Saturday, 28 November 2009

Where Do We Go From Here?

IRELAND TODAY: IT’S JUST over a year since Wall Street and its Irish cheerleaders chanted “We are where we are” while Main Street reeled. Since then, every wrong-headed, populist Government economic policy, every catastrophic failure of the Financial Regulator, every rampantly greedy, short-termist instinct of the financial institutions and builders/developers has been exposed...

A year ago, commentators were predicting something akin to the end of capitalism as we know it. Citizens were demanding humility, apologies, accountability, a purpose of amendment, radical reform, fewer tax breaks, an end to the bonus culture and a fairer share-out of the tax burden. So how is your head now, a year on? Still looking for other heads on plates?

There is a lot to rage against.

Only this week, headlines announced that banks are being “forced” to pay bonuses. But how long can a people sustain a condition of mass, impotent rage while remaining relatively sane and healthy? A few weeks ago, 1,200 people packed out the National Concert Hall at €25 a head to hear four journalists (“Four Angry Men”) give their scathing take on the culprits of the crash.

But when this reporter conducted a straw poll beforehand, it was evident that many people had moved on; they wanted to hear more about the future, less about the past. And yet, the bestseller lists are dominated by these men’s books. UK writers have produced similar works but failed to colonise the top five. So, clearly, Irish people continue to search for explanations – but what does that say about their state of mind?

In the past week, a broad-ranging social opinion poll, Ireland Today , conducted for this newspaper by Behaviour Attitudes, provided some answers – among them, the rather surprising one that the nation has indeed moved on. Emphatically so. That’s despite the fact that half the participants believe the economy will be in a worse state this time next year. Asked to name the biggest personal lessons learned from the recession, overwhelmingly and unprompted, they said they should have spent less and lived within their means.

Just one in eight said it had taught them to beware of poor government and corrupt politicians, and even fewer blamed bankers. As for arming themselves against future recession, the aim is self-reliance; save more, spend less. Just three in 100 will approach the next recession by looking beady-eyed at government and corrupt politicians; only two in 100 will focus on untrustworthy banks, the same number who plan to be positive and take one day at a time.

This was no surprise to Dr Pete Lunn, a behavioural economist with the ESRI and author of Basic Instincts: Human Nature and the New Economics. “It’s very rare, when we take the biggest economic decisions or purchase of our lives, to get direct feedback. We never know what would have happened, for example, if we had taken the other option . . . Psychologists would tell you that if you want learning to be quick, what you need is direct feedback and make it salient. And that’s what’s happened here. It’s taken the biggest recession in 70 years but a whole generation has got direct and salient feedback about their behaviour . . . Everyone’s got a whacking slap in the face.”

AND NO-ONE could accuse the survey respondents of being uninformed. Nearly two-thirds said they keep up with what’s going on in the business world. The same number pay more attention to the news than they did a year ago. Even more believe the recession here is worse than in most other European countries. Successive opinion poll results suggest that voters are doggedly intent on a change of government.

The survey’s finding that nearly 70 per cent have not had a pay cut or had their working hours reduced, though backed up by CSO figures, has met much quiet scepticism on the part of economists. Dr Lunn is one of the exceptions, saying it backs up solid evidence that for morale and productivity reasons, most company managers prefer to sack people than make pay cuts across the board.

The question of whether people are working longer, harder hours for the same pay was not addressed in the survey. Whatever the truth, the salient fact is that that some 800,000 people in this small country have seen someone in the household lose their job and one in five have had their hours reduced by an average of more than 40 per cent. Unsurprisingly, CSO figures reveal one in five households is in arrears.

Yet despite all that, three-quarters of those surveyed say they are content with their way of life. Even more impressively, 84 per cent believe Ireland needs to start believing in itself again.

Gerard O’Neill, chairman of Amárach Research, characterises this as “private contentment and public anguish”. It’s all about family, he says. “Family features massively in the Irish psyche. Irish satisfaction with family life is among the highest in Europe.”

That’s the private contentment. As for the public anguish, O’Neill suggests people are prepared to leave their warm homes to listen to the likes of Four Angry Men because they are seeking new channels through which to vent concern – and to find new ways to deal with uncertainty. “If you talk to charities, or look at the community response to the floods, people are rolling up their sleeves and coming together.”

But are we somewhat amnesiac when it comes to the axis of politicians, bankers and developers? “I don’t think people will forget what they’ve been through. They will carry huge levels of personal debt into the next decade in the form of negative equity, business loans, investments that went pear-shaped.” But remember, says O’Neill, “88 per cent of the workforce is still in employment, that’s something to keep in mind.”

Dr Maureen Gaffney, psychologist and chair of the National Economic and Social Forum (and currently writing a book on these matters) was another who wasn’t remotely surprised by the sense of positivity and desire to move on.

“The Irish are temperamentally cheerful, which is great,” she says, but we are in danger of being ground down by the pessimists.

“It’s an incredible tribute to our temperament that we are not so afflicted by all the pessimism around us. We have evidence on this ever since we started conducting polls on wellbeing and happiness; the Irish have consistently come out in the top four and that dipped only slightly in the last recession. The tragedy is that cometh the hour, cometh the pessimists and they are now the overwhelming voices.”

ISN’T THAT dangerously close to suggesting we stop analysing the forces that got us here or the high-stakes solutions on offer? “No, it’s not. In an evolutionary way, we need optimists and pessimists – and I don’t mean optimists in a Pollyanna way. We clearly do need that realistic assessment of the challenges, but we also need to believe there is a way to overcome them and that’s the way of learning, personal happiness, experimentation, economic prosperity. The evidence for this is overwhelming and while it’s appropriate to point the finger, it’s gone way too far . . . There is a whole other story about accountability and that one hasn’t been resolved. But where is this downward spiral going to end? The fact that people believe in the future isn’t surprising, but as many implications flow from that as from the doom-laden figures in the news.”

Dr Gaffney’s passion for the subject implies a scepticism on the part of others that psychology has a vital role to play in the nation’s recovery. Dr Lunn points out that the British treasury department just released a document by behavioural economists, outlining the lessons learned in recent years.

