Safe As Houses

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Six years after the onset of a crash that wiped more than 50% from its property market values, Ireland has roared back to be named the country with the fastest growing house prices in the world.

“With average prices up 15% in a year, the country is top of an influential global house price index, ahead of Dubai and the UK.”

“Estate agent Knight Frank, which compiles the index, said Ireland had enjoyed a remarkable turnaround in fortunes over the past 12 months. As recently as summer 2012, it was ranked 54th out of 55 countries surveyed, when house prices were falling by almost 10% a year following the damage wreaked by Ireland’s economic crash of 2008.”

“The firm’s latest index puts the UK in fourth place, with prices up 10.5% in the year to September, making it one of only six countries to achieve double-digit price growth. At the bottom of the table is Cyprus, where prices were down more than 9% over the same period.”

Roared back, eh?

Ireland’s average house price grows at world’s fastest pace of 15% in a year (December 8, 2014, The Guardian)

Thanks Joey Jo-Jo Junior Shabadoo

Eamonn Farrell/Photocall Ireland

66 thoughts on “Safe As Houses

  1. Mayor Quimby

    Broadsheet , if you really cared about this you would have taken a stand against the lobbyists and assorted muppets trying to water down the Central banks 20% deposit requirement.

    1. louislefronde

      Pardon me for being French, but are a significant portion of the Irish public really that stupid…I mean – the pump priming of the property market (again) is a classic case of the BIG LIE – say it enough, and no matter how ridiculous it is – people will believe it.

      Ireland in terms of population is low density country, if you took a flight over the city you would see for miles and miles green acres galore – which is not the case in the Netherlands or other densely populated countries where by some strange irony the property prices are significantly lower?

      There is no shortage of sites to build on, and labour (were it not for the penchant for the Irish to over pay themselves by European standards and over pay for bricks and mortar) should not be expensive. If there is a housing shortage, it is a temporary one that could easily be rectified.

  2. Siju Cat

    We are really a nation of strategy, discipline and intelligence that’s why we are right back where we started from. I wonder would Digitnas do us a discount if I had 50,000 compromised individuals from private and public life who need assistance shuffling off this mortal coil.

  3. thesuper

    What do we expect with the wealth that surrounds us? The big story that never gets told is the high percentage of very wealthy people in this little cuntry.

    1. General Waste

      What’s wrong with wealth?

      Our housing bubble is to do with lack of supply and all the crazy conspiracy theories forget that. It’s not some great plan by the elites to screw us and make more money even if that’s usually the outcome.

      1. thesuper

        the only people who can pay 500k for a house are those who have it, or access to it. I’m all for wealth too, as long as the door isn’t shut behind them.

  4. Formerly known as @ireland.com

    I think that low house prices are good for people, you know, the community. I don’t get the obsession with higher prices. Everyone needs a home. The more affordable they are, the better for everyone. The more money people have available to spend in the rest of the economy, on real products, stuff that people make and sell, the better.

    1. Clampers Outside!

      We need to put in more preventative measures on investors buying too much… especially the small investors who stretch themselves and jack up rents to compensate for their stupidity in over stretching…. I have zero sympathy for those people. Zero.

      1. Buzz

        It’s a personal prejudice but I have zero respect for people who make a living as landlords. Sometimes it’s unavoidable – they can’t sell a property and are forced to rent it out – but for the most part, they are parasites.

        1. Dubloony

          Some people are accidental landlords. They bought a small place for them self when younger, started a family and now the kids are bouncing off the walls. But they are stuck in negative equity.
          So they need to rent the 3-bed house for their own family and rent out the small place hoping to Christ that as soon as prices pick up, they can sell the millstone.

          They don’t want the hassle that goes with being a landlord but are stuck in a set of circumstances that only time will sort out.

          1. Anne

            That’s wonderful Clampers, but rents are never jacked up due to a massive mortgage.
            They’re jacked up due to a lack of supply and no other reason.. ever. Just sayin’

          2. Anne

            SP, it seems to me, the main cause of rent inflation has been down to a lack of supply and lack of regulation of the rental market.

          3. Spaghetti Hoop

            Well there’s 4 reasons right there.
            You could add;

            5. Landlords leaving the country, hiring Letting Agents and passing on the fee.
            6. Landlords facing increased Property Management fees and passing on via rent.
            7. Pure greed.

          4. Anne

            Yeah, but it boils down to the market rate.. i.e. what they can get away with charging and with a lack of supply, and high demand, the market rate will go up.

