Saturday, November 21, 2009

It'll never happen here

'It is irresponsible to suggest that the "negative equity" scenario that occurred in the late 1980’s in the UK could occur in Ireland,' said Marie Hunt, Director of Research at CB Richard Ellis, in April 2007. 'All we ask,' she added, 'is that the media consider these fundamentals and adopt a balanced, informed and considered approach when dealing with such an important issue.'

Physician, heal thyself...?Would-be first time buyers who have heeded equally dramatic and incorrect predictions in the past have lost out significantly as they ‘sat on the fence’ and watched prices escalate because of the underlying fundamentals in Ireland.*

She argued that 'the biggest threat to housing market performance is actually confidence'. In other words, keep your head in the sand and it'll all be fine. The example used to expand that point is this:
Would-be first time buyers who have heeded equally dramatic and incorrect predictions in the past have lost out significantly as they ‘sat on the fence’ and watched prices escalate because of the underlying fundamentals in Ireland.
That reads rather like scaremongering ('join the feeding frenzy or you'll lose lots of money') and sits uneasily in an article that condemned RTÉ's Future Shock - Property Crash
as 'irresponsible journalism,' 'unbalanced negative speculation,' 'sensationalist,' presenting 'unfounded doomsday scenarios' and to be 'dismissed as fiction'.

It's easy to criticize with the benefit of hindsight, but the CBRE press release is a fine example of hubris before a fall. The researchers present themselves as 'the independent research team at CB Richard Ellis,' a designation that makes little sense. In what way, exactly, were they independent? Not in any meaningful way, surely. If they had been then they might not have embarrassed themselves quite so comprehensively. Perhaps they'd contend that the property crash was caused by negative comment of the sort made by RTÉ, but the only sensible reponse to that would be to laugh all the way to the banks.



http://www.gunnenewhomes.com/images/cliparts/CBRE_Reaction.pdf




* Heal thyself, and learn about apostrophes: one two-page press release has seven errors.

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