from their peak by up to 200 basis points," she comments.


"The yield gap between secure income producing investments and those with higher risk profiles has also widened considerably."

Tenant demand for offices has fallen significantly and rents have dropped. Take-up in 2008 is expected to be close to 180,000sqm which, although significantly below the 2007 level, is still a good rate.

"Looking to 2009 it is likely that the first half of the year will see similar low levels of activity to those experienced in the second half of 2008 with maybe a marginal improvement in the second half of the year," Savills predicts.

"It is likely to be into the second half of 2010 before any significant improvement in market activity is experienced and it is likely this improvement will be seen in the city centre first of all".
In the industrial market, the total take-up for the first six months of 2008 totalled almost 100,000sqm which was in fact higher than the corresponding period in 2007.

Traditionally, the second half of the year has witnessed higher levels of take-up, but the expected take-up for the second half of 2008 will be 100,000sqm at best as the industrial sector begins to feel the impact of a weak economy.

The vacancy rate at the end of July 2008 stood at approximately 444,500sqm up slightly from the 439,000sqm of vacant space recorded in January 2008.

The overall trend in the industrial market has reversed and is now for renting rather than buying.

Report by Con Power - Irish Independent Newspaper.

Tuesday, 25 November 2008

Ireland's Bending The Rules - The Daft Irish Borrowing Binge Continues...

Ireland can breach EU spending rules to boost economy...

Ireland will be allowed to breach EU spending guidelines for two years and access significant EU funding ahead of schedule, under an EU-wide financial package to be announced this week.

The package will provide a boost for the government, which is preparing for a major shortfall in the annual tax take. Initial estimates show a 25 per cent decrease in the corporation tax take in 2008 and a shortfall of more than 55 per cent in capital gains tax receipts.

In a briefing with The Sunday Business Post in Brussels, Catherine Day, secretary general of the European Commission, said the commission stimulus package would contain ‘‘concrete and ambitious proposals’’ to help EU member states to deal with the economic crisis.

Day said it was likely that countries would be allowed greater flexibility from the EU Stability and Growth Pact, which limits borrowing by member states to 3 per cent of GDP. The flexibility will be allowed for a two-year period, after which members states would have to revert ‘‘back into discipline’’, according to Day.

But she warned that member states that were already in breach of the 3 per cent figure, including Ireland, would have less flexibility than other countries. The second part of the stimulus package is to ‘‘front-end’’ EU structural and social funds for member states.

Senior commission sources said member states would be allowed to drawdown structural and social funds ahead of target to boost their economies and maintain investment in capital and social projects.

‘‘It is about maintaining demand,” said Day, an Irishwoman who is the European Commission’s highest-ranking civil servant.

Report by By Ian Kehoe - Sunday Buisness Post.

Well it looks like the Irish have learned nothing - it's still borrow, borrow, borrow to spend, spend, spend! Hey let's party on guy's - but eventually reality will bite.

Thursday, 20 November 2008

More Price Cuts - Daft Property Scene - Ireland 2008...

Latest round of cuts as vendors move to sell...

Prices are tumbling at all levels of the market as homeowners accept that this is what's needed to tempt buyers

...four with deep price cuts:

NUMBER 72 LOWER Baggot Street was priced at €5 million when it first came to the market in August 2006.

Since then this price has been revised down to €3.8 million by selling agent Lisney, a cut of €120,000 or 24 per cent.

One of the last inhabited houses on Lower Baggot Street, the four-storey over garden level terraced house has been used as a home and dental practice for many years.

The 392sq m (4,200sq ft) of living space includes a self-contained flat in the basement.

It is also one of the few houses on that part of Baggot Street to still retain its full garden and mews - a two-storey mews house with three small bedrooms, and rear access onto a laneway.
The house was put up for auction back in September 2006, but failed to sell. It has been on the market quietly since then.

