“Investors, first-timers likely to buy“, so says the headline in the property section of today’s Irish Times in response to the recent Budget. It goes onto to say, “the Budget’s concessions to first-time buyers are designed to get potential residential property buyers off the fence.” It is a little way into the article before one of the elephant’s in the room is revealed: “banks will have to start lending on bricks and mortar again before many first-time buyers can get into the housing market.” The other elephants are, of course, that changing the mortgage interest rate will make no difference to the wider economy, or the unemployment or Live Register rate, or that because of the wider budgetary measures everyone will be worse off and are more likely to be cautious on consumption (this was after all an austerity budget).
All of the people quoted in the piece are of course representatives of the property sector who have a vested interest in talking the market up. No surprise then that they would like to see first time buyers plunge into the market. The budget has not led me, however, to revise my assessment of the long term prospects for the residential property market one iota. Spin is a wonderful thing, but is unlikely to make much difference to consumer confidence, and even if it did, many people are not in the position to enter the market.
The piece finishes with the ‘get in quick before it all disappears’ soundbite. “Ironically, first-time buyers who are tempted to dip their toe in the market by Budget 2012 might realize it’s hard to get what they’re looking for. Michael Grehan says that there is a shortage of the three and four-bedroom houses in traditional inner suburbs in northside and southside Dublin – the kind of properties its clients are looking for – on the market.” Only the Irish Times would think that everyone in the country wants to live inside the inner ring road of Dublin. Even if property is tight there, and I’d want to see some evidence of this, not just the assertion of an estate agent, there is a massive oversupply everywhere else in the country. Buyers have the pick of whatever type of property they want; assuming they can afford it and can access credit.