Most of the news reporting on the Irish Auctioneers and Valuers Institute (IAVI) Annual Conference two weeks ago focused on the role of NAMA and impact of the economic crisis on the property market. But where was the attention to the elephant in the room – the very possible emergence of a two-track property market and its implications for the social and economic fabric of our communities? While the two keynote speakers at the conference, Alan Ahearne (Special Adviser to the Minister for Finance) and Colm McCarthy of Bord Snip Nua, focused on the operation of NAMA and calls for the reform of stamp duty to kick-start the property market again, nobody considered the spatial nuances of a market in crisis. Estate agents and auctioneers within and outside Dublin both face crises but of two different kinds. Within the M50 ring, estate agents cannot find property to sell. They are actively seeking new properties to add to their books and the limited stock coming to the market is having severe implications on the sustainability of employment in this sector. This may be for a number of reasons but one of the clearest explanations is that property prices escalated to such an extent during the boom and have fallen back so far, that people just cannot afford to sell. In recent months quite a large number of properties in south county Dublin, for example, have come to the market to be relatively quickly withdrawn because the market simply can not sustain the prices asked and vendors cannot afford to drop the prices any further. The market is thus paralysed.

Outside of Dublin and major urban centres, the opposite trend is evident with estate agent windows full of properties that people simply do not want to buy. Again the sustainability of this sector is at risk as supply far exceeds demand and properties remain unsold indefinitely. The implications of such over-supply on property prices means that buyers are reluctant to take a risk in purchasing and thus this market is also paralysed.

The key question for NAMA therefore and all other decision-makers with influence on housing and planning policy is whether national policies can possibly address the crisis in the property market in a one-size-fits-all manner. The current problem of property market stagnation has two very different causes and no single policy approach can address both aspects. The adoption by government of a nuanced and scalar policy approach taking account of geographical variation is a possibility, but unlikely to happen. Conceivably in the next five years, a two-track property market will emerge in Ireland with prices in Dublin and other major urban areas stabilising and beginning to rise again due to lack of housing supply and the opposite trend continuing in most other places around the country.

Niamh Moore

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