David McWilliams - In Search of the Pope's Children

I think he raised an interesting point about people mortgaging their homes to buy property abroad ... and how big a risk this might actually be ... if the foreign market bottoms out and they can't sell their property.
 

Whoah! - Sorry to disappoint you - I dont know the man at all - he's got a good 5 to 7 years on me at least - put it this way - he was working on the Central banks input to the Mass treaty at the same time I was doing my finals in Belfield. He proceeded to go work in the City in London for the rest of nineties and I swanned around Japan , the US and middle east building up my "portfolio career" in that same time. Nah - Im just an apolitical humble Logistics and operations manager for an Irish Capital equipment manufacturer and exporter - Dont move in the same circles at all at all - Perfect Deckland material as my bank manager keeps intimating everytime he tries get me to purchase a mortgage when I drop in for a far more simple transaction!

I would definitely agree that McWilliams" In search of the popes children" owes more than a little to Brooks" Bobos in Paradise" when comes to style - tho If you have read the book - which I have and would be definitely recommend as a very funny sarcastic look at the "liberal establishment" in Blue State America during their period of self doubt at the growing conservative ascendency in dotcom Bubble America - on substance and subject they are quite different - McWilliams delves far more into the economics behind the Tiger - Brooks goes far more into the culture wars and a certain view of america , guaranteed to raise the ire of his chief audience , the readers of the New York Times in which he has a regular column in the OP-ED Pages , an outsider / insider role in which he revels - a smart elequent satirist who should be one of us ,who knows us only too well and we can't dismiss thim as crackpot or loony like Limbaugh, Buchanan or Coulter. Something McWilliams shares with him , given the amount of invective and bitchy articles that poured forth from the media aristocracy in the broadsheets over the weekend - which to be perfectly honest is good old Irish Begrudgery at this bright chap who comes from nowhere , in the view of the closed world of the Media Broadsheet elite , makes the one good programme that TV3 has produced in its entire existence , has the balls to actually write a bestselling book on the Celtic Tiger, and makes a whimsical, provocative TV programme on same , drawing in Late Late Show size viewing audiences and becoming the topic of conversation for the last week or so. Something none of the naysayers has yet to do - if ever they will - much more fun and safer to stay with the herd and do the criticising than step up to the plate yourself.

As I have stated in my first post on this thread on this thread - its on a page one actually, I do have my disagreements with some of the stuff that he comes up with, and for me , George Lees more understated Boom was a far better study on the Tiger. But when you pull back and leave aside the decklanders and hi-cos and all the flashy photography the message is exactly the same as Lees and both of them have been saying it for the same length of time - We're losing the run of ourselves here and in the end we're going to pay for it. Economics isn't called the dismal imperfect science for nothing - but like gravity - nobody, country or civilization can remain impervious to pendulum of economic cycles and supply and demand - history is littered with Booms and Busts ,everyone of them had proclaimed that they had managed to defeat economic gravity - they were postponing the inevitiable - what goes around comes around.

I've lived thru 2 of them - as mentioned elsewhere on AAM - I began my productive working life in Japan in the early 90s - spent 2 and a bit years there working for a Japanese multinational. Once the Bubble burst a 2 bed Apt outside Yokohama which would have cost 500.000e in 1992 was selling for between 180 and 200.000e in 1994 and prices fell for a solid 10 years folks. This in a country that was still one of the most competitive economies, the world largest exporter during the same period - interest rates were close to zero for most of this period - they are still less than 2% as I write . Japan also has a shortage of building space and large population. And Still prices fell ,the services sector fell to pieces and the many banks failed or were put into cold storage and on life support by the Government which borrowed trillions to keep some liquidity in the system and prevent total collapse. All because of a mania for property which left the real world about 5-6 years before the crash.

