Property…….Property…….Property

Some might expect the above headline to be an extract from a newspaper back in 2008 however it look as though after 5 long years of hardship we are getting back on the path of destruction again. Figures released yesterday showed that prices across the country have climbed dramatically over the past 12 months, with an increase of more than 6% recorded nationally and more than 15% in Dublin. Property ‘Experts’  to use the term loosely have highlighted the fact that the market remains dysfunctional, due to a combination of low transaction levels and a shortage of supply in some areas which in turn is putting unrealistic pressure on prices in some urban areas. However unrealistic the pressure  is, the reality remains and  for you and me house prices are increasing at a dramatic pace.

We are beginning to see people talk about property again, it is no longer a tarnished word, it is now seen as a great investment opportunity. No only am I talking about the everyday individual looking to buy a residential home, we are also seen a significant increase in activity surrounding commercial property. Today we have seen the announcement of Ireland’s second property investment company Hibernia REIT following from Green REIT the first trust to float since last years Finance Act paved the way for the establishment of these property vehicles. We have also witnessed a significant inflow of foreign capital coming into Dublin snapping up some of the offers that have been put on the table.

While plenty of the above is positive for Ireland and it is great to see that we are in a position to attract fresh foreign investment, I do however remain on the cautious side of the fence. With the dramatic year-on-year growth we have seen in property prices in Dublin first time buyers are trying to jump into the market before its too late, and they have another 10% to deal with. In a survey released during the week 1 in 5 individuals currently renting are looking to buy a home in 2014, so add this to the current short supply and you can see how bubbles are created. My major concern is that we have gone through the worst recession in the history of the country, and although we are on the path to recovery, we don’t seem to have put anything in place to prevent a repeat of history.