3. 3
Christmas Day on the Galtees 1878
“At the other side of the bohreen, lives one of the
“settled” tenants, the most wretched I have met
yet. This is a woman, Johanna Fitzgerald, whose
husband had gone to England as a labourer to
earn bread for her 4 children. Mrs Fitzgerald has
not been seen at chapel that morning, but her
bare feet and coarse petticoat made a pretty
eloquent apology.”
5. 5
Where Are We Now?
• Perversely, the scale of the crash has created a huge opportunity
• Property brought the country to its knees….. But the scale of the
correction has led to competitiveness – a launching pad for
recovery
• My view: we underestimated the correction and we’re going to
underestimate the recovery which has already begun
6. 6
Key Messages
• Dublin, Cork & Galway have weathered the recession
remarkably well
• Limerick, Waterford and the rest of Ireland haven’t
done as well but at the same time a lot happening in
terms of transactions
• Property crash has enabled Dublin to become the
capital of technology in Europe
• More multicultural society. Dublin is now a great
world city.
• Yes, there are challenges in terms of personal
debt, national debt and the national budget
7. 7
Is There a Bright Future?
• My bet – European recovery
• But Europe could remain stagnant. Prudent to prepare for the better
option
• Recovery could be complex involving banking union for the single
market to function
• Risks:
• Future European referenda
• Britain could leave Europe
• Scotland could leave U.K.
• …. This could present challenges for Northern Ireland and therefore
for the Republic
• We need a “running dialogue”
• Just because we got it wrong in the past doesn’t mean we’ll get it
right in the future.
8. 8
ARE YOU GOING TO BE A BRIAN OR A DICK?
Brian Epstein
Manager of The Beatles
Dick Rowe
Rejected Brian Epstein’s offer to sign The
Beatles in 1961
9. 9
• February 1962 T.K. Whitaker requested the ESRI to look into economic
implications of assumed growth rates of 3%, 5% and 7% for the period 1962
– 1970
• 2006 – 2011: biggest property price correction in post-war Europe. Yet our
population grew by 8.2%.
• 34% of population under 24 years of age
• Lots of the wrong product in the wrong place
• Population will grow by a further10% in the next 15 years = 460,000 people
• We have 1.99 million dwellings
• We need 2.44 million dwellings
• Quite a challenge out of the ashes of a crash
Key Messages
12. 12
Housing Recovery – A View
• Model shows a 49.3% - 68.4% recovery in 10 years
• Example:
• Dublin house value 2006: €1,000,000
• 58% nominal correction = (€580,000)
• House value Jan 2013: €420,000
• 68.4% increase = €287,000
Future value = €707,000
30% net correction
13. 13
Housing Recovery – 2 Sides of 1 Coin
• How to possibly say the same thing in 2026:
• “House prices have risen by close to 70%!”
• “House prices are still 30% off what they were 17 years ago!”
17. 17
Investment Market Trends
• Investment asset transactions €370 million YTD
• More liquidity from banks
• Sentiment towards Ireland now extremely favourable
• Investors want to invest in Ireland so are compromising on their
prime building/high yield approach
• Shortage of supply
• Weight of money is leading to yield compression
• Prime CBD offices/retail investment/shopping centres are in demand
• Loan sales now a factor of the market
19. 19
Retail Market
• Low rents providing opportunity for start-ups
• Time is leading to obsolescence
• 3 more European style shopping centres
required
• Power of internet may be ameliorated by a
recovery
20. 20
Source – DTZ Sherry FitzGerald Research
Distribution of Shopping Centres in Ireland, 2013
21. 21
THE FUTURE
• National Property Strategy
• Master Plan taking a 20 year view and serving the national
purpose.
• Connected city strategy
• Appropriate vision, high level supply and demand picture
• Funding, planning reform, future industry capacity, provision of
schools, social housing
• Challenge is a 2 speed Ireland
• Can we find an answer to the migration/emigration of young
people from regional Ireland?
22. 22
Ireland’s Demographic Profile
0-14 Years: 979,590 21%
15-24 Years: 580,250 13%
25-49 Years: 1,755,325 38%
50-64 Years: 737,694 16%
65 Years plus: 535,393 12%
Total 4,588,252 100%
The contrast with Germany
Germany 13%
8%0-64 Years: 16%
Germany 21%
23. 23
We need to get going!
• Are we recovering more quickly than we thought?
• Think bigger (just in case)
• Constantly curious (research)
• “The country is badly in need of a lead in demographic policy”–
Roy Geary, January 1945
• Let’s keep the running dialogue going
• Can an onerous responsibility be turned into a profound legacy?
