Home sweet home: The rules of property bubble 2.0
As prices around the country soar once more, Pat Fitzpatrick tells you everything you need to know about our latest spin on the property roller coaster. With advice on how the baked-bread effect never fooled anyone, how to spot a cash buyer and how to make reassure yourself that it's going to be different this time. Not that this is a bubble. Really
Repeat after Me
First things first. We're all in this together. If we're going to inflate this baby back up to boom prices, it's vital that everyone stays on message. And here is that message: This is not a bubble. Practise this mantra at home until you are sure you can get through it without wetting your pants from the laughing. That might take a while.
The Taoiseach has taken the lead on this matter, coming out in late July and declaring with some certainty that we are not looking at a bubble in the Dublin property market. Don't dwell on the fact that Enda isn't qualified to spot an asset bubble. He has advisers on very high salaries to analyse these things on his behalf. Neither should you dwell on the fact that highly paid advisers failed to spot the last bubble. Actually, you're better off not thinking about it at all. Just repeat the mantra and you'll be fine.
There is a strong likelihood that you will be approached by agitated foreigners asking for your opinion on the property market. There is a strong likelihood they are from the Troika. We hear they are back in town to investigate wild rumours that we are gone mad for the property again. So don't say, "A house on my road just sold for eighty grand over the asking price and now I want to buy a Range Rover." That just drives them nuts.
There is some useful bullshit you can use when talking to agitated-looking foreigners. Such as, "It's just a temporary shortage in the Dublin market," and, "How could it be a bubble if the banks aren't lending?" If the foreigners are French or Italian, you should also compliment them on their clothes. If the foreigners keep probing, try and blame the whole thing on Chinese investors. Unless they are in fact from China. In that case you should definitely try and sell them your house. We hear they're loaded.
How to Sell Your House
There was no shortage of crazy house-selling tips during the last boom. The daftest one was fill your house with the smell of freshly baked bread when it is being shown to potential buyers. This was based on the notion that, deep down, most Irish people would like to live in a bakery.
Filling your house with the smell of freshly baked bread is just another way of saying, "I'm finally getting some use out of that shagging bread maker I bought in Aldi." The best way to make your house attractive to buyers depends on where you live. Here is what you need to do if you live in Dublin: Nothing. People are so panicked at this stage that they would buy a place with a chalk body-outline at the front door. Sure look, it was probably just someone killed in the stampede when the house went on sale.
Outside the capital, it's just a matter of waiting for the non-bubble wave of optimism to reach your area. In the meantime you will attract hordes of people who have nothing better to do at the weekend than nose around your house. That's the problem with not living near an Ikea - culchies have limited options when it starts to rain.
The usual rules apply. Don't bother painting. First-time buyers always bring their mothers with them. And Mammy always says, "They must have something to hide," at the slightest whiff of paint.
You never know who will nose around your house. So makes sure to leave a note at the top of your knicker drawer saying, "Get away out of that, you dirty pervert." Unless things aren't going well in your marriage. In that case, just leave a note with your phone number. I'll give you something to do on a wet weekend, says you.
Myhome? You must be Daft
People take it for granted you need to advertise your house on one of the two main property websites. That is so last bubble. (Not that this is a bubble. We can't stress that enough.)
This not-a-bubble will be driven by new apps and smartphones. You can be pretty sure that some brainbox seven-year-old is already writing an app that will notify people instantly when a house goes up for sale nearby. It will be a dating app like Tinder. You'll still be trying to meet someone so you can screw them. The difference here is that you will be trying to screw them out of a fortune.
The app will probably be called Bubblr. That way the hipsters can use it ironically, which is the only way they can cope with using anything. It will be ideal for people trading up, who want to flog their house quickly and buy that place in Dundrum before some eejit with a trust fund pushes up the price by 50 grand. The seven-year-old brainbox will of course design the app so that the buyer and seller can exchange contracts by just waving their smartphones at each other. The app will make him a billionaire and wreck the lives of millions of people who currently earn a crust selling property. 21st-Century capitalism, baby, you gotta love it.
Of course there is another low-tech approach to selling a house, particularly if it is in Dublin. 1: Wait for someone on your street to put their house up for sale. 2: Watch the queues snake past your house. 3: Walk out of your house with a megaphone and tell them that your house is for sale. 4: Sold.
At some point in the next year most of us will blurt out the following sentence. "I've been thinking, and I reckon there has never been a better time to buy a holiday home in Ireland." The one thing you haven't been doing is thinking. A short moment of reflection is all it takes to conclude that your idea is insane. Or maybe a quick look back at your holiday photos from that fortnight in Kerry in 2012. At least no one could see you sobbing in the rain.
