Friday 18 January 2019

Future Shock - Property Crash - the reaction

Clíodhna O'Donoghue

RTÉ's Future Shock was very much a shock tactics programme and many within the property and construction industry have already labelled it irresponsible, partly inaccurate and wholly sensationalist while lacking sufficient balance - elements that call into question its credibility and authority.

According to one non-property observer it was: "like showing the film Jaws to a bunch of five-year-olds and then telling them that sharks bite". Richard Curran frequently stated the obvious, using foreboding music and menacing chanting as background accompaniment. The concluding segment on what might happen over the next few years was narrated in the present tense to make it sound even more threatening.

The broad consensus amongst the economists used on the programme was that the outlook for both domestic and international economies is positive.

However, the lack of balance used by the programme editors means that Alan Aherne, who was negative, was given a lot more airtime than say Pat McArdle or John FitzGerald. Was this because the views of the latter two authorities did not coincide with the main thrust of the programme's title?

John FitzGerald (ESRI economist) stated that if he believed there was a crash coming that he would sell his house and rent it back. Tellingly he is not doing so because he believes, as I do, that if (and that is a big 'if') the market is going to crash it will do so in a patchy, selective way which will not impact to any great degree on many of the existing homes in Ireland.

The programme breathlessly informed us of the fall off in international companies moving to Ireland. But, just a week ago one office market report outlined the increase in international company relocation to Ireland, particularly Dublin. This saw a strong reduction in our office vacancy levels.

It also, regrettably, has caused distress to many recent purchasers and has also put off many young buyers who were intending to purchase their first home in the near future. Even if only a few people took it at face value, the programme still did much damage to market confidence which the presenter himself acknowledged as vital for the market's health.

Everyone knows that property growth has stalled in many areas, in some cases home prices reduced and a relatively small number of new home developers are offering huge incentives.

This has been heralded for over a year and, because it is important that aspiring buyers are well informed about the marketplace, this has been regularly documented and highlighted by the media, including this publication.

However nothing was as dramatic as the programme claimed.

If the intention of the programme makers was to create crash fears, then it was successful.

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