January 18, 2012

Expect house prices to hit the bottom next year

Posted in Irish Independent · 181 comments ·

In July 2008, just as the falls in property prices were beginning to be really felt, this column threw up a chart of what had happened to the property market in Japan. It suggested that we would follow the Japanese path. Up to then, many people felt that the market would stabilise or lose maybe 15pc or, at a stretch, 25pc. The column contended that we would follow Japan exactly and prices would fall by 75pc. It seemed a radical forecast at the time.

Most of the commentary was still in the ‘buy on dips’ mode. This inertia is not surprising, given the long boom. Weaning yourself off a boom is like weaning yourself off any addictive substance — it takes time to change behaviour.

Four years later, we can see that the Irish property market experience is a mirror image of the Japanese experience. But while it looks depressing, it may also suggest that we could see the bottom of price falls in the next year or 18 months.

Look at this new chart. It shows you house prices in Ireland and in Japan. The chart starts at 2005 for Ireland and 1988 for Japan — the year before both markets peaked.

It measures the years from the peak along the bottom axis. You are seeing what has happened since. The blue line is what happened in Japan and the red line tells you what is happening in Ireland.

As you can see, the two lines move in tandem. It also shows that prices in Japan fell for five years continuously and then started to move up again. We can also see that the depth of the price plunges was similar.

For Ireland and the Irish property market, it tells us that if we continue to mirror the Japanese experience, the property market should hit the bottom in year six, which would be the end of this year or some time in the early months of 2013. It also indicates that the prices of property will rise again as activity rises but it won’t reach 2006 levels. In Japan, prices have still not reached their 1989 peak.

So does this give reasons to be cheerful for the hundreds of thousands of people in negative equity? Is there light at the end of the tunnel? Or are there other factors in Ireland, which were not present in Japan, which will cause prices to keep falling or prevent the Irish property market from recovering even if prices plateau? For example, will prices bounce along the bottom for years?

The major similarity between Japan and Ireland is that both countries are suffering from an “anxiety” recession. When you have so much debt and prices are falling, each fall in price makes the debt burden bigger because it increases the negative equity. People are anxious.

This is why, in order to get the economy going again, there needs to be an injection of demand. In short, someone has to start buying stuff.

But who is that going to be?

It won’t be the Irish (or, in the case of Japan, the Japanese consumer), because they have too much debt and don’t want to borrow any more.

Will it be the foreign demand? For Japan in the 1990s, America — its largest market — was growing rapidly in the Clinton years. This increased the demand for Japanese exports significantly.

However, the Japanese government knew that this would not be sufficient to keep the economy from contracting more and more, so the Japanese government borrowed and spent as much as possible.

This policy had two effects. The first was that it drove the national debt of Japan through the roof. The second was that it minimised the fall in Japanese economic activity and in so doing helped the property market to stabilise.

This is not possible in Ireland. We will be cutting government expenditure for the next few years and we also know now that the world economy is grinding to a halt.

Well, the whole world economy isn’t stagnant but growth in the bits of the world economy that we export to — such as the US, the UK and the EU — are anaemic at best.

SO what are the prospects for the Irish property market? Will there be a recovery like in Japan, where prices did start rising reasonably rapidly six years after the peak?

It seems that this is unlikely, for the reasons explained, but what is likely, given the way people are feeling in the country, is that prices will overshoot even the Japanese bottom, because in times of extreme pessimism that is what markets do.

The quicker we get there, the better. The recent move that limits the amount that can be paid to landlords from housing social welfare recipients is a step in the right direction.

This, together with the announcement some time this year of a property tax, will hasten the massive downward move in house prices that was seen in the last few months of last year. In the final three months of the 2011, the average asking price fell by almost 8pc.

According to Ronan Lyons — one of the few worth reading on the property market — this “means that the fall in asking prices over the course of 2011 was 18pc, as large as any of the falls seen in 2008, 2009 or 2010″.

When the falls this year are out of the way, yields will have risen substantially and money will come back into the market at much lower prices and much higher yields than have been seen for many, many years.

Whether this activity pushes up prices remains to be seen, but this time next year, the property market might just show signs of activity at prices that have some relation to our straitened reality. This is not a forecast, just a hunch.

  1. Adam Byrne


    • cavanman

      I see a few problems ahead which may mitigate against reaching a housing bottom next year,the huge oversupply of inventory,the possible dumping on to the market of NAMA owned properties competing for buyers with private sales,the unavailability of banking credit unless new lenders enter the market,the uncertainty over the sustainability of the Croke Park Agreement and wage,tax and mortgage tax relief generally.The emigration of so many young people who might otherwise set up home here.The ending of the permanent and pensionable job for life culture which the banks now require as security as there is a recruitment embargo in the public sector(Pity they were not as careful a decade ago.

      • Arguable addition to David’s thesis.

        • Lord Jimbo

          Indeed, there are many more factors in the equation, consumer confidence being another important one, which is on the floor and will continue to remain there every time there is a negative news story about job losses.

          Young people, natural first time buyers, will be evaluating their employment prospects. In the private and public sectors, at entry level people are being hired in on low wages and weaker contracts while at the higher levels, the wages are high and contracts somewhat stronger, the middle is certainly getting squeezed, with less people doing more work, for reduced pay.

          Comparing Ireland with Japan, while an interesting exercise, has its limitations. Japan during that tough period, as it is today, is a country with strong exporting ties to Asia, Europe and the US, massive population, long history of production/manufacturing, technical innovation, excellent infrastructure, industrious, some say overly obedient population. In Ireland, we have a risk adverse culture, banks unwilling to lend, along with the perennial complaints from the university sector that it is underfunded, regardless, few big ideas have come out of that overpaid sector to help us out of our difficulties in fact multinationals question the calibre of graduates.

          While Japan had its problems, it was much better positioned as a whole to bounce back and still they went through a lost decade. The rise and fall of house prices in Ireland, seems the least of our worries and is hardly a sector we want to put back at the centre of our economic recovery, which seems a long way off, especially with the debt burden the State foisted on itself. ‘Property’ should remain a dirty word.

  2. stiofanc02

    You have been right about everything in this economy for the past 8 years or so.
    I am forever grateful to you for that.

    In this case I think you may have it wrong.
    I put it at more like 18 to 36 months before there is any bottom and then the bouncing along will start.

    And it is only the height of the curb it will boune at.
    There will be a few small isolated areas that will see modest recovery but beyond that I am confident it will be another 2 to 3 years with falling prices, albeit smaller declines, but still more declines.

    But that said, I bought some investment property in Oct of 2004 and was confident then too, so what do I know? Nothing, but my own hunch is two more years and the occasional Dead Cat Bounce.

    We’ll see. Thanks again for another great piece and it will be interesting to hear the minister’s quote you now that you are saying something they want to hear and say themselves but dont have the guts or knowledge to be able to.

    Sure you might not even get credit, It’s lonley at the top. And bottom.

    • noady

      Hi David,

      I tend to agree with Stiofan in the sense that would it not be a better fit if the Irish curve was to start at 2006 instead of 2005 (when prices were still rising). This woudm have the effect of fitting th ecurves more closely but also showing another two years before hitting bottome assuming of course as you point out in your article that the correlation continues.

      Thanks for all your anlaysis over the years David – keep up the good work!

  3. Fergal73

    I spent a short time in Japan, and Japan is not Ireland. The infrastructure works – rail, light rail, underground, public transport etc. Population density in the cities is far higher than Ireland.
    Ireland has a much bigger overhang of unoccupied houses and a history / tradition of emigration that Japan did not and does not have.
    Based on the above factors, along with the current global economic situation, I think 12 – 18 months for a floor to be reached is ambitious. If the rent supplement really does hasten the decline from what are still overpriced levels, then maybe 18 months to 2 years. I think more likely Ireland will see steady 8 – 12% declines annually for 3 – 4 more years.

    • Colin

      I agree Fergal73, I reckon David is understating it a bit. I reckon 85% fall from peak will be more likely. Remember, we’re already over housed, and sending our young people abroad. Unemployment will remain high. Rents will eventually be forced down. One off housing in rural areas is still ongoing – Farmer Browne’s son don’t want a semi D in the town, he wants to be close to his land so he can smell his cow’s manure in the morning.

    • Juanjo R

      + 1

      Rent supplement is propping the market up. So too is the lack of repossessions and fire-sale property sales – which would show real mark to market values.

      Immigration/economic uncertainty will kill off strong demand.

      Plus there is such a huge variation in Dublin vs outside Dublin vs very distant from Dublin I think you need three different predictions. Dublin could bottom out and stabilise somewhat. The others are long term or possibly are permanently ( whats longer than long-term? ) messed up. This too will reflect on prices in Dublin.

      What a default in Ireland could do to all of this – can you imagine the effect of huge paycuts to Ireland public sector workers on all of this?

  4. Paris75013

    Hi David, thanks for another interesting article. I’ve been seriously looking at properties for well over a year now every time I’m home but I feel they’re still overpriced (a 2-bed apartment in Malahide beside the marina is around €300.000). Even my home village (the Naul) is way overpriced. Nothing is selling in these particular places, but the prices haven’t been slashed. So we’ll see if this changes in the next 12-18 months. I missed out on the boom (just as well maybe) having moved abroad, and because home will always be home, would love to have a second home there, in the area where I’m from (which luckily for me isn’t far from the airport).

    • I agree. My family are in the market for a well located three bed semi near central Dublin.
      These will be the last to fall of course.
      Nevertheless a developer with nicely located apartments in this location wants 315,000 for a three bedroom “house” in an apartment block (nice location,in north west city)
      Big negative:This carries all the management fees which are another millstone around the average, hard pressed family’s neck; and are in addition to the new raft of stealth taxes on property, water etc.coming down the line.
      I see 50% off this current asking price before it is an enticement for anybody..
      There is no bottom line for one/two bed apartments with extortionate management fees.
      Nama should get wise on this.

