Daft Property - Irish Property News

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...

Bubble bubble toil and trouble...

THE average house has lost almost €46,000 of its property-boom value. Prices fell in October for the 20th month in a row. House prices are now down 15pc from their peak of January/February 2007, according to the latest figures from the Permanent TSB/ESRI house price index. Over the past year prices are down 10.2pc after average prices nationally showed a fall of 0.8pc in October, a marginally smaller drop than in the previous two months. However, many economists feel that price declines have been more severe, with a number of estate agencies estimating that prices are already 30pc off their peak. And new figures out yesterday from the Central Bank seemed to back this up. They showed that residential mortgage lending is at its lowest level in 22 years. Permanent TSB executive Niall O'Grady yesterday defended the accuracy of the house price index. "The index remains as valid as it was when house prices were rising," he said. However, he admitted that there was a three-month...

We're getting back to basics in these recessionary times... ANYONE WHO, like me, has only recently learned to appreciate the wonders of Lidl will not be surprised by Ulster Bank's recent revelation that spending took the biggest nosedive since 1983 in the first three quarters of this year and Irish consumers continue to spend cautiously in the run up to Christmas. There was a time when the stark lighting, the anaemic decor (would a cheery sunburst yellow colour scheme be out of the question Mr Lidl?) and that curiously earthy smell once you hit the door (what is that?) was enough to have some of us running to the more sweet smelling Superquinn for cover. But our priorities are changing and we're discovering that rampant parsimony has its thrills. The psyche of a nation, formed over 10 years of profligate spending, is under review and it's not just property we're holding back on, but household goods, which Ulster Bank attributes to the weakness in the housing market,...

Dublin's early Xmas lights failing to dispel high street gloom... Christmas is coming early to Dublin this year as city officials try to dispel the gloom from the country's first recession in two decades. Mayor Eibhlin Byrne will switch on the Irish capital's festive lights display on Nov. 9, before cities such as London, New York and Edinburgh, after bringing the ceremony forward by three weeks from last year. ''For retailers, it's not an easy time,'' said Byrne. ''We are harking back to John F. Kennedy and we are asking not what your city can do for you but what you can do for your city.'' Irish shoppers powered the fastest-growing economy in Western Europe over the last five years. Now, consumers are cutting spending as unemployment rises and property prices slump. Gerry Harvey, chairman of Sydney-based electronics and furniture retailer Harvey Norman Holdings Ltd., which has four Dublin stores, described Ireland's economy as '...

Country now paying for 'one hell of a borrowing binge'... WE HAVE been on "one hell of a borrowing and spending binge" in recent years and now we have to face up to a radical change in our standard of living and expectations , the Céifin conference heard. Jim Power, chief economist with Friends First, said the Government's role in allowing spending to grow by 10-12 per cent a year in recent years was "absolutely criminal" and we would now pay for that mismanagement. Personal debt rose from €20 billion to more than €140 billion between 1999 and 2007, he said. "That is . . . one hell of a borrowing binge." Asked about the role of the banks in fuelling spending, Mr Power said he had worked as a banker for 20 "very unhappy years" and the incentivisation structures always worried him. "You were incentivised on the quantity of what you sold, not on the quality. I think the incentivisation structure did encourage irresponsible behaviour...

Poles flee ailing Irish economy... When the European Union expanded eastward in 2004, Ireland opened its doors to workers entering from former communist states to help maintain record economic growth. Now, immigrants are heading for the exit. The number of people leaving Ireland next year will outstrip those moving to the country for the first time in 14 years, according to Economic and Social Research Institute in Dublin. The biggest exodus will be among the 170,000 workers who arrived the past four years from Poland and other east European states. ''It's a very hard situation,'' said Artur Kawczynski, 30, who lost his factory job in Galway on Ireland's west coast 10 days ago. ''I rang my friends in Poland to ask what job opportunities there are like.'' Immigrants like Kawczynski fed the manufacturing and building booms that helped double the size of Ireland's economy during the past 10 years and made it the most dynamic in western Europe. N...

Budget cuts of 2 billion euro as economic crisis deepens... But property developers seek hundreds of millions in refunds due to value losses ... FINANCE minister Brian Lenihan is looking for fresh spending cuts of around €800m for next year, on top of the €1.3bn reduction that has already been signed off by ministers in estimates negotiations. The grim news comes as it emerged this weekend that Ireland's property developers, who made millions in the boom, are seeking tax refunds of hundreds of millions of euro after writing down the value of their land banks and other assets. This threatens to drastically reduce the corporation tax receipts the Revenue Commissioners were banking on. With September tax returns expected to be very bad and the economic climate rapidly deteriorating, a further 1.5% reduction in 2009 spending is now up for debate. This would bring planned cutbacks in current expenditure for next year to more than €2bn . " It's very grim. Two weeks after finan...

