Property bubble: NYT article on Japan's experience

MG

At the moment we are below the EU average housing stock. In about two-three years we will be at the European average. Current housebuilding per head in Ireland is a multiple of the EU average. 13% of the workforce is employed in building. About two thirds of the activity is in housebuilding.

What happens when we have enough houses?

Redundancies in the construction sector, unemployment goes up 1-2%, Social welfare bill increases, emigration of current immigrants (i.e. Eastern Europeans go home), housing related industries consumer spending falls, consumer/retail redundancies, Property related tax income raised by Government falls and you are into a vicious circle.

BTW if some people thought about it, there are many who would actually gain from a property crash. The obvious losers are the new entrants and those employment in related industries. But those in relatively stable, salaried jobs who got on the ladder earlier than two/three years ago might well gain from it as their relative stock in society would rise. (i.e. the hare and the turtoise principle)

D'Peoples Voice

MG wrote:

At the moment we are below the EU average housing stock. In about two-three years we will be at the European average. What happens when we have enough houses?

I don't see a crash, but I do see a leveling out of house prices.
One thing that will come back to haunt us is Section 23 properties.
A large number of these houses were purchased in the late nineties,

Assuming that the investor bought an investment property for €200K in 1997, and that rental income is €12,000pa, then after 16 years, the house is paid off. The investor will be caught paying tax on his marginal rate on this rental income, at a time that the price appreciation is very modest. Will they sell?

fly_agaric

spacetweek wrote:

I'm so sick and tired of the constant renter-bashing you get in Ireland, "Dead money" - a case in point. We still have this mentality of renters being working class and on the dole or something. I rent with friends in the centre of town and am very happy. The area is great, the accommodation fabulous, it's fully furnished with free 24 hour security, maintenance etc. And the rent is piffling - 400/month!

I never stop laughing at all you chumps out there with your 300k gaf in Athboy that'll lose 30% value when the market crashes.

The reason renting gets bashed (IMO) is because tenants here have very few rights, and thus in a way, very little security. Things are very much weighted in the landlord's favour, as regards upping the rent to whatever he/she wants or kicking you out pronto if they take a dislike to you. I have heard it is different in places like Germany, France etc but don't know any specifics.

D'Peoples Voice

fly_agaric wrote:

The reason renting gets bashed (IMO) is because tenants here have very few rights, and thus in a way, very little security.

That's untrue, the Private Residential Tenancy Board introduced by the Government 18-24 months ago gives a lot of rights to tenants.

Check out http://www.prtb.ie/

lomb

D'Peoples Voice wrote:

Will they sell?

why would they? what will they do with money, and as long as the rent comes in dont sneeze at 10 grand for sitting around doing nothing tbh, pays for a new car every year and a holiday...

fly_agaric

D'Peoples Voice wrote:

That's untrue, the Private Residential Tenancy Board introduced by the Government 18-24 months ago gives a lot of rights to tenants.

Check out http://www.prtb.ie/

Had a look at that site and the tenants' rights word doc (the .pdf's dont work - nice job). I have to say I'm not that impressed. As you probably gathered I don't know much about this stuff, so if this is "a lot of rights" for tenants in Ireland - how much worse was it before this new legislation came in ~1.5 years ago?

Not the type of situation you'd really like to be in if you want to settle down with someone or raise a family, so no wonder people in Ireland itch to buy their own house (even if they have a 3-4hr commute to/from it each day), speak of rent as "dead money" and the whole property pyramid scheme keeps going on forever.

BigEejit

zod wrote:

........The key in a credit-driven boom is not to be the last buyer......

With the amount of units being built yearly thats a lot of 'last buyers' ....

Like in the UK, in Ireland there are too many vested interests to put any serious political pressure on the government to sort out all of these idiotic tax schemes that benefit investors over first time buyers, they keep the rich, rich and the poor in their place .... it'll all end in tears ... its the people who have to have two wages coming in to pay the mortgage and put food on the table and pay for little Johnnys childcare who will suffer first:(

hehe ... but I live in london now so its a case of out of the frying pan and into the fire with me :eek:

<edit>
Did I read somewhere that 17% of all houses in ireland were built in the last 10 years? has the population following that trend?
</edit>

Bluehair

BigEejit wrote:

With the amount of units being built yearly thats a lot of 'last buyers' ....

