I have seen some wild predictions, but nothing to compare with this one in the Irish Times. Morgan Kelly, a University College Dublin economist, reckons prices could fall by up to 80 percent. "Construction, but not demolition, of residential and commercial property will fall to zero for the foreseeable future," he said.
The casual observer might dismiss this kind of prediction as scare-mongering from a publicity seeking academic. Unfortunately, there is one killer fact about Ireland that makes the prediction credible - the country has something like a quarter of a million empty holiday homes. These houses are probably worthless.
80 percent? Could be; maybe; anything is possible.
HOUSING MARKET: IRELAND WILL see more demolition than construction of houses over the next decade, as the economy struggles to recover from the collapse of the housing market and the emergence of “zombie” banks, UCD economist Morgan Kelly told the conference. In a presentation that drew several collective intakes of breath, Mr Kelly predicted that house prices would fall by 80 per cent from peak to trough in real terms. Recovery will be slow: “It has taken us 10 years to get into this situation – it will in all likelihood take us 10 years to get out of it.”
3 comments:
Briliant.
"the country has something like a quarter of a million empty holiday homes. These houses are probably worthless." Couldn't we bung our Asylum Seekers into them?
Ah well, our property market has yet to notice, as per this attractive listing, but a snip at EUR 6.75 mm:
http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=ct1&s[a_id]=pc4&s[mnp]=&s[mxp]=&s[bd_no]=&s[search_type]=sale&s[furn]=&s[refreshmap]=1&s[sort_by]=price&s[sort_type]=d&limit=10&search_type=sale&id=389528
But RTE Radio has taken to playing numbers such as this below, (lyrics only), from Mary Poppins. The more "self-amortizing canals", the better!
If you invest your tuppence
Wisely in the bank
Safe and sound
Soon that tuppence,
Safely invested in the bank,
Will compound
And you'll achieve that sense of conquest
As your affluence expands
In the hands of the directors
Who invest as propriety demands
You see, Michael, you'll be part of
Railways through Africa
Dams across the Nile
Fleets of ocean greyhounds
Majestic, self-amortizing canals
Plantations of ripening tea
All from tuppence, prudently
Fruitfully, frugally invested
In the, to be specific,
In the Dawes, Tomes
Mousely, Grubbs
Fidelity Fiduciary Bank!
Now, Michael,
When you deposit tuppence in a bank account
Soon you'll see
That it blooms into credit of a generous amount
Semiannually
And you'll achieve that sense of stature
As your influence expands
To the high financial strata
That established credit now commands
You can purchase first and second trust deeds
Think of the foreclosures!
Bonds! Chattels! Dividends! Shares!
Bankruptcies! Debtor sales!
Opportunities!
All manner of private enterprise!
Shipyards! The mercantile!
Collieries! Tanneries!
Incorporations! Amalgamations! Banks!
You see, Michael
Tuppence, patiently, cautiously trustingly invested
In the, to be specific,
In the Dawes, Tomes
Mousely, Grubbs
Fidelity Fiduciary Bank!
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