Be it Dan McLoughlin, Pat McArdle or any other opinion maker one must read between the lines of any comments from employees of financial institutions.
From what I can see there are two markets out there for the new / nearly new (i.e. less than 5 years built) housing schemes.
Outside of the cities, supply greatly exceeds demand and up to
recently house prices were kept up by the combination of mortgage
lenders vieing with each other to lend and this together with builders
and estate agents spinning the line that the graph for house prices was
going only one way and that was up.
All has changed, and changed radically, buyers aware of the new and
true realities have left the market, some for the short term but many
for potentially a number of years for they will not now be under the
pressure that ‘buy now or you will not be able to buy in 5 years time’
Builders of many small schemes with units unsold are now
bleeding to death, as the banks are cutting overdrafts to stem
exposure, this combined with the dramatic fall in sales on the one
hand and suppliers demaning payments the small town builders all
over the county are also experiencing the new realities.
The CSO figures last Summer calculated that 13% of the housing
stock was lying idle, add to this that the majority of the units built
since then remain unsold the senario is that wheither builders drop
prices voluntary or are forced to by their bankers or alternatively the
the liquidator is called in and does the necessary, prices are going
to experience a steeper fall in many areas than what Pat McArdle
says and this time next year the results for 2008 will bear this out.
This is the reality unless Dan and Pat and those others who reside
in the ivory towers of Bank headquarters have a new theory that
disproves the iron law of supply and demand.