Ireland: Back on the market

Jamie Smyth writes in the FT here.

4 replies on “Ireland: Back on the market”

“US investors led the charge back into Irish bonds,”

Charge? Hope its not into that valley! Not to worry, regiments of Irish foot-citizens are in the vanguard. They’ll absorb the grape and tire out the gunners!

” … foreign investors are flooding back into the property market for the first time since the crash.”

Flooding? Now are we talking about the Nile here, or the river Poddle?

“Several other big US private equity investors, such as Kennedy Wilson, Lone Star and BlackRock, have bought into Ireland over the past year.”

Makes sense if you know your investment is ‘risk free’.

“But the big question is whether Ireland can maintain 2-3 per cent growth for several years once it exits the bailout to enable it to tackle its sky high debt.”

Two, even three percent growth, is one mighty tall order. Our current reported ‘growth’ level is about equal to the statistical error in the measurement. Anyhows, G*Ps are now acknowledged as invalid metrics. Dream on, I suppose.

I have a nasty suspicion that the reported increase in construction activity may be about folk spending their savings – before they are taxed or looted. Carpe diem! The increase in Dublin property values (which is localized) may also reflect an urge to ‘get into the property market’ before prices go higher – forever and ever! What bets on a Mark II property bubble crash? Say in late 2016? That really would be interesting.

I’m also not sure about the ‘political toxicity’ of repossessions. It might have something to do with recognizing asset value losses (which citizens will have to pay) and the likely negative impact on residential property values if a substantial number of properties were put on the open market. It could take quite a while to clear any backlog. Maybe someone has done the math on this and has ‘discovered’ that income distressed folk are unlikely to be keen buyers. Especially if there is any hint that interest rates are about to start a secular rise.

Rolling over your debts – indefinitely, is a non-runner. You’re still borrowing to pay for your ‘daily bread’. And that bread is just going to get pricer and pricer. Someday … …

Comments are closed.