While he and Dr Gaffney might approach this from different angles, they are both adamant the psychology of human behaviour is as important as anything traditional economists might have to say. “We should be putting all our energies into finding ways to maintain this positive spirit because without that, we won’t be able to collectively keep going,” says Dr Gaffney. “I just think people are completely underestimating that you need a particular psychology to prosper . . . When you set out to do something, you have to believe you’re going to achieve it. The nature of a big challenge is that you don’t have all the information. You have to take a stance. The evidence is that the most fundamental thing to have is belief.”

Her frustration is palpable – and not only with the pessimists colonising the media. “The biggest, most serious lack facing this country now is that there is nobody at senior level in Irish society articulating a persuasive vision – that word is so overused – or scenario of the kind of Ireland that we can build. Nobody is totting up the things that are still right with us. Think of the people who have to deal with the most appalling personal adversity – in the face of the most awful challenges, you have to pick yourself up and begin again in a new way. Obviously, we have to know the pain ahead. But when was the last time you heard an account of what Ireland will be like in 2015, one that we can all relate to?”

Dr Gaffney detects a “huge hunger” out there for this persuasive vision. But who should articulate it? “It should be coming from political leaders on all sides of the House, from civic leaders, from anyone who has an influence on Irish society and opinion. We all have a responsibility.” So where does that leave the Four Angry Men and their ilk? “I think we should be drawing up a panel of optimistic women – no, okay, optimistic people,” she says with a wintry laugh. “And if I can’t get a panel together, I’ll do it myself.”

Article by KATHY SHERIDAN - Irish Times.

Thursday, 26 November 2009

Celtic Tiger Makeover...

How do you solve a problem like Clongriffin?

The bubble burst leaving the new north Dublin suburb in the lurch. Now designers and architects are figuring out what can be done to create a sense of community...

SO WHAT do you do with a place that’s merely a fragment of what was planned? Clongriffin, on the north fringe of Dublin, was supposed to have a population of 30,000 to 40,000, with all the communal facilities they would need. But construction ground to a halt when the bubble burst, leaving the area’s residents high and dry.

Enter Designing Dublin, a unique initiative by Design 21st Century, founded by Jean Byrne and Jim Dunne, who are both members of the Crafts Council of Ireland with backgrounds in business. Dunne was inspired by an exhibition at the Chicago Museum of Contemporary Art about how design could address current challenges.

They brought in Vannesa Ahuactzin, a young American architect who did a year’s programme at the Institute Without Boundaries in Toronto, which specialises in design innovation and inter-professional collaboration.

“We see the designer as a problem solver with the ability to effect positive change for humanity,” says its website.

The outcome was Designing Dublin: learning to learn , a pilot project to show how it’s possible to bring together people from different backgrounds to work together intensively for three months – an experience that would be transformational for them and “could transform this country in the next five years”, according to Jean Byrne.

“A lot of people are now volunteering to work overseas, but we need to get things done here as well. Unemployed architects and engineers could get involved in this kind of work all over the country, building and shaping a whole new way of doing things. If we could get even 10 per cent of those unemployed, it could really transform Ireland.”

With the support of Dublin city manager John Tierney and former Accenture chairman Terry Neill, who’s now on the board of CRH plc, the project developed legs. More than 100 people applied to take part, and 17 – divided equally between the public and private sectors – were selected following the personal ordeal of a day-long interview.

The chosen theme of the project was to “find the hidden potential of place”, and the challenge was to apply this to Clongriffin, a place that barely exists. Apart from all the new apartments, its main “boulevard” has just five businesses operating – a Chinese takeaway, an off-licence, a chemist, a hairdressing salon and (what else?) a Centra.

All of the remaining retail units are vacant, giving the boulevard a desolate air. “We realised there was a lot of wastage in this country during the Celtic Tiger years,” says Vannesa. “So in working on Clongriffin, we wanted to see what is there to tap into, to engage residents in taking ownership of area, make it more interesting.”

The 17-strong project team, ranging in age from 21 to 53, set about trying to understand the place by talking to the people who live there. Not surprisingly in a new area, many of them felt isolated – but many were also keen to get involved in building a community spirit, especially as they are now pretty well locked into living in Clongriffin.

Working with kids (no less than 13 nationalities are represented there) in the two prefab schools, the team gave them a series of images of things in the area, asked them to draw a picture of their favourite place, and ended up with a series of paintings that were put on exhibition in a vacant shop which was turned into a café for a day.

“We only had Thermos flasks and paper mugs, but it was very, very successful,” Jean recalls. “Parents came along, of course, and even curious teenagers walked in and started participating. In no time we had all these conversations going about what they’d like to see happening in Clongriffin.”

One thing the locals are very proud of is Father Collins Park, which Dublin City Council opened last May, with five wind turbines to generate electricity.

At 52 acres, roughly twice the area of St Stephen’s Green, it was designed by Argentinian architects Abelleyro + Romero, who won an open competition for the €20 million project in 2003.

“The park is a huge asset, people are really inspired by it so that’s very good at building optimism,” says Vannesa. But the Designing Dublin team found that the children also wanted access to “wild nature” – like the pond with swans in it half-way along an unfinished pathway to the coast. For them, this is a magical place.

One of the five projects selected for detailed study by a sub-group is to complete the missing link of 300 metres, so that Clongriffin residents can make use of the trail.

The aim is to get them directly involved in the project, even designing it themselves, so that the community will have a sense of ownership of this potentially important amenity.

Another project is called Hothouse – essentially, a community centre where people can meet. Prototype designs for this much-needed facility, on a site just south of Father Collins Park, are being worked up by local residents with the aid of four architectural technicians from the DIT School of Architecture. The final scheme might even be built.

Other projects include Grow Local, which aims to help budding entrepreneurs by providing space for them to develop their ideas, using one or other of the many vacant retail units as a base.

Gerry Gannon, who owns most of the development land in Clongriffin, is said to be sympathetic to the idea of making premises available.

Another sub-group is looking at Local Expression, which is essentially about enlivening the area and perhaps even transforming some of the areas of wasteland left over after the boom came to a sudden end. This might include painting hoardings around the sites and turning them into art objects, like the gable murals in Belfast.