  5. Malcolm McClure

    I like David’s 2 line paragraphs. His ideas just flutter by.

    House prices will bottom out when the average annual rental is one third of the average wage/ salary or whatever for each income level. Simple.

    Investors will start buying when ROI is about 4%, taking account of house levy, tax, etc.

    The government could boost the domestic house market by fixing tax on rentals at 12.5% of rent after deductables.

    • Yes-one way of kick starting the market.
      But in their desperation for cash, is this likely.?
      Even if this appealed to them, they would undoubtedly limit the tax break to new NAMA apartments.

  6. Stiofan

    Dear David, a better comparison is Ireland-France. Today you can buy a comparable three bedroom home, on a decent plot in Charont, 2km from a village with primary and secondary schools (3000 souls), 45 mins from airport, 140 square metres of garden, renovated, traditional, two-level, masonry and tile roof, 4 car garage with no work required, That’s 79 thousand euro. And that’s one of many I found. House prices in Ireland must fall by another 50 percent to compare, and 2013 is not soon enough.

  7. I believe David is optimistic in his predictions and it is my hunch that prices will bottom out in 2014 or later and remain flat for at least 12 months or more .My reasons are that Japan did not have have austerity measures imposed by their government thus the reason for their earlier recovery.I also think Davids hunch is a Pale reflection only and is not representative of (say) the western seaboard and the culchie lands elsewhere.

    • Bloodbath is more my reflection and we must not forget the population in Ireland has fallen since and that never was a case in Japan.And more people will continue to leave.

      Welcome to Dun Aengus and the old dark grey limestone in the Burren.

      • bonbon

        Dun Aengus is a semi-D, right?

        • Malcolm McClure

          bb: I usually choke pn your diatribes but for this I had to smile.

          –No Dun Aengus, isn’t a semi-D. Its a semi-O. Right, John?

        • @bonbon & malcolm

          Actually , Dun Aengus & The Burren are both abandoned dwellings .The former being a developers home with outside spikes fending away NAMA and the latter abandoned estates of houses all covered with the gentle blessings ( rain) from nature . Like all volcanoes the redemption from below ( new fauna ) blossoms over the original design and today we now call it ‘designated protection area never to be developed again’.They are now places for tourists .

          • Then on the other hand Dun Aengus is also Dept of Finance & Central Bank when it was a full circle and all made by man …sadly what remains is a semi circle made by both man and nature ( is nature …Devaluation ? ) .

            And when Shelly was in The Burren at the time of the Crash he wrote Ozymandias .

  8. CorkPlasticPaddy

    Property prices in this country are still outrageous despite the rapid decline in them since the crash of 2008.In fact the price of everything in this country is outrageous, full stop. I know that prices include various forms of excise duty and other forms of indirect taxation that puts the price of most things up in the stratosphere compared to some of our fellow EU countries, and why is that? As far as I can see we’re a small country that has a small population compared to that of our EU partners. Okay there are other EU countries that are smaller than ours with smaller populations, as well,but in comparison their prices are probably much lower than ours and that’s because of the magic phrase ‘we must stick to the bottom line’. There’s profit and there’s profit, but in this country there’s a definite ‘rip-off culture’ that’s going to be really hard to break free of.
    Don’t get me wrong I’m all for people being able to make a profit, but as I mentioned earlier on there’s profit and there’s profit!!!!!If you get my drift?

  9. stiofanc02

    Im starting to rethink my post as everyone seems to agree with my way of thinking. Consensus equals = wrong. Oh well, David is right again. Please write another book. I enjoy re reading about your Dad following you on your bike, its an American classic, albeit with bad weather. My Birthday is in March so maybe by Christmas?

  10. molly66

    A house is only worth what somebody will pay for it,thats if you can get a mortgage ,I have my house for sale and at the high it was worth 800000 now it’s worth 300000 any body that looked at it wanted to offer less, so no sale I will stay where I am.
    The only reason I wanted to sell because we found a smaller house we liked in an area we liked and the person selling that house would only drop so much the same as us.

  11. Deco

    Somebody mentioned a while back that
    “The Irish Times was a Property Paper, with a News Supplement.”

    Cannot disagree with that. The asking prices in South Dublin are STILL excessive. When these reflect economic fundamentals instead of unsustainable assumptions of address code grandiosety, then you will see the bottom of the market.

    And pf course all of this is assuming that the banks will be loaning more money next year. Current predictions are that they will be nursing losses to the point that this will be impossible.

    We should count ourselves lucky if we were to get through this recession like the Japanese. Extremely lucky. Which is why I don’t expect it to occur.

    • Colin

      South Dublin prices will fall when all the plugs are pulled on all the gravy trains. These trains include NAMA, Quangos, Semi States, Lawyers, Accountants, Judges, Civil Servants, University Lecturers, Bankers and Publicans.

    • paddythepig

      The Examiner was just as bad. Some people made a very good living out of property porn.

  12. Sonny_Mulligan

    Why is the graph in this article completely different from the one printed in the Irish Independent.

    Also I was under the impression that the Japanese house price drop lasted for 14 years. 1991 – 2005. See http://www.marketoracle.co.uk/Article8080.html for details.

  13. Emigrant lass

    This is not good news for people with huge negative equity and still paying a massive mortgage to the bank on a house thats worth half of what they owe though is is?

    Is anything going to be done for the Irish people that are in massive negative equity? The only talk of this is how they will give a percentage of debt write off to a small number of people who havn’t been able to pay their mortgage in months and will never be in a position to pay for it.

    We bought a two bedroom house in 2007 for 281,000 euro in a nice city housing estate and when we went back home in September we were told its only valued now at 130,000-140,000 euro.
    We are lucky enough to have it rented most of the months since we emigrated in 2009 but this only pays less than 2/3 of the monthly payments. We are therefore pumping money into negative equity every month and afraid to ask the banks to restructure our mortgage payments as we do not want to get red flagged by the bank!

    I don’t see why houses that were bought between 2005 and 2008 are not revalued and the mortgage restructured to lower amounts as long as the prices do not rise again which is unlikely to happen anytime soon!

    Does anybody think anything will be done? Or is it just wishful thinking!

    • Colin

      That’s not wishful thinking, its absurd thinking. You need to hope Punt Nua comes into being soon and is hugely devalued, making your monthly mortgage repayments more affordable using the foreign currency you get paid in.

    • molly66

      The banks are run like the Irish government runs this country,they are losing money they talk about Ireland needing another bail out we will and part of this is to pump money in to these banks,the other part is to pay the pay rises the pensions ,the lump sums,believe it or not while most of us take pay cuts there are people getting pay rises government advisors getting pay rises, friends of government getting plush jobs the very thing enda said would be stopped like all the other lies they told,it’s not there fault they tell us it’s the last showers fault .
      Do they think we are fools ,if kenny and Gilmore said grass was green I would not believe them ,that how much I trust the government there a shower of wasters feathering there own nests.

    • aodhanc

      That’s a fantasy theory – just arbitrarily decide to restructure mortgages for anyone that bought in the peak years of 2005 to 2008?

      It’s completely wishful thinking. That would mean anyone who makes a financial or investment mistake during their life (and suffers a heavy loss) can then just get reimbursed by the government i.e. taxpayer.

    • Fergal73

      Molly, welcome to the harsh world of capitalism. You bought during the peak, assuming that values would go up. You would have pocketed the profit had they risen and you sold (no capital gains if a primary residence, otherwise taxed).
      Others decided to rent, still more emigrated. I emigrated in 2004 primarily because the mathematics to my unsophisticated mind made no sense. Let’s be clear, many who are now NOT in negative equity are there because they made a sacrifice. Remember if you were in your late 20′s to 30′s in 2006 without a property (aka a huge mortgage), many viewed you as a loser / social pariah.
      Those who rented should NOT have to bail you out.

      Of course, a basic rule of capitalism was broken when private bank debt was made public, but the rules for the serfs and peasants are not the same rules that our lords and masters play by, but that’s another story.

  14. Lord Jimbo

    @ Bonbon in relation to your comment about who the ‘external people’ might be from a previous article.

    I think it is erroneous to look at an entire sector in one light. Irish banks were always run by a tight home crew, in a way they mirror some aspects of Irish sport of the late 80s, early 90s, which could be maddeningly bad at times, despite the wealth of talent in the country, all that changed in the late 90s as TV got involved, and more professionalism on the management, and training kicked-in, it was about results because results meant money/sponsorship and was less about who you knew. The same needs to happen to Ireland as a whole but it is a much bigger ask, because the Irish elite have a strangle-hold over the society, deeply embedded since independence, well documented by the better Irish social historians. They’ve had it good for decades, but they became complacent, got greedy and are now trying to maintain the status quo, whether they succeed or not is harder to say because this current game is still playing out but Ireland is definitely at a socio-economic crossroads and is being led down a cul de sac by Irish politicians who have very little business experience and tend to leave it to the IDA or Enterprise Ireland when what is needed is a culture shift of epic proportions, commensurate at the very least with the magnitude of the crisis before us. Farmleigh and the Global Economic Forum or whatever it was called, might make for good PR for a day or two, but who measures the results? And do such events change a society, a culture, a collective mindset? I think not. The people of Ireland have yet to be engaged, they got one national address from a Taoiseach throughout this crisis, and he promised more austerity but said the people were not to blame….hardly good enough to my mind. We need action, the first of which would be to break with the current elite and give new people, start-ups and possibly a new bank, which David mentioned, a shot. Open the game up, leave in air to a dusty room.

    International banking and finance attracts a wide range of personality types, there are some good people out there, and we have seen first-hand some of the positive steps the current financial regulator made when he took office (people are welcome to argue the toss, but he was largely untainted/unconnected to the political class and home business/banking elite).

    Banking professionals exist, but they hardly need to be told the reality of banking in Ireland, it has been all over the news for three years. If Ireland is to have any chance it needs to put its house in order, but it won’t happen, it will be fudged and we will limp on, as I said previously, the Irish elite will play it tight, not curing the patient but strangling it to death.

