Wednesday 13 December 2017

Agent View: The outlook? It all depends on who you are

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Pat Davitt

Musing on the current state of the property market this week I was reminded of Oscar Wilde's famous words in Lady Windermere's Fan: "We are all in the gutter, but some of us are looking at the stars." Except it's not that simple.

How you view the current housing 'crisis' depends on your role in housing. If you're a regulator you will view it, understandably, from that of wanting to prevent a future housing bubble. In researching inputs you may well observe as Lars Frisell, advisor to the Central Bank Governor, did recently: "In fact, even those who do not yet own a property often prefer a steeply rising market, as it feels safer to buy in the conviction that prices will continue to rise."

If you're an auctioneer, on the other hand, you will understand that psychological analysis very well. Though valid at times it's hardly apparent in the Irish market of 2016. Since 2007 prospective buyers are, on the contrary, seriously apprehensive that they could expose themselves to the same catastrophic drop in property values as their parents and siblings experienced in the crash. That is a very prevalent sentiment informing today's market. Fear and uncertainty continues to stalk large swathes of the market.

Apart from regulators and auctioneers, politicians and civil servants play a very powerful role in the property market. The prolonging and deepening of the housing crisis is attributable in fair measure to an administrative and political system where the focus on the issues comes from a perspective of individual departmental or ministerial responsibility, not in any cohesive whole-of-government way.

The Institute of Professional Auctioneers and Valuers (IPAV) has long called for a senior Ministry for Housing. Acting Taoiseach Enda Kenny has recently accepted the need for this.

That alone will not solve the many issues afflicting the market and making it so dysfunctional. Such a minister will need the full backing of a cabinet sub committee that will bring together the disparate parts of the civil and public service with varying responsibilities for elements of the property market. It will need to consult to gain the knowledge and input of all players in the industry, including property professionals and academics. A tight timeframe will be needed for a plan of action to arrest the continuing slide in the availability of suitable properties to meet the immediate needs of society, let alone our future needs.

Pat Davitt is CEO of the Institute of Professional Auctioneers and Valuers (IPAV)

Sunday Independent

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