            If the rate of rental inflation in the past few years in Dublin was proportional to property taxes, fees etc, tenants wouldn’t be doing so bad.

  5. Buzz

    So many buyers who got caught last time out and stuck with negative equity say ‘if only we knew then what we know now…’ Yet here we are clamouring for another go on the merry-go-round. Will we ever learn to step back and analyse the situation instead of being nudged into an artifically inflated market by those with vested interests.

      1. Buzz

        I have a lot of sympathy for people bogged down in negative equity and try to caution others from following suit. Not sure where you are getting the notion my nose in aloft in this.

        1. Mario Balotelli

          Yeah, I’m with you Buzz. At least those who bought in 05, 06 were getting told tales of ‘boomier booms’, then ‘soft landings’.. there was no precedent for what happened – not in Ireland anyway. Now, less than ten years since the arse fell out of the country, it seems to be happening again. People rushing to buy now don’t really have any excuse.
          Anyway, sure carry on booming.. might get me out of the Neg. sometime this century!

  6. OffDutyBL

    oh please. They’re rising back from deep falls in the past couple of years, not the same as the previous property boom at all.

    1. Buzz

      The ‘deep falls’ you mention was the market self-correcting so that prices more accurately reflected incomes. Dublin is not London.

      1. Spaghetti Hoop

        I’d argue that Dublin is becoming like London and that it’s time to weight Dublin salaries to reflect the cost of accommodation and transport in the city.

        1. Happy Molloy

          I’ve been saying that for a while. two teachers living in the west could live very comfortably and buy a nice house, not so in Dublin…

          don’t think the unions would be brave enough to tackle this particular injustice

    2. Owen O'F

      Except that the peak highs are not a target – they’re levels that bankrupted the country. ‘Rising back from deep falls’ should be a cause for alarm.

      Plus affordability has hit or exceeded peak now anyway. A 700k mortgage on a tracker is cheaper than a 500k mortgage on the cheapest variable rate being charged today.

      1. Dubloony

        There’s also the demand side – how many 30 somethings are there now all looking for a place to call their own?
        And how many have been booted out of existing rental due to price increase? They are getting it from all sides.
        Huge demand + limited supply = price rise.

        1. pedeyw

          I’d like to see a law that makes it illegal to raise rent by more than 10% year on year. Having absolutely no legal background, I have no idea how implement such a law or even if would be viable though. I’ve heard a few recent horror stories about rents being put up by ridiculous amounts.

      1. Formerly known as @ireland.com

        This is why you need a good government, that will enforce prudent lending. It appears that Ireland does not have a good government.

        1. Buzz

          I agree. The Central Bank at least tried to be a positive influence with its 20% deposit proposal but the government has done nothing but undermine them.

          1. Clampers Outside!

            20% was too high IMO.

            I think they should have come in at 10 to 15 tops.

            And then put some punitive measures on the venture capitalists with big stocks of homes and on the buy to letters.

  7. Dubloony

    In principle the 20% deposit makes sense. It forces people to be prudent savers, puts a lid on banks willingness to bankroll estate agents auctions and avoids a bubble.
    But for many people saving the 20% on top of extortionate rent and perhaps childcare is just too much.
    I think there are alternative ways of avoiding another bubble e.g.
    Phased increase of the 20%, start with 10% and over say 2-3 years work up to 20%.
    Or base on price range of house – up to €250K, have 10% (deposit of 25K between 2 people is 12.5K each is a bit more doable).
    250 – 350 K = 15%, 350+ = 20% or something like that.
    It would allow those on average earnings get a modest place, those that have serious cash need to have a serious deposit. How many people with high earnings went bust because they didn’t know the basics of personal finance?

  8. Kieran NYC

    As I’ve said before – we need professional landlords. Proper companies with plenty of capital, organized services and a knowledge of the law. Not someone part-timing it, making half-assed repairs and raising the rent to pay off the mortgage.

    1. Anne

      ‘we need ..proper companies with plenty of capital.. not someone part-timing it, making half-assed repairs and raising the rent’

      Yeah, true.. they could raise the rents to keep investors in the lifestyles they’re accustomed to instead.

      Christ above in Dublin.
      And what’s that they say about our brightest leaving our shores?
      I don’t mean to be picking on you or anything Kieran NYC, but you’re taking the p*ss now surely?

      1. Kieran NYC

        Why would you rather people who have no idea about the rental market, have no more money to invest in maintaining accommodation, no expertise in making repairs, clueless as to laws and obligations and have day jobs as guards or publicans chancing their arms as landlords?