True but not only that I feel a lot of people are trying to falsely reassure themselves that since they bought 2 or 3 years ago they could easily handle a fall of 20% or so without it affecting them.

The inevitable follow-on from any crash would be stagnant or slowly falling prices for years (look at Japan), how many people do you know who've bought in the last few years did so as a 'starter' property in areas and properties they've no intention of staying in for a long period? They'd be screwed too...

Dubhelp

Town planners throughout Europe bring their students and apprentices to Ireland to show them the worst planning system in Europe. There is no infrastructure with a lot of the first time buyers developments...with estate agents quoting a short 15 mintue walk to the nearest Luas 3 miles away.

ronbyrne2005

i see berties brother who is supposedly our "housing minister" was in The Times blaming greedy banks for the spiralling house prices and saying that they were creating artifical deman etc and that it wont end good.is this the first shots from the government who know they will be slaughtered when house prices fall?
didnt see him blaming the increase in stamp duty threshold by HIS government
or
the tax incentive schemes mainly promoted by HIS government
or
the bad planning system presided over by HIS government
or
blaming his government for zero attempts to cool the market with exception of bacon report which did little or nothing
etc
etc
no time to go into any detail.

air

Is that Noel or Dermot? Noel isn't a Minister.

ronbyrne2005

THE Irish housing minister has accused banks and financial institutions of “greed” and “reckless behaviour” and of “hyping up” the property market with 100% mortgages and interest-only loans.
Noel Ahern has also criticised financial authorities for not taking steps to dampen market demand. The taoiseach’s brother said the banks’ behaviour had reduced the prospect of a “soft landing” when the property market takes a downward turn.



Despite the record supply of new homes in 2004 and 2005, Ahern said the price of houses was likely to increase by more than 10% again this year.

“The rampant competition for market share between financial institutions is one of the factors why all predictions for house prices have been wrong. They are creating a false demand which developers are cashing in on,” the minister said.

“The banks hyped it up at a time when everything was going well. It is all about market share. It is not taking the broader view of the borrowers or the country into account. It is dangerous when people are just playing their own game rather than looking at the overall national point of view.”

The housing minister also voiced his disappointment that the Financial Regulator (formerly IFSRA) had taken no action against institutions that continue to fuel demand with new products.

The Fianna Fail TD said the regulator had powers to require a bank or building society to place a percentage of their “mortgage book” on deposit with the Central Bank, restricting the amount of capital available as loans.

The Financial Regulator responded that its role is to ensure the solvency of individual financial institutions and the stability of the banking system and not to influence trends in the property market.

It also said that Liam O’Reilly, chief executive of the Financial Regulator, had warned that 100% mortgages were niche products that should not be marketed at a mass audience.

The decision by five of the country’s 11 mortgage providers not to increase loan repayments in line with the 0.25% interest rate rise announced by the European Central Bank in December tends to support Ahern’s view.

Customers with standard variable home loans from Permanent TSB, Bank of Ireland, Bank of Scotland, AIB and ICS have not been asked to pay the full interest rate increase.

Bank of Scotland, whose introduction to the Irish market was credited with bringing more competition between the indigenous players, put 0.17% on to its standard variable rate bringing it to 3.49%, the cheapest available.

Permanent TSB and Bank of Ireland passed on only 0.15% to its standard variable loan holders, bringing their rates to 3.7% and 3.75% respectively. Customers at AIB were hit with 0.2% of a rise in the variable rate to 3.5%, as were ICS Building Society members who are now paying 3.75%.

IIB Homeloans increased its standard variable loan by the full amount, as did Irish Nationwide, EBS, National Irish Bank, First Active and Ulster Bank. All 11 financial institutions increased the rates on their tracker mortgages by 0.25% as these are tied into the Central Bank rate.