Finally, residents felt there was a need for a “communications exchange” to let people know what’s going on.

They already have a website ( and big billboards packed with local information, but the more innovative ideas include messages in the sky, given that it’s visible on the approach to Dublin Airport.

End-of-project activities this Saturday from 11am to 9pm include a “60-minute makeover”, transforming an empty shop beside Centra on Clongriffin’s main street into a prototype community “hothouse”, an exhibition of models made by local children showing how they see the future, and to cap it all, an an “imagination celebration”.

Report Environment Editor FRANK McDONALD - Irish Times.

Wednesday, 25 November 2009

Selfish Strikes By State Workers...

Strikes no answer to crisis...

AT A time when social solidarity and a sense of personal responsibility are needed as never before, employees in the most protected sector of the economy have behaved selfishly. A one-day strike by a quarter of a million State workers – and the threat of more to come – has damaged our international reputation and made the task of economic recovery even more difficult. When all the rhetoric and special pleading by trade union leaders is stripped away, what is left is the unattractive face of mé féinism.

Public sector workers can argue they are not responsible for the recession and that they have already been forced to pay a pension levy. But their anger at the banking sector; at the Government’s mishandling of the situation and the various regulatory failures that contributed to our current difficulties is shared by workers in the private sector and does not exempt them from the tough fiscal actions that are now required to correct the public finances. Just as their colleagues in the flooded regions of the west and south continued to work yesterday in order to help threatened communities, they also have a duty of care to the citizens of this State. The threat posed to the future welfare of Irish society by a €25 billion shortfall in the public finances is as immediate and fundamental as the rising waters of the Shannon.

This is a time of national emergency. There is no point in vested interests demanding that others should carry the burden of financial repairs, while seeking immunity for themselves. Every individual and group should be required to contribute according to their means. Next month’s budget will represent just the first step in an extended recovery programme that will, inevitably, involve reform of the taxation base and a restructuring of the State’s public services.

The Government and the main Opposition parties have acknowledged the need for a €4 billion cut in public spending next year. And while they disagree on how those savings might be achieved, they accept it will be necessary if public debt is not to spiral out of control. The Government plans to save one-third of this amount on the public pay and pensions bill. It has invited public sector unions to discuss the issues today. For their part, union leaders have offered to consider changes in work practices and reductions in numbers. They have urged delay in repairing the public finances. And they have threatened further industrial action if pay cuts are imposed. On the face of it, it would seem impossible for the Government to achieve its proposed savings without confrontation.

Strike action solves nothing. It sows the seeds of division at a time when we need to work together. It is being used here to defend the existing pay and conditions of a privileged group of workers. If the Government backs off, additional cuts in services and welfare benefits will be required. The most vulnerable sections of society will be affected. That would be neither equitable nor fair in current circumstances. If social partnership means anything, it should involve discipline and responsibility. This will be its ultimate test.

Report - Irish Times

Friday, 20 November 2009

People Struggling To Keep Roof Over Their Heads...

Over 77,000 now behind on mortgage or rental bills.

Figure twice previous estimate...

AT LEAST 77,500 households are in arrears on their mortgages and rent payments.

This is more than twice previous estimates of the numbers of people struggling to keep a roof over their heads. It is a clear sign that the country is now gripped by a mortgage and rental crisis, experts said.

Also, one in five households are struggling to pay credit card bills, credit union loans and overdrafts. Higher-income families are more likely to owe money to credit card companies and to be overdrawn.

The major study of incomes and living standards by the Central Statistics Office indicates that thousands of homeowners and those who rent are so deep in debt that many are at risk of losing their homes.

The frightening figures underscore the mortgage misery in the country and stress the need for a rescue scheme for heavily indebted families, mortgage experts said.

However, a leading economist said last night the arrears figures may be higher as the CSO study relates to last year. Since last year there has been a 30pc rise in the average numbers joining the Live Register every month.

The CSO figures also lay bare the extent that Irish families are mired in all sorts of debts, apart from housing loans.

One fifth of households are now in arrears on a range debts, with higher-income people more likely to have arrears on credit cards, overdrafts and mortgages.

Lower-income people are struggling to pay utility bills for ESB and Bord Gais.

The report also shows that overall household income rose last year, largely due to payments like child benefit.

This was largely become more than one-fifth of the average income of households now comes from social transfers such as state pensions, child benefit and other welfare payments.


This is likely to bolster arguments to cut social welfare payments in the Budget.

But it is the mortgage and rent arrears figures that are most likely to cause a stir.

Previous estimates from the Economic and Social Research Institute (ESRI) and housing charity Respond had estimated that the numbers in arrears on their mortgages could be as high as 35,000.

But the CSO's Survey of Income and Living Standards says that 4.9pc of households are in arrears on mortgage repayments and rents. It does not separate out figures on mortgages arrears.

There are 1.58m households, according to the CSO's assistant director general Siobhan Carey. This means that 77,513 people are in arrears on their rents and mortgage repayments. There are 645,000 residential mortgages outstanding.

Goodbody economist Dermot O'Leary said that the situation for cash-strapped households was likely to have become more difficult this year.

On average an additional 13,000 people are signing on each month this year, compared with 10,000 joining the Live Register last year, when the CSO study was carried out.

Mortgage adviser Karl Deeter of Irish Mortgage Brokers said the CSO report showed the country was suffering a mortgage crisis. The courts are seeing an average of around 100 repossession orders a month for homes. However, few of these cases end in repossession orders being granted.

Earlier this week the Cabinet decided it would fast-track a scheme to rescue mortgage holders at risk of losing their homes.

The issue is being pushed at cabinet level by Energy Minister Eamon Ryan following agreement in the Programme for Government to put in place a mortgage scheme to avoid families being forced out of their homes.

The new scheme is expected to be agreed within weeks, with new measures in place by early next year.

Yesterday's CSO report also showed that one in 10 families had an outstanding balance they owed on their credit card, with many of these owing more than €2,850.

Most families reported that they were falling behind with their payments on mortgages, rents and utility bills. Almost one in 10 families were struggling to meet mortgage or rent and ESB bills.

