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Tuesday, 29 September 2009

House Prices Crash...

Average house prices are now back at January 2004 levels - report...


AVERAGE HOUSE prices in Ireland are now back at the level seen in January 2004, according to the latest ESRI/Permanent TSB house price index.

Prices fell by 1.5 per cent in August, according to the data released yesterday, bringing the decline in the past year to 13 per cent. According to the survey, house prices have now been falling for two full years and are 24.4 per cent lower than at their peak in February 2007.

Niall O’Grady, general manager of business strategy at Permanent TSB, said the rate of decline had been more dramatic during the summer due to the low levels of activity in the market and a lack of confidence in any recovery this year.

“Recently, prices have started to fall faster in the Dublin region due to the high level of surplus stock available,” he said.

House prices in Dublin have fallen by 18 per cent over the past year, compared with a 12 per cent decline for property outside the capital, the survey found. The average price for a house in Dublin is now €306,795 compared to €351,096 at the turn of the year.

Away from Dublin, the average price is now €204,524. At the end of 2008, the average was €223,984. The survey is likely to show further falls in coming months as the index is a three-month moving average and is based on agreed sale prices, but only calculated when mortgages are actually drawn down.

The time lag between a price being agreed and a deal closed means that the influence of the lacklustre summer market will be felt for some time yet.

The lack of activity in the market is illustrated by the dearth of detail in the Permanent TSB survey. Traditionally, the survey provided data on the prices being paid by first-time buyers compared to people trading up.

However, the lack of business in the market has led the Economic and Social Research Institute to determine that there is not a sufficient sample size to produce meaningful data.

The same is true for figures on the difference between new and existing properties and for the performance of homes in the commuter counties.

On the basis of the survey, however, it is likely that most people who acquired their home in the past five years are now experiencing some degree of negative equity.


Report by DOMINIC COYLE - Irish Times

Monday, 28 September 2009

Lowest New House Completions...

New-house completions at lowest since 1970s...


HOUSE completions are to fall to their lowest level since records began in the 1970s.

The number of new homes expected to be finished next year will be 10,000, whereas even during the recession-hit 1980s the lowest number of completions was 15,654 in 1988.

A gloomy economic forecast from the Department of the Environment says it will be another two years before we see a return to economic growth. And it says that the estimated 150,000 unsold homes currently on the market will discourage new building activity for the next four years.

The Construction Industry Outlook 2009-2011, conducted by DKM Economic Consultants for the department, finds that the current downturn in the industry is the most severe on record and that the number employed in the industry could fall to just 138,000 by the end of the year. This is half the number employed in 2006 at the height of the boom when 267,000 people worked in construction.

New figures from the Department of the Environment show that just 7,611 units were completed in the first three months of 2009, a drop on 46pc on the same period in 2008, and it's expected that only 17,000 will be built this year.

This number will plummet again to the lowest level on record in 2010 and 2011, when only 10,000 units are expected to be finished. This will have serious implications for state coffers, with stamp duty receipts already in freefall because of the collapse in the housing market. And with no improvement expected until at least 2012, it means the Government will not be able to rely on taxes from property purchases.

"The most pressing problem in the residential market is the surplus housing inventory, which is leading to lower prices and lower production," the report says. "The oversupply of units available in the market -- over and above what is considered as the 'normal' level of vacant units -- is estimated at 136,000 units on average, which is equivalent to around four years of current housing demand although this is likely to be considerably less in some areas of the country.

Pressure

"The cut back in production is very severe, with less than 5,000 commencements in the first half of 2009. With public sector construction under pressure due to financial constraints, the medium-term projection is for just 10,000 new residential dwellings per annum in 2010 and 2011."

A spokesman for the Construction Industry Federation said the fall in house completions meant that valuable skills were being lost, and that when the economic recovery came the industry might not be able to cope with demand.

The report also says the value of construction output in 2008 was €32bn, or 21pc of GNP. This figure is expected to fall to €20bn by the end of the year.



Report by Paul Melia - Irish Independent.

Friday, 25 September 2009

1980's Déjà-Vu...

A little bit of history repeating...

Shoulder pads, Arctic rolls and grown-up boybands. We're reliving our youth...

Have you noticed how eerily familiar so many things feel at the moment? Take a walk round the shops and you'll see Dynasty-inspired shoulder pads, stone-washed denim and 1980s neon bright colours.

Just recently Blur headlined at Glastonbury, The Eagles played Dublin and Michael Jackson topped the charts.

Meanwhile, the hottest rumour circulating in the film world is that singer Rihanna is set to reprise Whitney Houston's role in a remake of 1990s classic, The Bodyguard.

The whole world seems to be suffering a collective case of déjà-vu.
The nostalgia wave has even hit food. Milky Way has re- issued their 1989 'the red car and the blue car' ad, Birds Eye's Steakhouse and Arctic rolls are back on the shelves after a 12-year absence and Cadbury is describing the re-launch of the Wispa bar as 'the most successful revival ever'.

According to psychologists, part of our collective fascination with the past and trying to recreate it is rooted in the current recession.

Psychologist Ann Marie McMahon says: "When people sit down and have their Bird's Eye meal they're thinking about everything that went with that. It's not just about having a meal, its about a world that we lived in and a desire to reconnect to it."

As we try to make sense of today's unstable economic climate, the gut reaction is to take solace in the familiar and it's a concept the music business has been quick to catch on to and exploit.

Take That led the way with a reunion in 2006. Their screaming girl fans were all grown up and the music industry had transformed in the decade since their split, so few, including the band themselves, could have expected the rush of adoration that greeted their return to the charts.

Their most recent Circus tour sold over one million tickets and beat Michael Jackson's record for the fastest-selling tour in UK history. Keen to cash in on the Take That effect, we've now seen everyone from The Spice Girls and Boyzone to Crowded House and Limp Bizkit jump on the reunion bandwagon.

"The comeback has always been part of show business," explains former associate editor of NME, Stuart Bailie. "But it very rarely adds anything to the band or musician's musical legacy.

