Late Late blame game property man also got it wrong, says ISABEL MORTON

LAST FRIDAY night, exhausted after a busy week, I collapsed into bed and flicked on the Late Late Show

Suddenly, I heard the word “property” and found myself wide awake, but within minutes, I was despairing of the studio audience who were clapping and cheering a man who was promoting his book.

The book in question claims to reveal the inside secrets of the Irish property industry. Unfortunately however, the author Derek Brawn had nothing new to say which we haven’t all heard a million times before, let alone any “secrets” to reveal.

He went on and on about how there was an oversupply of properties, how they were still overpriced, how many people were now in negative equity and how (in his view) property prices were going to fall further.

Nothing new there.

So hyped up that he could hardly sit still, Brawn kept turning to the studio audience in an effort to whip them into a frenzy. The sad part is, that in the main, his hysterical approach worked. Like an evangelical preacher, he managed to stir up the crowd.

The other guest, David Cantwell, director of Hooke MacDonald estate agents, who was presumably brought in to provide some balance to the interview, sat calmly and reported the facts. Property prices were once high and now had indeed dropped by approximately 40 per cent, but since they had, properties were selling. Not in vast numbers, but selling nevertheless.

As estate agents go, Cantwell wasn’t the “hard sell” type. He admitted that he could not forecast the future, but said that, in his opinion, the property market had now reached rock bottom, as the public had started buying again.

However, the unfortunate estate agent was shouted at by Brawn who accused him of “putting people into negative equity” because he admitted that he was now selling properties at discounted prices, which he had once sold at their full Celtic Tiger price.

It was hardly the estate agent’s fault that property prices had fallen, but the audience reacted as if he were entirely to blame.

Typical of many, who are happy to take all the credit and plaudits themselves when things work out in their favour, but find someone else to blame when things go against them, the audience found a scapegoat in Cantwell.

But blaming estate agents is utterly pointless. They are sales people. They sell property. Some are very knowledgeable on their subject and are extremely good negotiators and others are useless at their job. But, at the end of the day, their job is just to sell property. They are not paid to worry about whether or not the buyers will eventually sell on the property again at a profit or a loss.

In the same way as estate agents were not responsible (nor congratulated) for the huge profits people made on property investments during the “good old days” they can hardly be blamed now for “putting people into negative equity”.

However, none of us predicted the global financial crash and despite Brawn’s accusations, he was no more infallible than anyone else.

Two years ago, in April 2007 Brawn (an economist, then employed as head of research for estate agent Savills Hamilton Osborne King) discounted the possibility of Irish homes being overvalued and advised us not to panic as the economy was coping (published in the Irish Independent on April 6th, 2007).

Brawn wrote: “The long-term trend shows that the property cycle follows the economic cycle, so those who expect house prices to fall can only stand up their forecasts if they also forecast that the economy will slow to growth of less than 2.5 per cent. However, no such forecast exists.”

No doubt he was correct at the time. But like many others, he too, got it wrong.

Nobody questioned why, if he now sees fit to blame estate agents for “putting people into negative equity”, Brawn – who worked with Savills HOK – does not apportion equal blame to himself.

Perhaps Brawn’s view that property is “still 30 per cent overvalued” and his prediction that prices will drop a further 20 per cent will prove to be correct. Or perhaps, he is simply attempting to sell more copies of his book.

Or maybe the estate agent’s belief that the property market has reached rock bottom is nothing more than wishful thinking. After all, their livelihood relies on selling property.

As Pat Kenny pointed out, we might eventually look back on 2009 as the year in which we should all have invested in property, as interest rates have never been lower and property prices have plummeted.

Whether you buy now or wait, in the hope that prices may fall further, the same rule applies.

Caveat emptor – let the buyer beware.