The David McWilliams RTÉ television series, In Search of the Pope's Children, is a breathless, absorbing, but ultimately distorting insight into the new Ireland. He is so right about so much and so wrong about so much, but even when he is wrong, it is with such panache that it is refreshing. But he also misses some major points.
One of the things he is right about is the middle-class obsession with property and property prices, but one of the things he is wrong about is the significance of this.
For most of us property holders (ie those of us fortunate enough to own our own homes), property prices are entirely an irrelevance, whatever the homes cost us, whatever the homes are worth or not worth. That is unless we want to sell our homes and either live nowhere or move to somewhere where the property prices are much lower or much higher. What does negative equity matter to us? What difference does it make to us if our houses are worth five times our mortgage or our mortgage is greater than the value of our house, that is if we can afford to pay the mortgage? A collapse in property prices will mean nothing to us, as an explosion in property prices has meant nothing to us.
So what is so bad about negative equity? If we bought a home for half a million and it is now worth only €400,000, what difference does it make? The mortgage is the same, the house is the same and what it is worth in the market matters nothing at all.
Of course the price of houses matters to first-time buyers and for them a collapse in the price of houses would be a major bonus. For people who own several houses, aside from their own homes, the additional houses they own for investment purposes, of course the value of their investments matters.
Why should the rest of us care whether they lose out by a collapse in property prices any more than we would care if they were to lose their shirts on the stock market or on gambling? A property price collapse would be a good thing on the whole, for it would make property more accessible to those who need it.
The reason for worry is that we might not be able to afford our mortgages were there to be a downturn in the economy. If there were to be a steep and sudden rise in unemployment and many people could not afford to fund their huge mortgages, then there would be trouble for those who could not pay. But the major trouble would be for the financial institutions who have been lending these huge mortgages. They would be left with a lot of houses on their hands worth less than the mortgages outstanding against them. That would lead to a collapse in house prices, which, again, might be no bad thing. Bad for the lending agencies, good for the public, ultimately.
The price of houses is determined by demand and supply. The reason there has been an explosion in house prices is because demand has vastly exceeded supply, which happened because of bad government policy.Governments have allowed a situation to arise whereby there is a huge demand for houses in the Dublin region and a poor supply. This relates to perhaps the central point David McWilliams misses, or rather one of them. The huge demand arises from the failure of politicians over the last 30 years to develop a few growth centres away from Dublin that would be magnets for population movement, easing the pressures on Dublin - this, coupled with a failure to manage the growth of Dublin itself in a planned way to meet the housing demand. Had that happened, house prices might be a fraction of what they now are.
It is not that this could not be anticipated. As far back as the early 1970s, plans were drawn up to develop a number of centres outside Dublin, but only a small number, so that such centres could achieve a crucial mass of their own.
Politicians were all for developing centres outside Dublin, but all against making the hard decision not to favour towns all over the place but merely a few. No votes in Roscommon for favouring the growth of Galway.
The result has been the debacle that has emerged. Dublin is experiencing a population explosion which has spilled out far beyond the suburbs into Carlow, Wexford, Westmeath, even Cavan. We now have one huge sprawling metropolis, extending beyond a third of the country's land mass. This has given us not just the outlandish house prices, but the interminable traffic jams at rush hour. It has transformed the lives of hundreds of thousands of people detrimentally and unnecessarily.
This Government has given a classic example of how to screw up the situation even further. First, a spatial strategy that opted out of the very decisions that a spatial strategy is designed to force - which few areas to concentrate on as growth centres. Typically, it opted for centres all over the place. But then, to make matters even worse, it decided on a decentralisation plan that failed even to map the spatial strategy, opting instead for even more centres. All calculated to be a disaster - and the Opposition criticised it for not being even worse. And not a word about this from David McWilliams. So far!