'At base, the music business is a commercial industry and there's a lot of dough in getting a big name back on stage. Today's thirtysomethings dictate the market and they'll happily pay for a babysitter if they can go out for a night and see a band that helps them relive their youth."

According to Bailie, the trend for resuscitating old talent is also a disappointing indication of how few new stars are emerging.

He says: "I think there is a bit of a charisma vacuum at the moment and we're making do with the reheated leftovers of a previous era.

"When Blur and Oasis broke through in the 1990s, people really got excited and ready to wave in new music and acts. But there's been nothing like that in music for a long time. People might buy a Kasabian CD and quite like it but its not going to be life-changing for them.

"It's a terribly uncertain unfocused time for the music industry and I think it's lost its way."

But at least in music, it's the original artists up on stage re-hashing their crowd-pleasing material, albeit a little older and slower than before. In most instances (with the notable exception of The Jimi Hendrix Experience) if a customer pays top dollar to see an old favourite return to the stage, then that's exactly what they'll get.

Cinema by contrast is taking much-loved concepts and giving them a hi-res, CGI-friendly Noughties makeover. Short Circuit, Total Recall, NeverEnding Story and Top Gun are all up rumoured to be up for remake. It's one thing to reintroduce an Arctic roll, but surely messing with 1980s movie classics is a step too far?

Film critic Mark Cousins disagrees. "Remakes can be better than the original. The Wizard of Oz was a remake, Singin' in the Rain was a bit of a remake and plenty of great horror movies are remakes," he says.

"Films like The Karate Kid and Total Recall had bits that were good and bits that now look a bit clunky, there's definitely room for them to be improved."

Moreover, Cousins isn't convinced that the recession is the driving force behind in the wave of nostalgia-inducing 1980s remakes.

"The ideas tray is always pretty empty in Hollywood, so recycling has always been popular in the movie industry," he explains.

"I think the era of the DVD is playing a bigger part in the amount of films being remade than the recession or a craze for nostalgia.

"Many international film companies are buying back catalogues of film rights to release on DVD. Then they realise, since they have the rights, they're free to do big, blustery new versions of the film that will appeal to new audiences.

"This Lazarus effect of film rights explains, I think, why older movies are being redone."

But the fact remains that if there was no public demand for retro entertainment, the supply would soon dry up.

To some degree, we all -- particularly in stressful times -- enjoy retreating into something that makes us feel better. If taking time out to watch Charlie's Angels is just a brief pick-me-up that's fine, but counselling psychologist Lorraine McColgan warns against long-term escapism.

"It's not a great idea to give nostalgia too free a reign," she says.

"Whenever a generation comes of age, we always see some degree of revival. The generation dictating what we have at the moment grew up in the 1980s and saw that as a time of safety and potential.

"Even though it was an era of boom and bust, they didn't have to deal with it."

She adds: "But only taking inspiration from memories is not the best way to cope with the present. It's important right now for people to find inspiration in the present so we can maintain momentum and keep moving forward.

"If we're to get out of the trouble we're in we have to look forward, not back."



Report by Chrissie Russell - Irish Independent.

Thursday, 24 September 2009

Construction Deflation...

Builders? You can afford them now...


JUST WHEN the construction industry thought the news couldn’t get any worse, it suddenly did. Several reports published this week have painted a bleak picture for an industry already on its knees after the property sector meltdown...

They indicate that prices for big and small construction jobs have fallen almost as dramatically as jobless numbers in the sector have risen.

Although homeowners will have sympathy for individual tradesmen who have lost their jobs, they will relish the consequential price drops and the sudden availability of tilers, plumbers and carpenters who could not be got for love nor ridiculous sums of money at the height of the boom.

“Builders were making money hand over fist for years and even at a 30 per cent discount they are still making money and don’t let anyone tell you any different,” one industry source unsympathetic to the plight of builders told The Irish Times this week.

The Construction Industry Federation stoutly rejected the comments and claimed it was ignorant of the realities faced by Irish builders.

It will, however, find a more sympathetic ear amongst consumers sick of being ripped off and delighted to see the price of a single concrete block being laid – to pick just a single example – fall from €2 at the height of the boom to a somewhat more realistic 50 cent per block today.

Tender prices for the construction industry have fallen to levels not seen since 1999, according to figures published this week by the Society of Chartered Surveyors (SCS).

It says the rate of deflation is accelerating, with prices down 10.5 per cent in the first six months of 2009 and 17.3 per cent since last September.

Contractors and sub-contractors are now bidding well below cost just to secure work and keep cash flowing, a practice which is unsustainable according to Ken Cribbins, SCS president. On Monday he warned that if activity failed to pick up, more firms would go out of business.

His fears were borne out almost immediately by figures from the Central Statistics Office showing that 86,800 construction workers had lost their jobs in the last 12 months.

With stagnation in the market and the banks’ extreme reluctance to issue mortgages, anecdotal evidence from architects, quantity surveyors, builders and estate agents suggests people are deciding to take advantage of cheaper construction costs to embark on small scale renovation projects instead of moving house.

According to the recently published Onlinetradesmen.com price index, compiled from data obtained from over 200,000 home improvement projects submitted via the online service since 2005, the average spend per home improvement project this year is €5,659, down from a high of €14,044 in 2007.

The reduction has been driven largely by a drop in tradesmen’s prices as well as a trend towards smaller home improvement projects.

The index shows the average building cost is now €82.50 per sq ft down from €171 per sq ft in 2007. Plumbers have reduced their costs, with the nationwide average hourly callout rate now just under €60, down from a high of €109 in 2007. Electricians have also reduced their costs significantly.

While the headline figures are stark and consumer friendly, they may not tally with the experience of many homeowners getting quotes for small scale projects.

According to surveyor John Nolan of Austin Reddy Co, the biggest price falls have been on the large volume work “but when you get back to the smaller, domestic jobs, the room for builders to manoeuvre on price is much more limited”.

One factor keeping the domestic renovation sector more buoyant than it otherwise might be is its reliance on word of mouth.

