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Dublin Report The consequences of Dublin’s soaring property prices

February 16, 2011

By Staff Reporter

By John Kelly

A penthouse apartment in Dublin’s trendy tourist quarter, Temple Bar, recently sold for £850,000, that more than a million dollars. Experts predict that it’s only a matter of time before city apartments break the million-dollar barrier.

The Irish property market is truly astounding. A glance at any of the glittering property supplements in almost every Irish newspaper confirms the facts.

There was a time, and not long ago, when there was no insert as a property supplement in Irish newspapers. Readers might spot the odd auctioneer’s block ad, but the bulk of houses for sale were described in 10-line paragraphs, as modest as the prices they demanded.

As property sections first began to make their fleeting appearances in the daily Irish Independent and the Irish Times, they were dismissed by the late Maj. Vivion de Valera, then managing director of the defunct Irish Press group on the basis that they might encourage journalist corruption and deliberate favoritism.

He was proved to be partly correct when it emerged that newspaper management’s were forced to carry out investigations into the possibility of builder’s payola to certain, selected property writers.

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But what a lot of lolly the old Irish Press Group missed, especially today when daily and Sunday newspapers are awash with property advertising and glowing editorial endorsements.

Now you get a 31-page property section in the Irish Times devoted solely to that subject. Packed with advertising and enthusiastic editorial descriptions, you can peruse the details of a three-bedroom house in Killiney on offer at £240,000, well over $300,000.

That’s for a three-bedroom home, mind you. It has a small backyard with a sunken patio as well. Presumably, you can enjoy the odd barbecue there in the unlikely event that we ever experience a real summer.

We also read that in the reconverted former malting houses beside Guinness Brewery in the heart of old Dublin, the lucky young professional type as "upwardly mobile" careerists are still described in the ads, can fork out no less than £125,000 for a one-bedroom apartment.

Yes, you read right — that’s for a one-bedroom apartment.

An indication of the size is provided in the editorial description. The one-bedroom apartment has a galley kitchen, which means, of course, that it is tiny. But then, most Dublin apartments are rarely more than 400 square feet.

Thank God for small mercies.

It seems that you can forget the guide prices. Well-shod Irish auctioneers are flagellating themselves over the vexed problem of guide prices. More often or not, they are minimum figures, well below what is finally realized in the sales.

Houses advertised for auctions with guide prices of £400,000 can easily fetch more than £500,000.

Perusing the same Irish Times property supplement, we see a picture of a tiny, two-bedroom cottage in Stoneybatter, on the north side of the city, close to the center, and we find that its guide price is no less than £150,000. It is an artisan’s cottage, built in the latter part of the 19th Century.

Only 10 years ago, it would have sold for no more than about £30,000. Twenty years ago, the price would hardly have made four figures.

That is the way the property market has progressed. And it shows no sign of falling. Dublin City houses are rising by as much as 30 percent per annum. Some counties are keeping pace. Galway, for example, is increasingly expensive.

Particularly popular are Dublin neighborhoods traditionally popular as flatland for young people arriving from outside of the city for study or work.

Houses in neighborhoods like Rothmans and Raleigh, only two or three miles from the city center, are fetching some unbelievable prices, almost always exceeding the half million mark depending, only in part, on their conditions.

Other former working-class homes, particularly in the Liberties, are topping prices that their earlier owners could never have dreamed off. Pushing them up even more are the apartment blocks rising almost weekly on every available half-acre.

Then, of course, there are the traditional upmarket districts like the leafy south-side suburb of Foxrock, or the spectacular cliff-side Dalkey.

They carry telephone book price tags. We read, just to take one example, that a five-bedroom house in Foxrock has topped £830,000. Unfortunately for some eager potential buyers, it also had a slight problem with its guide price. The final deal was closed for £180,000 more.

During the same week, two palatial Dalkey residences went on the market with guide prices of more than two and three million, respectively.

The continuing price spiral has made it almost impossible for young Irish people who might otherwise be eager to marry and raise their families in once affordable suburban areas.

This has profound run-on social effects. Fewer young people marry. More live together in rather uncertain relationships. They pay very high rents for tiny one and two bedroom apartments that are rising in every conceivable nook and cranny. They scrounge desperately to save enough cash to place deposits for dizzying mortgages.

Dublin Corporation traditionally eased such strains with the provision of cheaper accommodation and a points system favoring young married people with families.

Huge housing schemes in Crumlin, Drimnagh, Ballyfermot, Coolock and Artane, eased the burden for earlier generations. But land is no longer available as it was then. And when does arrive on the market, it fetches prohibitive prices from private developers.

No matter how you view it, the consequences are severe. The social effects will be long lasting.

Nothing, it seems, can halt the top-heavy Dublin spread. There is increasing traffic chaos in a city that sorely lacks public transport facilities, a city that has spread its tentacles, north, south and west, creating effective dormitory suburbs in counties like Wicklow, Meath and Kildare.

Vastly improved road and highways become traffic saturated even as they are opened.

Something clearly has to be done. But few, it seems, have any effective ideas to stop the rot.

Meantime, prices keep rising. And property supplements in Irish newspapers add on yet more glowing pages.

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