Report by Charlie Weston - Irish Independent.

Wednesday, 18 November 2009

State Should Print Money To Rescue Economy...

State should start printing money to rescue economy...

Did you know that our country's housing wealth has shrunk at a rate of €142.8m per day since the peak of the boom in 2007? This is a catastrophic figure because housing wealth was one of the key drivers of spending, and domestic spending is what kept the dole queues so low in the boom years.

Without this housing "feel-good factor" we will continue to spend less. And the housing situation is getting more alarming. In January 2007, the total value of all our houses and apartments was €550.64bn and today that figure is €411.69bn. According to the latest report from, rents are collapsing back to 1999 levels. Many people believed that, even in the worst case scenario, the housing market would bottom at 2003/4 levels. This now looks optimistic.

The more rents fall, the more house prices fall too and this is because the rents are a leading indicator of what is happening to real housing demand. There is such an overhang of houses in the system and such a lack of demand that house prices will continue to tumble.

The problem is that it is getting worse by the day. Not only is the housing market not stabilising, it is getting weaker.
This fundamental weakness in our balance sheet is one of the main reasons that we have to be cautious about the positive spin we are hearing this week from some stockbrokers and the spectacularly useless forecasts from the Department of Finance.

Like almost every economic problem of the past two years, all roads lead to the banks. In a situation where house prices are falling, the banks will not lend because the banks' balance sheets are mortgaged to the very houses and properties that are now falling in value. As this process leads to defaults, the bad debts of the banks will rise, reducing their capital base and causing money to leave the banks. With investors unwilling to plug the gap until the full extent of the bad loans becomes apparent, the forced nationalisation of one of the big banks is clearly a distinct possibility.

Yesterday, we heard that the serial delinquent Irish Life and Permanent -- an outfit whose loan to deposit ratio reached a ludicrous 260pc -- is now trying to gain deposits again. But if it gets its deposits up, then to get the loans to deposit ratio down it has to lend less. Here again is evidence that credit in the economy is drying up.

Shrinking housing wealth brings into focus what is happening around the country and explains why hundreds of thousands of us have stopped spending and borrowing. Why would you borrow when prices are falling by 6pc and the banks are charging 5.5pc at least in interest? This is a real interest rate of 11.5pc. What company or individual, when faced with falling incomes, will contemplate borrowing at these rates? More crucially, when faced with real rates of interest of this magnitude, banks will not lend to businesses because these levels of interest rates increase the risk of bankruptcy.

This is the monetary environment we are faced with. In economics this situation is called a liquidity trap. It describes a situation where the banks are unwilling to lend to risky businesses, so business gets starved of cash and people are unwilling to borrow because they are crippled by the servicing costs of debts they took out in the boom.

This credit crunch is felt most drastically in much higher unemployment than is necessary. Unemployment, for anyone who has experienced it in a family, is a most destructive force. The shock is not only financial, but the psychological and emotional cost as well as the stress associated with unemployment is enormous. If you want to see this, ask your local doctor; doctors are seeing people presenting to them who never visited a surgery before.

The only way out of this liquidity trap and the rise in unemployment -- according to mainstream economics -- is now to bypass the banks. If the banks are not lending the money which the European Central Bank is giving them, then bypass the existing ones. This means one of two things. Either the State sets up a new bank, deals with the creditors of the old banks and gives these creditors some equity in the new bank; only a new bank will start to lend again and this is how our system works.

Or, more radically, the State could follow the moves of every country that has found itself in this dilemma in the past -- it could print its own money free of any constraints to get things moving again.

This idea of pumping new money into the system seems radical until you examine history and see that extraordinary times demand extraordinary responses. This is how the US, for example, got out of the Great Depression following the collapse of the economy and the banking system in 1931.

On April 18, 1932, within weeks of coming into power Franklin D Roosevelt, ignoring the advice of his economic advisers, took the US off the gold standard and allowed the Federal Reserve to print as much of these "new dollars" as was necessary to get the economy going. The effect was almost miraculous. The financial markets jumped 15pc on the announcement and in a matter of months the US economy rebounded, with industrial production rebounding.

We need the same sort of political courage now to do something radical because if we leave the economy to its own devices and continue to cut spending when the people are petrified and the present banking system is in tatters, the wealth of the country will just keep on shrinking.

Report by David McWilliams - Irish Independent.

Tuesday, 17 November 2009

Boom Buyers Seethe As Prices Now A Third Less...

Boom buyers seethe as units now three for price of one...

HOUSEHUNTERS in a busy commuter town can now get a two-bedroom apartment for just €110,000 -- a third of the original asking price.

It's a case of 'three for the price of one' at the exclusive Capella Court apartments in Newbridge, Co Kildare.

When the gated development first opened in 2007 -- buyers forked out prices starting at €322,000.


But now they will be seething at the prospect that newcomers can buy three apartments for the money they handed over at the height of the boom.

Residents at Capella Court who bought in 2007 will be paying three times the amount in monthly mortgage repayments of their new neighbours for apartments of the same size and specifications.

The attractive price tag comes as receivers have been appointed to re-launch the apartments.

Dwellings are finished inside and lighting, footpaths and landscaping are in place. The two-bedroom apartments are set to attract investors, with average rents in the capital's commuter belt at €733, according to the latest property survey by popular website Daft.

David Browne of HT Meagher O'Reilly, who was appointed by Simon Coyle of Mazars accountants to handle the sale, said a number of units were sold at the initial launch in 2007.

Prices started at €322,000, but in April 2008 when the houses were re-launched, they dropped to €299,500.

Capella Court, which has 63 units in total, is laid out in three blocks, one of which is completely occupied. But of the remaining two towers, just four units are occupied.


HT Meagher O'Reilly are releasing just 20 units in this phase, with a view to releasing the rest of the unoccupied units at a later date.

Units range in size from 65-80 sq m and come with balconies, fully fitted kitchen units, tiled floors and fitted wardrobes.

Capella Court was built by developer Hugh Heskin, who was also responsible for the upmarket conversion of the Estoria cinema in Galway into apartments; and the mixed-use Yew Tree scheme in Clane, Co Kildare, both of which sold successfully.