The surgery on the first floor is modern but the rest of the house has an old world feel and a new owner would more than likely spend a lot of cash turning it into a city centre trophy home.
With its location close to Baggot Street Bridge, this house is surrounded by offices. But with more and more south city Georgian houses reverting to residential use in town, number 72 might well interest wealthy buyers looking to escape the suburbs.

TERENURE: FROM €1.95M TO €1.375M
THE ORIGINAL asking price of 23 Eaton Square, Terenure, Dublin 6W was €1.95 million. But now the price of the 219sq m (2,630sq ft) four-five bedroom redbrick has been reduced to €1.375 million, a cut of nearly 30 per cent. It is being sold through Sherry FitzGerald.

Renovated and extended over the past 10 years, it's a smart and comfortable family home which overlooks Eaton Square, close to the centre of Terenure.

It has five good-sized double bedrooms, interconnecting reception rooms. A large open-plan kitchen/family/diningroom is the heart of the home: it opens into a low maintenance back garden with a stone patio.

There are wooden floors, and plenty of original details. There is off-street parking in a garage.

NUMBER 2 THE Vale is one of four luxury homes built in Kilmacanogue, Co Wicklow launched in October 2006.

The five-bedroom house originally had a price tag of €3.25 million. Now selling agent Gordon Lennox of Lennox Estates has reduced the asking price to €2.65 million, a reduction of €600,000 or 18 per cent.

Aimed firmly at well-heeled buyers looking for a turn-key home, Number 2 comes with all the bells and whistles - surround sound, a €100,000 Poggenpohl kitchen, central vacuum system, underfloor heating and spa-inspired bathrooms.

Located half a mile out from Kilmacanogue, The Vale is right beside Carrigoona Commons and is at the foot of the Sugar Loaf Mountain.

SAVILLS IS quoting €1.15 million for 8 Booterstown Park, €400,000 less than the original asking price.

When the four-bed house first came on the market in April, the price tag was €1.55 million. This was revised down to €1.45 million. A further revision brought the price down to €1.35 million.
Now, this, the third price cut, represents a reduction of 25 per cent.

A typical south Co Dublin semi-detached house, number 8 is laid out over 170sq m (1,828sq ft).
The property would suit buyers looking for a solid family home. Located off Booterstown Ave, Booterstown Park is close to excellent primary and secondary schools and convenient to UCD.

Report by Fiona Tyrrell - Irish Times.

Home Truths In These Recessionary Times...

We're getting back to basics in these recessionary times...

ANYONE WHO, like me, has only recently learned to appreciate the wonders of Lidl will not be surprised by Ulster Bank's recent revelation that spending took the biggest nosedive since 1983 in the first three quarters of this year and Irish consumers continue to spend cautiously in the run up to Christmas.

There was a time when the stark lighting, the anaemic decor (would a cheery sunburst yellow colour scheme be out of the question Mr Lidl?) and that curiously earthy smell once you hit the door (what is that?) was enough to have some of us running to the more sweet smelling Superquinn for cover. But our priorities are changing and we're discovering that rampant parsimony has its thrills.

The psyche of a nation, formed over 10 years of profligate spending, is under review and it's not just property we're holding back on, but household goods, which Ulster Bank attributes to the weakness in the housing market, clothing, footwear and even food. We're acquiring new learned behaviours. Instead of the old "see, want, buy", it's now more a case of "see, want, agonise, agonise again, only buy if it's needed and cheaper than everywhere else".

We haven't entirely shrugged off the behaviour of our recent past though. If you hit a Dublin shopping centre at the weekend, you'd never know we are in a recession. On a recent Sunday we went to Dundrum Town Centre and it was heaving with people. Admittedly few appeared to be weighed down with bags, so it begs the question that if retail sales are down, are people just wandering around shopping centres, soaking in the atmosphere without actually making many purchases?

