This feature in today’s Irish Times (see below) tells us something very important: the lunatic spiral in house prices which brought us first the Celtic Tiger and then the great banking collapse and recession cum austerity shows distinct signs of a comeback.
How else to explain the fact that in today’s Irish market you can buy for what you pay for a modest bungalow (ranch house in America) in Clonskeagh, an unexceptional suburb of south-west Dublin whose postal code, Dublin 14, tells you all you need to know, a chateau in France with six cottages and 180 acres of land, a period villa on Italy’s Adriatic coast, an eight bedroom villa on the Greek island of Corfu, complete with its own swimming pool and views of the Mediterranean or a four bedroom villa in Portugal, also with a swimming pool, a large one by the look of it.
Which one of these would you want to live in, or rather which one would you least like to live in. Silly question!
The point though is this: I seriously doubt that the Irish economy has recovered from ’08 so thoroughly that consumers there can afford to buy such an over-priced bungalow on what one might call ‘normal’ terms. e.g ten per cent down and evidence of an income healthy enough to support the interest on a loan of €800,000 ($900k).
My suspicion is that Ireland’s well-fed and pampered banks are back in the business of lending to anyone able to stay vertical long enough to shake hands on a deal while the government is content to turn a blind eye, not least because in rising housing prices the voters (who go to the polls on February 26th) may be hoodwinked into seeing a recovering economy.
If so, they won’t be the only ones hawking a mirage. The Irish Times publishes this little feature without comment and the casual reader is as likely left with the impression that Ireland’s paper of record is a little bit chuffed with this piece of good news.
And why not? The Irish Times made an absolute fortune from housing ads during the Celtic Tiger years – it was the paper of choice especially for ads catering to the super-rich – and the suspicion lurks that the paper’s hyping of the Irish housing market in those days played no small role in creating and sustaining the bubble that very nearly brought the country to its knees.
But true to an old Irish tradition, we don’t talk about such things, least of all in our media.