Real Estate of Ireland
Dublin and Pittsburgh real estate markets worlds apart
By Aaron Kendeall

   In the United States, the fall of housing prices has not been uniform. In the wake of the economic recession that started in 2008, places like Las Vegas, Nev., have seen developments falling into bankruptcy, while the market in Pittsburgh has remained relatively stable.
    “Here in Pittsburgh, we haven’t felt the extreme ‘blip’ felt in other places,” said Lynne Bingham, independent Pittsburgh Real Estate agent. Bingham said that the housing market in places like Connecticut and Phoenix left brand new housing developments slated to be demolished as their financial backing collapsed.
    Alternately, most experts count Pittsburgh as one of the most stable regions in the country. Forbes Magazine listed Pittsburgh as the best place to buy a house in the United States. According to Moody’s Investors Service, Pittsburgh’s commercial real estate market is No. 1 in the country.
    In fact, living in Pittsburgh, you may not have noticed that there has been a real estate crisis facing the nation. As people move from suburbia back into some older parts of the city, it may seem that the market is in many ways healthier than it was during the boom periods of earlier decades.
    But in this global economy, fiscal devastation was not localized to the U.S.; rather it has reached every corner of the planet.
   Financial pressures have been especially taxing on certain countries in the European Union, the so called PIGS Countries (Portugal, Ireland, Greece and Spain) whose governments’ bankruptcies threatened the stability of the European Union and its currency.
   Ireland’s tale is particularly troubling. From the mid 1990s until the months leading up to the global meltdown, the Republic of Ireland was in an economic explosion so great that the nation was dubbed the "Celtic Tiger."
    A rise in the disposable income of the Irish working class fueled a building craze. New infrastructure, civic works projects, sporting complexes as well as residential and commercial real estate enterprises created construction jobs.
    The story should be familiar to Americans: uncontrolled borrowing led to a demand for luxurious housing, leading to ambitious construction projects that were financed by many of the same banks. Financial institutions felt obligated to loan more money to home buyers to keep the construction projects from bankrupting, creating a bubble that was unsustainable. The impending collapse played itself out in much the same way as it did here.
    “The biggest factor in property is the supply of money,” said Ryan Mannix, property consultant with the Irish-based Zubav Properties.  “Nobody buys real estate with their own money; they buy it with the banks' money. People have less money to spend on property.”
   Mannix explained that while the supply and demand curve is complicated, it boiled down to the amount of liquid funds available in the market.
    “If banks would’ve approved your loan for 500 thousand Euro, now you’d be lucky to get 300 thousand,” Mannix said. “If the banks won’t give you a mortgage, you can’t buy.”
   Unlike the much larger United States, the Republic of Ireland’s treasury could not afford the large government subsidies that initially helped shelter homeowners and the domestic real estate market. The much smaller island was also more uniformly affected by the crisis than their American counterparts.
   Mannix explained that the housing crisis was not focused more intensely from one county to the next, but was rather exaggerated by asking price.
    “Top end housing has seen the biggest percentage drop in prices,” Mannix said. “1.5 mill Euro homes dropped down to 1 mill. That’s pretty much across the board.”
   Because the Dublin area had the most demand, a lot of the top end real estate that Mannix referred to revolved around that market – but not exclusively.
   Daragh Carolan, a farmer in County Meath, said that the housing collapse affected the properties in his rural, agrarian community as well.
    “Dublin was the worst because of the prices they were asking there,” Carolan said. “But here in Meath, my brother sold land for a building and got 1.5 million Euro for about four acres. The boom went bust and the fella who owns it now, they want about 20 thousand for the whole thing.”
    For Carolan, whose family has lived in the same house on the same plot of land since 1760 (give or take ten years), the allure of cashing in on his land for a quick buck was not great. Still, signs of the recession are still visible near his home.
   “There’s a big estate near here, probably with 30 or 40 houses in it,” said Carolan. “I’d say only two thirds of the houses are finished. Some of the unfinished houses are lying there without their roofs on, or with scaffolding up. You’d think it was a war zone -  everything had vanished.”
   While the factors that caused the disaster have been dissected at great length, who is to blame is still up for debate. The Irish media have been assigning blame to everyone from homeowners to bankers to politicians. Mannix believes it’s a bit easier than all of that.
    “You can spend your whole life looking back and assigning blame,” Mannix said, “but the fact is there’s enough of it to go around. It was a combination of factors: there was a recession, banks were guilty of giving out too much money, planners were guilty of building more homes than people could buy, buyers were guilty for buying houses they couldn’t afford, politicians were guilty of turning a blind eye. If you want to play the blame game, then nobody’s exempt.”
    What’s more, according to Mannix, it is the same journalists and experts who devote a large portion of their air time and column inches pouring over the problem that make the situation worse.
   “Those frontline idiots piss me of and RTE just rehash the same sh*t again and again. The mentality is wrong,” Mannix said. “Any economy is a cycle and there is a hidden positive spin to this economy right now. There are good things here. Facebook is located here; the EU is here. The infrastructure is improving. Nobody is going around with no shoes on or starving or standing in long lines for the dole. We need to have more of an American, ‘Yes we can,’ attitude, as Barack Obama would say.”