I did spot quite a few Hamleys bags but you could put that down to a recession-proof universal law, ie if you want your day to go well, don't bring a child to a toy shop and try to leave without buying something. Our purchase was the cheapest thing in the shop, a Nemo-like bath toy for around €11. For anyone who is rediscovering their inner cheapskate, there are no end of bargains to be had as shops, companies and restaurants vie for custom in this difficult time. If you actually have the money to get a job done in the house, you will find tradesmen undercutting each other to get the job.

On the cusp of the recession we decided to have our lumpy back lawn relaid and even negotiated a price with a gardener. By the time he was ready to do it, we had some sobering financial news, and decided only to spend on necessary repair jobs, ie ones that would prevent the house falling down around us.

Up until recently we had a cleaner come in once a week to help us stem the chaos and dirt that accrues when you're full-time working parents with young children but now we've had to limit it to every third week. Although we're doing our best to keep a level of hygiene that won't attract the attention of social services, it's all starting to look a bit shabby around the edges. I've been looking into acquiring a staple gun to do a few quick fix upholstery jobs.

And it's not just our homes that are starting to lose their lustre, the recession is also taking the sheen off us as a nation. With twice weekly blow-dries gone by the wayside, I reckon I'm not the only one who has had the trauma of becoming re-acquainted with their real hair. I won't be buying a new LBD for the Christmas party but will be customising last year's one à la Gok Wan. And conversation has become more mundane as I feel compelled share my latest Lidl triumph: "Can you believe it, 39 cent for marrowfat peas?"

On a positive note we were nearly beside ourselves at the weekend when we went out for our now once monthly family lunch to the Old Boro in Swords and were offered a four-course lunch for €18.95. "Aren't the portions very generous," we kept on marvelling, while trying to do breakdowns of the cost of each course. If there's one upside to the current downturn it's that sometimes it's the simple things that make us happy.

Report by Edel Morgan - Irish Times.

Thursday, 13 November 2008

Irish Property Prices 'Worst In World'...

A new survey by the Royal Institute of Chartered Surveyors (RICS) has found that not only are current property prices in Ireland the worst in the world, but the outlook for Irish commercial property values is also dire...

After a decade of phenomenal rises, Irish property has hit its lowest level yet.

It's a far cry from those halcyon days when five of the ten counties with the highest house-price growth in the UK over the past decade were in Northern Ireland, with County Armagh's prices more than trebling.

Commercial property

Irish commercial property prices fell for the first time in five years during the first quarter of this year in what has been termed as an ‘unprecedented reversal' of the once buoyant market. Returns in the quarter were the worst since 1995.

Since the beginning of the year, the Irish property investment market has been characterised by a lack of transactional activity, with only £322 million of Irish investment deals signed in the six months to the end of June 2008 compared to £1 billion in 2007.

Irish investment in UK property plunged to £654million in the first six months of 2008 compared with £5 billion of investment transactions in the UK in 2007.

According to the RICS survey, the outlook for commercial property in Ireland is the worst in the world, with 10 per cent of survey respondents expecting Irish property prices to fall in the fourth quarter of the year for shops, offices and warehousing units.

This is despite efforts from the Irish Government to revive the flagging commercial and residential markets with a host of measures included in the 2009 Budget, one of which is cutting stamp duty on commercial property.

The universally unpopular tax has been lowered from nine per cent to six per cent, but it still remains still higher than the European average of five per cent and the UK rate of four per cent.
The lack of bank funding is continuing to cripple the Irish commercial property market, according to the final bi-monthly market update for 2008 of property consultants CB Richard Ellis.

CBRE says conditions in the Irish commercial property have continued to deteriorate in recent months against a backdrop of weakening economic indicators and financial market turmoil.

The property consultants say that some landlords have started to accept slightly lower headline quoting rents in addition to inducements such as rent-free periods and break options to secure lettings in their schemes. However, many occupiers are postponing expansion or re-location decisions until such time as economic conditions improve.