Now take a look at dear old ireland. only 4% of our land is urbanised - the least in Europe . Our export industry has remained static or contracting with a few little upward blips here and there for the last years. 87% is owned by folks who have little concern for the price of a house in Kinnegad and the profits they make leave this country for even more tax friendly climes - if the US government ,now controlled in part by a more protectionist leaning Democratic party, feels that they would prefer that the jobs came home aswell as the profits I would start to feel distinctly queasy. We have no indigenous export industry worth talking about and Im in the Hi tech export industry. If the property market goes south , dont be depending on the old celtic tiger to come to the rescue - its dead - our competiveness being wiped out by cost of actually trying to live in the place. The whole show is running on vast amounts of borrowed money - its our biggest import. There is a dark clould on the horizon. unlike a lot of the now departed bears here - I have always felt that late 2007 /2008 will see big changes - it takes time to build traction - but all the elements are coming together for a bad one - an all but certain US recession , only question is how bad - Im worried - my immediate job prospects rely on Mr and Mrs Smith in Des Moines Iowa going out to buy computer and electrical durables next year ,in the largest quantities possible so I can dream about a payrise -( been on freeze for last 12 months and its a barrel of laughs in Manufacturing here), a steadily improving european economy which will bring interest rates back up something approaching normal 5-7% and a growing realization that we have just been paying way too much for a very modest "asset" - The elements are there , but because bubble growth is irrational - its impossible to call when it peaks and don't for a minute believe it will be any less irrational on the way down the other side

Im Done
 
I remember in the early nineties some people forecasting how a recession was around the corner and how the day may come when the govt would not be able to pay the dole. We owed tens of billions in foreign debt then. Come to think of it, despite all the handouts from the EC, we still do...
 
Thank you Edo, as a fan of his work its good to learn that he has not just done a copy of Bobo. BTW I couldn't agree more with the assessment of the reaction.It was entirely in keeping with past behaviour. Fay is the classic, such poison and bile week in week out, it must be awfulf being so cynical, always assuming the worst in people. Much of the stuff leads to truly depressing reading to be honest.
 
Excellent post, Edo - seems like you have a similar perspective to myself, having spent a bit of time abroad.
 
Great points Edo. I just have one comment on the land issue:

edo said:
Now take a look at dear old ireland. only 4% of our land is urbanised - the least in Europe .
Im Done
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Dublin has no space left to build and there is not an awful lot of work outside Dublin. I would move out to a cheaper part of the country if I could find a job like the one I have. I also would be reluctant to give up the (few) benefits of living in a capital like decent shopping, restaurants, theaters, concerts, etc....

I have toyed with the idea of moving to the west but I just could not stand life with a the lack of facilities (however crap they are in dublin) that I like having around me. To me that is "worth" paying a premium for in Dublin and there are alot of people out there that think like I do. Until such a time as there is a motorway network linking all the major cities to Dublin and each other, people have very little choice but to pay the extortionate prices for houses in and around dublin and that is one factor that keeps the prices high. As to how much of a factor it is in keeping the market up, I dont know.
 
homeowner said:
Dublin has no space left to build.
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I don't agree. Look at any aerial photo or map of Dublin and you will be amazed by the scale of unused and/or green space within a few miles of the city centre. For example Dublin port and its environs take up several hundred acres of land that is currently used for low return warehousing and storage yards. There is no reason why the port cannot be relocated and this and other unnecessary green space and brownfield sites utilised for residential housing.

The potential for higher density construction within the city centre alone is limitless. Walk a few hundred yards north of O'Connell Street for example and you will come across streets of single storey and two-storey housing. There is no reason why these (and similar areas) cannot be demolished, making way for large scale multistorey developments.
 
homeowner said:
I also would be reluctant to give up the (few) benefits of living in a capital like decent shopping, restaurants, theaters, concerts, etc....
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For a different thread, but we have all of those things outside the pale too.
 
Homeowner -

re the point about needing to be in Dublin for the creature comforts, I used to live in Dublin but now dont. That isnt to say I never return. The way I see it I get the good bits without the hassle.

i.e. if theres a social/sporting/entertainment event at the weekend (they are rarely enough on 'school nights') then I can go. OK I stay with friends or a hotel but I get to enjoy the city when it's less hassle. Same goes for shopping. The shops unique to Dublin wouldnt require to be frequented by me more than once or twice a year (as a fella I wouldnt really bother anyway - but I have seen that the ladies have a homing instinct for certain Dublin stores )

Its not that I want to change your view but its just to give the perspective that a) its not all sackcloth & ashes (comforts wise) if you live in the country and b) the benefits of the capital arent all lost when you live outside of it.

Of course if you're going to go then go far enough away so you're not a commuter to Dublin which has to be the worst of both worlds.
 

Completely Fair Point Homeowner and Im in total agreement with you on that.

Im in roughly the same boat myself.