The Financial Regulator said that 100% mortgages and other initiatives had been introduced when employment was growing, immigration was running at 50,000 a year, inflation was falling and interest rates were at an all-time low. “We are conscious that these factors are unlikely to remain in their current state for ever,” he added



Department of Environment officials are understood to have expressed their concern to the Financial Regulator about the likely impact that the new mortgage products would have on housing demand. They said the regulator cautioned against intervention in the market without being certain as to what the knock-on effects might be.
Ahern is convinced that young people planning to buy property in two or three years’ time are being pressured to bring forward their purchase plans by products such as 100% mortgages, creating artificially high demand.



He said financial institutions giving a 100% mortgage needed price increases in the market to cover their investment should anything happen. “So they are banking on, hoping for, and deliberately fuelling, price increases. The Financial Regulator has powers but I have been disappointed that action at that sort of higher level has not been taken.”

Ahern pointed out that the construction sector was building 23,000 houses a year in the early 1990s, but had increased output to a record 77,000 units by 2004.

While final output figures for 2005 are not yet available, Ahern said all the indicators suggested that the construction industry would probably match the 77,000 figure or slightly surpass it.

However, the minister said the trend in house prices had not followed the path predicted by most analysts in the light of increased housing supply.

While experts a year ago were forecasting increases of between 5% and 7% in 2006, the consensus now was that house price increases would again be well into double figures because demand was continuing to outstrip even these record levels of supply.

“The financial institutions compete vigorously among themselves, but they all play the game and they don’t badmouth one another,” Ahern said.

He accepted that only a small proportion of borrowers would qualify for 100% mortgages but said that the heavy marketing of the product was “throwing petrol on the fire when there was no need to” and hyping up overall housing demand.

“Everyone is out there trying to make a buck for themselves but there is too much greed coming into the thing,” he said. “If we keep throwing petrol on the fire, so to speak, we are not going to get this soft landing we have been talking about.

“If people are going to be reckless, and I think some of the financial institutions have been reckless — there is too much credit and no control whatsoever — I think that we could all end up in trouble.”
.......................................................................................................

"i think that we coould all end up in trouble" the government even thinks the housing market is out of control! wait till the sh1t hits the fan they will be blaming everyone except themselves

D'Peoples Voice

ronbyrne2005 wrote:

THE Irish housing minister has accused banks and financial institutions of “greed” and “reckless behaviour” and of “hyping up” the property market with 100% mortgages and interest-only loans.

The muppet!
If he read the Bacon report he would have seen that the housing crisis was caused by the lack of serviced land, especially in the Greater Dublin Area. The operative word being "serviced".
County/City councils had not put aside or zoned enough serviced land up to the early nineties. They KNEW we had the baby boom in the 70's, the councils KNEW we would need somewhere to house our growing population, they KNEW from international experience that any bloackages in the planning system causes speculation!
But our County/City councils by the looks of things, never planned for the future during the eighties! The Bacon report highlighted this in the mid-nineties! To say the horse had bolted at that stage was an understatement. Some areas like the North Fringe were only getting their serviced land in the past 2 years!! No point in rezoning land banks if the land is not serviced!
And that muppet blames the banks!

That muppet's party reduced stamp duty, they caused the increase. Did that muppet look to see who is buying the houses, what type of units were being purchased. First time buyers are buying the houses, and they are buying 2nd hand houses, houses that have had the stamp duty reduced! The muppets were told beforehand, because stamp duty is not included in the mortgage it acts as a valve against stoking demand because not everyone has the lump sum saved to pay stamp duty. Removing this valve, you have loads of first time buyers who can suddenly buy a house knowing they don't need to have a lump sum saved. Who benefits? First time buyers--No!, because while some were originally having to pay 3-5% stamp duty, they are now paying 15%-20% higher in prices now!!

Bluehair

D'Peoples Voice wrote:

The muppet!
If he read the Bacon report he would have seen that the housing crisis was caused by the lack of serviced land, especially in the Greater Dublin Area. The operative word being "serviced".

Nail... meet head.

