Saturday, May 01, 2010
It only seems crazy in retrospect ...
BBC News: Ghost estates testify to Irish boom and bust
There are 621 ghost estates across Ireland now, a legacy of those hopeful years. One in five Irish homes is unoccupied. The obvious question of who people imagined would live in all these new-builds makes Irish people wince now. County Leitrim alone would have needed about 590 new houses between 2006 and 2009 to accommodate its population growth. It got 2,945.
Posted by karma4all @ 11:02 AM (2061 views) Add Comment
21 Comments
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1. vacuouspolitician said...
"If the country immediately used them to house every person on the social housing list..." ...this is the real crime about this situation...together with Brown's admission yesterday that housing was the private sectors problem...
2. taffee said...
at first you think it seems ridiculous......'cos we are so used here to everything being snapped up and rented out....then you wonder if this is what its gonna be like over here!
3. drewster said...
Maybe some of us house-lacking Britons could move over there? What's the job market like in Ireland at the moment?
4. nubbers said...
I wonder, in 2006 how many people in Ireland would have been convincing themselves that prices were so high because of supply and demand?
5. tenyearstogetmymoneyback said...
3. drewster said
More sensibly people could retire there. Move to the right place and you can still do
your shopping in pounds over the border
6. drewster said...
nubbers,
A few years ago the "Celtic Tiger" was attracting hordes of immigrants from eastern Europe. From May 2004, when Poland et al joined the EU, to May 2005, Ireland handed out 85,000 new National Insurance numbers. That may not sound like many until you remember that Ireland's population at the time was just over 4m.
In the long term, Ireland's population has risen from 3.5m in 1990 to 4.4m in 2008 (most recent figures available). Part of that was emigrant Irish moving back home; part was from eastern Europe, and part was from Ireland's naturally higher birth rate (Catholicism, abortion is illegal, etc).
If the population continues to grow at such a pace, I can see the logic in the "supply & demand" argument.
7. tenyearstogetmymoneyback said...
Of course my comment was supposed to refer to Drewsters "Maybe some of us house-lacking Britons could move over there?".
In the long term the question is who has made the bigger mistake. I suspect it is far better to have a housing surplus
than shortage. Whatever happened to Browns house building targets ? The houses in the film look really nice.
Over here they demolish houses like that (well maybe ones thirty years old) to build rabbit hutch flats.
I can think of immediately think two examples I could point out on Google Maps.
8. quiet guy said...
Isn't this bullish for UK property? We still have the speculative mania but without the massive building programme. Unfortunately, one similarity with the Irish story is that some of our most recently built property has quality issues. I'm not suggesting that now is a good time to buy - far from it - but I don't see how we can have a crash similar to Ireland's considering that the UK's population is approximately 60m.
9. tenyearstogetmymoneyback said...
quiet guy
I think what this does show is how much of the U.K.s supply/demand problems are caused by land "shortages"
As I have said before it really annoys me that they keep demolishing existing houses to pack in more flats.
In the past I have given an example where they demolished a house converted into four flats to build a block of ten.
On interest, around the country when was the last time you saw a new housing estate built. Around here
I think it was 1995.
10. mark said...
some decent sized properties, shame about the fences and the lack of imagination to alter the design now and then
11. nubbers said...
drewster @6, thanks for the background info. My original thoughts on this were that this would be a good case to examine how important supply and demand actually is to house prices (personally, I think the credit boom was by far the biggest factor). I guess it would take quite a detailed analysis to proove anything here though.
12. taffee said...
there is plenty of demand for bentleys...in fact there is demand for everything 'nice'...but it is in fact money supply/credit that determines prices.......for instance there is demand for housing in india,but people live in slums
13. powerofnow said...
Non productive speculation (gambling) on land prices does not create any real wealth. Perpetual house price inflation at the rate we have seen and are seeing is unsustainable without real wealth being generated within the economy.
To maintain the illusion that house price inflation equates to a real increase in wealth, there will also need to be perpetual shortage of supply and perpetual high demand, i.e. perpetual unaffordable housing, perpetual homelessness, perpetual shortage of land for building. This will require our cooperation in the perpetual delusion that there is not enough land in the UK. Everything works so long as we don't notice that the supply and demand equation is based on an artificial shortage of land.
The biggest barrier to solving this whole thing is our own susceptibility to delusion and basing our actions on beliefs rather than maths.