“If you are going to go with a builder based on the recommendations of others, then it inevitably limits the size of the pool and takes the competitive edge away,” Nolan says.

“Most people are prepared to pay a premium for peace of mind when it comes to their own homes.”

Nolan says that while tender prices for large scale projects has fallen by over 30 per cent, the domestic market has fallen by closer to between 10 and 15 per cent.

“If you tender you will get much lower prices than you anticipated but I can guarantee you that the price at the start will not be the same as the price at the finish.” He also warns people to be “wary of a builder cutting costs to such an extent that they don’t have the capacity to finish a job”.



Report by CONOR POPE - Irish Times

Wednesday, 23 September 2009

Emigration Hits New High...

Emigration hits new high as foreign workers leave...



FOREIGN workers have been losing their jobs in droves and leaving the country -- resulting in the first net emigration since 1996.

Figures from the Central Statistics Office show that a quarter of all the jobs held by foreign workers disappeared in the 12 months to last April. Most of these belonged to workers from eastern Europe.

This job loss compared with a drop of 8pc in employment overall. This reduction, and a doubling of unemployment to more than 11pc, is the steepest decline in the labour market ever recorded.

It was driven by a loss of more than one in three of all building jobs -- where employment collapsed by 86,000 -- a 13pc fall in retail and wholesale, and a 9pc drop in industrial employment.

Analysts say the worst of the jobless rises may be over, with increasing emigration keeping down the total. They expect unemployment to peak at around 14pc next year -- better than earlier estimates of 17pc.

"These figures to April do not capture what seems to be faster emigration in recent months," said Rossa White, economist at Davy Stockbrokers.

Distance

"The pace of job losses is slowing, said Austin Hughes, chief economist at KBC Bank. "However, the likelihood is that we remain some significant distance from any prospect of a turnaround in employment prospects here or abroad."

Almost 14pc of the labour force -- more than 300,000 people -- described themselves as unemployed in April. The official figure of 260,000 is based on the strict international definition of working less than one hour in the previous week.

Employers group IBEC said the figures emphasise the acute need for further labour market supports. "We must in the first instance prevent job losses to the greatest extent possible. The scale of the €250m package announced over the summer is inadequate," IBEC economist Reetta Suonpera said.

CSO estimates say that 18,000 Irish-born people left the country in the 12 months to April, which is less than the number who departed in 2006. But 47,000 foreign-born people emigrated, while the numbers coming into the country fell from 84,000 in the previous 12 months to 57,000.

This left net emigration of 7,800 -- the first such outflow in 13 years but still small compared with past figures, especially where Irish citizens are concerned.

"We don't have a breakdown by nationality of the 70,600 who emigrated in 1989, but it is safe to say that emigration by Irish nationals is not yet running at anywhere near those levels," said Brian Devine, chief economist at NCB Stockbrokers.

Over a third of the Irish-born emigrants went to the UK, with a further 30pc going to Australia. Less than 4,000 went to the USA, and not all of them were Irish nationals. A similar number are believed to have gone to Canada.

An age breakdown of total emigration showed that 46pc were aged 25-44 and 40pc were 15-24.

The fact that only 1,200 children were recorded leaving suggests the emigrants were mostly single people.

Stephen McLarnon, who organises exhibitions on job prospects overseas, said many young people were trapped in negative equity on their homes and could not avail of opportunities abroad.



Report by BRENDAN KEENAN - Irish Independent

Saturday, 19 September 2009

Last Chance Saloon...

Superpub entrepreneur now entering last-chance saloon...



CAPITAL Bars is the Dublin hotel and superpub group owned by brothers Liam and Des O'Dwyer.

Through Capital Bars, the O'Dwyer brothers own a number of prominent premises in Dublin, including superpubs Cafe En Seine, which holds up to 1,500 people, Zanzibar and the Trinity Capital Hotel.

The chain also includes Break for the Border and Howl At The Moon.

Like many of the country's hospitality entrepreneurs, the O'Dwyer brothers have been exposed to the downturn.

Earlier this year the group said that it was experiencing "huge downward pressure on room rates and occupancy" and said that it was engaged in "aggressive cost cutting".

Last May Deepdrill Developments, a property vehicle controlled by the two brothers, filed a High Court petition to shut down Danninger, the main operating company behind Ireland's biggest developer, Liam Carroll, who will seek an unprecedented second examinership hearing in the Supreme Court next week for his Zoe group of companies.

But it was conditions placed on a loan facility from Allied Irish Banks, which is owed €26m by Marino Limited -- the parent company that distributed loans down to the O'Dwyers' subsidiaries -- that forced the industry pioneers to seek court protection yesterday.

The O'Dwyer brothers are hoping to break up their empire into "good" and "bad" divisions, allowing the latter to be liquidated to allow their profitable companies to survive.

In all, up to 350 jobs in the capital are at risk.

The High Court will hear a full examinership application next month.



Report - Irish Independent

Friday, 18 September 2009

Property Investor...

If the Green Party has its way, there will be no immediate recovery in property values...

THE LAST few months have been spent analysing the wreck that is the Irish property market. Though most attention in recent weeks has centred on Liam Carroll’s attempts to save the Zoe group of companies, punters have been equally interested in the huge price reductions for new apartments and second-hand homes.

Luckily for first-time buyers, there are mortgages available for many of those who can comply with the strict new ground rules on job security, earnings and savings. For others anxious to trade up now that prices are on the floor, there can be little prospect of securing bank loans unless the Nama strategy works and the banks are recapitalised to resume lending, first of all to businesses and, after that, to house purchasers.

Mind you, the events of last week did little to inspire much confidence in the property industry. Firstly, there was the proposal to introduce a punitive property tax on all homes to compensate for the abolition of stamp duty. The new tax was also to apply to first-time buyers, a change not expected because they were already exempted from paying stamp duty. The recommendations from the Commission on Taxation would hit residential investors hardest of all because they would have to pay both the stamp duty and the property tax at a time when rents are continuing to fall and the vacancy rates are rising even in Dublin city centre.

