"The great property debate" SB Post

Did anyone read this yet? Its not up online yet but the “Soft landing” article by Pat McArdle" is basically 3/4 attacking the other view as not taking Ireland’s “special situation” into account and 1/4 arguging that we have 2 salaries buying instead of one. The 1/4 argument can explain a doubling in house prices, how can he explain the 300% odd growth we have had?

It really was a pathetic exercise in FUD (Fear, Uncertainty, Doubt)

The “We are all doomed” article by “Morgan Kelly” in UCD was much better researched and only once or twice commented on the people making the oposite claim.

I think this pair of articles showed just how unfounced the current house prices are as the Chief Economist of one of the countries largest banks had to resort to attacking the other side rather than figing any proof for his own. I hope anyone reading these will be struck by the lack of proof or precident given by Pat.

The great property debate - Perfect Storm (Morgan Kelly) vs Soft Landing (Pat McArdle)
sbpost.ie/post/pages/p/story … qqqx=1.asp

On the Likely Extent of Falls in Irish House Prices.
Morgan Kelly
ucd.ie/economics/staff/mkell … ousing.pdf [adobe acrobat required]

I think this point is often disregarded by most commentators!

Whilst I agree with Kelly re at least a 50% fall, etc, I don’t agree that McArdle’s argument is as flacid as you say.

Is this the same Ulster Bank that’s willing to lend money to people in the North to buy houses that have risen in price by 50%+ in many(most) areas in just one year. I guess net rental yields less than half the base rate and agricultural land values three times those in England makes the Ulster Banks prospective of overvaluation ahem…different.

Interest rates will have risen by 100% by the next time the Boys from Berlin apply their Teutonic thinking to matters monetary. And when your countrymen and women are the most indebted in the world (by all accounts )the impact of even quarter percent rises in the cost of borrowing and borrowed money is amplified to deafening.

We do have full employment but there’s employment and there’s employment. Low productivity service sector Breakfast Roll jobs and bench-marked civil servants are the areas where the jobs are on offer. The most productive sector manufacturing is contracting and the end of the spendthrift debt era will deal a blow to retail, leisure, construction and swathes of financial services.

The true extent of the oversupply of housing in Ireland will only become apparent once the boom ends and the economic migrants start to leave. We do know that approximately 15% of the housing stock is empty. That figure may shoot up to above 20% once the slowdown becomes established. In the UK the number of empty homes is 3% of the housing stock yet the bank ABN Ambro still reckon that UK house prices may be overvalued by up to 50%. Average UK prices are lower than average Irish prices incidentally. (check out the rational and reasoning in the ABN report its a must read forum.globalhousepricecrash.com/index.php?act=attach&type=post&id=1171 )

Events dear boy. Its obvious that Mc Ardle is unhappy with coverage of ‘events’. Events should be covered in a certain way it seems, so that one side of the story is put forward. That ladies and gents is the substantive point made by this banker. Make no mistake, he wants a little more in the way of news management. Knowledge is power.

**Property debate grows over fear of fall in prices **

thepost.ie/post/pages/p/stor … qqqx=1.asp

Aye, I thought The YES article summed things up quote well while the Ulster Bank article (NO) spent too much time attacking the analytical methods of predicting a crash.

As regards the “we’re at full employment” bit, outside of Dublin, Cork and maybe a few other places the local economy is nearly completly dependent on construction. For example in Carlow (where I am), there are very few manufacturing or service industries. There are however a plethora of estate agents, mortgage brokers, architects, surveyors, electricians, plumbers, tile and bethroom showrooms, etc. etc. And thats excluding the builders themselves.