Daft Property - Irish Property News

How the great Irish fairy tale hides the true horror story... Gene Kerrigan's new book presents an alternative view of the economic crisis, suggesting that some people are actually benefiting from austerity policies. We've been subjected to the Big Lie. We are not all in this together, as this extract reveals By now, they can recite the fairy tale in their sleep. Politicians, their media fans, tame economists and hired mouthpieces use the fairy tale to explain what happened. Like all stories, the details can be changed from time to time, but the basic fairy tale about the Celtic Bubble, the crash and the recession is pretty consistent. And it goes like this. Once upon a time, the Irish people threw off the shackles of the past that held us back. We began to work hard, to innovate, to find within us the talents we always had but which had been suppressed or neglected for too long. In the bad old days, you see, the Brits held us back, or perhaps the Catholic Church sti...

Figures dispel myth that we're top home buyers in Europe... HOME ownership in Ireland is in line with the average in the European Union -- debunking the myth that home ownership here is among the highest in the EU. The Spanish, Greeks, Portuguese and people in a host of former Eastern Bloc states all have higher ownership levels than Ireland, figures obtained by the Irish Independent show. Some 74pc of Irish people own their own home. This is in line with the average for the 27 members of the EU. Ireland ranks 18th in home ownership levels out of 31 countries looked by the the EU statistics agency Eurostat. The figures are for 2009, the latest available. The highest home ownership is in Romania (96pc), followed by Lithuania (91pc), Hungary (89pc), Slovakia (89pc), Estonia (87pc), Latvia (87pc), Bulgaria (87pc), Norway (85pc), Iceland (84pc), Spain (83pc), Slovenia (81pc), Malta (79pc), Czech Republic (77pc) and Greece (76pc). Ireland comes in at 73.7pc, while 70pc of pe...

Cuts, tax and emigration the harshest medicine... IT'S often been said that the best cure for poverty and unemployment is a job. But the reality of the modern Irish economy is that the best cure is emigration. The Economic and Social Research Institute (ESRI) said yesterday that 100,000 people would leave Ireland this year and next, keeping a lid on already high unemployment and helping to relieve some of the budgetary pressures on the Government. The loss of 100,000 mainly young people is hardly something to celebrate, but the reality is that without this safety valve the Irish economy would be mired in levels of unemployment last witnessed in the 1980s. The ESRI calculated yesterday that if the amount of people in the labour market had not fallen over the last year via emigration, the rate of unemployment would be about 16pc not the current 13.4pc. Ireland is shipping out its young people to countries like Canada, the US, Australia and the UK, thereby easing the pressure on the e...

NAMA ‘won’t solve developer problems’... THE property, development and construction sectors will not be served by a functioning bank post-NAMA, unless the proposed legislation is amended to provide access to sufficient working capital for new and viable projects, the Construction Industry Federation has said. Following a meeting of the Construction Industry Federation (CIF) members yesterday director general Tom Parlon outlined serious reservations they have with the whole NAMA scheme. "The entire NAMA project is predicated on the need to get liquidity flowing again to support the normal economic life of the country, protect jobs and give people a renewed sense of confidence in our collective futures. "As more details emerge, however, there is a growing sense that NAMA could have the opposite effect by essentially freezing working capital for construction employers and adding to the sense of uncertainty and paralysis that has permeated all aspects of the economy since April’s...

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 r...

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 Le...

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 admitt...

25,000 families now face losing their homes FEAR: No more breathing space on mortgages... UP TO 25,000 home owners face the chilling prospect of having their homes repossessed because they have fallen significantly behind on mortgage repayments. Irish Life & Permanent (IL&P), which has a 25pc share of the home mortgage market, has confirmed that 6,122 loans are now three months or more in arrears and it is estimated that up to another 20,000 mortgage holders with other lending institutions are in a similar position. Under the State bailout arrangement, banks had agreed to give all mortgage customers one year's breathing space before repossessing. But, for many, that deadline is now imminent. New legal orders coming in to effect on October 1 will make it easier for District Courts to grant uncontested repossessions, which is likely to increase the number of homes being taken over by banks. Under the same act, contested repossession cases will be heard in the Circuit Court ra...

We're facing worst crisis in history of State... FORMER president Mary Robinson yesterday warned the Government that the country is in the grip of possibly the worst crisis in the history of the State. She bluntly told the country's leaders that a lack of a vision of ourselves "lies at the heart of the crises we face" and warned that it was vital that example now come from the top and that the vulnerable be protected. The former UN High Commissioner for Human Rights yesterday became the first former president to deliver the General Michael Collins oration at Beal na mBlath in west Cork. Her speech centred on the scale of the crisis facing Ireland and how those in positions of power should deal with it. "Challenges of this magnitude demand not only detailed solutions but a comprehensive vision of what sort of society we want to see emerge from our current difficulties. "The likelihood is that, in the absence of a vision of our future which enjoys broad suppor...