        Because there’s plenty of those in Ireland, and it’s not working out too well.

        1. Anne

          So you’re saying those with more wealth would be more ethical landlords is it?
          Like those foreign investors who bought Irish property on the cheap?
          Have they’ve brought down the rents?
          People like John Malone, a Connecticut billionaire – also referred to as ‘Darth Vadar’.

          I’d be more inclined to want affordable housing for people, than professional landlords myself..

          1. Kieran NYC

            I’m saying they’ll be more professional. A lot would be run on behalf of investment/pension funds who want a steady, predictable return (which is conducive to long-term renting).

            Price is a different kettle of fish and has more to do with the collapse in the construction sector due to a lack of Irish developers with money and bank credit, as you know.

          2. Anne

            Professional gougers, are still gougers though.

            Capitalism has run amok Kieran.

            Here –
            http://www.irishtimes.com/opinion/housing-crisis-why-nama-should-be-asked-to-do-more-to-alleviate-the-shortage-1.2017674

            The uncomfortable truth is that those who will benefit most from Government housing policy, and Nama in particular, are international wealthy investors and banks, developers and landlords – and not the ordinary Irish people who have paid dearly for the write-downs on development loans transferred to Nama.

            The reality is that Nama is playing a significant role in worsening the housing crisis through its sale of assets to real estate investment trusts (REITs).

  9. Anne

    And in case you missed paged 2 –
    Nama is working against the interests of those looking for an affordable and secure home. It is continuing the speculative-asset approach to housing that fuelled the crisis. This promotes residential property as a commodity rather than a social good.

  10. Anne

    And one last bit –
    Nama is facilitating a massive transfer of wealth created by the Irish people to foreign and domestic capitalist investors. It exemplifies all that is wrong with the current model of financial neoliberal capitalism. Rather than investing in the “real” economy and social requirements, it is promoting speculative finance

  11. Anne

    Ok just reading the comments on that article..

    From Finfacts –
    On Oct 22, a press release from property agents announced that 588 Dublin apartments across seven residential developments, along with 36,274 sq ft (3,370 sq m) of commercial and retail space, had been brought to the market with a guide price of €116m…

    The press release had no reference to the seller NAMA – which recently announced that 88% of its purchasers are US vulture funds – (it didn’t of course call them vultures!).

    What happens when one fund owns hundreds or thousands of housing units is that when it decides to raise rents, it’s across the board in contrast with what happens with a diversified ownership

    That addresses your point specifically there Kieran.. which a dog with a mallet up his ar*e would understand.

    http://www.finfacts.ie/irishfinancenews/article_1028278.shtml

  12. Anne

    This fupping boils my fuppin p*ss, and you have knuckle heads living in the U.S. advocating it.. coz they’re like professionals.

    I give up.

    1. Kieran NYC

      Jaysus. You really went off on one there.

      Would ya relax? You seem to get very, very angry whenever someone else has a different point of view. Especially me.

      It’s not worth it – it’s only Broadsheet. Step away for a bit, ignore me and enjoy Christmas :)

      1. Anne

        Fupp off, Christmas isn’t for another 2 weeks.

        And I couldn’t get any more relaxed.. I’ve the electric blanket on and I’m about to doze off.
        Is that your way of admitting you know you’re wrong, telling me to relax..
        I’ll ignore you so when you say something sensible.. Deal?

        1. Lilly

          Kieran like to point out that people are ‘angry’ whenever they disagree with his point if view – as if by attempting to patronise them, he establishes his superiority. Classic passive aggressive stance.

          1. Anne

            True.. he seems to revert to a bit of misogynistic patronising when (and it’s quite often) he lacks the cognitive prowess to be able to debate the nonsense he spews.

            He’ll regret the day he patronised me though.. I’m very excitable like that.

      2. Adama

        Kieran

        I’ve been reading your posts and as usual you won’t be satisfied until Ireland (and in this case our hopelessly dysfunctional property market) operates on a par with your beloved America, ie screw the poor and favour the rich. The ongoing sale of properties by Nama to vulture funds is one of the daftest policies ever pursued by a government agency. It pursues profit at the expense of society and the basic need for everyone to have a roof over their heads. It’s only when Nama is wound up that Ireland will discover exactly how much of a punch bag for profit vast swathes of society have become. Our dear leader may want Ireland to be one of the best little countries to do business in but he neglected to worry what would happen to society if we just pursued mindless profit at the expense of others.

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