A property tax directly affecting both first-time buyers and residential investors would, at the very least, create uncertainty among the two key groups who would normally be expected to clear the enormous backlog of new homes overhanging the market. For the moment, residential investors will remain out of the market, if only due to difficulties in getting mortgage approval.

If the Green Party has its way, there will be no immediate recovery in property values. Their Minister for Energy and Communications, Eamon Ryan, is quite rightly concerned that there should be no repeat of the speculative property bubble that led to the present difficulties. However, he also argued last week that a significant fall in values “is a good thing and we are not looking for a return to property prices going back up”.

On the contrary, homeowners who were mere spectators as the property bubble burst will be anxious to see a recovery in values to allow them to cash-in on their investment when their children have grown up and moved out. Part of the proceeds of the sale of many family homes are frequently given to sons and daughters as deposits on their first homes. Gently rising values are a long time function of most property markets and, with a bit of luck, prices here will start moving up again once we shake off the current malaise.

The Green Party is on safer ground in its plans to introduce a windfall tax of 80 per cent on profits from increases in land values once rezoned. Unfortunately, this measure was not in place during the lengthy property boom when many local authorities seized the opportunity to rezone considerably more land for housing and commercial developments than they are likely to need for many years to come. The rush to rezone has meant that some councils have enough development land to carry them through to 2075, according to the Minister for the Environment, John Gormley. Once the zoning system is reformed, development plans for the various local authority areas will be aligned with regional planning guidelines, spatial strategies and population demand.

That should mean the end of the road for many shifty characters who frequently engineered the rezoning decisions with the help of compliant county councillors. Rezoning decisions should in future be an executive function rather than one for councillors.

Either way, it is a bit rich for the Green Party ministers to expect owners of newly zoned land to hand over a whopping 80 per cent of the enhanced value. The landowners simply won’t buy it. Perhaps a tax of no more than 40 per cent might get the ball rolling.



Report by JACK FAGAN - Irish Times

Wednesday, 16 September 2009

Property Bubble Caused By ‘Mistakes’...

The property bubble was partly fuelled by political and regulatory mistakes, education minister Batt O’Keeffe has admitted.

Addressing the Construction Industry Federation (CIF) conference and dinner last Friday night, O’Keeffe said that those in positions of leadership in the construction industry had the ‘‘opportunity to help shape the future of the sector in a way that acknowledges the mistakes of the past’’.

He listed those mistakes as ‘‘the failure of the Central Bank and Financial Regulator to properly control lending practices and the failure of the private sector, including developers and bankers, in amassing wealth without adequately considering the longer term implications’’.

He also admitted to a ‘‘failure of politicians to curb a culture of one-upmanship and target-driven greed in the banking and property sectors’’.

O’Keeffe said that the annual construction industry review and outlook, to be published this week, ‘‘will not make for happy reading’’.

It will show that almost two thirds of the total drop in employment in the economy since the peak of the boom has been in construction.

Direct and indirect employment in construction dropped by 32 per cent from late 2008 to early 2009, according to the review figures.

The value of output in the construction sector fell from €37.4 billion in 2007 to €32 billion last year, and is expected to drop to just under €20 billion this year.

While the cost of living rose by almost 40 per cent from 1998 to 2007, construction workers’ weekly wages rose by more than 80 per cent.

‘‘The harsh reality is that earnings across the economy will now need to moderate in the medium term, as we move to regain our competitive edge," said O’Keeffe.

He also said that there would be ‘‘no easy terms’’ for developers under Nama.

Meanwhile, CIF director general Tom Parlon has described Nama as the best solution to the current liquidity crisis and predicted that it would operate successfully and make a profit.

‘‘It is innovative, novel and brave," he said. ‘‘There is risk attached, but I personally think the government and the NTMA [National Treasury Management Agency] have been conservative in how they’ve set it up. I believe it will be successful and return a profit."

Parlon said that, while there was a view that Nama was ‘‘a bail-out for the developers’’, the truth was that they would ‘‘have to pay back every penny’’ they owed.

‘‘The only solace Nama gives developers is more time to repay loans," said Parlon.

He criticised ACC Bank for pursuing loans to developer Liam Carroll, but said that, ‘‘if it wasn’t for Nama, Irish banks would possibly be acting in the same manner’’.



Report by Niamh Connolly and Nicola Cooke - Sunday Business Post

Sunday, 13 September 2009

House Prices To Fall Until 2012...

House prices to fall until 2012, industry bosses told...

HOUSE prices will continue to slide until 2012, it has been claimed, as construction chiefs were told the industry will never be the same again.

Yesterday’s figures also show that lending to the construction industry soared from €10 million in 2001 to €115m at its peak.

The statistics were revealed at the Construction Industry Federation (CIF) conference in Cork.

Labour party leader Eamon Gilmore said that the industry will never again employ the same number of people as it did two years ago.

He said there will again be a demand for new housing but he wants a construction industry – like any other – that is sustainable.

At its peak in 2007, the industry employed 280,000 direct employees and a further 120,000 indirect, equivalent to 19% of total employment.

Today it employs 200,000 but the CIF said that another 100,000 direct and indirect jobs could still be lost.

Mr Gilmore also said there is huge scope for reform in Ireland’s planning laws.

This news comes as the federation looks for powers to be allowed to reduce wages in the sector.

It said wage costs in the construction industry are "extremely high" compared to the wage costs in manufacturing industry.

CIF president Andy O’Gorman said it is important that there is flexibility in the Registered Employment Agreement to allow wages be adjusted or to have an "inability to pay" clause inserted as is available to employers in other sectors.

At present if a construction company cannot pay wages it is put out of business, he said.

Foreign Affairs Minister Micheál Martin, who also spoke at the conference said the proposed National Asset Management Agency (NAMA) is not a bailout for developers.

The CIF said construction output will fall to below €10bn in 2011, down from a peak of €36bn in 2006.

