IT: Fall in house prices second-highest in EU

Story from The Irish Times, 15th February 2013



Blue Horseshoe

How is “recovery” defined by these bods?
Our “similar recovery” will not be a return to price or production levels of the bubblier times - that’s for sure!

Hmmm, I wonder why ? …

Unfortunately a sizeable group, possibly even a majority of people in Ireland still believe that property prices in the country will within the short to medium term, return to the levels seen during the bubble years. This will quite simply just not happen. They are yet to understand, or if they do understand then are yet to accept this very simple economic truth; that what was experience by the market during that period was an aberration. It did not represent a fundamental change in the intrinsic of value of property in the country … it was a blip, a mistake, an error in the system driven not by fundamentals but rather fuelled by cheap credit and mania; in short a bubble.

The market is currently correcting (not crashing, but most definitely correcting back down towards normal price levels) from the abnormally high prices that were experience during the bubble years. That’s ultimately what markets do.

As has been pointed out on this board before; the recovery in the Irish property market will not be marked by some stellar or even moderately robust price increases it will be marked by a return to a an annual number of property transactions that is in line with the historical norms of the market (corrected for population). Quite apart from the current problems inherent with and imposed upon the Irish property market all of which are preventing this from happening, the macro economic malaise in both Ireland and our trading partners creates further resistance to a return to normal transaction levels any time soon. IMHO, anyone who believe otherwise is, yet again, ignoring the facts and hoping for a new bubble.

Blue Horseshoe

The headline the biased IT chose:
Fall in house prices second-highest in EU

The headline they would have chosen if they didn’t have a long property bias:
Fall in house prices second-highest in EU in 2012
Fall in house prices highest in EU

Yet? Why not simply “Irish prices have not staged a similar recovery”? What’s with their constant predictions of higher prices?

The paper of record…