    I think David’s idea of a new bank or banks, might hold the possibility of ushering in a new era, but the current banks know that if the Irish people were offered a serious alternative, then their customer base would be under serious pressure overnight, NAMA came close with talk of entering the market in terms of property, a full blown bank, well that is another thing entirely and highly unlikely for reasons already explained.

    Without trying to reduce this to complete simplicity, the current situation does strike me as a case of the needs of the elite versus the needs of the population, with 100,000 emigrating over two years, I think we know who had their pyrrhic victory.

    • bonbon

      Banks are banks, everywhere. To “burn the bondholders”, externals, is a political issue, that banks simply must conform to. To really see who has a stranglehold on whom, this is the way to go. Ireland does have this current from before actual independence.

      I would like to see who turns up at the negotiation when this issue is raised. I think I already know some, but I am open for surprises.

      GS, PWC are undoubtedly expert and are active all over the sector. But are they part of the solution? I remember the case of ENRON, fully accounted for by Arthur Anderson, dumping -$80 billion on taxpayers. AA went defunct, and PWC simply hired the staff!
      The EU has let in Draghi, Monti, Papademous all GS honorable men to do what the elites are incapable of. Dublin stands right now before the same.

      I would say Monti is a Viceroy.

      I think some memories run deep, explaining the housing obsession, but others run deeper.

    • bonbon

      Where does DMcW elaborate on a new bank – I would like to see the argument.

      • Lord Jimbo

        See previous articles, mentioned. Maybe DMcW can elaborate further. From what I can see, he has always been an advocate of opening up the game, attacking shoddy insiders on comfortable salaires and pensions who still get paid went wildly wrong, and I understandf his frustration.

        We simply don’t have a professional state and this is not an attack on those hard working, honest people working on the lower and middle ranges of the public service, I am referring to people across the senior levels of banking, politics and business, by their fruits they shall be know, we are bankrupt and struggling, depending on foreign bailouts with the IMF camped out in the Department of Finance, that should tell you all you need to know about how the country has been run into the ground, and the greatest of ironies, that the majority of people responsible, with the exception of the last cabinet, who have vanished like a collective fart in the wind, are all still talking on the radio programmes and tv shows (this is also a relfection of how that tight that game is played, with few new voices introduced, a perfect microcosm of the overall Irish Republic).

  15. molly66

    If you are up to your neck in a sea of debth big mortgage ect and you get the chance to make a fresh start in a land of sunshine far far away give the keys back to the bank and don’t look back ,remember the bank is not your friend and the bank helped you get into this in the first place and it’s only fair they should share in the pain as well.
    We the Irish some of us are benign asked to shoulder to much of the pain so enough is enough .

  16. LKSteve

    I abandoned the ould sod long ago. I wouldn‘t live there if I was paid. The weather and the gombeenism have put me off the place permanently so a house in Ireland would be the last thing I‘d ever buy. On the other hand, I have brothers and sisters still living at home who love the place and who call it home. Generally speaking they are comfortable with little or no mortgages so they can afford to live in Ireland, unfortunately, their children are in a different situation. No or low paying jobs, no access to bank lending due to their insecure finances. To them, home ownership is a pipe dream. Emigration is their only hope of getting on in life & it is an option I would whole heartedly support. Forget about ghost estates. Ireland will eventually be filled with ghost towns. Housing recovery? For that to happen Ireland needs to provide jobs. There will be no return to job creation in Ireland for years, if not decades.

    • Treasa2012

      That gloom ‘n doom talk is part of the Irish character I know but its of no benefit and not going to get us forward. Our resilience and strength of character will. We’ve been through depressions before. Remember the 80′s? I had 2 sisters and one brother who along with thousands more were forced to head for London after college because of no jobs in Ireland. I’m an emigrant too, emigrating during the boom because I hated seeing what it was doing to our little country – we lost the run of ourselves basically. I’m proud to be Irish and we are hugely respected and liked throughout the world. I care what happens to my little country and I want to see it thriving again. I’m only one of many diaspora out there who want to help!

      • LKSteve

        Yes Treasa2012; I certainly do remember the 80′s, mainly for the tax I paid on an apprentices wage of 48%. We were expected to tighten our belts and cough up our taxes for the good of the country, except we were being screwed by Haughey and his like, with their snouts in the trough, flying their Charvet shirts in from France on Government jets while the rest of us struggled from payday to payday.
        I remember the 80′s well. I traveled to London and worked on the buildings during the Sunny Summer of 85, it was the Summer of Live Aid and Bruce Sprinsteen’s “I’m on fire”. My dear departed dad begged me to come back to Ireland and finish my education which I dutifully attempted to do. Unfortunately, the overpowering stink of corruption, graft and gombeenism was too much for me to tolerate and after some pain and anguish I followed my nose to Australia, then the U.S and South Africa followed by New Zealand and back to Australia. I have no regrets at having turned my back on Ireland. I returned for a short time at the turn of the century and was astonished at the economic transformation. I visited the labour exchange in my home town where thousands used to queue for handouts. The site had been transformed. A new building sat almost deserted, a shrine to the labour shortages of the day. I understand it has all come full circle now, again, the labour exchanges are thronged. Everything about the management of Ireland during the last 30 years stinks. The gombeen class & those that voted for them are to blame.
        Ireland’s problem is that the ‘you scratch my back, I’ll scratch yours’ culture has seen the most devious and despicable rise to the top. The dire state of affairs in Ireland today is a direct result of this. Ireland, you’ve gotten exactly what you deserve, you voted for this.

  17. Emigrant lass

    It might be a land of sunshine but it has no family for us here. Three years without both families has taken its toll. Sometimes the far way places are just too far away and unlike the UK you cannot hop on a plane and be home in two hours to your doorstep! Instead you have to pay thousands to get home for that little holiday.

    Its the price we pay for the banks. I know we wanted to buy the house back then but only because we were sick of paying 800 Euro monthly rents for an appartment for somebody elses mortgage. The problem was that no mortgage applications were denied then. They were approved in the thousands and we like many others got sucked in!

    • Colin

      Ah God love ya, you’re in the land of opportunity and sunshine and you’re still not satisfied.

    • osheaf01

      Ah, so you fell for the “rent is dead money” Big Lie? Well, now you’re learning that interest on jumbo mortgages is a lot more dead money than the rent was.

      Bottom line is: you bought, expecting to make a capital gain. Would you have shared that out if it had eventuated? Why, then, do you expect everyone else to subsidise your losses? More to the point, you expect everyone to write off your loss, so that you STILL get to keep your house. The minimum acceptable condition is that you should lose your house, but perhaps have a less onerous bankruptcy. LEt people off this particular hook, and you guarantee a repeat during the next credit bubble.

      I emigrated because house prices were insane – and it didn’t take genius to realise that – and the renting alternative was too insecure, as it’s unregulated. This was, of course, deliberate – and it’s the first thing that needs to be fixed, if we want to avoid repeating this social catastrophe. The Germans don’t have hangups about owning houses but, then, they can get 100 year leases, and can’t be evicted on a landlord’s whim.
      Mind you, this – making renting socially acceptable and secure (renting having been regarded as almost a form of “child abuse” during the bubble) – is about as likely to occur in Ireland as the Swedish practice of transparently declaring the income tax everyone has paid. The Irish are what they are – ME FEIN first and foremost. Fianna Fail were not economic criminals; they perfectly represented what the Irish were and are.

  18. irish_c

    I believe you are overly optimistic David. GD2 has only gotten started. No getting away from the debt. Next up on the chopping block: China. You know what happens then, you wrote about it recently: Oz goes pop! No more cheap oil to fuel global economic growth, less resources, more mouths. Iran may throw a spanner in the works. Either way, the chinese curse will come to pass re: interesting times. Hope I’m wrong.


      I agree, our own national difficulties will be exacerbated by peak oil, continuing instability in banking and finance and our new role as a province of the EU. Every time I see a prediction of what will happen in ten years, I think “30 years, if we’re lucky”. The comparison with Japan does not hold much water, they made a decision not to make cuts and their economists are urging us to follow suit, but nobody’s listening. We are in a downward spiral and our government’s declarations about how they want to see jobs and growth is pure spin – as in it’s 180 degrees from what their policies will deliver: ten years sinking, ten years at the bottom and ten years of slow recovery.

  19. aodhanc

    David, in relation to what you mention about Ronan Lyons from Daft, the difficulty with his analysis is that it is based on asking prices of property.

    In the current market, asking prices have very little in common with sale prices, so it doesn’t provide a very accurate picture. Most people’s belief is that prices have fallen considerably further than officially estimated.

    I don’t know why the Govt don’t proceed to create a national house price database (based on actual sale prices) as exists in other countries.

    The public are entitled to have this kind of information, before making a decision on buying or selling property.

    • gerry

      For me, this is one of the key problems I have with buying a house in the near future. Without a national house price database, listing the actual selling price of properties, how can I know what I’m paying for a property is what it’s worth at the time of purchase?

      After keeping an eye on certain properties over the last year, I can tell you that what sellers are asking for their property does not reflect the annual drop of 18 percent. These houses and apartments have not budged in price at all in this time.

      In my opinion properties that are advertised on daft and in national newspapers, are for the most part, still overpriced and need to come down to what they are actually worth. I also feel that the average house price should be a multiple of 3 to 4 times the average wage to make it more affordable.

      So personally, as a potential buyer, I am going to wait til at least another 18 months to see what happens.

      • Eireannach


        For the love of God, don’t buy a house until the property price database is up and running at the end of 2012.

        Then, to paraphrase Warren Buffet, the tide will well and truly be out and we’ll see who has been swimming naked. The current asking prices are hopeful, and understandable. The poor sellers will probably be in trouble if they don’t get their asking price, or close to it.

        As Slickmick says above, the asking prices need to come down closer to Liverpool/Leeds levels, basically another 50%.