Financial crisis...the main issues behind the government's decision to guarantee bank deposits... Q: Why did the Government guarantee bank deposits? A: It had no choice. After yesterday's collapse in bank shares and the rejection of the Paulson bank bailout plan in the United States, the Government had to move. With Irish banks paying a huge premium to borrow money from foreign banks our entire financial system had come within a few hours of completely seizing up. Q: How safe are my savings? A: After this morning's move, the savings of bank depositors are now 100pc state-guaranteed. This means that savers who have money deposited with the six Irish banks -- AIB, Bank of Ireland, Irish Life & Permanent, Anglo Irish, EBS and Irish Nationwide -- can sleep easily in their beds at night. Q: Which banks aren't covered by the guarantee? A: None of the foreign-owned banks are covered by the guarantee. These include Ulster Bank, NIB, First Active, Bank of Scotland, Halifax a...

Revenue failed to tax €2m staff benefit... BENEFIT-IN-KIND TAX: DELAYS BY the Revenue in identifying obligations to tax benefit-in-kind (Bik) of approximately €2 million paid to its own staff is highlighted in the report. In the course of drafting a Statement of Practice during 2006, officials raised concerns in relation to the tax treatment of benefits received by Revenue's own staff in respect of travel to and from work. A working group reviewed benefits which had accrued from January 2004 to June 2007. About €2 million accrued by way of Bik during the period reviewed. This comprised €1.7 million for use of official vehicles by officers for travel to and from work, and €0.3 million paid under agreements made with staff whose work began or ended between the hours of 11pm and 8am in locations not served by public transport. An overall liability was calculated at €1,656,920, including interest and penalties. The relevant Inspector of Taxes was informed of Revenue's intention to ...

OPINION: Unbridled capitalism outlived its communist rival for exactly 17 years... POLITICAL HISTORIES, with their clear before-and-after dates, are so much neater to write about than their rather more tortuous economic cousins. On December 21st, 1991, the representatives of all member republics of the Union of Soviet Socialist Republics, with the exception of Georgia, signed the Alma-Ata Protocol, dismembering the USSR. Just five days later, on St Stephen's Day 1991, the Supreme Soviet dissolved both itself and the country it had once ruled. One of the two great political and economic theories of the 20th century, Soviet communism, ceased to exist. The year 2008 will enter our history books as the year when the rival 20th century theory of unbridled capitalism passed away. As this demise is an economic one, we lack an equivalent before-and-after date. Perhaps historians with a sense of symmetry will select December 26th, 2008? Such a selection would allow us to write that unbridle...

The crash is now the new porn... Fair play to the Irish, we'll knock a bit of crack out of anything. The property boom, for all that the official line now says it was the worst thing that ever happened to us, we treated as one huge game in which everyone could be a player. Even people who weren't investors as such, but who just happened to own a house because that's where they lived, had a great ride for 10 years as they constantly calculated how much their house was now worth and how much more they had made in the property game last year than they made by actually working. Most people were never going to sell their houses, and if they were they were going to have to buy an equally overpriced one, but people just enjoyed the feeling of getting ever richer on paper. What other nation could come up with a whole new type of porn, based on fully-clothed people standing in their kitchens, often flanked by their cute children? And the sight of a Miele kitchen in a period house ...

THE GOVERNMENT has no plan to deal with the biggest economic crisis in a quarter of a century and lacks the conviction to win public confidence, Fine Gael leader Enda Kenny told an opening session of a two-day special conference of his parliamentary party in Co Clare yesterday. Warning that the next general election "may come a lot sooner than expected", he told his colleagues that if they were "united, disciplined and tough" they would win power in the next Dáil. Focusing on the Government's approach to the economy, Mr Kenny said people were frightened because nobody seemed to be in charge. "In response to the biggest economic crisis in a quarter century, the Government first denied, then dithered, then went on holidays ." He added: "All the Government seems to be able to do is congratulate itself - in advance - for tough actions they haven't yet taken, and they'd never have needed to take if they'd done their job well enough in ...

Celtic Tiger eatery closes its doors as downturn really bites... Now facing closure, Cooke's Cafe has long been one of the favourite eateries of the cashed-up chattering classes in Dublin. But the award-winning venue -- which counts celebs like U2 among its customers -- has this evening been served up as the industry's first high-profile casualty of Ireland's credit crunch. A spokesperson for the eatery, situated on the corner of South William Street and Castle Market, has confirmed to the Herald that they will cease trading at the end of this month. "It's true, we're closing up," he said. Shock In news that has sent shock waves through the tight-knit circle of Dublin restaurateurs and chefs, Cooke's will close its doors in two weeks. It's understood that the lease has now been bought by Abrakebabra owner Graham Beere, who has indicated he may turn it into a sushi restaurant or use the venue to extend his chain of Gourmet Burger Kitchen. As proof t...