It probably still won't undermine your plan to buy a holiday home. The last two summers of mild sunstroke have seen to that. The Irish brain is programmed to forget two things: property disasters and miserable summers. Hence the renewed demand for holiday homes.
The question now is where to buy. People didn't just move daft distances from Dublin during the last boom; they also bought holiday homes in places that might best be described as 'you must be kidding me'. It's one thing to buy a cottage on the Beara Peninsula. It's another to convince yourself you want to spend every summer for the rest of your life in a duplex outside Roscrea.
Here's the deal. Ireland has a coastline of almost 1500km. There's no need to spend two weeks every summer next to a freezing lake in the midlands, being eaten alive by a band of furious midges. Buy a place near the coast. Somewhere nice, within driving distance of a beach. That way you can sit in the car in the pissing rain and argue with each other over why anyone would buy a holiday home in Ireland. Forgetfulness, that's why. Sure we'd be lost without it. By the way, the next time someone mentions our folk memory of the Famine, tell them to cop themselves on. The Irish folk memory can hardly remember what we did last week.
The International Dimension
Sometime in the next five years there will be no more property available to buy here in Ireland. By then, someone in government might even have released this statement: "We checked the figures there again; we forgot to carry the one. It turns out this is a bubble alright. A right big hoor of a one at that." Not that anyone will notice. We'll be all-in at that stage. This kind of frenzy resulted in Paddy and friends buying up large chunks of Bulgaria the last time around. Paddy later found he had a lot in common with the locals. A lot of them don't like living in Bulgaria either.
So where should we buy this time out? London is out. Their property bubble is so big that you almost can see it from the top of the Wicklow Mountains. Of course you could always try somewhere like Manchester. The danger there is you could end up with a place in Manchester. Jaysus. Google Maps is your friend if you are looking for somewhere nice on the Med. Zoom right in to Street View. See that tattooed guy in the cut-off Celtic jersey carrying two overflowing bags of Der CheapenLager up from Lidl? He's your new neighbour. So try somewhere else.
One thing is clear. We need to show a bit more savvy this time round. European property sellers clearly jacked up their prices when they spotted us arriving in droves during the Celtic Tiger. So this time, let's try and sneak in under the radar. That's tricky because nothing is harder to conceal than a group of Irish people in an airport. Sunburn and sheepishness. You'd recognise us anywhere.
Room to Improve
Not everyone gets to ride this latest property roller coaster. Spare a thought for those in negative equity. They get to sit this one out. Lucky them you might say, if you weren't too busy applying for a mortgage to snap up a ghost estate in Roscommon.
A lot of negative equiteers will transfer their property lust into an extension. This adds value to your house in pretty much same the way that a new car keeps its value when you drive it off the forecourt. Anyway, expect a lot of blatant bullshit in credit unions up and down the country - "So Mr O'Mahoney, I see here that you would like 25 grand to buy something nice for your mother-in-law."
This extension boom still has legs. RTE should meet this demand with nightly episodes of Room To Improve. They could put it in the Nationwide slot, keeping Mary Kennedy on as a roving MC. We join her walking along under a tree somewhere saying, "Dermot went to meet a nice couple in Cashel, who ended up with a glass box in their back garden whether they wanted it or not."
This boom is good news for architects. (They could do with it.) Having someone you can refer to as "your architect" is a must these days for the social-climbing classes. They're right up there with mindfulness consultants, but a lot less expensive. This fantastic value won't last now that they are back in demand. So make sure to hire one quickly while they are still a bit hungry. And remember this. The glass box they design will never go out of fashion. And you'll never again go out of the house - you'll be stuck in every weekend washing two square miles of glass.
Property is the worst kind of investment in the world. Except for all the other ones. If you doubt this then start putting money into a private pension. The projected annual income for your retirement is more disappointing than a son who got the points for medicine but decided to become a social worker instead. (The little prick.) Or else you could become a day trader and play the stock market. That involves following a tipster on Twitter called @WhisperingJoe and watching Bloomberg TV, where men roar their opinions at each other in a way that suggests they have unusually small genitals. It also involves losing all your money. First slowly and then very, very quickly.
Here's our advice. Cash in all your investments and buy an apartment in Dublin. It is now clear that every hipster in the world is moving to the capital, carrying all their belongings in a battered leather suitcase from the 1950s. They will need an apartment each, because hipsters are allergic to sharing. They need the headspace to figure out if wearing two hats at the same time is ironic or just plain stupid. They certainly don't want to live in a house. Imagine if someone saw them cutting the grass. That kind of suburban carry-on is kryptonite for your hipster.