        Then, when you buy, be sure to pay whatever you have to for Insulation Max, Passive House standards, so your home heating bill will be down from €2000 a year to as little as €200.

        Check out the latest episode of RTÉ1 Eco Eye on RTÉ player to see the amazing savings Insulation Max can “earn” over the lifetime of the building.

        Buy in 2-3 years when the property database makes everything clear. Spend €10-15K on insulating to passive house standards. A job well done!

        • gerry

          Thanks for the advice Eireannach. I’ll have a look at that program on insulation.



          • Juanjo R


            Can I caution care here – it’s a precise area if you want to do it properly. Its also still developing.
            Its very difficult and costly to retro fit an existing house to a true passive standard though they can be improved greatly. Cost effectiveness is key here. Beaware of expensive gizmo solutions this area. Sales information/pitches must not be taken as hard cold factual information.

            Loads of in depth good information here…( please try to look past the involvment of green party politicans)…http://www.constructireland.ie/

            Any companies/people associated with this organisation are true eco-warriors and won’t let you down I believe…http://www.easca.ie/

            Good luck!

          • stiofanc02

            Gerry this is my area of expertise. I dont SELL anything except the actual items that WILL work.

            It is impossible to get to passive standards on a retrofit as it is only really obtainable from a new build, that said, with much effort you can get your heating bills down to an attractive sum.

            Sometimes it can be with little effort although that is rare.

            Dont pay any attention to BER as they are a load of crap.

            I am a Thermal Image surveyor and this coupled with other invasive cameras and maual inspections are the only way to get the job done correctly.

            I have been going around the country fixing underfloor heating systems, upgrading radiant heat systems, improving insulation levels, installing easy to use controls for comfort, adivising on glazing issues, taking the mystery out of chimney problems, teaching folks about the value of a boiler stoves, showing them with this awesome technology, thermal imaging, exactly where the heat is lost and generally reducing monthly and annual costs for homeowners in Ireland.

            Send me an email if you need any advice.

            Oh and good luck with your new home if I dont hear from you. All the best, Steve

          • Juanjo R

            @ Stiofanc02

            I find your sales pitch above to be both obnoxious and pushy. Are you 5 years old or something?

            Can I, respectfully suggest that you take one of your invasive cameras out and then SHOVE it up your own arse so you can VERIFY for sure that the SUN does not indeed SHINE out of it on this matter.

            You do not have a monopoly on any expertise, here or anywhere else – do you follow?

      • imithe

        Have a look at the Allsop Space auction results and find something comparable. You mightn’t find a match for what you are looking for but it’s as close to transparency as you will get. http://namawinelake.wordpress.com has published the sale prices.

  20. redriversix


    Dept of Finance release statement claiming 1.2 % percent growth in 2012.

    “would the Minister please confirm to this House and the Citizens of this Nation that their Department are not using crack cocaine”?


    • bonbon

      Since financial traders are hooked on the stuff, I’ll bet they’re wannabees!

    • Realist

      GDP growth does not mean the real prosperity and real economic growth.
      The economic growth is whether or not a given amount of physical labor can acquire more goods and services each year, and that can happen even with GDP falling.

      GDP represents mainly gross domestic consumption.
      When central banks pump a lot of money into the economy, they boost GDP growth.
      So, it is primarily a measure of inflation, as the quantity of money in the economy increases faster than the quantity of goods and services.

      GDP is meaningless mathematical aggregate telling us nothing special about what is really going on for you and me.

      • bonbon

        I agree the GDP is since the last 35 year a purely synthetic number to prove growth, when in fact there was none. Reason – to “prove” limits to growth.

        Real growth must involve :
        1)increase in energy flux density per capita, per hectare
        2)increase in the relative potential population density
        Ireland is dying with this measure – emigration showing the decrease in relative potential population density, and the move to green energy of low density.
        Any physical economic measure is so shocking that the policies would become immediately obvious for what they are. No gov’t would stand a chance in the transatlantic region if these measures were used.

        Anyway these policies can no longer be hidden with bust after bust popping up.
        The statistics do not show this, by design.

  21. Morning

    Thanks for all the comments. Regarding property, you will know that I have always believed that property is one of the great curses of the Irish state of mind and is a most useless economic resource in a competitive world.

    But just because I think that doesn’t mean everyone else thinks that. After more dramatic price falls this year, the yields on property will be attractive to even cash investors, which is why we will not need to see the banks playing a huge role in the sentiment change towards property.

    Now maybe I am wrong and this process will take more time.

    In terms of thr big pictture; in either the inflationary scenario (we leave the euro) or deflationary scenario (we stay as is) the property market will attract people.

    In the defaltionary scenario, yields will play their part. In the infationary scenario the “store of wealth” notion is likely to predominate is prices fall enough next 12 months.

    Just a few thoughts,

    All the best,


    • mcsean2163


      It might be useful if we used the same percentage for Japan and Ireland. Clearly the Japaneese house prices crashed a lot harder than the Irish equivalents. As the crash is not as hard, this single indicator probably points to less of the extreme saving suffered by the Japaneese.

    • bonbon

      I did not realize it was such a curse until I read here. DMcW is right. The curse is to the detriment of all other ideas of wealth – mere multiplication of houses is not growth. There are limits to multiplication.

      I wonder if this has roots in the evictions 100′s of years ago? Is it possible that memory drives policy today, subliminally? Of course that suits those profiteers. Now evictions because of the bubble are “foreclosures”, a horrible irony.

    • Colin

      David, the root of all specifically Irish problems (property, the drink, drug taking, gombeenism etc…) is responsibility. There is very little self responsibility around the place. A drunk blames the barman for selling him liquor, a negative equity buyer blames the newspaper’s property supplement for ‘making him buy’, a druggie blames the dealer for the free first ‘hit’, the gombeen blames society for not providing him with better employment. Its always someone else’s fault you see.

      • bonbon

        Interesting. My reading of SF, Arthur Griffith, is that SF means responsibility, we ourselves. The jury is still out on FF/FG after the civil war – was this broken?
        People have a history and a future, animals do not. Personal or cultural. We are not simply “thrown” into society, ala Nietzsche. Take away history, or the future and you get the problems you list.

        • Eireannach

          Colin is absolutely right.

          Who do you know who brews his (or her!) own beer, distills his own flavoured whiskey, makes his own soap (easy), grows his own kitchen garden, buys sheets of leather and cuts and sews his own leather wallet together, knits, makes his own jars or jam and chutney?

          Most people are interested in making big money, easily, the most obviously simplistic way being to buy a house cheap and selling it at a higher price and trousering the difference.

          We brew a few ales and lagers in Ireland – Smithwicks/Kilkenny, Macardles, Harp, Galway Hooker.

          The English brew literally hundreds of ales.

          The Belgians brew at least 750, probably more by now.

        • bonbon

          Strangely enough you omit electricity – soon we will all be owners of our wind turbines – it’s a drafty place!

          With that survivalist thinking we would never have had the Shannon scheme. We would be spinning wool by candle light! How romantic, if the draft does not blow it out.


      I don’t know enough about the Japanese, but there is absolutely no doubt that the Irish are addicted to home ownership. The rest of Europe, apart from the UK, do not share this obsession. We all know the historical & cultural reasons but there is also an obvious problem in our rental sector. The laws under which this operates are very different from those of our European neighbours. In Holland, Germany, etc you rent a building, white walls and wooden floors are standard, you paint the place whatever colour you want, you put in whatever furniture you want and unless you’re damaging the building or failing to pay your rent, you have very strong security of tenure. You can actually plan to rent for 30 years, knowing your kids won’t have to move school, etc. The majority of rental properties in Ireland are sub-standard in decoration, insulation, heating, plumbing, etc and entering this market will bring you into contact with some of the nastiest, most criminal sociopaths you will ever cross paths with. Put simply, renting in Ireland is not an alternative, if you want to live decently.

    • tony_murphy

      The cash investor is a sitting duck right now for the globalist bankster elite. whats with the love of worthless paper?

      My guess is the elites will have a bank holiday, remove a few 0′s from euro + rest of fiat currencies soon enough.

  22. pyramidpyre

    Why is the graph show on your website completely different than the graph printed in the Indo?

  23. Cheeses

    @ David McW,

    That chart is misleading. I should know; I’ve done a few in my time.

    1. You’re using different scales for Japan and Ireland. Fitting the lines to your argument. Set them on the same scale to see relative adjustments.

    2. You’re starting Ireland’s series before its peak. Naughty.


    The asking price for 3 bed houses in clontarf is still 600k! We need prices to reach Liverpool /Leeds levels, 100k.

  25. bmv

    Well spotted Cheeses. That means we’re on year 4, and not year 5.

  26. soma

    I’m a big fan of David’s. However what I’d normally say is “David is usually right – but his timing is usually wrong”.

    I believe that to be the case in this instance. Without credit and jobs, neither of which I see returning anytime soon, how can the current prices (or anything remotely close to them) be supported?

    Yes I can see the south county dublin set establish a floor because of the gravy train culture as others have mentioned – but that still leaves the vast majority of the country ‘exposed’.

    While I too feel uncomfortable when my views appears to be ‘the concensus’ (they’re normally not) – I just can’t see it playing out any other way at the moment.

    • Soma,

      Sometimes consensus is connsensus because it is right:)

      All I want to point out in the article is that strange things happen in recessions/depressions, things you think are highly unlikley until they happen.


      • Lord Jimbo

        This indicates the limitations of knowledge, we can number crunch, watch the variables, factor in the indicators, talk to those in the market, banks etc, but to come back to Donald Rumsfeld, it is what we know we don’t know, those are things we cannot anticiptate, because of the massive turmoil in Ireland, in Europe, in the global economy, people would be well advised to sit tight and see this thing play out for another 12-18 month time frame as you indicated, people can build up their savings, do their house research, even pick out the colours and furniture, but for God sake, don’t buy for 18 months to two years.

        12 months from now we could be out of the euro, or in the second class rail carriage to EU expansion, with the Germans driving on.