In 2010, it is expected that the industry will build 10,000 new homes, that is 80,000 less than the output in 2006 and substantially below the level of 45,000 to 50,000 identified as the medium to long term required level, according to the CIF.

It said the pipeline of new public sector construction projects is somewhere between €500m and €1bn this year, which it said is a far cry from the €6bn needed to achieve the Government commitments set out in April’s budget.

Mr O’Gorman said the "interim period" created by the NAMA announcement is causing particular problems, with banks unwilling to lend against viable projects before the transfer of loans, good as well as bad, into the new agency.
"Add in falling public and private investment and construction is experiencing its perfect storm," he said.

The federation also urged a Yes vote in the upcoming Lisbon referendum.

It said it is important to remember that Ireland’s success in attracting high quality foreign direct investment has been largely predicated on its access to the markets of Europe.



Report by Niamh Hennessy - Irish Examiner

Saturday, 12 September 2009

Cute Hoor Fast Buck...

Cute hoor/fast buck gene to be removed from national herd...


The Greens have done a complete about-turn and embraced genetic modification on a grand scale

THE GREENS have embraced the concept of genetic modification, and with remarkable results.

That’s a turn-up for the books.

The party doesn’t do things by half measure. Their conversion isn’t down to some namby-pamby tinkering on the fringes of the allotment, or attempts to grow a pig from quorn.

John Gormley, Eamon Ryan and their ecologically motivated Frankensteins have only gone and engineered a change to the basic genetic make-up of the Irish people.

Using a secret procedure (which has been fully approved by their frightened partners in Government because they fear an agonising political death if they don’t), the party has succeeded in removing the cute hoor/fast buck gene from the national herd.

“We’ve actually taken away that whole speculative impulse,” Eamon Ryan announced at a press conference yesterday.

Thanks to new legislative engineering to be introduced by the Greens in the “post Nama period”, profit-driven land hoarders will lose their amoral desire to squeeze as much cash as they possibly can from hard- pressed fellow citizens.

The Greens – Eamon says it should have been done 30 years ago – think they have discovered the formula that will curb the baser instincts of the Irish wheeler dealer.

They will neuter the loophole merchants before they become swashbuckling entrepreneurs and beggar another generation. They will temper the national tendency towards greed.

Their windfall tax will make us good people. And net a Nobel Prize for John and Eamon.

If it works, it will be a stunning triumph for the science of genetic modification. The speculative impulse is deeply ingrained and for some, impossible to resist.

Having a ball with somebody else’s money is a major symptom of the speculative impulse. That, and lack of shame.

Again, the Greens were ahead of the curve yesterday in this regard. Following further revelations of lavish overspending in the State training agency Fás, party leader Gormley said the board of directors should resign.

This was in contrast to the Taoiseach, who shrugged his shoulders and said they were due to be replaced shortly anyway so why cause a fuss, while his Tánaiste said she would accept their resignations, if they were of a mind to go.

Was this, perhaps, evidence of a rift between Gormley and Cowen? One man looking for resignations, the other a noncommittal step behind.

In light of the Government’s abject standing with the electorate, Gormley was asked: “How satisfied are you with Brian Cowen’s leadership style?”

The reply was baffling in one way, but perhaps, rather telling in another.

“I think personalising it is not good. I mean, I find that some of the questioning can be quite intrusive. I don’t like that. I don’t like the way that a person can be pushed in that way and, you know, intruding into somebody’s personal life and some of the questioning I find, I don’t like it, but you know, it’s up to the media and if they want to go down that particular route, it’s up to them.”

When the question was put a second time, he said he has “a perfectly good relationship with the Taoiseach.”

But in his first answer, Gormley appeared to be indicating that the Taoiseach might not be coping well with the media’s fascination with his personality and delving into his personal life.

Still on the subject of speculative impulses, and the modification of same, the subject of the expenses regime in Leinster House was also given an airing.

John thinks it should be overhauled. “I also believe that it will be one of the items that will be up for review in our programme for government.”

They’re all in favour of doing something about their expenses down Leinster House way, but it’s a very slow process. And a bit embarrassing to have to discuss it in public, like they were ordinary folk. They’ll just have to take their time with it.

Meanwhile, as the Greens patted themselves on the back for having such a major influence on the Nama legislation, a large group of farmers protested outside over cuts in the sector.

“On your bike!” they roared at party members when they appeared, reserving the loudest abuse for Minister for Food Trevor Sargent.

“Ye’re lookin’ at bicycle sheds in Dublin and light bulbs, but you’ve abandoned rural Ireland. Ye should be ashamed of yourselves!”

A large number of gardaí arrived at the hotel doors, but the protest went the usual way of farmers’ demonstrations.

There was a lot of noise, a demand to be met by the most senior political person present, protests about being snubbed, an eventual meeting, a bit of banter with the gardaí outside, distribution of leaflets, the arrival of the ham sangwitches followed by tea and orderly dispersal.

It’ll be noisy for the Greens again today, when proceedings switch to the Sheraton Hotel in Athlone for a party discussion on Nama.



Report by MIRIAM LORD (at the Green Party think-in, Athlone) - Irish Times

Tuesday, 8 September 2009

Property Market Stamped Out...

Fears raised over stamp duty issue...


REACTION: ESTATE AGENTS fear the struggling second-hand housing market may well grind to a halt after the disclosure that stamp duty may be abolished and replaced with an annual property tax.

The Government will be under pressure to clarify whether it plans to implement proposals by the Commission on Taxation in the December budget, having already signalled that it it may not proceed with the property tax.

Buyers who may be tempted by heavily discounted prices in second-hand houses will be reluctant to make commitments until the stamp duty issue is clarified.

The report comes at a time when house sales were beginning to pick up at the opening of the autumn selling season. However, agents last night warned that activity could cease until the Government indicated whether it would proceed with the taxation changes.

The Irish Auctioneers Valuers Institute (IAVI), which represents about 1,700 estate agents, last night urged Minister for Finance Brian Lenihan to provide clarification on stamp duty. Otherwise “the already limited number of sales would stop, further diminishing tax returns to the exchequer,” said Simon Ensor of the IAVI’s national council.