Report by Yvonnne Hogan - Irish Independent.

Saturday, 14 November 2009

€500k Antidote To Recession...

€500k Christmas lights 'an antidote'...

The capital's Christmas lights this year have cost a staggering €500,000, but are being offered as an "antidote to the recession".

The launch of the Christmas lights may be one of the most honoured traditions of the festive season, but this year's half-a-million-euro price tag has raised eyebrows.

Funds for the lights, which will be launched in the capital next week, have been provided by the Dublin City Business Improvement District (BID) and Bord Gais, in partnership with a number of retailers on Henry Street.

Although spending is tight as the country spirals further into recession, and costs are cut everywhere, this seasonal tradition is one that Dubliners will not have to say goodbye to.

Richard Guiney, CEO of Dublin City BID said: "Christmas in Dublin is a magical experience.

"The enchanting atmosphere is unmissable and is something that people travel from all over the world each year to enjoy and experience. It is, of course, a substantial investment, but the lights are all energy-efficient.

"We're using LED lights, which last up to 10 years, and if it's taken over a period of time, it's quite good value for money."

Mr Guiney went on to say that the investment is part of an incentive to remind people of more spirited times.

"Times are tough, there's no doubt about that," he said. "We want people to come into the city and be happy.

"It's something of an antidote to the recession."

Bord Gais will also be paying for the electricity costs.

David Bunworth, the managing director of Bord Gais Energy said: "We are delighted to be involved in the Christmas festivities.

Given the very successful year that we have had with the Big Switch campaign, we felt that it would be nice to give something back."

Report by Caitlin McBride - Evening Herald.

Thursday, 12 November 2009

What Recession??????

Public to ignore recession with festive spending...

IRISH shoppers will spend twice as much as their European counterparts on presents, food and socialising this Christmas despite the recession.

Households will fork out an average of €1,110 during the festive season – almost double the €600 that will be spent in Europe.

This is despite shoppers saying they will spend 30% less on gifts, 6% less on food and 22% less on socialising this Christmas, according to figures compiled by accountancy firm Deloitte.

Irish people plan to spend three times more on socialising than those in Germany and Italy this Christmas. An average of €180 per household will be spent at pubs and restaurants, which is the highest spend in Europe.

In an attempt to lure shoppers, retailers said they plan to begin their sales earlier than ever this year, according to chief executive of Retail Excellence Ireland (REI) David Fitzsimons.

"You’ll find a lot of nervous retailers out there who are keen to convert stock into cash. The Irish are a big nation for occasions, so it’s not surprising that they spend so much at Christmas.

"Expect to see a big drop in the sale of gift vouchers this Christmas as people will be keen not to give gifts that have a monetary value," he added.

The most recent figures show how far consumers have cut back. The average spend per transaction fell to €45 in the last quarter compared with €63 in the same period last year, according to REI.

Irish consumers have traditionally been the biggest Christmas spenders in Europe but they have fallen to second place this year behind Luxembourg, where households will spend an average of €1,150.

Three out of four respondents to the survey said they have less to spend this year and two-thirds intend to buy gifts that are on sale.

Consumer business partner with Deloitte Susan Birrell said the Irish consumer is now more rational.

"The focus is on practical, useful gifts. Customers will look for promotions and attractive prices. The retailers that don’t offer these to consumers will be the losers this festive season."

The survey, which questioned 500 people last month, found:

n42% of adults would like to receive cash as a present.

* One in five will give a cash present.

* One in five also said they will be cutting back on gifts for work colleagues.

* One in six will not buy a present for somebody’s else child.

* A third of shoppers said they will buy gifts on the internet to avoid crowds.

Also nine out of 10 people believe the Government has not reacted properly to the financial crisis, which is the highest dissatisfaction rating in Europe.

Just 40% of Irish people believe their employment to be secure, which makes Ireland the most pessimistic country in western Europe.

Report by Niamh Hennessy - Irish Examiner.

Go Christmas Shopping at:


Tuesday, 10 November 2009

Thousands Seek Mortgage Help...

1,000 a month seek help to pay mortgage...

MORE than 1,000 people a month are turning to the Government for help to pay their mortgages.

But as many as half of them are being turned down some months.

The dramatic rise in the numbers who cannot afford to meet their monthly mortgage repayments has underlined the scale of the crisis affecting a growing number of desperate homeowners.

The mortgage interest relief supplement is designed to cover the interest portion of the home loan. Those seeking aid have to show they negotiated to reschedule the mortgage payments with their lender. They also have to be means tested. And both husband and wife must be out of work.

The increase in applications comes at a time when mortgage interest rates are at record lows. Expected rises in the next year are likely to push substantially more people to the financial brink.

Figures obtained by the Irish Independent reveal that the Government expects to have to spend €60m this year helping homeowners to pay their mortgages. This is double the amount spent on the mortgage interest supplement scheme last year.

About 400 households a month are now getting an average of €367.40 every four weeks from the State to help them cover part of their repayments, the Department of Social and Family Affairs admitted yesterday. A total of 14,136 people are now receiving the mortgage assistance. This is expected to increase to 15,500 by the end of the year.

New figures show an average of 1,000 people a month are applying for the mortgage supplement, with up to 2,000 applying some months. However, large numbers of families are being refused the payment because of strict rules on who can qualify.

A report obtained by the Irish Independent reveals 2,116 people had claims for the mortgage interest supplement registered in May this year, but just 1,644 of these were granted assistance. This means close to 500 were turned down for State help that month.

The largest number of applicants was in the eastern part of the country, with the south-east also heavily represented in the figures.

Consultants who help people to appeal refusals for the state assistance said up to one-third of applications for the mortgage supplement were being turned down every month.

Director general of the Free Legal Aid Centres (FLAC) Noeline Blackwell said thousands of people were being refused assistance every month as the rules were so strict.

The supplement is designed to cover the interest portion of the home loan only, not capital payments.

It is assessed by community welfare officers, who are part of the Health Service Executive, but the funds are provided by the Department of Social and Family Affairs.