        Sit tight people, the storm has definitely not passed and there is no better advisor in the whole universe than a person’s gut, people just need to listen to their inner voice.

        • bonbon

          Rumsfeld’s used that perverse logic to start a war – he knew we did not know if Iraq had nuclear weapons. Now we know they did not and he knew they did not, lied and got the war.

          Beloved economist Hayek’s “limitation of knowledge” is used to prove his “Final Conceit” that people cannot change things.
          This is pure Kant, who as everyone knows simply Kan’t do it!

          Now how about some serious economics?

        • molly66

          Why do you think the Germans will fair better than the rest of Europe ,is there arse not out the window when the countries they have lent vast sums of money to can’t pay them back.

          • Realist

            We and others were/are also buying a lot of German bonds or bunds, basically subsidizing their exports (bmw, mercs, …).
            Germans might be better off some nations as they saved more money as a nation and they can use it.
            Nations without a lot of savings might be in a bigger trouble if nobody outside wants to invest/borrow to them.
            I think who will be better off depends on who will end with the more sensible government after all this mess :)

      • bonbon

        And some people can do things in a crisis they never believed possible, would not even consider before or in the run up. Forecasting should include this or at least pose what must be done to abruptly change the forecast which will roll out if nothing is done.

        Forecasting is a difficult business, timing is almost impossible.

        • Lord Jimbo

          Fog of war, or fog of economics, which some say is a fog full stop.

          • bonbon

            Was it Churchill who said the first casualty was truth?
            But economics ? Statistics alone guarantees the first casualty.
            We do not need “complete data” as if that could even exist.

            We always see through a (fogged) glass darkly. That’s the basic principle of science after all.

            Hayek in fact goes after this principle with “spontaneous” order, unknowable because of “complexity”.
            While we are paralyzed waiting for data, finance just goes ahead ruining us.

          • Realist

            Austrian economists are saying that it is not possible to have all economic information in one central body (either central bank, government or whoever) to decide about where to do investments,
            We are all economic drivers as we are the only one who are deciding what we want to buy, do we want to save and so on.
            GDP and all other nonsensical mathematical constructions are things that they fought against.
            They are for microeconomics, the main deconomic driver is entrepreneur (company) who merge labour, land, natural resources and invested money to create the new product that people want.
            It is not up to government to artificially say Ireland needs more green energy or more IT or more buildings. How they can know what the whole nation wants today, tomorrow and in 3 years ?
            (millions of) Entrepreneurs posses more information about the economy as they have more information about locality, people and their current and potential future customers.
            All other economic schools are not even interested in entrepreneur activities and human action.

          • bonbon

            Yes exactly, macroeconomics is supposed to spontaneously emerge from micro-entrepreneur activity. I have no doubt many entrepreneurs have ideas and energy.
            But my point is how is the common good to occur? Hayek and others quote Mandeville – private vice publick prosperity – a doctrine of the LSE. That means action on the macro or national scale explicitly for the common good can not work.
            JFK’s mission-oriented national economics driving the best of entrepreneurship is directly opposed to this LSE required reading.

            All that the LSE dogma has produced is the criminal energy of financial entrepreneurs unbridled by Glass-Steagall, has produced publick misery. I firmly believe this is just as Mandeville really propounded.

          • Realist

            I would just say that I do not care about names, as I am getting a headache now of Mandeville I never heard about, even after reading a lot of books :)

            I am the man of logic and I care only about ideas, concepts and proper plans and care of no names, nor titles.
            I have no symphaty for politicians as they never served us well, they can be corrupt as the power is in their hands. They get elected on 4 years term and than do as much as possible for themselves.
            Public good is nobody’s good and I learned that for almost 30 years living in socialism. It just cannot work.
            This is why I am for free market capitalism without government influcence.
            Just look parts of society where government had the least influence (as hardly any business is without gov influence) and how people (us) benefited from competition and vast companies producing the good.
            And then look public services where you have no choice, no way to compute costs, to compare or say they are efficient.
            Only public services are talking about not having enough, restrictions, not having enough beds, enough water, …
            You could never say that for bread, milk, ..
            Stores are actually discarding so much food each day …

          • bonbon

            Mandeville is the icon of the LSE. AFAIK Nobel or similar luminaries are expected there to give a Mandeville Lecture. Hayek’s I posted part of here. It’s not just a name, but the core curriculum. It’s basically cultivated irrationality as an economic axiom. For such, any regulation interferes with this. Once can say for example, spontaneous prosperity occurs amid the rush of daily transactions. Or one can say the system is much too complex to understand it so we can never have complete data. Both boil down to enshrined magic.

            This is best seen posing the alternative : national mission oriented economics as per JFK’s NASA or FDR’s TVA over a generation, driving new industry, science, management methods. NASA managed 400,000+ people quite well.

            The reaction of Hayek free-market ideologues borders on, well, irrationality.

          • Realist

            I think we concluded you never read any book on austrian economics so not sure how you can really comment on it. Even wikipedia is against you:

            NASA what I read is governmental organization that spent trillions of money on ridiculess projects that nobody needed.
            They are planning to send man on Mars for a few trillion of dollars only. Is this what we need and what we want as people and society ?
            Did they ever ask people do we want to send man on Mars or do we want to have better economy and happier people ?

            Austrians just want to revert decisions to people, me and you, to have tax free salary, so we can decide what to pay and to whom, what company to strive and what to go bankrupt.
            They do not want somebody else to decide as we have seen at least 90% of all government projects (including NASA) are failures.

          • bonbon

            @Adam Byrne. I had a look at those links. It seems Varoufakis borrows, as does Hayek et al, much from maths, physics, for example game-theory, chaos, fluid dynamics etc. This reflects the migration of physicists to finance over the last 35 years. The Black-Sholes Nobel Prize winning maths is pure physics.
            Which raises the question – if the result of this is a total disaster, what about science?
            Varoufakis seems to do an “Atlas Shrugged” and say all economic forecasting is impossible, as the forecast itself changes it (coded as non-linearity). This again is the same unknowability of Hayek whom he criticises!

          • bonbon

            @Realist. The Austrian School Wiki does not mention Mandeville. Why I cannot imagine. Hayek, corroborated by Simon said himself very explicitly, Mandeville is the inspiration. I recommend very strongly, looking at The Fable of the Bees, Private Vice, Public Virtue. If LSE takes this so seriously, Hayek too, it is urgent to check it now that we have a complete global economic breakdown loooming.

          • Realist

            You are just reiterating the same without any real argument.
            You are not going to discredit austrian economists that easy.
            Most of Austrian books are free and you can google them and find them.
            No book is telling anything about Mandeville or what you are implying from 1 article.

            Arguing about what you believe without reading 1 book or article from austrian economy is not going to bring you respect you might deserve.

            The Internet brought the strength to austrian economists that were always without money or advertisments or mainstream economic university appeal. You can read all their treateses books for free, or just search them.

  27. Realist

    Excellent article and as usual makes us thinking harder and more.
    As you said there are so much factors to predict what will happen.

    I am not sure that the property market is the major worry in Ireland, even if it looks that way.
    I would say that it is already lost project, money and wealth is burned down to the hole.
    We are not suppose to bring it up artificially as it will just burn more and more wealth (e.g. savings).
    We should just leave the market to correct to whatever price people are willing to buy.

    Japanese factors are historical so well known now.
    Ireland factors in the next 5-10 years are unknown, so unsure where we are going.

    What I mean by this is next:
    1. Money supply
    The Bank of Japan had a conservative monetary policy for most of the last 20 years.
    The growth of the monetary base averages less than about 5 percent per year.
    Ireland depends on ECB that at the moment also took conservative root (last 2 years or so) and decreased money supply to 2-3%

    2. Economy growth
    Japan actually experienced economic growth even with money supply being cut down, as they used their savings to continue creating capital goods that of course produced both capital and consumer goods
    So, they did not destroy their capital goods basis and their production structure.
    Ireland, we will see, as it needs to continue producing and keeping capital goods (tools, machines, factories), so we continue producing both capital and consumer goods.
    Savings should not be wasted on just consumer goods (bumping GDP does not mean it is good per se).

    By doing this analysis if we continue on the same path as Japan for Money Supply and Real Economy growt we can mimick Japan.
    Japan grew in real terms (PPP) over last decade, as they can buy more goods for their salary.
    I hope the same happens to Ireland in the next 5-10 years.

    This is why I hope Irish government leaves property market to correct and do not bother about it, focus on real economy growth (NAMA should not hold assets and keep the prices high).
    The Irish recovery will come from real savings being used to continue and grow capital goods production, as without capital goods we will have no real growth nor production of consumer goods to sell.

  28. bonbon

    I have great difficulty comparing Japan to Eire. Japan with 58 nuclear reactors, Tokyo with 2 times the population of the entire island. The energy flux density and population density with infrastructure are simply too different. Machine-tool production just for reactor design simply does not exist in Ireland.

    The international finance flows producing a housing bubble there, followed by the USA, then Eire, Australia, and even China are obviously incapable of investing in growth, only multiplication producing multiple bubbles.

    For Ireland to grow its energy flux-density per capita and hectare, this kind of finance will never help. So this finance actually explicitly stops growth. Limits to Growth is the swindle to open the door to multiplication bubbles. After 35 years of this we have the crash.


      I thought the population of Tokyo was 35 million? That figure was constantly quoted during tsunami news reports.

      • JapanZone

        No, that would be the Tokyo Metropolitan Region, centred around Tokyo but also including cities like Yokohama and Kawasaki. Tokyo by itself is about 13 million, a mere three times the Irish population!

  29. Deco

    Well to paraphrase that baldy clown running the Finance Minsitry.

    Ireland is Not Japan.

    We would count ourselves very lucky if we manage to keep through this as well as Japan has managed.

    Ireland is much much more mismanaged than Japan.

    After we stopped dowing damage to ourselves, by means of the Great Irish Binge, we then brought in the Troika for more nonsense, by means of the Great Austerity drive.