While 50 per cent of respondents to the RICS survey expect Irish commercial rents to fall in the fourth quarter, this is below the expectations for UK and US, where around 60 per cent expect rents to fall.

Property prices

Ireland was also ranked worst in the world for property prices in the third quarter, a position it shared with Slovakia. In contrast Brazil was ranked best in the RICS survey according to 65 per cent of respondents, followed by the UAE and Nigeria.

Economist Patrick Koucheravy, of agents CBRE, said he was not surprised at the negative sentiment towards Irish prices.

"The survey partly reflects the increasingly negative international sentiment towards Irish commercial property resulting from the small scale of the market, the lack of international investor presence, and the relatively high rate of stamp duty prevailing up to last month," added Mr Koucheravy.

Report by Catherine Deshayes - The Move Channel.

Wednesday, 12 November 2008

Ireland The Emerald Isle - But Just How Green Are The Irish?...

Irish use of resources not sustainable, says Gormley...

IRISH PEOPLE are "living beyond our environmental means" and are using too much of the planet's resources, Minister for the Environment John Gormley will tell a sustainable development conference today.

Mr Gormley was referring to a recent report commissioned by the Environmental Protection Agency (EPA) which found that if everyone in the world consumed as much as an Irish person, three planets would be needed to sustain the world's population. The report also found that meeting policy targets in relation to the reduction of the State's "ecological footprint" would not be enough to live within the capacity of global resources.

Speaking ahead of his address to the annual conference in Dublin today of Comhar, the sustainable development council, Mr Gormley said Ireland must rein in its consumption of resources.

"We are living beyond our environmental means. If everybody in the world consumed as much as an Irish person, we'd need three earths. We need to assess how we move towards a more sustainable environment and a more sustainable economy where everyone has room to breathe," he said.

Mr Gormley acknowledged that current policies were not sufficient to reduce the State's ecological footprint. However, he said the Cabinet subcommittee on climate change was working to develop new policies.

At the conference yesterday, it was claimed an increased focus on sustainable development could help Ireland out of recession.

Prof Frank Convery, chairman of Comhar, said encouraging sustainable building could ensure the construction sector does not collapse and that sustainable businesses could thrive and give the economy a "much-needed" boost.

"We need to promote economic, environmental and social sustainability to ensure we overcome the current economic downturn and establish ourselves as leaders in developing sustainable communities," he said.

Other speakers included Tom Coffey of the Dublin City Centre Business Association and John Vidal, environment editor of the Guardian newspaper.

Mr Vidal said it was important for authorities at national, local and grassroots levels to work to develop a more sustainable approach to living or else risk life in cities becoming untenable.
"There seems to be a gulf with different visions of sustainability and clearly there is a need in Ireland, as well as in the UK, for a national debate about which way the countries develops," he said.

"With a potential recession the stakes are very high, clearly Ireland can not continue its breakneck, hell for leather unsustainable growth and a new model of development is needed."

Report by OLIVIA KELLY and STEVEN CARROLL - Irish Times Newspaper.

So Irish people are living "beyond their environmental means" as well as "living beyond their means"??? How green can you get!

No wonder it's called Ireland "The Emerald Isle"!

Sunday, 9 November 2008

"Shit Happens"- Economic Crisis & Bart Simpson Defence...

Shit happens, but why Brian?

Brian Cowen seems to have decided to take refuge in a variation on what is known in political speak as the Bart Simpson defence.

And no, relax, he's not suggesting we eat his shorts, more the other Bartism: "I didn't do it, nobody saw me do it, you can't prove anything.'' Cowen's version was: "There's no crisis, OK maybe there is a crisis but it's not my fault, why can't you people get it through your thick skulls that there is a crisis."

Back at the start of the summer, when even Fine Gael knew there was something wrong, Cowen was telling us that the fundamentals were sound. Having announced a saving of half a billion, which was going to solve all our problems, Cowen and his whole Government then disappeared for the whole summer as the world plunged into crisis.