Thousands seeking help as debts surge... THE number of people turning to a Government money advice service to save themselves from financial ruin will double this year. In response, the Government has been forced to hire a new team of advisers to bolster the under-staffed Money Advice and Budgeting Service (MABS). Despite the public sector recruitment ban, the Department of Finance has given the green light for a team of new recruits. The extent of indebtedness emerged as it was revealed that up to 500 ESB and Bord Gais customers were being disconnected every month because they could not afford to pay their bills. Stark new Department of Social and Family Affairs figures reveal: * The MABS helpline received more than 12,200 calls in the first six months of 2009. This compares with almost 11,000 for all of last year. * MABS staff have been visited by almost 10,000 new clients -- owing an average of €15,100 -- since the beginning of the year. * The vast majority of the debt (65p...

We're gripped by collective stupefaction... We need more than a changing of the political guard...We need to take the axe to the nation's greedy elite WHEN the last of the Celtic Tiger cubs are basting in the St Stephen's Green sunshine like Sunday afternoon cooked chickens, it is hard to think revolutionary thoughts. Sadly, even as we noted that a government which has turned our economy into the Cuba of Europe could be forgiven if it did the same trick with the weather, the antics of our judges and the International Monetary Fund (IMF) swiftly brought us back to more normal dreams about the virtues of Jonathan Swift's wise suggestion that we should hang half a dozen bankers every year. While the hanging bit is a tad excessive, when it comes to numbers Mr Swift may actually have been too prescriptive -- for any bonfire of our Tiger nonentities should include a right good sprinkling of politicians, clerics, regulators, barristers, mandarins and social partners. Last week...

Vendors still slow to lose belief in the hype... I WANTED to get away from nasty estate agents, houses containing load bearing dank and breathe the pure, fresh air of New York for a few days. The problem is that fresh air exists here like a Green Party first preference vote and the only other option to going outside and choking to death is sucking in a lungful of legionnaire’s disease in the hotel air conditioning system. Worse still, the search for a new home is stalking me at every given turn. America is the home of the property bubble and ensuing credit crunch. This is, if you will, the San Andreas Fault of finance, to our San Francisco. When I mention we’re living 60 miles from work, group therapy ensues, as people mention their own horror stories, of getting up at stupid o’clock and travelling via Neptune to get to work. House prices pop up in otherwise pleasant chit chat – a topic only slightly cruder than making fart jokes in front of the pope – and someone will describe how ho...

We will have to pay for excesses of the past... RECENT economic reports have a hint of desperation about them as they struggle to suggest the battered economy will revive in two years time. The bit between 2009 and 2010 is being glossed over, as the economy is expected to plunge to its worst recession ever in modern history . If it’s true, the 9-10% fall in output this year is from a high base and even if growth reverts back to 2005 levels then that would be no bad thing. That was the year before we built a record 96,000 houses and employment doubled towards 2 million over a 10-year period. That’s all positive, but the reality check still has to kick in. One report from West Cork suggests house prices in some areas are in desperate trouble. One source has reported that 10 houses built in 2007, achieved prices of €400,000, some bought with €390,000 mortgages. But as the market tanked, unsold houses were bought for €180,000, leaving many in negative equity territory. It is also a fact th...

Home debt-trap hits 340,000... Massive rise in borrowers caught in negative equity AS many as 340,000 people could now be in negative equity following a sharp fall in house prices. New research which reveals up to a third of a million people owe more on their mortgage than their homes are worth is considerably higher than recent estimates that found 250,000 homeowners were in negative equity. Being in negative equity means you cannot switch mortgages for a better deal, fund a move to a larger home to start a family, or move house to take a job somewhere else. Economist with property website Daft.ie Ronan Lyons has calculated that 340,000 people, or one in five homes, are now in this predicament. "That's 340,000 homes where if the homeowners have to sell, they will not be able to pay the bank back solely through the money they get from selling the house," Mr Lyons said on his blog site (ronanlyons.wordpress.com). The findings are broadly in line with a survey by Amarach ...