    • molly66

      What’s wrong with this country is there is a percentage of people in this country getting to much and on till that stops we are on a road to nowhere.

      • Paris75013

        I agree. The teachers, civil servants etc are all getting too much (even with a 50% salary cut, they would all still be better paid compared to other EU countries). And there was also too much greed during the boom. I know so many people who were investing in a property in Ireland on a yearly basis during the boom years, as well as buying properties in France at bargain prices (because they’re located in the middle of nowhere). People just talked about nothing else but property. It’s so different in France. People just don’t talk constantly about property. In Paris intra muros, property prices increased by 18% between Sept 2010 and Sept 2011 (yes, in the space of one year!) and nobody is obsessed with talking about how much their place is worth.

        • Eireannach

          Bragging about how much your property is worth was the first time since before the Anglo-Norman invasion of 1169 that ordinary “Tadhgs” (as UlsterScots call them up North) had a chance to claim they were somebody in worldly terms.

          It HAD to happen like this. If you could go back five years in a time machine, and tell them all they were out of their minds thinking Ireland or the Irish are worth this much money, they’d have laughed in your face!

          They had their moment of bragging rights. Now it’s time to pay back the money…

          • bonbon

            I did do that and the unbelievable smart-ass attitude when you tell them they are living in a bubble is incredible. The same thing happened with dot.com-munism a little before. One risks being pilloried warning bubble heads in a fish bowl that someone is going to flush it.
            And to warn about the Euro at the beginning? – normally cool people becoming rage-balls was a sight to see.

            Same today when one goes after greenie limits to growth or governance…

          • bonbon

            But in spite of all this it is not to be forgotten that bubbles and paradigms are pushed by very influential groups who are the real sharks circling the fish.

            It is easy to loose sight of this while they prepare the next bubble.

            We have a financial system out of control ruining us and it takes much more guts to go after that than the neighbor.

        • molly66

          If you look in the housing estates around Dublin and most of the driveways of these houses if there is a new car there chances are it’s a civil servant .
          If you add up all the tax being paid by one house estate was added up it would pay a government ministers pension,so the people living there should name there estate after the said minister.

        • coldblow

          Maybe so. But (and I know I’m repeating myself) to look at it from the other side, it was very hard to recruit COs into the Civil Service in 2001, in Dublin anyway, as the wages didn’t cover rents. Prime Time did a bit of a programme on the subject. Some civil servants left for the private sector in the following years as the wages were much higher. I knew one who left even in 2007 – she wasn’t the brightest spark.

          As for comparisons with wages in other countries Ireland has a higher cost of living than nearly everywhere in the EU, or so I understand.

          When I left England 25 years ago the air was thick of talk about ‘property’ values. They used to be called ‘houses’ but this changed in the early to mid 80s. If the prices have gone up that much in the centre of Paris then maybe they’ll get round to the subject at some stage during their interminable dinners (they must have arses of steel). It could just be that they are more sophisticated or have better manners. I don’t agree with our present Uachtarawn na hÉireann on all that many things but he was right when he snorted a few years ago at the Irish badge of sophistication, which was talking about wine. When asked during his campaign what his views on religion were he answered, after a pause, that he was ‘spiritual’. Maybe that’s what the French are, and they scorn crass materialism. I wonder what our old next door neighbour would have said about that (his widow has just turned 100). After his experiences in the trenches it wasn’t the Germans he disliked, but the French.

    • Bamboo

      No matter at what angle I look at it I can’t see how we can compare Ireland with Japan. Well, it is surrounded by sea. Is there anything else I should look at?
      The fact that the property graph happens to show some similarities does it mean we can actually make a comparison? If kazakhstan has the same property graph should we compare Ireland with kazakhstan?

      “We are living in unprecedented times” said by us all and property doesn’t fit into this picture anymore. Many see the boom time as the good times. But for others (many with with good education and employment) it quickly become a nightmare as they come to realize that hey can’t ever afford to have a home of their own. Rented accommodation was/is the only option. In continental Europe renting is as good or even better than owning a property and you can happily live in rental accommodation for a whole life time and raise a family.

      Unfortunately there is no room in our society for a renting culture. And we have deliberately chosen a government and therefor a society and culture that concentrates on property ownership as the main driver of social ranking/status.

      • Eireannach

        I don’t agree Bamboo.

        Not all Irish landlords are what you might call “slum landlords”, meaning they never take care of the property and they treat their tenants with disrespect.

        All rental properties should have Building Energy Certificates, revealing how well insulated the property is. A good BER is a must. Your home heating bill might be only €200/year with a very well insulated property, whereas it would be over €2000 in a slum landlord’s auld kippy apartment.

        The thing is, the slum landlords are going out of business. Not only is the cost of insulation retrofits too high for them, but tenants aren’t interested in their properties because they are kips, they aren’t tax compliant so they don’t accept rent allowance and since an Act of the Oireachtas in 2004 tenants have much more rights (after 6 months the notice period for eviction extends to 2, then 3 months).

        Rents are still too high. But a well-insulated rental property with a great BER is the way forward. In a few years buy a place when the property database is open for all to see what the true sale price of houses actually are.

        It’s a mindset thing – get over it! Renting is GOOD in Ireland, in a good property, and there are plenty of good rental properties. Rents are still too high though, by European standards.

        • Eireannach

          I forgot to mention the fact that bedsits with outside toilets are against the law now. So slum landlords have to pay to have toilets in every apartment.

          Needless to say, this is ruining all the slum landlords in Rathmines, for example, and everywhere else they have bedsits. Finito amigo!

          • Bamboo


            I do understand your points.
            However, Not really sure if you are referring to my post as I don’t see in my post the points you reply on.
            Regarding buying a place. I don’t intend buying a place as I have bought 30 years ago and still in the same property so you can imagine I am one of the lucky ones.
            I am just reflecting and have sympathy for the many people who are stuck.

          • Eireannach


            I was responding to your remark that there is “no room in our culture for renting”.

            Since the 2004 Private Residential Tenancy Act, tenants have lots of rights in Ireland, including the right to demand a BER cert, the right to have an annual rent review, and so on. The notice period for the landlord to ask the tenant to leave extends, after 6 months of the contract has elapsed, up to 82 days notification.

            Many people think we still live in the bad old days before the 2004, when landlords gave 28 days notice and no reason, when they routinely kept deposits, and when they herded people into bedsits with outside toilets.

            As of 2013, ALL bedsits in Ireland will be illegal. EVERY unit must have a shower and toilet inside the unit.

            There is a revolution happening in Ireland – against landlords, in favour of tenants.

            With respect to yourself, your remark that Ireland is not a tenant’s culture is out-of-date, it’s pre-2004.

            Tenants are now entitled to deposits back, fixity of tenure, en suite toilets and showers, high-level insulation to keep heating costs down. People who aren’t in the rental market don’t realise that the shoe really is on the tenants foot nowadays.

          • Bamboo

            Thanks Eireannach,

            Best Wishes

          • Lord Jimbo

            @ Eireannach

            “There is a revolution happening in Ireland — against landlords, in favour of tenants.”

            Will be music to my landlord’s ears who expects me to pay the €100 property tax, he is currently on holiday somewhere in the Alps….

            Standard of properties where I am from are scandalously bad, amazed these jokers are even allowed to rent their hovels, where are the government inspectors? Are there even such people? Another case of zero regulation?

            I’ll believe this revolution when I see it.

          • Eireannach


            The types of landlords you’re talking about – your classic “slum landlord” – is unlikely to suddenly become compliant.

            However, if he hasn’t got en suite toilets and showers in every unit, a good Building Energy Rating because he spent real money on state-of-the-art insulation, if he isn’t registering his tenants with the PRTB and paying up his €70 per unit, if he is trying to pass on the €100 household charge….

            …well, he’s either in trouble already, or he will be soon.

            Lookit, one of the headlines in today’s Irish Times was about changing bankruptcy laws in Ireland. The eagle is about to land. Everyone is going to be checked for compliance, and the “slum landlords” are all going to end up in the courts.

            Yes Jimbo, it really IS different this time. The EU IS our government atm. What they say goes. What they’re saying is “change the bankruptcy laws, lets move against the whole lot of them in the next 12-18 months, and we can reset Ireland ASAP”.

            You will believe the anti-slum landlord revolution, because you will see it. Every day, all day, in the courts. Total turnaround time 90 days per slum landlord. Banks repossess, the transparency of the property database brings clarity to the market values of units, the bottom is finally reached, banks begin to sell at the bottom of the market, and up we go again, albeit tentatively for the first few years.

          • Adam Byrne

            You are highly optimistic about things being done right, fairly and transparently in the this country (for once).

            Certainly not in my long experience and observation.

          • stiofanc02

            A BER cert is at best a “thumbnail scetch” as to how a property is performing.

            They are in reality an ineffective load of crap from a comfort level standpoint and have no bearing as to how much it will cost to keep the comfort level at its optimum.

            The DEAP method software used by SEAI is greatly flawed and is NOT something I would reccomend.

            Thermal imaging, manual inspections and other techniques to determine insulation levels, heating system suitability and draught proofing are needed and are far more effective methods.

            Talk to a BER assessor and ask him how he proves what he is ticking in the boxes?? and he wont be able to answer you, because usually he cant.

            The BER assessor is not to blame, he is adhering to a strict regime, highly flawed and unrealistic in many ways, set out by SEAI. And they dont have a clue.

            They took the UK model, removed the Crown and put a Harp on it, added some mispellings and WOO HOO BER’s for Ireland! Disaster in my opinion.

            The only advantage has been it got the homeowners and landlords thinking about how the house is actually performing. But the BER cert is pretty much a useless piece of paper that should be used to light your next fire in your new boiler stove.

            Just one mans opinion.

          • Eireannach


            True, a BER is not a particularly good audit of the thermal properties of a house.