To have a successful application, people seeking the supplement must show evidence of having negotiated to reschedule the mortgage payments with their lender. They also have to be means tested, and both the husband and wife must be unemployed.

The rules also specify that a homeowner must have been in a position to meet the repayments when the home loan was taken out.

But many community welfare officers are concluding that anyone who took out a mortgage during the housing boom that was between five and six times their income could not afford to repay it, so the mortgage assistance is being refused.

Applications are also refused if the level of arrears is regarded as unreasonable.

People who re-mortgaged during the boom on the basis that their house increased in value are also finding themselves shut out from the scheme.

Ms Blackwell said thousands of people who took out mortgages with sub-prime lenders such as Start, but had since lost their jobs, were finding that they were not qualifying for the mortgage interest supplement.

Minister of State at the Department of Finance Dr Martin Mansergh told the Dail last week: "Applications to the scheme are lagging unemployment by some months and the rise in numbers is expected to continue for some time."

The Department of Social and Family Affairs said last night it was reviewing the operation of the scheme. This is to see if the scheme "can better meet its objective of catering effectively for those who need short-term assistance when they are unable to meet their mortgage interest payments".

A spokesman for the State-supported Money, Advice and Budgeting Service (MABS) said a huge proportion of its clients were people having difficulty paying their mortgages.

Some 69pc of people who seek help from MABS are either in a job, have recently lost their job, or are self-employed.

Only one-third of those seeking MABS assistance are social welfare recipients.

Traditionally, the majority of those going to MABS were social welfare recipients.

Report by Charlie Weston - Irish Independent.

Sunday, 8 November 2009

Handing Houses Back To Banks...

Homeowners handing their houses back to the banks...

HOMEOWNERS who can no longer afford to pay the mortgage are voluntarily giving up the keys to their property as they see no other way out of the debt
, according to a housing charity.

Respond warned that many people in negative equity did not think it was worth trying to sell the house to repay the debt as there was no market for it.

These people are simply handing their houses back to the banks, the charity said, with some leaving the country and others moving back home with family.

Respond spokeswoman Aoife Walsh said figures for repossessions in the courts did not accurately reflect what is happening on the ground.

"Many people are feeling hopeless because of the collapse of the housing market. They are simply handing back the keys of their home to their lender as there is no prospect of selling the home to repay the debt," she said.

"These cases are rarely reported and we suspect there may be far more ‘voluntary surrenders’ taking place than anyone is aware of."

Ms Walsh said Respond was receiving calls from people enquiring about their eligibility for local authority housing.

"These people are worried if they will be eligible for local authority housing or not.

"It is up to the discretion of each area, but they are generally accepted."

However with more than 50,000 people on the housing list, Ms Walsh said they could be waiting a long time.

"In the meantime they are moving in with family, or looking for cheap rental accommodation," she said.

Ms Walsh also said many were leaving the country.

"There was 18 repossession orders in courts this week.

"None of the property owners were in court and neighbours were saying they had simply left – some had left the country."

Report by Jennifer Hough - Irish Examiner

Friday, 6 November 2009

House Price Crash Gets Crashier...

That 40% drop - it's already happened...

Economists have predicted that house prices have to fall by at least 40 per cent from their peak of 2006 but house builders say that’s already a reality...

NEW HOMES agents have supported a claim by the Irish Housebuilders’ Association (IHBA) that selling prices for newly built houses and apartments have either bottomed out or are close to that stage in the price cycle.

Dominic Doheny, chairman of the IHBA, said earlier this week that prices across the country have dropped by an average of over 40 per cent and that the level of unsold stock was between 35,000 and 40,000. He said that there are 9,000 new homes overhanging the Dublin market – a figure well below other estimates which put unsold properties at 15,000.

Ken MacDonald of Hooke MacDonald said yesterday that judging by the magnitude of the price cuts and the increased number of enquiries and viewings in recent months, there was room for a guarded optimism that the market had bottomed out, particularly in Dublin. “There is now the expectation that we could see the start of a gradual return to an increase in sales activity in the early part of the new year.”

To illustrate the fall in prices, Hooke MacDonald is marketing two-bed apartments at the former Phoenix Park Racecourse in Castleknock. They originally sold at €425,000 and are now 44 per cent lower at €239,000. Two-bed units at Carrington in Santry, first on the market at €375,000, are now down 43 per cent to €215,000. The developers of two-bed live-work apartments at Hyde Square on the South Circular Road have cut prices from €540,000 to €275,000, a drop of 49 per cent. In Rathfarnham, four-bedroom houses at Stocking Wood are back 40 per cent from €695,000 to €415,000.

Sherry FitzGerald New Homes has also noted a pick up in sales since prices were reduced earlier this year. This is particularly true at Wyckham Point in Dundrum where it has sold more that 60 apartments in recent months. One and two-bed apartments are down by 39 per cent, from €560,000 to €339,000 for the larger units, and from €410,000 to €249,000 for one-bed homes. The joint agents are Hooke McDonald.

Eoin O’Neill of Sherry Fitz-Gerald New Homes said there was clear evidence of a recovery in sales where prices had been substantially reduced, in many cases by up to 40 per cent. He noted that some buyers were offering less than the asking price and, depending on their ability to complete the purchase promptly, they were getting the homes.

Deals have been done on a wide variety of schemes, including those at the top of the new homes market, such as the Bloomfield development in Donnybrook where prices are back by at least 40 per cent since the launch in September 2006.

The renewed interest in the top end of the new homes market has led to renewed sales in Castleknock where large five-bedroom townhouses in Farmleigh Wood have been reduced in price by 40 per cent – from €1.75 million to €1,050,000.

In Delgany, six-bedroom houses in Churchfields are now available at €895,000, a drop of 42 per cent on the original price of €1.55 million.

Sherry FitzGerald is also selling one of the lowest priced one-bedroom apartments in the greater Dublin area, a well finished unit at Dunboyne Castle for €129,950, a drop of 54 per cent on the September 2006 price of €285,000.

Ronan O’Driscoll of Savills said that two-bedroom apartments at Clare Village on the Malahide Road in Dublin 17 are “flying” since Albany Homes cut prices from €375,000 to €170,000, a reduction of 55 per cent. In the last month alone, 50 of the apartments, complete with full fit-out, had been sold.

