Bargains out there for shrewd investors

The faint-hearted agonise over buying, hoping that prices will fall further. But don't wait, says veteran property investor Kevin O'Connor. Buy now, don't listen to the doomsayers

The fable about Henry Ford has rarely been as apposite as now. During an American recession, the shoeshine boy on the sidewalk gave Ford some tips on the stock market. Ford's response: "When the shoeshine boy is telling you what to buy, it's time to sell!"

The same might be said of the current recession in the Irish property market. The dogs in the street - and commentators who never bought or sold beyond their own homes - are urging "sell, sell before prices drop further". They foresee further slide. Well, yes. And yes. And by the same token, buy, buy, buy . . .

Because if that amount of sellers are dropping prices with the alacrity of a celebrity's thong, then bargain time has arrived. A rare enough event in Irish property affairs and like the first cuckoo, worth marking in this august paper of record.

This week I heard of the following: a two-bedroom, spacious apartment in Dublin's Mountjoy Square for €315,000. This time last year, even as prices were dropping, the same apartment was asking €365,000. A drop of €50,000 in 12 months smacks of a bargain.

So does a two-bedroom new apartment in a gated complex on the outskirts of Sligo, with the lure of being fully fitted-out, including furniture and white goods. Asking price €129,000 - unlikely to be as cheap again. Roll up, roll up I say, let's see the colour of yer money! If I sound like a fairground barker, it's because the Sligo offer was drawn to my attention by a buyer whom I will call SPI - shorthand for Shrewd Property Investor.

Our SPI has been round the block several times since the boom began around the early 1990s.

He has made several fortunes, mainly in Dublin's inner city, on new apartments which by the late 1990s had brought a new young renting population into previously derelict sites.

He has a better grasp of how population movements relate to property than a lecture hall full of textbook sociologists. He cites, for instance, how crime and anti-social behaviour diminishes in proportion to well-lighted streets and young people looking after their own modest properties.

The faint-hearted are agonising over buying now. Of course they are, that's what the faint-hearted do. This time they are using as excuses the uncertainty of interest rates, bank tightening on lending, reduced mortgages. They are kicking to touch on the hope prices will fall further, just as the the people now selling in a panic at rock-bottom prices held off for years, hoping to hit the height of the boom.

Well, our SPI has news for both parties. The slow sellers have missed the boom by a mile and should sell while they can - and the slow buyers should gallop with fistfuls of money, borrowed or promised, to any buyer willing to part with a property at the market rate. Because - and this is Thursday's mantra - there be bargains out there, folks.

Of course, by writing thus, I have blown it for the naysayers, the prophets of doom who are happiest when dirging in sack- cloth-and-ashes. Remember how confidently they predicted new apartments would become "modern slums" inhabited by legions of single mothers.

Problems did come aplenty, but so did solutions, albeit painfully with the maturing of community responsibilities and management companies.

Does anyone seriously contend that Dublin and other major cities are worse off now, than in the urban wasteland of the 1980s when dereliction was such that film companies used Ireland to represent Berlin or London after the war? Or that the harmonious blocks of apartments along the river walks of Limerick, Cork and Galway are worse than the stone mills of exploited labour which they replaced? Or that the green fields of subsistence farming was a better time for the few, in contrast to the many who inhabit commuter legoland of Lucan, Leixlip or Portlaoise?

Answering those weighty questions, apart from giving one a headache, strays off the thrust of this analysis. Which is - the massive building expansion left by the boom is here to stay, in terms of plain bricks-and-mortar. Far from stealing away in the night, these houses, apartments and new towns will be bought and sold over the generations, as these new communities become embedded into the fabric of a country re-making itself. They will likely increase in value at a graduated gradient, rather than the hysterical highs of the boom. Now is probably a good time to buy into that prospect.