HOWZAT

Retailers are offering discounts of up to 70% to attract customers. Furniture prices dropped 6% last month and clothes prices fell 12%. Harvey Norman, the country’s brashest seller of electrical goods, has invited customers to “come in and haggle”.

“It’s not a case of a generalised recession,” said Austin Hughes, chief economist at KBC Bank Ireland. "There are severe economic difficulties widely shared, but there is a relatively small group benefiting from the downturn.

“This fortunate group don’t have any job insecurity, haven’t got a lot of debt, have seen rents coming down or are living with their parents, and are benefiting from the lower cost of clothing, electronic gizmos and foreign travel. Or they may be in their late-40s and the kids have finished education, the mortgage is nearly paid off, and they’re not relying on a pension investment. But then, these people’s spending was probably never particularly rash anyway.”

The Economic and Social Research Institute (ESRI) has predicted that first-time and investor purchasers who bought apartments in the Dublin area near the peak of the housing bubble in 2007 will have to wait until well after 2030 to get back what they paid for their homes.

But those who bought earlier, or who have yet to buy, can afford houses in locations that would have been beyond their reach during the boom. Providing they can overcome strict lending criteria to secure mortgage approval, that is.

The average asking price of a house has plummeted by almost 20% over the past year, while prices for residential property in Dublin’s city centre are now a third less, on average, than a year ago.

Prudent savers, taken aback during the heady days of the Celtic tiger by taxi drivers snapping up apartments in Turkey and Bulgaria, are finding holiday homes coming back into their price range as banks foreclose on Irish-owned foreign property. Developers have been forced to halve prices on new apartments to sell them.

The new breed of post-recession buyer will not purchase holiday homes off the plan in a Dublin hotel conference room, preferring instead to do their homework and view as many properties abroad as possible before making an offer, according to Colin Murphy, director of Torcana, a Dublin-based agency that specialises in distressed property sales in Florida, Spain and the UK. The two-bedroom apartments he is selling as a result of foreclosure at Millenia in Orlando, America, now cost about $79,000 (€57,000), down from $270,000 at the height of the market.

Murphy said: “We have a lot of regular people who didn’t buy during the boom and now want an investment because their cash is only generating 1% or 2% in the bank, when they can get yields of 6% to 7% in tenanted foreign property. Or they’ve been to Spain lots of times and now know what holiday home they want to buy there.

“Lots of people were completely burnt during the boom, but a lot have only themselves to blame. When your taxi driver is giving you property advice, you should know it’s not the time to buy. There are always people who invest during recessions, the type who will be wealthy over the long term. They don’t get carried away during the good times.”

Middle-income earners are even finding that the BMW they could not afford during the boom times is now within their grasp as collapsing sales of new and second-hand cars prompt dealers to slash prices and even haggle with customers to get a sale. A Sunday Times survey in April found that car dealers were reducing second-hand motors by as much as 25% and that even when vehicles were cut to below normal prices, a buyer could still negotiate a further 12% off the price. The Society of the Irish Motor Industry says used-car prices fell 15% in 2008.

“The people who were cautious in the past have antennae to look for bargains and this is the environment in which to do so, their time has come,” Hughes said.

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