Vol 6 No. 28 - April 5, 2006

It�s a mad, mad real estate world



PHOTO/JOHN BOLGER
Louise Bolger in front of Atlantic View Bed & Breakfast for sale in Clifden, Galway, Ireland.
By Louise Bolger
SUN STAFF WRITER

I recently returned from a trip to Ireland, home of my husband’s family. The last time we were there over 20 years ago, Ireland was still basically a poor country trying to get a foothold in the world economy.

Well things have sure changed. Ireland now boasts the best economy in Europe and as part of the European Union, economic doors have opened for the country in every area, not the least of which is real estate.

The front page above the fold story in the Irish Independent newspaper dated Friday, March 17, headlined "Auction fever as property makes astronomical price."

The fever it was referring to was the sale of what it defined as an ordinary Dublin City, four bedroom 1950s home selling for 3.7 million euros. If you’re not keeping up with the world currency markets, let me remind you that a Euro is worth about 20 percent more than a dollar, making the sale price of this property approximately $4,440,000.

The column went on to say that the same house a decade ago would have sold for less than 890,000 Euro. The emergence of accidental millionaires was fueling the market, with people who have made huge profits on the equity of their homes trading up or re-investing in more property.

It finished by drawing the conclusion that while in America and the United Kingdom people have dipped into their housing wealth to increase personal spending, in Ireland people are dipping into their housing wealth to buy more property, a blanket statement I would not necessarily agree with.

I was pretty impressed by the property prices in the paper. One-bedroom condos were listing at 300,000 Euro, but I decided that Dublin was a major European city and the values were probably comparable to American cities.

When we arrived in County Galway on the west coast of the country, the rugged area my mother-in-law escaped 70 years ago, I assumed property values would be substantially lower. Wrong. We stayed two nights in a bed and breakfast outside of the lovely town of Clifden, Galway, an unexceptional home, with a modest view of the ocean, and about 2500 square feet. It happened to be for sale, and when I returned home, I tracked it down on the Internet. Modest indeed, the property was being listed for 700,000 Euro or $840,000.
I guess we Americans are accustomed to being on top of the world economies, but it seems that our Irish cousins are at least keeping pace with us. I guess we’re not the only real estate market which has gone mad. It is indeed a mad-mad-mad real estate world.

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