Also going well is Capel Development’s Waterways scheme at Ashtown where the price of two-bedroom apartments has been reduced by 45 per cent, from €450,000 to €248,000.

O’Driscoll confirmed the IHBA view that prices had bottomed but said that, with around 15,000 unsold homes currently available in the greater Dublin area, most builders were selling below cost and it was unlikely that any new building operations would begin until prices bounced back by at least 20 per cent. Gemma Lanigan of Douglas Newman Good’s new homes division said it was obvious that prices in several of their new developments had bottomed out and the homes were selling again. In one scheme, Waltrim Grove in Bray, two-bedroom apartments – originally priced from €440,000 – were now selling at €225,000, a drop of 49 per cent. Three-bedroom apartments are down 47 per cent to €299,950.

Douglas Newman Good has also had considerable success with large family homes in Rathfarnham.

The four-bedroom semis at Butterfield Avenue sold out in one weekend in September after prices were cut from €1.2 million to €599,950.

Not all housing developments in the Dublin area have introduced price cuts. Several developers are holding firm on prices after selling a substantial number of homes off the plans in 2006 and 2007. However, many of the sales have yet to be completed with the now reluctant buyers attempting to pull out. Completing the deals immediately would put them into negative equity.

Report by JACK FAGAN - Irish Times

Thursday, 5 November 2009

Get A Move On Lads...

For God's sake get a move on...

THE message from the OECD is clear. Translated into the vernacular, it is: "For God's sake, get a move on, lads" The secretary general of the helpful international body warned that cuts in public spending should begin immediately.

In other words, the idea that a restructuring, spread over three to five years, would solve the crisis in the public finances is misguided. Mr Angel Gurria was probably too diplomatic to say as much in public.

Instead, he looked Brian Lenihan in the eye and told him: "The problem is that you may not have time, Mr Minister . . . The markets are zeroing in on countries."

The "markets" are loaning this country €2bn a month so that the Government's pay cheques for public and civil servants will not bounce, and so that the 160,000 private sector workers who have been thrown out of work in the past year will at least have some euro to buy food for their families.

Yesterday's lowering of Ireland's credit rating, due to our continuing problems, including what is seen as an "exceptional" rise in our debt levels, is likely to make it more difficult and more expensive to source those borrowings. The markets will also have been zeroing in on the Government's repeatedly stated commitment to firm and decisive action and the lack of evidence of such.

Despite much talk about spending cuts, government spending will rise by about 7pc this year and the State will have borrowed about €23bn to fill the gap between revenue and spending. The McCarthy recommendations on savings in the public service and the report of the Commission on Taxation were released amid flurries of good intentions, but that was that.

Ministers who supposedly support the principle of public service reform poured scorn on proposals which threatened to impinge on their own departments.

The result has been continuing inaction.

It was Colm McCarthy, at the recent Kenmare economic conference, who warned that what happened in the 1980s is happening all over again. We have apparently learned nothing from the mistakes of the late 1970s when delays in fiscal adjustment cost the country years of subsequent economic misery.

The markets will no longer be appeased by good intentions. They are the paving stones to hell.

Report - Irish Independent

Tuesday, 3 November 2009

Thousands In Unfinished Estates...

Thousands facing a future living in unfinished estates...

TENS of thousands of homeowners face the prospect of living in unfinished estates for the foreseeable future.

Construction bosses admitted yesterday that incomplete developments may never be finished.

Cash-strapped builders can't get loans to tidy off their estates and now heavily mortgaged families will be forced to remain there without proper roads, footpaths, green spaces and public lights.

Former president of An Taisce Eanna Ni Lamhna, who is still an active member, told the Irish Independent that the state's heritage body had long warned of the effect of half-built houses on the landscape.

"It doesn't give me any pleasure to say that if they'd listened to An Taisce, we wouldn't be in the situation we're in now with all these houses," she said.

"I must say that we've been saying for years that it was too much too soon. I was told that I was against development and we were against everything -- look what they've done to the country now."

Yesterday, the Irish Home Builders Association (IHBA) claimed that some of its members were being forced to sell properties below cost.

But the IHBA conceded that while prices have fallen by more than 40pc for units in some developments, many builders are still making a profit.

Maplewood Homes, which is building homes at the Paddocks in Adamstown, Co Dublin, has dropped the price of a two-bed apartment by 43pc to €185,000 today from €325,000 in 2006.

But the developer says that even with the reduced price, he was still making money, which shows just how much house-builders made during the boom.

The builders' profits will come as little consolation to homeowners who bought expensive properties at multiples of today's prices but who could find themselves living in unfinished estates.

The IHBA, which represents 1,500 companies, said that work on completing many schemes was not proceeding and that unless banks started lending, the situation would remain the same for the foreseeable future.

There are no official figures on the number of unfinished housing estates across the country. Last year a survey by the Irish Independent showed that at least 1,100 housing estates were completed but had not yet been taken in charge by local authorities.

Councils had refused to take over the running of the estates because they were often not built to the standard required in the planning permission.

"There's no doubt there is an issue. In some instances, work to conclude those schemes is stalled at the moment," an IHBA spokesman said.

"The re-commencement of the work will be based on a commercial decision. It will be based on capital from the banks. Where you have portions of an estate not finished, there will have to be working capital which developers just can't get, they've run out of cash."


The Construction Industry Federation Housing Review and Outlook published yesterday also shows that in the last three years, Leitrim had the highest number of house completions per head of population than any other county in Ireland.

Leitrim had 91 houses built per 1,000 population -- almost three times more houses than were completed in Wicklow (31) and Dublin (33), with much of the housing boom driven by tax breaks.

Last night Alex Brett, spokesman for Maplewood Developments, which has dropped the price of its units at Adamstown by as much as 43pc, said prices can go no lower.

"We are not selling at below construction cost levels, but it's got to the stage that if there were any more price reductions, you would be selling for less than the cost of building the house, that makes no sense."

Report by Paul Melia and Colin Gleeson - Irish Independent

Monday, 2 November 2009

Ireland Is A Disaster...

