News
What goes up, must come down ….. or does it?
By Ted Healy of DNG TED HEALY
In recent months the rate of property price increases has softened and with that questions have begun to arise around whether a drop in prices could be on the cards.
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CSO released the latest Residential Property Price Index (RPPI) on Thursday which shows national prices in the year to the end of August rose by 12.2% - the fifth successive month in which the annual rate of house price growth nationally slowed. Since August of last year, the rate of increase had been climbing in double digits, and it peaked in the early part of the year, prior to the change in the economic climate internationally.
There are a huge number of factors that influence house prices. Like any market though, at its heart it boils down fundamentally to supply and demand.
On the supply front, signs are that the availability might be starting to loosen up a little. Demand is deflating too as rising interest rates and inflation push home ownership out of the reach of some.
The European Central Bank have increased rates by 1.25% and the expectation is there will be two further increases before the year end. Central Bank mortgage lending rules also continue to help keep a lid on house price inflation.
But there are ongoing pressures keeping house prices high, and we continue to have a severe shortage of housing.
And then there is inflation. Construction price inflation was running at 14% on an annual basis in July, according to the Society of Chartered Surveyors. The soaring cost of raw materials, labour and other factors continue to make building more expensive. If this continues, the bump in new home supply we saw earlier could tail off – putting pressure on prices.
A third factor at play is that most of the main lenders here have not yet passed those increases on to borrowers - giving home purchasers some breathing space.
Central Bank data released during the week showed average interest rates here remained steady in August, while at the same time across the Euro zone they rose more markedly. There is an expectation though that the banks won’t be able to hold out on passing through the extra borrowing costs forever.
How likely is it then that house prices could fall?
House prices here have recovered significantly since the depths of the post-Celtic Tiger crash. Nationally they now stand at 2.2% above their highest level recorded in April 2007.
From January 2008 they fell for five straight years until June 2013. Since then, there has only been one four-month period beginning in July 2020, at the height of the COVID-19 pandemic, that they have fallen slightly, before recovering strongly over the subsequent 24 months.
That recovery was in large part fuelled by significant household savings accumulated during pandemic lockdowns, along with disrupted supply and pent-up demand.
With demand remaining strong and as supply has not yet caught up, leading experts say it is unlikely prices will fall dramatically anytime soon.
Interview conducted by Aodhagán Ó Súilleabháin, Cormac Flanagan, and Ryan Twomey.
Name: Kieran O’Leary – Entrepreneur and Killarney businessman.
Year of Graduation: 2005
Occupation: I would be the Jack of all trades and the master of none. I am involved in the hospitality industry. I have Corkery’s Bar, Revive Café, Ruckus Café and I’m a part of Integrity gym, so I do a lot of coaching. The passion by me would be probably in the fitness industry, because I played at a high enough sporting level and that’s come to an end now so I’m kind of concentrating on the coaching early mornings, hospitality day and evening and I have a young family as well so that’s obviously the biggest priority of all.
Could you describe a typical day for you?
I wake up at 5.30 and I am in the Gym for 6am. I work with clients till 8.30 – 9:00am. I then have school drop off, check the stock in the cafes and open Corkery’s. I kind of float around all day, kind of just helping where I can, and then evening time is probably the most hectic, at home, the kids might have football, well the young fella has football, he does a bit of Jiu-Jitsu, and dinner, stop, start, repeat the following day. I work hard, when you’re self-employed it can be difficult, but I try to get down time on Sundays or maybe Wednesdays.
What drew you to St Brendan’s as a school?
It was the sports that kind of drew me. The past pupils that I would have known from the sports clubs and would have seen their careers progress. It’s renowned, the history behind the Sem is unbelievable. I wasn’t really going anywhere else. The history behind it, the stories that come out of it, the people that have progressed and done so well in life. I don’t mean success by wealth, they seem to be happy in their professional life, happy with their life decisions and I suppose the Sem has a huge part playing in that.
Would you have kept in contact with any teachers?
Even now you see older teachers that may be retired or are even still there, they still have a bit of time for you, and they’ll stand in the street and say how are you getting on? We live in a small town, where everyone knows kind of everyone’s business to such an extent, so I think just the camaraderie, friendships and like the great times we had, I’ll always remember that.
Would you have kept in contact with your classmates?
The friends I made. They are lifelong friends. We were lucky enough to be a part of a good few sporting teams, and we would have progressed through the Kerry GAA side of things, and then there’s a lot of them working around here, a few of them abroad, but you’d have your core five or six fellas that you still stay in contact with. Outside of that if you saw past students of the school around the town, of course you’d stop and talk to them.
Were there any specific academic programmes or teaching methods at the school that helped you succeed in what you’re in today?
I didn’t apply myself the way I’d like to which is kind of a regret, but I did Business Studies with Joanna Ryan, she was a very good teacher. I went on to do business which I didn’t complete in IT Tralee, and funnily enough, then I got involved in the business side of things, so it’s funny how things work out. Just because you mightn’t do the best Leaving Cert doesn’t mean that you’re a failure, there’s always an opportunity around the corner and if you’re willing to apply yourself in any shape, way or form then you’ll succeed. It’s all about the mindset, discipline and as I said, my mindset was GAA, maybe even soccer related when I was that age, I could see nothing else, I was a bit blinkered, but as you broaden your horizons as you get a bit older, more mature you realise there’s different ways to go about your goals.
Can you share an example of how a teacher or staff member made a meaningful impact on your growth.
I’d say Seamus Grealy to be honest, because he is an excellent teacher. He was a soccer coach and he would have seen the potential in me and even though the application mightn’t have been there at times. He still persisted and gave me that chance to try and achieve the best possible grade I could within the Leaving Cert year. I would have done honours English even though my mother and father were saying “What are you doing?, you know, because I hadn’t the work done or whatever. The fact that he gave me that kind of TLC. I needed, that kind of arm around the shoulder, to say, listen there’s more in you, try your best, and as you know he can be firm as well, I just found him pretty good to deal with.
St Brendan’s College: Voices from the Halls
Interview conducted by Aodhagán Ó Súilleabháin, Cormac Flanagan, and Ryan Twomey. Name: Kieran O’Leary – Entrepreneur and Killarney businessman.Year of...
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