Collapse in house prices will be good for economy... Many people in recent weeks have tried to explain what is happening to the economy. How can we visualise why credit has dried up? How do we rationalise the fact that we went from a situation of so much money we didn't know what to do with it, to a situation of no cash at all? Where did it all go? One interesting way to look at this, and this column has used it before, is to think of events in the natural world. Think of the aerial photos of the Serengeti at the beginning of the annual rainy season. What was a parched arid climate where nothing grows suddenly become florid, verdant and full of life. Animals, flowers insects flourish and the place is abuzz. We see migrating wildebeest, crocs and birds and then, at the height of the season, the whole plain is crackling with energy, fuelled by that most precious of commodities, water. Then as the seasons change, the water begins to evaporate. Life disappears from the edges of the pla...

Take a long look at the chart below. Digest it. Maybe look again if you have to. This happened in the most sophisticated economy in the world. This is what happened to the price of development land in Japan. Prices roared upwards and then collapsed, ending up below where they started at the beginning at the boom. This is likely to happen here; development land is likely to settle back to 1996 prices. We haven’t seen the half of it yet . When we hear some property lads talking about green shoots, this chart should be enough to tell them to snap out of it. But we can’t seem to snap out of it. We are still caught in the trap. We seem to believe that the price of houses and land will miraculously rise again some time soon. This will not happen. It can’t and shouldn’t. In fact, houses prices are likely to fall another 50 per cent from here before we see anything like the bottom. International comparisons bear out these forecasts. Until now, many Irish people have clung to the myth of what ...

'I moved from a three-bedroom house into a six-bedroom house. So I'm stuck' . HARD TIMES: Dublin families who moved to the commuter belt in search of a better life are among those now queuing for a living... IT’S AN eerily quiet midweek morning in Cavan town. Until recently, processions of lorries thundered through here at rush-hour and heedless streams of cars clogged up the narrow approach roads. Today, traffic glides through the town. The mid-term break from school means it’s quieter than normal, but local people say the long traffic jams have all but disappeared, even on normal weekdays. Greg (47), a father of five, would welcome the quieter roads and the faster journey to work, except he’s signing on the live register for the first time. He’s one of a swarm of Dublin migrants who sold modest properties in the capital and bought large, detached trophy homes in commuter-belt towns across the south of Cavan such as Virginia, Ballyjamesduff and Bailieborough. Some, though,...

Trophy seaside home tells story of the boom... IF A SINGLE house could tell the story of the property boom then it might be Sorrento Villa on Vico Road in Dalkey, Co Dublin. The Victorian detached house, facing the sea, slumbered up on the hill for decades, its interior divided into two spacious units that would have been described as flats rather than apartments. The house dates from the 1860s when it was built by a provost of Trinity College as a summer villa: and he chose one of the finest sites on the hill with a sunny east-to-south exposure. Two years ago when property prices reached fever pitch, it came on the market with an Advised Minimum Value (AMV) of €4.5 million. However, after intense bidding at auction it sold for €5.6 million. Stamp duty at 9 per cent added an additional €500,000. The new owners went on to spend many thousands more on redecorating the rooms and making changes to the layout, converting it to a five-bedroom house. They also drew up plans to install an expe...

European journalists deliver the last rites to Celtic Tiger... EUROPEAN DIARY : European media outlets have been scathing in their criticism of a ‘Wild West’ financial culture ... THE CRISIS gripping the Irish economy is clearly the big news at home this week. But it is also hard to avoid the topic in Brussels, where journalists and diplomats are busy reading the last rites to the Celtic Tiger and rethinking their past praise for the Irish economic miracle. In the European Commission press room, colleagues from other EU states tend to broach the subject in one of two ways. Over a cup of coffee some ask concerned questions about what went wrong, who is to blame and what impact it will have on a second referendum on the Lisbon Treaty. Others invoke gallows humour, telling the in-joke: “What’s the difference between Iceland and Ireland? Answer: One letter and about six months.” The BBC’s daily current affairs programme Europe Today repeated this – by now hackneyed – joke on air on Friday ...

Ireland's Property Market: A Fallen Star? Ronan Lyons, Daft's in-house economist, commenting on the latest Daft research on the Irish property market... When we look back at 2008 in a few years' time, I think it's fair to say we will regard it as the annus horribilis for Ireland's property market. In late 2006, we issued a report which was the first to spot a slowdown in the property market. At the time, it was our view - unpopular though it was - that rising interest rates and high levels of supply would lead to a levelling off in house prices. This turns out to only have been the start of the story. Bursting onto the world stage at the end of the 1990s, Ireland was heralded as an economic phenomenon and rapidly became a global superstar and poster-child for economic development. But recently it looks like it's all just falling apart. Nowhere is this more evident than in Ireland's housing market - until recently the engine of Ireland's economic growth. ...