14. drewster said...
taffee,
You're quite right. If Ireland had a population of 8m but none of them had a decent job, what would house prices be?
The Irish story of land is fascinating. In the 19th century, Ireland was directly governed by the UK. Most of the land was owned by English landlords who rarely visited Ireland (whence the term "absentee landlord"). They extracted high rents from Ireland, as well as demanding that the Irish raise cattle for export rather than grow crops for domestic consumption. To feed themselves, the Irish turned to potatoes, which provided the most calories of food per acre. This potato monoculture led directly to the Great Famine (Wikipedia link). I encourage everyone to read that link, and to understand how landlordism pushed the Irish to poverty and starvation.
15. mark wadsworth said...
Glorious. Time for Mr & Mrs Tenant Super to go on a scouting mission and see if any of these Ghost estates are near places where you can find jobs.
Powerofnow: "To maintain the illusion that house price inflation equates to a real increase in wealth, there will also need to be perpetual shortage of supply and perpetual high demand, i.e. perpetual unaffordable housing, perpetual homelessness, perpetual shortage of land for building."
Spot on!
I must see how often I can slip that into the conversation in future. But we know perfectly well that the Home-Owner-Ists have prepared their responses (all lies, of course, but a lot of people actually believe these to be true) in advance:
1. We don't want to restrict supply, we just want to protect the Hallowed Green Belt to cushion future generations against food shortages.
2. Young people should just live and save responsibly and buy a house like when I was young. They just want everything for nothing.
3. It's all the immigrants to blame for pushing up house prices. Britain is a 'crowded island' etc.
16. taffee said...
lets be completely frank here....ftb's at 38?????...houseprices at record highs versus income when we have the second worst deficit in the world
little wonder kids join gangs or hang themselves........no future for them to join society...and they will be the tax payers of the future
total madness
17. Powerofnow said...
@mark wadsworth: But we know perfectly well that the Home-Owner-Ists have prepared their responses...
I think the truth is just too shocking....
everything I thought was real is a only a flawed belief based on obviously incorrect facts and disprovable by logic and key stage one maths.... No wonder they fight dirty
18. Miken said...
@16, well I've not got my first property yet and I'm 34. Problem I have is my life is wasting away whilst I wait for houses to become affordable. If I've got to wait until I'm 38 before I buy I will be very disappointed! Hoping not to go hang myself in the mean time out of despair! Right now I am lodging in a very large house with one other person and this works very well. Though I really would like to put my own touch on the place, paint the walls, etc. The landlady owner has retired and can't afford to run the house without my income...
19. tenant super said...
It is time to go scouting, indeed! Ireland is still fairly anti-English, not in an aggressive way (especially since we have provided employment to the Irish for generations... Mr TS came to England from Limerick because there was no work in the nineties recession) but the sentiment about independence from England for the reasons Drewster outlines is still very strong. So one of the problems we face is the tendency for the Irish (in this time of recession) to give Irish people preference for a job. Ironically, this is more likely to affect Mr TS. because I don't look English, my work is far more specialised and I already have lots of contacts in the field over there. Even though he is born and bred Irish, his accent has very much softened and with an entirely English employment history he will be viewed as an outsider.
We visit the country at least twice a year and will do window shopping for property when we're there as we are considering buying something soon with view to moving over at some point in the future. The labour market isn't the only consideration. Many of these ghost estates have problems. Sometimes, the developers failed to properly plug the estate into the utilities and there are stories of people having to pay thousands to get plugged in (particularly to the eircomm phone system). Secondly, there are a number of horror stories about builders building on unsuitable ground or not filling or levelling properly. The second problem is defective building materials containing pyrite which swells and cracks. Finding the money for legal fees to take the developer to court is proving an absolute nightmare.
All that said... in perspective, this is a minority of new developments. The great thing is that the knock down sale of new properties is winding down the prices of second hand homes. We think prices still have a lot further to unwind and are when the time is right we can buy thanks to Mr TS having always had his savings and a small inheritance in an Irish account and therefore not dented by the Sterling crash.
We're seeing decent houses for a good price but not really when you consider the area. We're waiting for some of these prices you're seeing in Leitrim or Longford to be found in the nicer Galway commuter towns like Athenry. To be honest, they're not too far off with a nice four bedroom home in Athenry having an asking price of eu180K
20. mark wadsworth said...
tenant super, do keep us updated. I've got ginger hair and can pass myself off as Irish if needs be.
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