Marc Coleman: Property tilting closer to recovery, but could tip back
On the cusp of a bailout, fact-based confidence is going to be crucial at this time, writes Marc Coleman
Some of the nicest events in life are unexpected. There we were on Thursday in a kerfuffle over having to pay the property tax next year when that nice Mario Draghi decided to ease our mind by paying for it himself. For at around €35 per month on a €250,000 mortgage – or around €420 a year – Thursday's surprise rate cut means that for the average punter next year's property tax is effectively on the ECB. And if this economist is right, Mr Draghi may do us an even larger favour around this time next year.
Having hung in the balance, our property market is tilting closer to the tipping point of recovery. But it could tilt back. Last week the ECB rate cut was a gust of wind in the right direction. So was a change of heart by an up-to-now pessimistic source of comment on the Irish economy. Until now Moody's rating agency has been true to its name as far as our economy goes. In June it told us property prices would fall by 20 per cent. At the time this column disagreed – and since then prices are up 4 per cent nationally.
In July Moody's warned that a deterioration in the economic outlook could threaten our credit ratings. Now there is a saying that bad news has travelled twice around the world before good news has got its boots on. In the sensitive time of 2010 hastily formed opinions travelled rapidly around the world with a devastating impact on confidence in our economy.