Then they all reappeared after their long break to concede that, all things taken into account and having examined the figures, there might be a problem. The important thing though was that the problem was not Cowen's fault. It was a fairly typical civil service reaction. When confronted with an urgent situation in the private sector our immediate reaction is to look for a solution; in the civil service the priority is to cover your ass.

And then Cowen moved into phase three, which was to hector us, the people, for not getting the magnitude of the crisis. Even though most of us got it long before Cowen did. In his latest opus in Hot Press, Cowen suggested last week that everything was fine in Ireland until Lehman Brothers. So Brian Cowen thought things were fine with Irish banking and the financial system until September 15. So Bank of Ireland shares, for example, had lost about three quarters of their value before Lehmans happened, but Brian still thought everything was fine? Truly he has the finely honed instincts of a trained killer.

In general, Cowen has been practising a new form of government. We like to call it the "shit-happens" school of government. Basically, you go around acting like you are just a bewildered outsider watching events unfold, events that are completely outside your control. Events which you cannot, nor should you be expected to, do anything about. And you talk gravely about how bad it all is and what a shock it all is, and then you kind of shrug your shoulders as if to say, "Shit happens".

"There's financial turmoil out there," Cowen says, "from which we cannot go on thinking we're immune." So true. Except the rest of us never thought we were immune. Did Brian Cowen? Bizarre. He talks too of the need for "dialogue with the public so we understand what we're facing into and why we should confront it". Hilarious. We've been confronting it since before Cowen knew it was happening. We confronted it all summer while he was on holidays.

Nice to see you've caught up Bri.

Report - Sunday Independent Newspaper.

Saturday, 8 November 2008

Dublin Get's Early Xmas Lights - But, As Property Prices Slump, It's Doom & Gloom For Xmas 2008 In Ireland...

Dublin's early Xmas lights failing to dispel high street gloom...

Christmas is coming early to Dublin this year as city officials try to dispel the gloom from the country's first recession in two decades.

Mayor Eibhlin Byrne will switch on the Irish capital's festive lights display on Nov. 9, before cities such as London, New York and Edinburgh, after bringing the ceremony forward by three weeks from last year.

''For retailers, it's not an easy time,'' said Byrne. ''We are harking back to John F. Kennedy and we are asking not what your city can do for you but what you can do for your city.''

Irish shoppers powered the fastest-growing economy in Western Europe over the last five years. Now, consumers are cutting spending as unemployment rises and property prices slump.

Gerry Harvey, chairman of Sydney-based electronics and furniture retailer Harvey Norman Holdings Ltd., which has four Dublin stores, described Ireland's economy as ''a basket case.''

''They are putting on the lights early to make people spend their money,'' said Margaret O'Hara, 70, browsing on Henry Street, one of the city's main shopping boulevards. ''The shops are not doing business. There's no bustle there.''

There are signs of the slowdown throughout the city of 1 million people. Across the River Liffey, which divides Dublin, a 22,000 square-foot store housed in a converted 18th century building lies idle, after a franchise of London-based furniture retailer Habitat Ltd. closed down its outlet in May, blaming declining sales on a slump in the property market.

Crunch lunch

Nearby, on the city's quays, Yamamori Noodles is offering a credit crunch special: a bento box including sushi, rice, miso soup and a glass of champagne for €18.95 euros.

''Putting the lights on early may have a psychological impact, persuade people to have a last fling,'' said Alan McQuaid, chief economist at Bloxham Stockbrokers in Dublin. ''But there's such negativity around, it'll have a marginal impact.''

Irish retail sales fell the most in almost a quarter-century in August and consumer spending will drop around 1 percent this year, according to McQuaid. By contrast, spending rose 6.5 percent on average in the previous two years.

