Firstly, I was very glad to see a bumper 30-page property supplement in the Irish Times this Thursday. About 18 pages of this supplement contained property adverts, and those of you who work in the industry will know that full and half page adverts in the national press don’t come cheaply.
Upon browsing quickly through such a supplement packed with real estate adverts, you might be forgiven for thinking that Irish developers have suddenly discovered a new found optimism and have been confidently screaming at their marketing staff to secure the best position possible to promote their fabulous development in Leixlip, Celbridge or Mullingar.
Look a bit closer though and you’ll notice something very different between these adverts and the ones of a couple of years ago. In the good old days, the developers used to state a price, insert a nice picture and give you until the following Monday to reserve it. Now they are offering huge discounts. “Now Reduced!” screams one headline “Save €80,000 off your new home!” screams another. The best has to be an advert for a development in Drumcondra. Not only are they offering up to €120,000 off the last remaining units, but they are throwing in free legal advice, a €3000 holiday voucher and a €2000 furniture allowance.
For those of us who are lucky enough to be liquid at the moment, it might be tempting to rush in and take some of these units off the struggling developers hands, but my own opinion is that the worst times are yet to come. We haven’t seen any big Irish developers going bankrupt yet, but we have in Spain and we have in the US and it can be argued that the Irish market is next.
The credit crunch is a major factor and is certainly the main reason why Irish developers are struggling to raise cash, but an equally big one is simple supply and demand. Too many units were built and bought in a very small country for investors seeking tenants to pay a low interest mortgage while their asset appreciates by double digits every year. When mortgage rates started to increase and property prices started to slow, it was far easier for investors to pull out than the dozens of developers who have committed to finishing big residential projects.
Perhaps these big adverts will result in the extra sales so badly needed. Either way, you’d be hard pressed to find an Irish publication (including dedicated property magazines) with regular adverts and editorial for the countries Someplace Else Ireland promotes – Argentina, Belize, Montenegro, Romania and Serbia to name but a few.
Maybe this is because we’re not working hard enough at PR, but the big money was made in Ireland long before the 30 page property supplements arrived, and it seems to be holding just as true in the emerging markets above.
Kind Regards
Colin Murphy
www.someplaceelse.ie
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