            But if you don’t have a BER and you rent or sell a property, you face a €5,000 fine or 3 months in prison! That’s the law as it stands. It’s important to have your BER, clearly.

  30. wills

    Robert Schiller economist who insists that house prices should always remain static in order for a solid, innovative and wealth creating productive economy to exist.

    Without it he asserts we get an economy eating itself.

    • +1

      This should be legislated into law to make effective.

    • bonbon

      A quick look at Shiller, his famous book is Keynesian.
      What worries me is Keynes’s General Theory first edition was published in 1938 Germany with a preface that only a total-state could appreciate it.
      Opponents of the Hayek-Mises school pillory Keynes, but at the same time propose “spontaneous” unknowable order, exactly the same as Keynes!
      R.Shiller’s Animal Spirits, co-authored with the Nobel Prize-winning economist George Akerlof, traces back to the theory of John Maynard Keynes. In 1936, in The General Theory of Employment, Interest and Money, Keynes wrote: Most, probably, of our decisions to do something positive, the full consequences of which will be drawn out over many days to come, can only be taken as the result of animal spirits — a spontaneous urge to action rather than inaction, and not as the outcome of a weighted average of quantitative benefits multiplied by quantitative probabilities. Shiller’s book is another chapter in the growing field of behavioral economics, and it documents how emotions can lead to irrational economic decisions. In his talk, Shiller said that if people were truly rational, they would be paralyzed by uncertainty. Instead, they exhibit a Keynesian spontaneous urge to action.
      Keynes, Hayek, Mises, and others all agree that economics relies on unknowability. This is irrational radicalism at its worst – Dionysian, or Nietzschian, or more precisely Mandeville-ian.

      The reason I mention this is nothing in the living or human world stayes fixed. Without growth attrition will bring extinctions.

      • Realist

        You put it wrongly again Keynes with Mises and Hayek.
        They are totally different.
        Today’s economy is driven by Keynesian and Monetarists, not Austrians.

        Who is then your prefered economist or idea ?
        I hope it is not socialism or communism due to your national bank proposal, where the central body knows everything that is needed for me and you.
        Like people are stupid and do not know what to do with money.

      • bonbon

        On the surface, yes there are apparent huge differences between Keynes, Hayek…
        Digging a bit about publications, underlying theory, reveals an uncanny similarity. I trace this to the irrationality buried there, and the irrational result of both should not be surprising.
        This is best encapsulated in Mandevilles’s basic economics, endorsed by the LSE for example.
        Glass-Steagall is a direct and effective smashing blow against this feudalism. Repealed in 2000 it opened the door to extreme “irrational exuberance” to quote Sir Alan Greenspan.

        • Realist

          If Greenspan is your idol to be quoted nobody can help us from your ideas :)
          The problem is always to have corrupt politicans and governments who put in law all kind of crap laws.
          The only thing that is easily corruptible is public domain, where people have no incentives to work hard nor to represent anybody but themselves.
          Without competition and proper free market capitalism the current socialism is going to cost us a lot.
          The government should move away from company competition and leave them to fight for customers, that is the only choice.

          • Realist

            Wanted to say, government should move away from interfering in market activities, leave competition to work out, no bailaouts. It needs to create the proper environment initially, put laws for non-fraudulent banking is the first.
            And if they can downsize substantially, privatize all spheres possible in their domain so we get better services.

          • EMMETTOR

            Governments not interfering in markets? Never been done, it’s the nature of their interference that’s important. Competition is not a feature of any but the most immature markets, they all end up as monopolies/oligopolies. Privatising never improves service, relative to cost. Ever.

        • bonbon

          Sir Alan was knighted by the Queen for bringing stability to the financial markets after the S&L crash of 1987. Well he did that by expanding the derivative instruments and campaigned tirelessly to repeal Glass-Steagall, which was done in 2000. Sir Alan’s mistress was Ayn Rand, is a Rand-ian through and through. Looking at Rand’s Objectivism one comes accross the exact same irrationality as one finds in Hayek, and Keynes.
          The alternative to this unbelievably destructive ideology, is Hamilton’s mission-oriented credit system as national policy, well delivered by JFK, FDR. The Apollo program was a 10+ year national mission demanding the best entrepreneurship and a credit system. This all happened under the Bretton Woods stability agreement until Nixon killed it in 1971/2.

          Stopping Apollo is not a business cycle thing, rather a deliberate sabotage of a national mission based on free-market ideology. Stopping Shuttle, and Constellaton is also a deliberate destructive act. Very reminiscent of an Atlas Shrugged of Sir Alan.

          • Realist

            Not too interesting about who admired who and why.
            It does not mater, what maters are their actions and effect on people (us).
            I am always for some kind of balance between opposing things as found that the most rewarding in life.

            The thing is that booms and busts are happening now for 100′s of years under current banking system.

            What do you think is the reason for booms ?

            This is the culprit for everything.
            You cannot solve the problem without understanding what is the cause of it.
            Austrians clearly explain the cause of financial crisis. Others have no clue, they just tackle bust phase with printing more money or bailing out banking sector, ….

            How your Hamilton will prevent booms ?
            How will it deal with busts ?

      • bonbon

        National Banking defined by Alexander Hamilton of the First US National Bank.
        Hardly a central bank, nor some later communist construct designed in London.

        Everything cannot ever be known, but we do know one thing for sure – money in service of irrationality produces chaos, as today, never common good. So obviously money must be of, and from the Common Good.

        • Realist

          You need to give me some link or something more serious about Hamiltonian idea, so I can read.
          Or you just tell us how will that work out/prevent Irish boom and bust.

          Banks should exist to benefit their customers in the proper non-fraudulent way.
          If they electronically print 10x or 20x more money they have reserves for (e.g. 1M in deposits can become 20M in credit loans to the builder) nothing will help us.
          Central banks that can keep 1% (EU) or 0% (US) interest rates, telling people saving is stupid, spending is great for last 10 and more years is just crazy.
          Booms and busts will happen again, if governments do not return laws to non-fraudulent banking and no central banks monopoly (e.g. government owned monopoly).

          • bonbon

            Banks will and did not function for the public good without Glass-Steagall. This was very clearly identified in 1933 and over the last 30 years as it was salami-sliced away. Banks will never apply this themselves, only a national mission for the common good will do this. Any attempt at free “stress-tests” run by the banks themselves is an utterly unbelievable swindle.
            The Volcker Rule (after all he was replaced by Sir Alan after the S&L) is known as the swiss-cheese rule, is paraded today as the solution, when Volcker recently admitted we need Glass-Steagall!

          • Realist

            The banking sector is fraudulent for last 200 years once the fractional banking system get legalized in England and other countries.
            They were fraudulent with and without Glass-Steagall.

            This is why I am telling you that this is not good enough to prevent booms and busts.

            If they abuse your and mine money put for holding (e.g. current accounts) by taking it and using it to expand credit, to create 10x more electronic money through the credit expansion, so causing malienvested sectors to go bunkrupt (e.g. building industry), causing banking crisis and financial crisis.
            Or buying government bonds and use them as collateral to ECB/FED for credit expansion.

            It is not just your Glass-Steagall, it is more than that.
            So how will national bank work ? on what principles ?
            Who will decide where the money goes, to what projects ? How is that different than today ?

          • bonbon

            A real boom, not a synthetic bubble swindle as DMcW in 2003 on that video said, means growth in the phyxsical economy (not the mathematical monetary shadow). Thus the only reason for a bust is removal of the boom cause. Boom’s are INTENDED, as for example the Bretton Woods post WWII boom or NASA. Removing Bretton Woods, or killing JFK so the “other things”, NAWAPA etc that JFK intended were stopped.
            Law #1 there must be growth (not multiplication) for our species to survive. The difference with the biological world, is we intend that growth. Evolution brought growth in energy flux-density from Dino’s to mammals requiring a massive extinction.
            It seems Hayek boom-bust cycles are a Darwin observation. Not surprising as Hayek says Mandeville was Darwin’s key inspiration also!
            Intention implies a policy of what the future should and could be, meaning the actions to be taken now. This is different from the Hayek view that the present business kinetics determine the future.

          • Realist

            This is austrian business cycle and it is not based on Darwin/Mandeville of course:

            Austrians correctly predicted all crisis in last 100 years of existence based on this.

    • uchrisn

      Schiller started the first house price index in the US where you can use a financial product to bet on house prices. It has been constantly in backwarddation. Be interesting if someone made a product for Ireland. He also has a free online course. http://oyc.yale.edu/economics/financial-markets/ He is a smart guy and agree 100% with what he says.

      • bonbon

        I believe the current EU Gov’ts, and the FED believe everything either Keynes, Mises or Hayek says. That should be a wake-up call. A minimum of diligence?

        Blind belief in “spontaneous” order from pure “free” speculation has blinded Monti, FG to reality.

        Even if this blind belief does produce statistical matching patterns, one should ask if that has blinded us also to the reasons for the chaos?

        • Realist

          Mises and Hayek do not believe in such abstract mathematics in economy as it is a social science.
          They fought against scientific methods to be used in economy as laws of physics cannot be applied on humans the same way as on particles.
          Particle is not learning like we do.
          I might learn that your Hamiltonian idea is great, while particle will never do the same :)

          Today’s economy is Keynesian where all problems are solved by more government debt.
          Austrian (Mises, Hayek) are for no debt and no bailing out.

        • bonbon

          I know Hayek’s approach. It reminds me of Newton’s “I do not make hypotheses”. The only problem with this is a hidden axiom, and there is one.
          Hayek basically said no science can ever deal with economics, for various reasons. Then he posed “spontaneous complexity”, which is straight from statistical mechanics i.e. physics. Newton posed “action at a distance” while writing to a student that it was absurd!
          The difference with us humans, and Hamilton fully understood, is intention. We are willful and this must be cultivated in a creative way. A credit system of banking intends progress for the common good, which Hamilton was involved with in the US Preamble.

