Thursday 27 October 2016

Editorial: Property market has a boom-time feel about it

Published 03/04/2014 | 02:30

Are we seeing another housing bubble?
Are we seeing another housing bubble?

As house prices rise at quite a dramatic pace and supply falls alarmingly, in Dublin at least, we are back in what is known in the property world as a sellers' market, a market that has a distinctive 'boom-time' feel about it. Nor does the property tax, which was seen as something of a cure for 'property porn', seem to have in any way dampened the Irish enthusiasm for buying and selling houses.

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Just when you thought the timing was most unsuitable, along comes Bank of Ireland with an incentive for property buyers. The bank is now offering to pay the stamp duty for first-time buyers taking out a new mortgage. While this will no doubt be welcomed by intending first-time buyers – those who are lucky to be able to find a property at an affordable price – it is a trend that is worrying those who look back in anger at the heated state of the market that led directly to the property/banking collapse and left Ireland in the paws of the Troika.

It is also likely that, in the competitive world of banking, the BoI incentive scheme will be followed by others in the mortgage market, again something that will be welcomed by consumers and property sellers, but should certainly send a shiver down the collective spines of the Central Bank and the Financial Regulator.

Of course this country needs a functioning property sector. It is a huge source of employment. Our Taoiseach, perhaps hoping to continue the welcome trend of a downward fall in unemployment, has said that the greater Dublin area could do with 30,000 new houses and that developers would have no trouble selling them. But this does not seem like the market we really want. It appears to have hysteria rather than moderation written all over it.

Already there is talk of asking prices rising by €5,000 a month, of people being gazumped and houses that they had agreed to buy appearing back on the market at a higher price.

It seems that a property boom that was so memorable we collectively decided it could "never happen again" is edging ever closer. While we have all had enough of talking shops, now might be the right time for someone in Government to convene an expert panel, made up of those in the property business, the banks and regulatory area, to assess and discuss exactly what is happening in the property market so that some order might be brought to the situation.


Like pubs and churches, our railways are something we cherish, but don't seem to use very much any more. People who pack into weekend trains to and from Cork, Galway, Sligo, Dublin and other destinations might disagree as they chug along in standing-room-only trains. But despite huge investment in the rail service, numbers using Irish Rail are continuing to decline. Now Leo Varadkar, our straight-talking Transport Minister, is proposing that if Irish Rail does not improve its performance, he may cut its Public Service Obligation subvention and give it to other transport services.

Irish Rail clearly has difficult staff issues, from over-manning in some areas, lack of investment in modern technology and outdated work practices. These are of little concern to travellers, but management and unions might do well to heed the minister about the gravity of the situation.

What we now need is a reliable, efficient and fast rail service. Where investment is needed in new technology it must be made and there is no room for "cost-cutting" measures.

There have been many improvements in the railways and it would be short-sighted for the management or workers in Irish Rail or the Transport Minister to jeopardise those gains.

Mr Varadkar says that a belief that the Government "will protect and fund existing rail service" is no longer "realistic". But it is realistic for the travelling public to expect a first-class rail service and they are not much concerned who provides it.

Living, as we are, in the world of deregulation, the question must be asked, if Irish Rail cannot provide a reliable service, maybe somebody else can?

Irish Independent

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