‘Controlling what is Within our Control’

You might have spotted property columnist Paul McNeive’s piece in the Independent earlier this week in which he outlined “an extraordinary series of events [that] have combined to transform our property markets, and are changing the supply of residential and commercial units. In particular, the operation of the residential development market has changed completely in five years or so, with implications for Irish society, and for estate agents.” That’s a big, bold assertion, however, he is absolutely correct. So many factors have combined – or collided – to cause a ripple of transformation across Ireland’s planning, construction and property industries over the past decade that it is difficult to attribute cause, or to distinguish between the real cause and effects in many instances. We know that the recession wiped out a whole segment of the buyer/investor market on a grand scale, but we still don’t have a good handle on who or what has replaced them. The market tells us that they have been replaced but the rest is quite anecdotal, as is our knowledge of the true origins of those funds. Are they emanating from the US, Asia or the Middle East?

The column quotes an interesting figure, that is, a quarter of Irish households are now in the private rented sector, or PRS (one-third are in some form of rental accommodation). It is blatantly obvious that this particular trend is accelerating globally and Ireland is not immune “There has been half a dozen sales of entire large schemes to institutions/funds in the past 12 months and more are on the market”.
In truth, when it comes to FDI, construction materials, labour or investment funds, we still don’t know exactly how Brexit will impact this.

Closer to home, influential factors include erratic supply, seemingly consistent demand, an improving credit environment with fluctuating consumer and market confidence. This is certainly not the paint-by-numbers market operators are most comfortable with. Can we really be comfortable with rising property prices if we do not fully understand why they are continuing to rise? Similarly, can we accept stagnation or a lull if we do not know what forces lie beneath, waiting to surface and dictate the next wave?

In the column mentioned above, the writer notes that “young Irish people have taken to the European model of long-term renting, and remain nervous about the traditional rush to buy a house and get on the ladder”. Certainly, this type of rhetoric has entered the Irish housing conversation, however, we are not convinced that international trends are the ‘cause’ and changing attitudes are the ‘effect’. It feels much more likely, upon speaking to the younger generation, that chaos, uncertainty and straightforward unaffordability are the real causes and people becoming accustomed to not being able to buy a property is merely a symptom.  Whether or not, in time, this particular symptom becomes an effect is anyone’s guess. We would be interested to hear your views on this.

Ian Lawlor
086 3625482

Director / Business Development
Lotus Investment Group