Mr Ensor welcomed the long expected abolition of stamp duty which, at 9 per cent for houses over €1 million, had been a cash cow for the Government throughout the property boom. Mr Ensor said the reintroduction of property tax was “somewhat inevitable” as it would provide the exchequer with a more stable taxation base.

Taoiseach Brian Cowen will be under pressure to decide on his policy in relation to property tax. He recently told a Sunday newspaper that he was “not wedded” to the idea of such a tax.

If the abolition of stamp duty proceeds, it could reactivate the second-hand market, where value is now emerging with house prices down by as much as 50 per cent from peak. However, sales have been relatively slow because of the lack of mortgage finance.

Marian Finnegan, chief economist with Sherry FitzGerald, said the punitive rate of duty in the second-hand market had “for too long been a barrier to entry to the property market and was in effect a tax on mobility”.

While the prospect of dropping stamp duty is good news for house-hunters, buy-to-let investors who were key players in the market over the last decade, are now being squeezed. They will still pay the full stamp duty on investment properties as well as the new property tax, all at a time when rents and values have been falling.

NCB stockbrokers warned that while the second-hand market would benefit, the changes would hit the buy-to-let market hard as a result of the property tax and the fact that stamp duty on investment properties would remain in place at a time of falling rents.

The stockbroking firm said there is a two-year supply of homes overhanging the market. The recommendations, it warns, will hit first-time buyers and investors – the two key groups which could clear the housing surplus.



Report by ORNA MULCAHY Property Editor - Irish Times

Monday, 7 September 2009

Great Property Giveaway...

Roll up for the great property giveaway...

Agents say an estimated 24% drop in house prices is far too low...


There were double-takes all round last Monday when the Permanent tsb /ESRI house price index announced a 24% drop since February 2007 – a figure many believe to be conservative in the extreme.

It's difficult to find out exactly what a property sells for as, under the Data Protection Act, publication of selling prices is prohibited and information is therefore based on asking price. Those involved in the business believe a truer estimate of just how far property prices have plummeted is between 40% and 50%. And counting.

Ronan O'Driscoll, director of new homes at Savills, points to "the concrete example" of his own home. "I bought it for €1.9m in 2006, but one on the same road sold recently for around €850,000."

The new homes landscape has changed radically in ways other than price, he adds, saying that negotiating a deal on a brand-new property is now similar to a second-hand deal. But activity is scant in terms of brand-new launches and sales.

"There won't be any genuinely new launches for several years. Realistically, when is the next builder going to open up a new site to develop? What you will see are the next phases of existing developments coming up, perhaps with a name change."

With prices at near giveaway levels, Manor Park Homebuilders have taken that concept literally with a 'Win A Showhouse' competition. The prize is a new two-bedroom showhouse at Barnwell Hansfield, off the Ongar Road, near Blanchardstown shopping centre, Dublin 15. According to Manor Park MD John Moran, the value of the house is €250,000 and it comes fully fitted with everything. "It is ready to move into; just bring your toothbrush."

Ken McDonald says first-time buyers can find plenty of choice in the €200,000-€350,000 bracket. There is a lot of interest, even if not an equal number of transactions, suggests McDonald. "The autumn is not going to be spectacular, but our office was buoyed up throughout the summer with plenty of enquiries."

Among the schemes still attracting interest is the Herberton development, off South Circular Road, Dublin 8. With a location opposite a Luas stop and prices substantially reduced, buying an apartment might be a shrewd move for first-timers. One-beds are now priced from €175,000 and two-beds from €199,000 (reductions of up to €150,000 since the launch, says agent Hooke & MacDonald).

The same agent is jointly selling Wyckham Point in Dundrum with Sherry FitzGerald New Homes, recording 30 sales since May of two-beds priced from €339,000. Castlethorn Construction has launched the final phase of Belarmine, Stepaside, Dublin 18, offering apartments with prices from €175,000. The Gallery, Donabate, which was launched in June, has resulted in 25 sales. Two-bed apartments here are priced from €195,000.

Ivan Gaine, recently appointed director of new homes with Sherry FitzGerald, says those seeking a house rather than an apartment can buy a three-bed semi in the Holywell development in Kilcoole, priced from just €299,000. Three-bed houses in The Hastings, Balbriggan are priced from €169,000 through the same agent.

"There is strong activity for properties under €350,000, but there has also been a noticeable increase of inquiries for higher-end family homes, with a handful of deals at €1m-plus to include Claremount in Carrickmines and Farmleigh, Castleknock," he says. "Also in the pipeline is a development of family homes coming to the market over the next few weeks."

Jordan Auctioneers is handling enquiries for two different house styles, at reduced prices, at the Hawthorn Wood development in Suncroft village, Kildare. These large (2,500-3,000 sq ft) four- and five-bed houses are now priced from €450,000-€540,000.

According to Ronan O'Driscoll, the market for new homes has been tricky for much longer than many may realise. "It goes back much further than the start of the economic decline last September. The last really good sales month for us was back in July 2006. Builders are now offering property at near below construction prices. There is nowhere left to go," says O'Driscoll.


Report by Valerie Shanley - Tribune Property.

Sunday, 6 September 2009

Irish Taken For Fools...

Vested interests: 38 politicians voting on Nama have extensive property portfolios...


Almost 40 of the politicians who will vote on the critical Nama legislation designed to clean up the banks' toxic loans to property developers have extensive property interests both here and abroad themselves.


The current register of interests, in which politicians are legally obliged to reveal any outside commercial interests, shows that, excluding the hundreds of acres of farmland owned by politicians, 38 TDs and senators have substantial development land and commercial property holdings.

These range from the relatively modest three properties held by Taoiseach Brian Cowen, including one in Leeds, to Fine Gael's Alan Shatter, who lists joint ownership with an "other" of 14 investment properties in Dublin, London and Florida.

Of the 38 politicians, 17 could be considered to have significant interests which, during the property boom, would have provided a comfortable income on their own.

