There’s no danger of a property bubble any time soon in Gouldavoher, home to Michael Noonan, and even if the market is hotting up in leafy southside Dublin the Finance Minister was entirely correct this week to dismiss concerns about the way prices are going in this country.
The suggestion in some quarters that seeds are being sewn for a repeat of the monumental crash that saw prices tumble from 2007 onwards is unhelpful and inaccurate nonsense. True, there has been a marked increase in prices in certain parts of Dublin, but it follows a fall of more than 50%.
Back in the early days of the property crash, newspapers were criticised for helping to inflate the bubble. Fat property supplements brought welcome income at a time when it seemed that nearly everyone was benefiting from the boom. It all went horribly wrong – and to say that there were not enough voices in the media warning about unsustainable price rises would absolutely be fair comment.
There was a time, in 2007, when the Limerick Leader’s property supplement ran to 72 pages every week. These days, reflecting the fragile state of the market, the section is much reduced in size, although it remains popular with readers who have been keeping a close eye on a market that is finally showing evidence of pent-up demand leading to more sales.
Comparing the asking prices to be found in one of our property sections from seven years ago with those featured in this week’s publication makes for sobering reading. New three-bedroom homes can now be bought for under €100,000. Not too far from Mr Noonan’s home in established Dooradoyle, a fine four-bedroom property of more than 1,530 square feet – in “turn-key condition” as the auctioneers like to put it – can be bought for €175,000, possibly a touch less.
And yet, while business has picked up in certain parts of the city, the overall market remains in cautious mode. Many would-be sellers are holding back, unwilling to enter the fray until there is a pick-up in asking prices. A huge number of young families who have grown in size since purchasing starter homes are ready to move out of these smaller properties but find too few larger houses on the market to meet their needs.
Amid this relative stand-off, the mere suggestion of a potential new bubble in the making – even 120 miles away in southside Dublin – is hardly helpful, especially as it has zero relevance to the reality on the ground here.
It goes without saying that we value the fact that many still look forward to seeing the latest offerings on the market in print, via the Leader. For obvious reasons we hope our property pages increase in number, but we have no intention of hyping the local market in order to stimulate that demand.
And yet there comes a moment when the time for caution – understandable for many reasons in recent years – is over. For the good of the local economy, for the restoration of normal family life, it is high time that the market here started rising again in a meaningful but realistic manner. That will only happen if those who have been keeping their powder dry, waiting for further house-price decline, accept that now is the right time to make their move.
Seven years of decline has seen the average house price in the city fall to just €129,000 – 52% below peak levels – and the average in the county drop to €140,000, a 51% fall.
There would be something drastically wrong if demand for property did not eventually lead to a noticeable increase in asking prices. Dublin – which has benefited from so much inward investment in recent years – was always going to lead the way. Pity Ireland’s prospects if that were not the case. In the league tables charting the house-price recovery, we find ourselves down the list behind Cork and Galway, for starters.
If the day comes when property prices in Limerick are first to follow Dublin’s lead, we’ll know that things have taken a significant turn for the better here. That won’t happen until Limerick city is returned to its rightful place as the thriving capital of the Mid-West region.
But in the meantime, we hope that the the increase in enquires seen by local auctioneers rises substantially over the coming months. There is also, of course, the critical matter of the banks being more accommodating in faciliating more new mortgages, a point very well made by our financial columnist Liam Croke on the opposite page. But it’s time Limerick got moving again.