A word of warning. Property investment is still considered a form of witchcraft in Ireland. It might have something to do with our difficult relationship down the years with absentee landlords. Or because we hate anyone with a few bob. Answer two looks the more likely lad there. Anyway, the upshot is that investors are the first against the wall if things turn south. Just look at the way the banks enjoy shafting buy-to-let investors with eye-popping interest rates.
The trick here is to pretend that an investment property is actually a primary residence for you, or one of your many fictitious wives. Don't worry, half the country is at it these days so they can hold on to their trackers.
How Far Will You Go?
The big question in this latest non-bubble is how far the Dublin commuter belt will stretch. It got ridiculous by the end of the last boom. Of course, the capital's catchment area shrunk a bit after the crash. People got sick of the daily commute from the Azores.
Property prices are starting to push people out of the capital again. This is forcing Dublin families to face up to some of life's toughest questions. How long is too long in the car? Is it worth it for a slight improvement in my quality of life? What's the point of Offaly?
As we know, it isn't just lower prices that attract young families down the motorway corridors. It is also those precious extra hours away from their screaming kids. That guy at work who is always on about how guilty he feels about not seeing the kids in the evening? He's guilty because he's enjoying it so much. Better still are the long drives back to Dublin at the weekend so the kids can see their grandparents. Tie up your kids anywhere else and the cops will be all over you before you can say, "There should be a law against toddlers". Tie them into a car seat and you can keep going until the batteries run out on the portable DVD player. Everyone's a winner there.
There is one question that keeps Dubs awake at night: Will I still love my kids if they have a Monaghan accent? It can be a shock when your five-year-old suddenly starts calling you 'horse'. This could drive some families south, all the way down the M8 to the outskirts of Cork. The question then becomes will I still love my kids if I can't understand a word they are saying? Yes, particularly if they are teenagers.
The New Cromwell
Times change. About five years ago, the most despicable bastard in the Irish property ecosystem was someone with a tracker mortgage. There they were coasting along at one per cent above the ECB rate, while bankers used actual shovels to shovel actual shite on people with standard variable mortgages.
There is a new despicable bastard on the scene. They are known as the cash buyer. They are the modern absentee landlord, preventing young couples from getting on the property ladder with their evil cash. You may well be one of these yourself. Obviously you can't admit to being a cash buyer - you might as well walk down the Falls Road wearing a T-shirt that says "I Love Oliver Cromwell". So here is how you should pretend you got a mortgage from the bank.
The first thing is to make sure you name a bank that is still active in the Irish marketplace. That's tricky, given that about 40,000 banks have limped out of the Irish market, muttering darkly about the dangers of getting involved with a nation of gambling addicts. (Don't worry, they'll be back any day now.) Don't hold back when you're describing the mortgage application process.
We've been led to believe the banks are stricter now, so we can pretend it's not a bubble. So say something like, "They did such a thorough examination of our circumstances that at one stage I thought your man was going to put on a pair of rubber gloves." People find rubber gloves very persuasive.
Finally, if you are telling someone about your mortgage application, they will probably ask what income multiplier the bank used. That's just a sly way of trying to figure out what you earn. Not that earnings matter to a fat-cat cash buyer like yourself. You bastard.
Gentrification me Arse
Here's the problem with Location, Location, Location. (Other than Kirstie's mad-looking hair.) Irish people watch the show in the hope of getting some insights about our own property market. They draw the wrong conclusion when an awkward hipster couple joins a load of other awkward hipster couples in an area of London formerly known as the Old Slaughterhouse and Whoring District. That's fine in London, where new areas get gentrified all the time.
It doesn't work over here. Stoneybatter was the only place in the country to get gentrified in the whole of the last boom; and that was only because some Dubs saw a chance to pawn off their tiny houses on some wannabe culchie hipsters fresh off the train at Heuston Station. Outside of that, middle-Ireland tended to stay in middle-class areas. Why? Well, why does anything happen in middle-Ireland? Because of Mammy.
You see Mammy didn't put you through college so you could move into an area where people say things like, "I do be frozen." How is she supposed to show her face in the bridge club when it emerges that her eldest son now lives on a road named after someone who died for Ireland in 1916? (It doesn't get more working class that that.) This wouldn't matter if said son could get a mortgage and let Mammy rot in bridge-club hell. Unfortunately he needs 50 grand off her so he can compete with those bastards, the cash buyers. So there goes any chance of that terraced house on Sean Mac Brits Out Road.
Of course Daddy might surprise everyone and give you the cash. But the last time he was allowed to make a decision was back in 1974. And he made a balls of that by all accounts.