Politicians must list all interests held outside politics but they are not obliged to reveal their value. While the politicians' property portfolios are unlikely to be worth anything near the billions in toxic debts owed by the likes of developer Liam Carroll, in many cases they are significant enough to raise questions about a conflict of interest about Nama.

Fianna Fáil's John McGuinness, who lost his job as junior minister in the Department of Enterprise, Trade and Employment last year – and who lists interests in warehouses, apartments and hotels – said politicians first and foremost are legislators.

"Politicians' property dealings are declared up front on the register of interest," said the Kilkenny TD, who confirmed his ownership interest in Rolestown House hotel, a holding company behind Kettles Country House hotel in north Dublin, which has just come out of examinership.

But McGuinness is in the ha'penny place compared to the likes of Galway TD Frank Fahey, who lists 18 separate property portfolios, most of which are in or around Galway. The Fianna Fáil TD also lists 15 apartments in Brussels, as well as houses in Dubai, Portugal, Massachusetts and France.

On top of his extensive bloodstock interest, Fine Gael's Seán Barret is a director of property company Balbrag Ltd and also holds shares in Cabinteely Property Holdings. The Dún Laoghaire TD also lists shares in a Jersey-based company Richmond Care Villages.

Opposition spokesman on health Fine Gael's Dr James Reilly declares a commercial interest in Lusk Town Centre in north Dublin. As well as accommodating a surgery, the centre houses a supermarket, offices, a bookmaker's, a gym, a restaurant and some apartments. Reilly also declares a quarter-share interest in Green Hills nursing home in Tipperary and a 1.3-acre commercial site in Swords for a one-stop-shop medical centre.

Independent TD Michael Lowry, who is the subject of scrutiny at the Moriarty tribunal, has a 10% interest in a 2.5-acre site in Mansfield in England and a 50% interest in Vineacre Ltd, a property company in Bedfordshire.

Dublin Central TD Sean Haughey, on top of a lengthy list of shareholdings, lists ownership of a 4.3-acre site in County Wexford, an "undeveloped site for mobile homes".

Outspoken Cork TD Noel O'Flynn lists part-ownership of business units in Mallow and commercial units in Dublin.

Fine Gael's Frank Feighan owns properties in Sligo and also has property interests in France, Bulgaria and Hungary. He also has an interest in a Sikh restaurant in Boyle.

In the Seanad, Fianna Fáil's Jim Walsh declares an interest in 30 acres of development land in Rathfarnham in Dublin. His colleague, Francis O'Brien, has an interest in an impressive 10 parcels of development land in Cavan, Monaghan and Mayo, as well as around half-a-dozen properties which are rented out.

Top Political Developers

Frank Fahey (FF) - 30 properties in Ireland, Brussels, Dubai, France and Portugal

Jim Walsh (FF) - Shares in Irish, UK and Dutch property funds; director of property firms in Wexford; 30 acres development land in south Dublin

Francis O'Brien (FF) - Ten separate parcels of development land; six properties

Frank Feighan (FG) - 15 properties in Ireland, Hungary, France, Bulgaria

Alan Shatter (FG) - 14 properties in Ireland and US


Report by Martin Frawley - Tribune News

Saturday, 5 September 2009

Cowen Late Late Show...

Cowen says FF should have taxed property more...

THE GOVERNENT should have taxed property more and spent less during the economic boom, the Taoiseach said last night on the Late Late Show with new host Ryan Tubridy.

Under questioning from Tubridy about what he accepted blame for during his years as Minsiter for Finance, Mr Cowen said “looking back now we should have taxed housing more than we did”.

When Tubridy asked Mr Cowen why this was not done, he said: “Because at the time there was no-one suggesting that that was a policy intiative that was relevant or that was going to solve the problem.”

Tubridy again asked the Taoiseach to clarify what he accepted he had done wrong, and Mr Cowen said: “If I knew then what we know now we wouldnt have spent as much.”

However, Mr Cowen said he wanted to make the points that during the economic boom Ireland was still reducing its debt, still had surpluses, and was not spending everything that was coming in.

He insisted that the decisions taken were based on the best advice available and a lot of historical problems were dealt with. Twice Mr Cowen used the phrase “hit the wall” to describe what had happened to the economy recently.

Tubridy asked Mr Cowen if he envied his predecessor Bertie Ahern’s sense of timing, prompting laughter from the audience when he added “you talk about hindsight, he had some foresight”.

Mr Cowen said he thought that was unfair on Mr Ahern. No-one had foreseen the collapse of Lehman Brothers, he said. “He served his country well over that period of time.”

In the early part of the interview there was audience applause for some of the questions but not for the answers. The host made reference to “crazy spending” on Ministerial expenses, without mentioning Ceann Comhairle John ODonoghue.

“Can you tell me Taoiseach how you’re going to stop a bill for for example €9,616 on car hire while attending the Cannes film festival?” he asked.

Mr Cowen said the arrangements referred would not be repeated and changes had already been made.

He acknowledged that the results of the opinion polls carried in The Irish Times this week had been disappointing on a personal level. “Were not living in normal times and obviously it was a quiet breakfast in my household,” he said.

Later Mr Cowen said Nama was “the only show in town”. He added: “We will make sure that this Nama is being set-up for the purposes not of losing money but of making money,” he said.

Mr Cowen said he believed the Lisbon Treaty had to pass for the sake of the country. “We have nothing to fear from this Treaty and the assurances that we’ve got have dealt with the concerns, including a Commissioner for our country. ”

The Budget would be very difficult, he said.

“The Minister (for Finance) has made it clear that we look at expenditure cuts on this occasion . . .we have to because we can’t sustain the present situation.”

Later in the interview, the audience responded positively as the Taoiseach answered questions about his personal life.

When Tubridy asked the Taoiseach if he drank too much, Mr Cowen said: “No I dont, not at all”. Tubridy said: “Well where does the rumour come from?”

Mr Cowen said he was not responsible for these things.