''Our like-for-like sales in Ireland are down and if the same thing was happening in Australia we wouldn't be making any money,'' Harvey of Harvey Norman said on Sept. 30. ''I've never seen a situation where like-for-like sales fall more than 20 percent, that's what is happening in Ireland.''
Sarah Kells, a 26-year-old nurse, said she plans to cut her Christmas spending by as much as 40 percent to about €300.
''I've a huge family,'' said Kells. ''We've all decided not to buy each other presents.''


The Irish didn't confine themselves to home, either. Last year, 291,000 Irish shoppers traveled to New York, spending about €500 million, according to Dublin-based lobby group, the Irish Small and Medium Enterprises Association.

''Show a little bit of patriotism,'' said Byrne. ''There is no point saying 'I love Dublin' but shopping in New York.''

As part of a campaign to keep shoppers spending in Dublin, businesses in the city are spending €1 million on Christmas lights, including an 18-meter, five-ton structure made up of 100,000 bulbs on O'Connell Street, Dublin's main thoroughfare. Not everyone backs the decision.

''I hate to see Christmas trees going up too early,'' said Louis Copeland, who runs five men's clothing stores in Dublin. ''Christmas always happens, there's no reason it won't happen this year.'

The slowdown is benefiting at least some Irish retailers. Copeland, who lines his store walls with photos of celebrity clients including actor Kevin Spacey, says sales are recovering after falling by as much as 20 percent in May.

''With the recession, people are starting to be more conscious of what they wear,'' said Copeland. ''For a while, people were dressing down, everyone got sloppy.'' (Bloomberg)

Report by Louisa Nesbitt - Irish Independent Newspaper

Friday, 7 November 2008

Not So Daft! - Irish Property Buyers Wait For Market To Hit Rock Bottom To Find A Bargain...

'Hot' buyers wait in the wings for market to bottom out...

ESTATE AGENTS who feel they may never complete another good sale should be cheered by some new research from Sherry Fitz-Gerald. A survey carried out by the company suggests there are over 650 buyers with an estimated €831 million to spend in the Dublin residential market - as soon as prices have stabilised.

Group chief executive Mark Fitz-Gerald sees prices bottoming out in the next six months, with prices having already dropped by 35 per cent in some neighbourhoods.

The survey carried out among the company's branches has identified 656 "hot buyers" in the Dublin area; people who have expressed a strong interest in buying in the coming months.

An additional 74 buyers are poised to spend €26 million in Cork city, according to the agency's research.

Sherry FitzGerald found that 65 buyers are waiting in the wings to buy property in Ballsbridge, with a collective budget of €129 million.

In the area stretching from Blackrock to Glasthule, with Deansgrange and Stillorgan in between, there are no less than 92 strong potentials with €213 million to spend between them.

The Terenure branch has identified 88 would-be buyers with an interest in homes stretching from Crumlin to Dartry and Walkinstown to Rathmines, while in the Dalkey, Sandycove, Killiney area, 30 potential punters have, on average, just over €1 million to spend.

Ninety-seven "hot buyers" are standing by in the Dundrum area with a collective €66 million to spend, while 22 buyers are identified by the Sutton branch as having an estimated €23 million to spend between Kilbarrack, Raheny, Sutton, Howth and beyond.

Greystones and Delgany between them have an estimated 20 people intending to buy in the coming months, with a combined budget of €13 million.

Meanwhile the Drumcondra to Finglas stretch has an estimated 30 buyers ready to spend up to €18 million on property in the coming months.

The exercise is being repeated in estate agency firms across the city, as estate agents seem to agree on at least one thing: there are buyers out there, but only if the price is right.

Report by ORNA MULCAHY - Property Editor - Irish Times.

Thursday, 6 November 2008

Ireland Paying For 'One Hell Of A Borrowing Binge'...

Country now paying for 'one hell of a borrowing binge'...

WE HAVE been on "one hell of a borrowing and spending binge" in recent years and now we have to face up to a radical change in our standard of living and expectations, the Céifin conference heard.