'Ireland is a disaster . . . leave now and enjoy your life'...

On these pages last week, Shane Fitzgerald, a young graduate of University College Dublin, wrote about the Government’s failure to deliver on its promise of a bright future in Ireland for him and his generation. Rather than draw the dole here, he left recession Ireland behind him – departing “these bankrupt shores” for London. His experience rang true for many online readers, some of whom reacted with strong antipathy towards our politicians. Here is an edited selection of how they see Ireland and its politicians.

JAY: BORN and educated in Dublin, I emigrated to Canada in my 20s after working around the British Isles for a few years after graduation. My best advice, based on my very varied, interesting and relatively successful life filled with rich experiences and career choices, is to leave now and enjoy your life.

Ireland is a disaster. It is sorely mismanaged and misruled and destroyed by its own absurdity. There is corruption in the Government, banks, business, police, law, and even the Catholic Church (Home Rule was certainly Rome rule).

And it seems we learn nothing. The UK is also in dire economic straits and offers nothing much different from Ireland (how could it?), only with less corruption. North America, New Zealand and Australia (where I now live) are all beautiful, and are happy to welcome people from our islands, their ancestral home.

It’s all out there for you. Go now while you are young.

Chris: I signed out of the country in the late 1970s. And stayed out until the 1990s. In many ways I regret coming back. This is a very difficult country to try to survive in. Everything seems stacked against the ordinary person. We are expected to pay, pay, pay and get very little in return.

There seems to be one law for certain groups in society and a very different law for ordinary taxpayers.

At the moment I am looking down a very long, dark tunnel as I see no chance of Ireland being able to pull herself up by her bootstraps because we have an absolutely incompetent Government and a public sector which, in the main, is extremely selfish. Worse than that, there are many in public sector who are willing to abuse their power to punish the private sector or those who have become unemployed.

I don’t blame young people for leaving; what incentive is there to stay? Even if they work hard all their lives and pay their taxes they will never attain the security or standard of living of the Nordic countries. Waving goodbye to our young will become increasingly normal. And once they experience the good life they most likely will not want to come back. It seems to be Ireland’s tragedy and her fate.

Pocaifolmha: Welcome to the diaspora, Shane, you have done just what the Brian Lenihans of this world wanted you to do: reduced the unemployment register and become a potential source of external revenue.

You are now a nonentity in the eyes of the Irish Government. You do not have the right to vote and will be considered as a tourist in your own country. This situation is not your fault but your parents and relatives may not have not helped by their complacency in voting for the crooks that run Ireland and not demanding change.

A country that continually loses its brightest and best will never make progress. You and your friends should really be rioting in the streets like the French would but the Irish have been put down for so long there is no fight left in them. Don’t think that things will change in near future because if Nama floats it will at least 10 years before things improve.

Eamon3: If it is any consolation to the class of 2009, graduating earlier would not have been a panacea. My son graduated in 2003 and spent over five years in excellent well-paid jobs, buying an apartment during the boom. After spending the first two months of 2009 on the dole, he secured employment on the Continent.

Returning to Ireland is now something he hopes never to have to consider. This is how our leaders can assert that the growth in unemployment is slowing down.

Catherine P: I am currently making plans to leave this country, with no hope of ever returning to live here. I did not take part in any of the insanity of the last few years when I was working full time; I have no debts or mortgage. But I am one of the many that is paying the price.

I have seen precious little indication that the current Government or Civil Service have the interests of the country at heart. All I have seen in the last 12 months is the usual self-involved behaviour that has become more endemic in this country.

There are people out there who genuinely want to make this a better country to live in, but there are more people in all sectors of our society who are so obsessed about their entitlements that any sense of social responsibility has long gone.

Paddy Behan: I left Irish shores two months ago now, along with my wife and five-month-old son. I left a permanent teaching job in the heart of Kilkenny. I was very happy and content, my wife sadly was not. So, here I am now, no more that one mile from the beach, earning €80,000 tax free a year. My wife has a good job and is being treated with respect.

My son has his own nanny, at a fraction of the cost in Ireland. Good, Catholic Ireland, eh? My advice is get out while you can. The metaphor of rats leaving a sinking ship invades my mind every time I think of home. Sorry, but that’s the truth. I wish you all the very best of Irish luck, whatever that means nowadays.

Penguin: What about those who voted these criminals into a position of power? Two years ago the electorate bought into the “greed is good” philosophy (as in all recent Dáil elections) and this is the result. While I strongly sympathise with Shane, enjoyed his article, and might consider doing the same (head for foreign shores) were I his age, sometimes you just have to make a stand and say “this has gone far enough”.

Joe: I’m planning on leaving soon. Many of my friends have left already. Australia, the US, parts of continental Europe. Even Irish friends of mine are working in Eastern Europe. All of them are having the time of their lives.

Ireland is a very complex country, regulated by a rigid, mostly unspoken ideology; an ideology that looks confusing, contradictory and even idiotic to those who don’t benefit from it, and as natural and as just as the holy law of God to those who do.

Ireland’s future does not look very bright – but for myself and many others it’s not our future, it’s not our concern.

Sean Reynolds: The economy is in the toilet in my view, and will be for some time yet. I graduated in 2008 and after a short part-time contract, Government cuts led to my peanuts job being cut while the “higher-ups” were insulated from cutbacks.

The Government has completely blown the benefits of the Celtic Tiger, and put nothing away for a rainy day.

I have zero faith in the Government, they do not understand the problems ordinary folk have and just don’t seem to care. While I wouldn’t find it easy to move abroad, it is something I am actively contemplating because this economy is wrecked.

Robert Browne: I have every sympathy with Shane Fitzgerald and the shame is clearly on our useless and utterly corrupt Government, aided and abetted by the likes of Ictu.

Lshields: Funny that Shane can’t say anything good about Ireland, but is still happy enough to take Irish Times money though.

Bobs: What a bunch of whingers, none of ye were crying when the money was coming in. Nobody asked where it was coming from or how long it would last because in reality ye didn’t want to know.

Now it’s all somebody else’s fault – collective schizophrenia.

Report - Irish Times

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