          There is a science of intention and has been for quite a while.
          Mandeville being human did intend something with his economics – exactly what we see now, a chaotic breakdown, increase in entropy, disorder, and domination of a financial oligarchy.

          I intend to counter that as all humans should.

          • Realist

            You probably mean “spontaneous order”.
            You wrongly concluded that is to do with physics and Newton and wikipedia clearly states it means different in different spheres:

            Spontaneous order in economy is nothing to do with physics.

            For example Internet was not created by governments, as the result of the conscious overall planning of a corporate body, but through the interaction of a variety of differently motivated individuals and associations of individuals.

  31. Philip

    We are a nation of migrants. immigration and diaspora and history are evidence that Irsh people will not be back any time soon. The only way prices will go up is when our new emmigrants say so. Need to ask the opinion of our Nigerian, Polish, Romanian and British friends. If Irelands relative comfort improves, David could be on the money. Welcome to the networked world. We do not have to be from here to spend money here and we do not have to work here to spend money here and enjoy what truly is one of the beeter places to be on this planet.


    http://www.tv3.ie Vince Browne did a Cantona style tackle on the troika yearerday !

  33. redriversix

    Good Morning Slickmick

    Excellent questioning by Vincent Brown….First time a saw a German turn to a woman for solace and support ! he [Karl] cannot give a straight answer because its a scam,any scam put under the spotlight ducks for cover.

    Dept of finance has predicated growth this year to rise by 1.2% and according to Herr Noonan,emigration is a “lifestyle” choice.!

    So we are all wrong,its all grand.

    Jeeze,thank god for that , I thought we were all doomed.

    You know,renting a house is a perfectly fine option,save your money for something worthwhile………


    • grougho

      yeap its a scam either way, and the reason our politicans are hitting the issue is
      1) they are being blackmailed
      2) they are idiots

      vb on wed night had the not our debt campaign on and to listen to the gvts response is mind boggling

      its actually disappointing to try and hear an elected official voice the muddle that jan o sullivan was trying to do. its subservient and i am ashamed that this woman is there to represent us. i would not allow her in charge of feeding my cats.

    • molly66

      Good to see vb standing up to them that clown noonan does not live in the real world ,how do we the Irish people pick these clowns is it because they are good at telling pork pies.

    • Adam Byrne

      Thanks John,

      This video should be compulsory viewing for all secondary and indeed, third-level students.

      Great work David,


    • bonbon

      Excellent! And truthfull.

      When everyone can have any opinion truth is thrown out the door. Truth must stand up against all those opinions.

      The “free market” of Hayek, Friedman, Mises produced this bubble with pure irrationality.

      • Realist

        Today’s market is not free market.
        You are wrong.
        Today’s market is government owned, who is corrupted to big businesses, like banking sector who still works under fractional reserve/central banking system.
        Or IP laws, like patent laws where Microsoft and similar companies excell.
        These are all government inventions in the past, preserved and expanded with today’s governments.

        Free market means no government intervention, no bailing out, competition that brings cheaper and better products to all of us.
        Free market means no taxes, no public servants on top of private businesses.
        Free market means you and me will be able to decide directly by buying products what we want and what we do not want.

        Free market never wanted 50% of all welth to be spent on public that is overkill for the society, where politicans deciding what everybody’s needs are.

        • bonbon

          Free-market means no Glass-Steagall and that is so since 2000. Free-marketeer of course will always say we are not there yet, we need more not less! Hedge funds say we need more freedom, liberal finance!

          I heard exactly this from a communist – it was never applied fully or correctly, that’s why it went bankrupt!

          The 6 largest derivative banks own all governments, just by balance books alone. We are supposed to rescue these TooBigToFail cancerous monsters.
          I prefer to make it a lot less liberal for them.

          Just look at RT’s Max Keiser 239 on petroleum markets prices. The ex-chief of the IPex, Cook, this week did a very revealing expose on the so-called free market. There is none! There never was or will be. It is a smoke and mirrors show for finance.

          • Realist

            Not all free-marketeers are the same and this is why it hurst me when you put austrian economists into such mess.

            If bankers own the governments that means something is wrong with democratic system and governments too, is not it :)
            The same is with communist/socialist or fascist systems.

            All this is possible due to governments putting laws into existence allowing banks to do reckless business due to their beloved and friendly central banks.
            Who borrow money to governments ?
            How they get their bonuses ?

            Taxation system is not enough for reckless politicans in the last 100 years, so they picked on stealing through the inflation by borrowing freshly printed money and banks buying bonds.

            They need each other at the moment as if one side collapse the other will too.

        • bonbon

          The Gov’s are all free-marketeers, just look at Obama and Geithner, never mind FG/LP, Merkozy, the EU of NAFTA, globalization.
          So the free-market is owned by free-marketeers!
          Sounds like a cartel to me!

          • Realist

            And this is why austrian economists are for libertarian society without the governments.
            How you can talk about free market’s with all this taxation, VAT, VRT, bans, tarrifs and other stuff going on :)

            We are at the moment going into the different direction, socialism, more power to government and such and such.
            Democratic society is unstable as it either goes to socialism/communism/fashism as of now or to the free/libertarian society.

            This is why I cannot listen to talks about giving more power to the governments as they screwed it out in the first place.

  34. ‘The Straw’

    Time is approaching for us to look behind our backs for a change.

    Early public service retirement to 29th Feb 2012 ( leap year ) will cost the state 7,500 x lump sum values in once off payments alone and all tax free .Billions we cannot afford not alone the loss of front line experienced staff and this will contribute to the collapse of ‘utilities and basic standards’.

    Is this the last straw ?

    Is the camels back broken already ?

    Where will these monies go …if they are paid ?

    Will the government cause reason for a change of mind at this late stage? …Panic ?

    Why is opposition so WEAK now ?

    Why so many lump sums remain unpaid already for many who have retired last year ?

    Why is the silence so deafening ?

    Are these monies ‘sweeteners’ to make room at the top of public service so their replacements are taken up by Hans & Helga ?

    Does financial SS come to mind and ‘silly services’ ?

    Is Minister Michael Noonan :

    proxy politician
    sick man
    too old
    inglorious bastard
    poker player
    village school master
    spotted salmon

    Will the real Minister stand up?

  35. Deco

    Here is an interesting critique of the US Republican Party Presidential nomination…


    Newt Gingrich reminded us, as the debate began, that his capacity for pious baloney is unsurpassed. The man who did as much as anyone to savage Bill Clinton over his unseemly affairs proceeded to insist, as sanctimoniously as possible, that the media had no business prying into his indiscretions

    And we thought we had problems with Spoofer Gilmore, and Turncoat Varadkar….

    • redriversix


      I believe American election process no longer relevant as I now Believe that our own Government has no relevance now as Senior Civil Servants appear to have a lot more power than elected officials.

      The entire democratic process is falling apart or has done over the last several years.
      The purchase of governments by large corporations is now clearly evident and that is all that matters.

      We the people now count for nothing,there is clear evidence of this,
      not just in Ireland , but all over the World.

      There will be no change in this status quo until the people decide for real change and that is not possible at the moment due to the Fear Factor and Apathy.

      They are winning……….

    • bonbon

      Newt is pushing Hayek as the New American Civilization.
      Nothing new and nothing american about all this. Its pure feudalism from Hayek’s Road to Serfdom.

      • Realist

        Did you read that book ?
        It is capitalism as companies compete, strive or go bankrupt without government interventions.

        • Malcolm McClure

          Is it just me, or is anyone else finding this bonbon v realist pingpong becoming just a trifle boring?
          Hayek ———–Mandeville Love 15
          Gingrich———-Glass-Stegall 15 – 30
          Hamilton———–Friedman Deuce
          Fable of the Bees ——- :) Game, Set and Match

          All of which, of course has nothing whatsoever to do with David’s chosen topic this week.

          • Realist

            Good one Malcolm.
            Yes, it is pretty boring as I am more for telling arguments than names.
            E.g. how come all booms are starting, why banking is fraudulent, how to fix it and so on.
            And too many names I never heard or know what they did about :)

          • bonbon

            When doctors argue about the patient, it has nothing to do with the disease, rather the cure. If cure is OT, the patient will die.

  36. franta

    This would be a great analysis in the case of Irish economy being normal. But Irish economy is too far from being normal. When vast amount of every Euro circulating in public sector has to be borrowed, when vested interests of professional classes and rip off culture are being protected in all cost, when every step made by this government makes things worse etc. and that’s why this article and whole discussion about it is premature.
    I have to admit I am surprised that David would publish such forecast when majority of establishment is still in denial about anything being wrong so not that only no real solution was implemented yet but they still do not understand what’s going on.
    The way it is going now I can’t see any recovery of property market in 18 months but rather a total collapse of economy with a total collapse of many services provided by public sector unless… (Wait a minute did not I hear somebody talking about a second bailout? What would be the price to get it?)

  37. DH

    I’d like to buy the house I live in:

    I’m paying €1100 rent in a house currently worth about €300K… In six months I will have payed €6600 rent and the house could easilly drop in value by €20,000 as it has done for years.

    This is the logic that has soothed my soul since the start of the bust and will continue until my montly rent is more expensive than the montly drop in the value of the house.

    I wont buy until I know this shift has occured through natural attrition. (and not as a result of some crazy scheme)

  38. lff12

    There is one small difference, David, and that is demographics. In Japan you have a severely ageing population, whereas in Ireland we are one of the few places where the population replacement rate has remained steady. Emigration may change that, but right now we are not shrinking.

    What is scary is that when real population falls start to occur due to ageing, property prices will probably collapse in even in-demand economies as new household formation will eventually start to fall.

    You cannot get any smaller than 1 person per home.

  39. [...] market started showing signs of life. Two years ago, in January 2012, this column suggested here that Irish house prices would stop falling in 2012 and begin to start rising in [...]

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  41. [...] Expect house prices to hit the bottom next … – I see a few problems ahead which may mitigate against reaching a housing bottom next year,the huge oversupply of inventory,the possible dumping on to the … [...]

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