Jim Power, chief economist with Friends First, said the Government's role in allowing spending to grow by 10-12 per cent a year in recent years was "absolutely criminal" and we would now pay for that mismanagement.

Personal debt rose from €20 billion to more than €140 billion between 1999 and 2007, he said. "That is . . . one hell of a borrowing binge."

Asked about the role of the banks in fuelling spending, Mr Power said he had worked as a banker for 20 "very unhappy years" and the incentivisation structures always worried him.

"You were incentivised on the quantity of what you sold, not on the quality. I think the incentivisation structure did encourage irresponsible behaviour."

He said the Government would have to take tough decisions such as tackling taxation. "I wouldn't be in favour of a significant increase in taxes, but what I do think we need to look at is a significant widening of the tax base. It's not very popular, but I believe a property tax is essential."

He also urged against education cuts, saying education was the key factor if we were to emerge from the economic situation intact.

Mary Forde, principal of the Presentation College, Athenry, painted a bleak picture when she spoke of teachers being forced into parenting roles because some parents were incapable of doing this. "It's not unusual for us to provide breakfast, dinner and supper for some children. And that's not just in my school," she said.

Ms Forde pointed to the Budget cutbacks which will come into force in January, and asked how schools would be able to continue to help such students.

"I really can't go to the convent again, looking for another extension of finance," she said.

Teachers were forced to intervene to assist children from broken homes and many felt they did not have the skills to help. Children from dysfunctional homes have told teachers "I wish there were no holidays" as they went on the summer break, she said.

Ms Forde was delivering the inaugural Patrick Hillery Memorial Lecture. The former president was a regular attender at the annual Céifin conferences.

Bishop Willie Walsh presented the 2008 Céifin award to Dr Hillery's widow Maeve.

Report by ALISON HEALY - Irish Times Newspaper.

Monday, 3 November 2008

House Price Crash - Irish Homeowners Now Into Negative Equity...

140,000 homeowners 'have fallen into negative equity'...

Jim Power, chief economist with Friends First, said: "I reckon the majority of first-time buyers who bought into the market over the last three years are in negative equity."

Analysing the gains made up to the peak of the housing boom, and the losses since, Mr Power said negative equity was affecting "at least 140,000 people and that's rising by the day".

He warned that, in terms of the recession, "we haven't seen anything yet" and predicted the numbers in negative equity could reach 200,000 by the end of 2009.

Latest Census figures show there were 570,000 residential mortgage holders in 2006, with tens of thousands of new mortgages taken out since.

So the continuing decline in house prices means that one in three mortgage holders are likely find themselves trapped in a home worth less than the loan they took out to pay for it.

With €125bn owed on Irish mortgages, homeowners facing rising debts will be desperate for another European Central Bank interest rate cut, which could come on Thursday.

According to Mr Power: "Negative equity becomes a serious problem if you lose your job. It doesn't matter where house prices are or where interest rates are when you're faced with having to sell your property in a situation like that.

"A lot of people are going to lose their jobs in the next 12 months so it will be a significant problem. For everyone else, negative equity is not the end of the world."

According to the Permanent TSB/ESRI house price index, prices reached their peak in March 2007 and have fallen 15pc since.

But many within the industry believe that the real drop has been as much as 30pc.

This is borne out by recent research by Goodbody Stockbrokers, which suggests that house prices will have fallen 30pc by the end of 2009.

According to Sherry Fitzgerald, second-hand properties in Dublin are down by almost a third from a peak in June 2006.

Niall O'Grady, Permanent TSB's general manager business strategy, said: "Prices are now where they were in the third quarter of 2005.

"Anyone who bought in the intervening period and who took out a 100pc mortgage, depending on the part of the country they bought in and the type of house they bought, there is the potential for negative equity.

"It is impossible to predict what will happen with prices next year but we are expecting the trend of the last 15 months to continue in the first half of 2009."


