Re: Re: The Question of Land
The common public understanding of land now, is that land is worth nothing. I hear this view from a lot of Irish people now.
I disagree. Land and its ownership is probably one of the most emotive subjects in Irish society. Think of â€œThe Fieldâ€, Cromwellian dispossession, Penal Laws, Repeal Acts, Wyndham Acts, etc, right up to the Land Commission of the 1950â€™s. The Irish love land and always put a high value on it, which is why only a single-digit percentage of the Irish land bank changes hands every year. That is why Irish agricultural land prices in early 2008 averaged Â£15,357 compared to Â£4,316 an acre in the UK. (â‚¬/Â£ at Q1 2008 rates) Consider those values in the context of population size & wealth stats and the difference is even more outlandish. Much of the Irish land cost was due to lifestyle farming, selling up in D4/Dalkey and buying a big house in the country with a good few acres.
It is like they are delighted that land has lost its value, so that the mean old nasty builders can get caught out.
Correct. What Joe Public thinks is â€œIt serves them right.â€ Yes, we still like the bit of begrudgery, particularly when for several years we have had our noses rubbed in the mud by developers who buzzed us in their helicopters, outdid us at everything, from bling houses and cars to parties for their 16 year-olds and got into mingent competitions over â‚¬30k turf buckets.
……….that Irish banks refused in the recession times of the 1970s in Ireland to take land off builders hands in lieu of loan payments.
In the mid 1970s I worked in banking, my first real job. Back then, a banker was someone who lent money and got it back. That definition seems to be outdated today, but the job is the same, not to build or develop land banks.
What keeps a stability in the system in the UK, from my knowledge, is the fact that insurance companies and pension funds do invest in property as the yield improves during recession times
Yes, they do invest but get a rate of return commensurate with their investment, a return possible only because of realistic investment values. In the mid ’80s the UK departed from that and learned the lesson, unlike many in Ireland.
But I wonder if this recession will be any different to any others in Ireland.
Yes it will. It will be longer, it will be deeper and it still has a long way to go. Hopefully, when we start to come out of it, we will have learned some lessons. Hopefully we will have a Regulator that regulates, Regulatory & Dept. of Finance staff that understand economics, a lending policy that is based on reality and boards of directors that are knowledgeable and do their duty. A heavy dose of commercial morality would help. Hopefully the ODCE will do its stuff and those who merit it will be disbarred and / or behind bars. That would be a start.
…we have a dangerous and destructive wrecking ball that keeps swinging back and forth, eventually getting everyone.
The wrecking ball will continue to swing until NAMA is up and running. Then, and only then, can the extent of the destruction be quantified.
Donâ€™t hold your breath.