“I work hard and I’ve never in any way at any time when I was doing my public duties ever done anything in an inappropriate way,” he said.

“And like yourself and members of the audience there are times at the weekend when you can relax with friends for a couple of drinks. That’s all this involves.”

He said he was trying to be authentic and true to himself and have a normal life.

When Tubridy asked the Taoiseach if he had annoyed him by asking the question, Mr Cowen prompted clapping when he responded with a good-humoured “Its your show”.

He said he probably rebelled against the “politically correct culture”. He was trying to be his “natural self, to talk to people and to behave properly of course in my public duties and relax with friends if I can”.

His answer was applauded by the audience. Mr Cowen also told Tubridy he liked being Taoiseach.


Report by MARY MINIHAN - Irish Times.

Wednesday, 2 September 2009

House Prices To Fall Further...

Property: making a move...

With house prices set to fall even further, it's no surprise that most buyers are sitting on the fence. But for those who have no choice but to bite the bullet, think long-term...


All the available data and commentary on the domestic property market suggests the continuing fall in prices still has some way to go, so it's no surprise that the majority of potential buyers are still opting to "sit on the fence".


But the Irish Banking Federation (IBF) recently reported a 9pc rise in new mortgage lending in the second quarter of 2009 when compared with the first three months of the year.

But with new lending still 7pc lower than in the same period last year, the IBF said it was too early to say if the market had turned a corner.

Karl Deeter, of Irish Mortgage Brokers, reports an increase in applications and numbers of loans because of recent price falls.

"We had felt for some time that price drops would come fast once the realisation about the economy became widespread, but instead it took about a year for it to happen," he said.

"Now that prices are dropping, there are more buyers."

While there is still a lot of uncertainty, some buyers are finding the right property and placing well thought out bids.

"Seller reality, however, is lagging behind buyer reality and the supply side is swamped so further price reductions, in particular for apartments, are likely," said Mr Deeter.

The IBF figures also showed that first-time buyers and movers combined now have a record 60pc share of the total market, while the investment end of the market continues to fall off sharply.

"There are funds available as lenders are concentrating on first-time buyers and those trading up," says Michael Dowling of the Irish Mortgage Advisers' Federation.

All of which suggests that more buyers are preparing to take the leap.

"I think the increase in mortgage drawdowns we saw in the second quarter of this year points to some element of that, namely that people have been waiting and are making a move where they see enough of a discount from the peak price," says Ronan Lyons, an economist with property website Daft.ie.

For those who have to move for business or family reasons, some may be reckoning on now being a good time.

"If you're planning to get married, recently married or planning a family, then you don't have the luxury of waiting for much longer to make a move," says Fiona McLaughlin of www.privateseller.ie, which assists people in selling their homes themselves.

Ms McLaughlin says that there has been a 30pc rise in the numbers viewing properties on her website. The prospect of interest rate rises by the ECB is having a stronger impact on buyers' decisions than actual market prices, she says.

"They know that prices are flexible, supply is high and sellers are more open to negotiation than ever before," she says.

"Waiting for guide or actual sale prices to decrease even further will have diminishing returns once interest rates have hit rock bottom."

What is already clear is that the market is no longer pacing itself according to house-buying "seasons".

During the boom times, the month of September would have been regarded by those in the property business as the start of the new season. But not any more, it seems.

Buying

"In my view, the traditional buying season has changed radically in that there is no season any more," says Liz O'Kane of Get-Sorted, a house-hunting service. "Property is for sale for much longer, therefore boards remain in place for longer, with price reductions being the main marketing tool."

So what are the best strategies for those who need to move home?

"Consider renting, but if you definitely want to buy then negotiate well, do a lot of homework, work with an agent you can trust and have mortgage approval before you start," says Mr Deeter.

Ms O'Kane says: "If you need to buy over the next few months, whatever your circumstances, think long-term."

But the issue of owing more on your mortgage than your house is worth may still prove a bridge too far for many potential movers, particularly those who have bought within the past five years.

"It also depends on whether they have equity still in their own house or whether they find themselves in negative equity," says Mr Lyons. "If it's the latter, they'll have to talk to their financial institution about their situation."


Report by John Cradden - Irish Independent.

Tuesday, 1 September 2009

Recession Wipes €72,250 Off Homes...

Recession wipes €72,250 off value of the average home...


HOUSE prices plunged another 1pc in July, bringing the total wiped off the value of the average home since the height of the property market to €72,250.

New figures show house prices fell by 1.1pc in July, bringing the drop over the previous 12 months to 12.5pc.

The annual fall in prices in June was 11.7pc. The average price for a house nationally in July was €238,828, compared with €311,078 in February 2007, when property prices peaked.

Prices are now down 24pc since February 2007, according to the Permanent TSB/ESRI house price index.

Permanent TSB's Niall O'Grady admitted that the property market had remained sluggish throughout the summer, with low levels of activity.

He said that despite lower interest rates and improved affordability, consumer confidence needed to pick up before there could be any increase in activity.

"It will definitely be a buyers' market for the coming months."

Permanent TSB admitted that the property price figures may not capture recent price falls as the house price index is based on information gathered from mortgage drawdowns.

It may take three months or more between the time a house sale price is agreed and when the mortgage is drawn down.

The index shows much sharper price falls in Dublin than the rest of the country.

Prices in Dublin dropped by 2.2pc in July, having fallen by 17.1pc in the 12 months to July. The average price for a house in the capital is €312,822, down from €351,096 last December.

Outside of Dublin the fall was 1.2pc, and 11.1pc in the past year. Houses outside the capital cost an average of €209,484, compared with €223,984 a year ago.

Buyers

House prices for first-time buyers dropped by almost 1pc in July, and are now down by 19pc in a year. The average price paid by a first-time buyer is now €198,411, down from €224,153 in December last year.

Second-time buyers saw prices fall by 1.1pc in July, which takes the prices of these properties down almost 10pc in a year.

Prices for second-hand houses now average €275,894, compared with €296,302 in December last year.



Report by Charlie Weston - Irish Independent.