Uncertainty over jobs after record market fall... AS grave uncertainty hangs over the future of thousands of jobs at Irish branches of recession-slammed US firms, markets are not expected to rebound quickly from yesterday’s record-breaking fall. At home, the ISEQ index of Irish shares’ closing figure was its lowest for more than five years. Across Europe, the trend was similarly dismal for a second day, with the FTSE Eurofirst 300 index falling 2.6% to its worst close since May 2005. The stock market shock waves followed the collapse of investment bank Lehman Brothers, the 158-year-old fourth largest financial institution in the US. In response, central banks around the globe pumped funds into the money markets, including €70bn from the European Central Bank, $50bn (€70.5bn) from the US Federal Reserve and £20bn (€25.2bn) from the Bank of England. Lehman’s bankruptcy filing, the biggest in US history, followed Merrill Lynch & Co’s decision at the weekend to sell itself to Bank of A...

Smart talk? The whole global warming and need for carbon reduction is very much debatable. But measures are being taken in Ireland to reduce your carbon footprint in your house... It's now time for..."Smart meters scheme to help reduce home electricity bills... HOUSEHOLD ELECTRICITY meters in the Republic are to be replaced by "smart meters" which offer a range of functions including the intelligent use of cheap-rate electricity, while also providing for householders to sell home-generated electricity back to the national grid. The meters are to be rolled out over the next four years at a cost of almost €1 billion. Launching a pilot scheme involving an initial 15,000 smart meters yesterday, Minister for Energy Eamon Ryan said they would help householders to reduce their electricity bills, improve the operation of the electricity system and reduce carbon emissions. Smart meters can monitor and record the amount of electricity used by the householder, as well as when i...

Developers cut prices, give interest free loans... Apartments in Elm Park, D4 and The Grange in Stillorgan are among those being offered at cut rates to buyers... TWO OF the country's largest developers are offering financial packages to buyers in an effort to kick-start the new homes market. In Dublin 4, two-bedroom apartments in the Elm Park development on Merrion Road, have dropped at least 20 per cent to €470,000 with developer Radora offering buyers loans at zero interest of between 20 and 30per cent of the selling price. Radora is controlled by Bernard McNamara along with Gerry O'Reilly and David Courtney. Meanwhile Ray Grehan of Glenkerrin Homes is offering buyers a 15 per cent interest-free loan for up to seven years on luxury two-bedroom apartments at The Grange in Stillorgan which are being sold at 2005 prices, of €525,000. The deal, which is backed by the Construction Industry Federation, is being offered across other Glenkerrin-developed properties including Ballint...

State of emergency... BRIAN COWEN last night tried to get a grip on the country’s escalating economic crisis by calling an emergency October budget that looks primed to inflict deep spending cuts. The unprecedented decision to advance the budget — the centrepiece of the Dáil year — by almost two months to October 14 was sparked by shock in government circles at the collapse in tax revenues over the summer that has left the country heading for a €6 billion deficit by the year-end. The cabinet made the dramatic move as unemployment surged to a 10-year high as dole queues swelled by record amounts for the fourth month in succession. Finance Minister Brian Lenihan said the Government’s priority was to “curb spending” and this would be achieved through a “balance” of taxation, borrowing and cuts as he warned the country faced the worst economic conditions since the late 1980s. “We cannot let our state to drift into fiscal unsustainability. We have to take corrective action,” said Mr Lenihan...

Exchequer faces €5bn shortfall as tax revenues drop sharply... TAX REVENUES are continuing to plummet, according to the latest official figures, which indicate the shortfall for the year could exceed €5 billion. This is far worse than the Government was expecting as recently as two months ago. In July, the Government projected a tax shortfall of €3 billion for the year, but a rapid slowdown in consumer spending has hit VAT receipts, while the dramatic slowdown in stamp duty and capital gains tax receipts has continued due to the property crash. The implications of the figures will be discussed by the Cabinet today at its first meeting after the August holiday break. Substantial cuts in public spending for next year now appear inevitable and are likely to be accompanied by increases in borrowing and taxation. The Opposition parties last night accused the Government of failing in its duty to get to grips with the crisis in the public finances during the summer and taking its traditional ...

The fundamentals of the Irish housing market point to more sharp falls over the next two to three years... WITH HOUSE prices falling fast and likely, come the autumn, to fall even faster, no sane person would currently even think of buying a house. But this immediately raises the question of how long the crash will last. In other words, how long will it be before you can buy a house and not regret the decision for the rest of your life? Looking at past collapses in house prices abroad, we can see that they fall into two broad groups. In the first group, that includes Japan and Switzerland, prices suffered a long, slow decline of a few per cent a year for a decade. The second group, that includes the Netherlands and Finland, saw real prices halve in three to four years, and then fall gently for a few more years. If this second pattern repeats in Ireland, given that we are already one year into the crash, we can expect two to three more years of sharp falls. After that, prices should sta...