Houses in some of the most exclusive neighbourhoods in Dublin 4 are down by as much as €4m while prices in some new developments in west Dublin are down by €100,000.

Those most vulnerable to negative equity are first-time buyers, those who took out 100pc mortgages, or those who have high loan-to-value mortgages of over 80pc. During the peak, a worrying one in three homebuyers took out 100pc mortgages.

And with unemployment expected to spiral to 8pc next year, many homeowners unable to meet mortgage repayments may be forced to sell their property for less than they paid.

A recent report from the Bank of England warned that 1.2m people are in negative equity there.
Mr Power said the situation in Ireland could, relatively speaking, be "every bit as bad, if not worse".

Meanwhile, figures on housing yesterday revealed that every county in Ireland has seen a slump in housing starts.

Dublin was the best performing county yet it has seen output fall by almost 50pc this year, while 15 counties have seen reductions of 70pc or more.

The Construction Industry Federation warned that up to 40,000 jobs would be lost in this sector by the end of next year.

Report by Breda Heffernan - Irish Independent Newspaper.

Sunday, 2 November 2008

Ireland Property Crash...Building Sector To Lose 40,000 Jobs - 2009

Building sector to lose 40,000 jobs next year...

Many leaving to seek work in the Middle East.

THE Irish economy is dead on its feet and as many as 40,000 construction workers could lose their jobs next year as housing starts have slumped to pre-1993 levels, according to latest figures obtained by the Sunday Independent.

So bad are things here that a number of leading Irish building companies are leading an exodus of our most skilled and talented workers to foreign lands in the search for work.

It has emerged that Irish firms are now lining up work in places like Dubai and Iran, both of which are experiencing building booms.

In what is further bad news for the Irish economy, the number of housing completions this year will be just 45,000 compared to the 93,000 at its peak two years ago, and next year it is reckoned that the number of completions will be less than 20,000.

This year, not one county in Ireland has managed to match or better the number of housing starts last year.

In a shocking realisation of how bad things are, in September of this year, 12 counties started less than 10 houses while four counties Wicklow, Longford, Roscommon and Cavan started no houses what so ever.

Fifteen counties have seen reductions in output of 70 per cent or more and Dublin was the best performing county, yet it has seen its output fall by almost 50 per cent.

In total, only 1,112 developments were begun throughout Ireland in the month of September, and so far this year only 16,738 houses have begun construction, compared with 45,718 in the same period in 2007.

Hundreds of small developers have gone under as a result of the market collapse. One such builder is Denis Finn, from Howth, whose story has been told in the Sunday Independent and in the Washington Post.

His company went bankrupt and he dismissed his 34 employees. Mr Finn made no money when he sold an old lodge, and recently lost more than $1m when the bank repossessed his two unfinished houses and sold them for less than half the price he had envisioned.

"I have never seen property values in my life go down, and they just took a nosedive," said Mr Finn, a father of four. "I had a good little company; now everything is gone," Mr Finn said. "It's just painful."

The Construction Industry Federation said further casualties are likely, and Ireland will build less than 20,000 houses next year. CIF director general Tom Parlon said: "While we will look to do something like 45,000 houses this year, we'll be nowhere near that next year."

Mr Parlon said that if only 20,000 houses get built next year, which is an optimistic projection, 40,000 construction jobs will be lost.

At present, the collapse in house starts is as a result of an oversupply of stock, but the CIF has warned that the shutdown in activity has been too "sharp" and could lead to another shortfall in the next 12 to 18 months.

But it has emerged that a number of leading Irish developers have just returned from Dubai where they have begun tendering for major civil and private building projects. Given the property boom, many Irish firms are seen as having the expertise necessary to carry out such major projects.

Several firms have also moved into Iran which is also embarking on multi-billion dollar large-scale projects.

Report by Sunday Independent Newspaper.

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