Monday, Jan 04, 2010
Meanwhile, closer to home ...
Irish Times: House prices down 40% since 2006
The average cost of a second-hand property in Dublin fell by a further 4 per cent in the final quarter of 2009, bring the total drop in prices to 21.5 per cent for the year. According to new data from estate agents Sherry FitGerald, prices in the capital have fallen by 45.7 per cent in real terms since the peak of the market in 2006 and are now at 2003 levels. Overall, the average cost of a second-hand property in Ireland declined by 4 per cent in the fourth quarter of 2009, bringing the total yearly decline to 20.3 per cent. Nationally, house prices have fallen by 40.2 per cent over the past four years.
Posted by mark wadsworth @ 03:24 PM (1631 views) Add Comment
8 Comments
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1. righttoleech said...
So in sterling terms no change from the mentalist bubble prices. Brown has pauperised us on every measure!
2. mrflibble said...
If only, instead we opted for a slight dip of 10% and a 30% currency devaluation. Sadly the Sheeple just don't get currencies and the broadcasters are not touching the devaluation at all. In real terms the UK is down by a similar amount, in nominal terms, who knows.
The people of this island wake up and believe whatever they want to believe, this is the island of the sugar coated fantasy, cooked up by the crook behind the black door.
Buy a house or have your wealth torched, it's the UK way...
3. tenant super said...
If Ireland still had its own currency they would have devalued the punt and embarked on QE just as our policy makers did. Don't think they're any wiser over there!
4. will said...
But Ireland is an island like Britain so it shouldn't be falling.
I look forward to witnessing a similar drop in the UK.
5. tenant super said...
There are some differences between the markets.
Firstly there are lots of empty houses in Ireland but more importantly, the public are aware that there is a housing surplus because of the construction boom. Whether or not the 'shortage' in the UK is real or not, the public believe it is.
The population of Ireland is about the same size as the population of London so the country is less densely populated. Our house price problem is particularly bad in London and the South East.
The short term profiteering home-owner mentality and credit binge is more recent, and is less ingrained than in the UK (Ireland only a couple of decades ago was an agricultural economy and one of the poorest in Europe).
However, the main difference is that being part of the European monetary union (having monetary policy and interest rates dealt out by the ECB) has meant the government could not pursue the same reckless policies and intervention as our government did. They have tried to use legislation to prevent reposessions but they don't have the rest of the arsenal of props employed over here. For this reason Will, unfortunately, a similar crash in the UK is not a forgone conclusion.
6. will said...
Tenant super
Several major western economies have suffered similar house price falls to Ireland including the US, Spain, Greece and Germany. They all had there own reasons for their booms prior to their respective busts.
The UK cannot remain alone in defying the natural laws of free markets. We are constantly told that many superprime properties in the UK are being bought by foreign investors, but at some point these investors will look to other cheaper countries in which to invest their cash (when currencies re-balance).
Why do the press seem bent on talking up the property market? I have yet to read an article which advocates lower home debt levels to allow people to save for their old age and still have sufficient funds with which to live.
7. tenant super said...
I really hope you're right Will! I want lower house prices as much as the next person and I am sickened by the actions of the policy makers in the UK. I have just developed a layer of cynicism after all the cogent arguments for the bounce being unsustainable for than more than a few months and interventions wouldn't work etc. being incorrect over the past year.
8. growler said...
@ Will
I'm with you on wishing the HPC to reassert itself.... But ... Germany has had no boom or bust property market like the UK at all. The Dutch market (apart from Spain) it the nearest to a boom - but even then nowhere near the UK in terms of increase or average earnings.
The UK is unique here - even the US has FAR lower average house price to earnings figures - and they've had a bust.
The reason is the UK economy - as another HPCer has posted - is completely home-ownerist focussed. The personal UK property market is a tax-free credit drawdown facility inflated by vested interest. We've 70% of taxpayers who have their disposable income influenced by the size of the mortgage in relation to the value of the property. If the gap widens, they spend. If it doesn't, they borrow to spend. If they can't borrow - then we might be were we are now. Stagnant. Waiting for so-called better times of house price inflation. With this comes the key to reflate the UK economy... and so it goes on.
It's not in anyones interest to ramp the market so such an extent - we all live bound to our houses. No job -> no house.
Then - looking at Germany in particular but most of continental Europe - look at the build quality per currency unit. We've papier mache walls, draughty doors, creaking floorboards, no cellars, hopelessly inefficient windows.
As I've said before, tax the profit realised on 1st properties. Make the house as an investment compete on a level footing with industry or other investment opportunity....
... then we might also look forward to quality improvements in housing as builders have to encourage people to buy through serious improvement - rather than peddling the poorly built or miniscule 9 x 9 rooms that make up the UKs most modern residential construction.
... and might even afford more items of luxury - get those towels on the sunloungers, newer cars, better diet, etc etc etc.
All of these purchases benefitting many more sectors of the economy than just the UK home-ownerist view of priorities.