Have toyed with looking at moving down to the home patch in South Leinster , but as you said yourself, unless you are going live the "Good Life" on your own green acres , there is very very little as regards the amenities of urban life that in Dublin you take for granted. Normally when I start feeling wistfully nostalgic of the country life of my early years , I take a trip down to see the old folks for a week , enjoy the first couple of days , the fresh air the fishing , on the local golf course where I can take mulligans to my hearts content but by the end of the week, knowing that if I need anything from the shops I will have to have it purchased by 7pm at the latest, sitting the pub with about 4 other barflies and the most interesting topic of conversation is who did what with whom last weekend , and of course lack of employment on half decent money anywhere nearby normally has me flying back to the big smoke at warp speed at the end of the week.(Totally personal opinion by the way!)

Dublin will always attract a premium price as its the main urban centre and capital city - nothing will change that - even in this time of silly money there is a large difference between the Pale and outside it. Unless the government comes up with a real decentralisation strategy - it should be possible given the country isnt massive - from Jan07 Cork will be only 2 hrs from Dublin by train. Infrastructure is built here at a snails space and in a such a haphazard way it would make you wonder if the planners ever look at a map at all. And of course there is the issue of amenities - it would appear that planners never seem to consider when overseeing the worst urban sprawl this side of Denver that the citizenry might want something else outside their door rather than the road to Dublin - then again if you have to travel 2-3 hours a day in each direction to work and back - maybe all you need is a roof over your head - there wouldn't be much time left to anything else with your life - buts that a discussion for another day.
 

You are right there, but the fact is the government wont do what you have suggested. So that leaves us with the land that is available. Building up is an option but to those of us who want a house with a garden for our kids then the choice is even more limited. There are solutions to the problem but the government be wont implement them.

People make the argument that families in france, spain etc... live in 3 bed apartments so why cant we, but i have seen those apartments and usually they are huge and rent is fixed for 10 years or more which is a totally different situation to a tiny 3 bed apartment in dublin city (actually most 3 bed apartments in dublin are penthouses and really expensive).
 
homeowner said:
People make the argument that families in france, spain etc... live in 3 bed apartments so why cant we, but i have seen those apartments and usually they are huge
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There is no reason that Planning Depts. in Ireland don't set larger minimum sizes for apartments - particularly in suburban areas.
Apartments are designed for investors rather than owner occupiers. Their small size perpetuates the belief that one cannot live longterm in an apartment.
 
Betsy Og said:
Its not that I want to change your view but its just to give the perspective that a) its not all sackcloth & ashes (comforts wise) if you live in the country and b) the benefits of the capital arent all lost when you live outside of it.
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sorry. i didnt mean to imply that life is terrible outside dublin. I am just used to living here and it is very difficult as Edo said to go back to life without the convenience of what you have been used to. Having said that, for me, to live by the sea would go along way to winning me over, but that comes with very little choice of jobs.
 

Hear hear! And with rent control.............ah, sure we'd be in Paradise. Will the govt actually do this? Not on your nelly. Have you not noticed the govt only ever takes direction from the UK or the USA? (Unless the EU makes them!)

(BTW was watching documentary on the Herald of Free Enterprise - the UK Labour Paty was in opposition at the time and said it was a disgrace that Townsend Thoreson weren't prosecuted for corporate manslaughter and that they would bring in a law as soon as they were in power.........20+ years later, they still haven't. Politicians' promises...)
 
Vanilla said:
For a different thread, but we have all of those things outside the pale too.
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Most places have good facilities nowadays, with one major exception -- broadband.

I was looking at relocating to the west for part of each year, with the idea of coming back to the capital for the dark wet months, but any nice places I looked at couldn't be served by broadband (except satellite, which is one-way and no use to me, as well as being a bit pricey).

Was selling off Eircom, including the network, one of our worst decisions?
 
Yorky said:
A four bed detached in rural Ireland valued at €450,000? Absurd! Real value circa. €150,000.
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Even if you had the site for nothing you'd struggle to build it for that. I'd say €250k min. (unless you're also of the view that materials and construction skills are grossly overinflated)
 
I wonder will McWilliams be revising his predictions for world oil prices now that they are down 30% from their July highs ( basis - light sweet crude futures for Dec. expiry)?
 
Betsy Og said:
Even if you had the site for nothing you'd struggle to build it for that. I'd say €250k min. (unless you're also of the view that materials and construction skills are grossly overinflated)
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I know people who've built four bed houses on their own sites for €150 K.
 
cjh said:
I know people who've built four bed houses on their own sites for €150 K.
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The 250k was the value on the built object - what you'd sell it for at the very minimum (i.e. if, as the poster suggested, all the hypthesised market madness was taken out of the equation).

I know its not impossible to build for €150k but you'd be definitely in a direct labour situation (and maybe doing bits yourself).
 
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