CIF hits out at Fitch report on house prices

CIF hits out at Fitch report on house prices

Tom Parlon

The Construction Industry Federation (CIF) has called on Fitch rating agency to look at how they compile their residential property briefings for Ireland in future after they predicted that Irish prices could fall another 20% earlier this week.

The Federation said that compiling a macro view of the Irish property market no longer holds water with Ireland now a series of localised markets.

“It’s not accurate to present a macro picture for Ireland’s property market at present,” said CIF Director General Tom Parlon.

“What we’re dealing with is a series of mini marketplaces. That’s why last year prices in places like Dublin, Cork and Galway as well as other urban areas were stabilising at a rate that was completely at odds with what was happening in more rural residential markets.”

“The legacy from the Celtic Tiger days is that too much residential property was built in certain parts of the country. As you can see from the Government’s vacant housing report produced late last year, this was particularly pronounced in counties likes Cavan, Longford, Sligo, Roscommon and Leitrim. The vacancy levels in the National Housing Survey for these areas varied from 17 – 35 per 1,000 households.”

“However we are starting to see a distinct shrinkage in the level of vacant housing in the more urban locations. Areas such as Waterford City, Limerick City, Galway City and Dublin City show vacant housing of only 2 – 7 per 1,000 households in these areas,” said Mr Parlon.

“With that level of fluctuation between supply along with the increased level of demand that is manifesting in urban areas, how does it make sense to produce an overall report for the residential market in Ireland? It is a flawed and irresponsible approach. It is damaging to some of the localised markets in Ireland at a critical time. What’s going to happen to the Dublin market this year will bear little relation to the market in places like Leitrim.”

“We agree with the scepticism voiced by Minister Noonan on the report. He claimed that it was a “pretty ambiguous kind of assessment” and we believe that is fair comment. This country has learnt a lot since the Celtic Tiger years and one point is that the devil is in the detail.”

“The Fitch report speaks to the kind of catch all commentary that used to permeate Irish property analysis. That’s not good enough these days. It’s an out of date approach. This country requires more focused, more detailed information to be provided. For that reason we would urge Fitchs to reexamine the way they go about providing Irish residential property commentary in future.”

There are 2 comments for this article
  1. Donal at 12:44 pm

    Do you get the feeling that the vested interests are annoyed that we might finally realise that indentured bondage in the form of ridiculous mortgages are not the answer, the CFO could hardly have the interests of the common person at heart

  2. Paddy at 4:48 pm

    Tom Parlon has some neck, he was one of those who pushed hardest to build anything anywhere in areas such as Cavan, Longford, Sligo, Roscommon and Leitrim. Many thousands of those same almost worthless houses now stand empty or half built.
    The best thing Tom ‘concrete everywhere’ Parlon can do is urge sellers to drop their asking prices by at least 20%, in some cases 80%. This action will set a floor and get the property market moving as opposed to the protracted correction we are experiencing at present. What is not sold can be knocked. As for minister Noonan, his concern is that should the value of the NAMA assets be further lowered, a 2nd bailout will result.

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