I can really see this coming to the fore over the next few years as everyone looks around for someone else to blame.

It amazes me in a comparitively tiny nation with one of the lowest densitys of population per sq km that the focus is on cramming as many properties into as tiny a plot of land as possible. Crazy... absolutely crazy...

Serviced land properly zoned and served by a decent infrastructure could easily have been in place by today without the rampent property speculation. Truely the budget surpluses of the last decade have been pissed away and the nation taken over by various vested interests.

Sponge Bob

D'Peoples Voice wrote:

County/City councils had not put aside or zoned enough serviced land up to the early nineties. They KNEW we had the baby boom in the 70's, the councils KNEW we would need somewhere to house our growing population

ever heard of emigration ????

D'Peoples Voice

lomb wrote:

D'Peoples Voice wrote:

Will they sell?

why would they? what will they do with money, and as long as the rent comes in dont sneeze at 10 grand for sitting around doing nothing tbh, pays for a new car every year and a holiday...

Lets assume ave Section 23 hse costs €320 now, and you are earning €10k rent.
Thats a return of 3.125% (10K/320K) on rental income alone pa, add another 10% capital apprec. Excellent money.

Now make 2 massive assumptions,

rents continue to remain constant

house prices continue to increase at 10%pa

Now in 10 years time when the tax relief runs out, you are looking at a rental income of 1.2%(10K/830K) before tax of 42%.
Now ask yourself, would they leave their money in property earning such little rent, UNLESS house prices can continue to rise at high rates indefinitely, in which case with rents so relatively low, who would buy?

Sponge Bob wrote:

ever heard of emigration ????

According to this website,
http://www.cso.ie/releasespublications/documents/population/current/popmig.pdf

Possibly, or perhaps with the start of the AIDs epidemic in the 80's, they felt AIDS would solve the problem for them.
Sponge Bob, I'd love to share your opinion of our county council being such deep thinking people.

Sponge Bob

D'Peoples Voice wrote:

Sponge Bob, I'd love to share your opinion of our county council being such deep thinking people.

My lot (Galway) do not do forward thinking or planning . They are still stuck in the 1960s rut , unstated in any development plan since 1980 but ingrained nevertheless , of getting Galway City and burby bits to a 'critical mass' of population by hook or by crook ....invariably by significantly more of the latter from what I can see.

gimpotronitus

Great and interesting thread. As someone who bought first 6 years ago and am now a "mickey mouse" small time investor, I can definitely say it is not a case of if but when house prices correct themselves. A correction can however take the form of 1-2% price increases over 5-10 years or no price increases over the same period. It will take an external shock for the drastic case of 20-30% price drops in a short period of time.

The problem is that Ireland has no absolutely no capability of insulating itself from external shocks and since no one has a crystal ball its obvious that it is impossible to say what will happen. In my opinion the greatest threat at the moment is the growing current account deficit in America though that country has proven time and time again that it is built on incredibly solid fundamentals and that is still where business is at.

In my experience, people without property talk all doom and gloom and are not happy that they put off buying. They are generally risk averse people who prefer to feel and touch their money rather than take a punt. If house prices drop they will feel vindicated but probably still wont buy because of "further price drops"!

Those talking up property have vested interestes also which are obvious i.e. wealth!

One thing you cant argue with though - this economy is booming and will continue to boom (barring a major external shock) for at LEAST the next 5 years...that is without a doubt. So are you going to continue to put off buying? Tough choice. I know where I would rather be.

PDelux

Does anyone know what the average age of a first-time buyer is these days?

air

Dont know but I was quoted a figure of <5% of mortgages being given out to people under 24.
I would guess based on that that its probably around the 30 mark.

ronbyrne2005

saw property prices fall in many parts of uk in last 3 months of 2005, also property down in paris and many parts of usa. central bank warned on house prices again today. the bubble is coming close to an end

MG

Interesting stat from the CIF website today:

“Ireland has a stock of 391 houses per 1000 of population. The EU average number of houses per 1000 population is 428.”

Interestingly, if Ireland’s population were to increase by 100,000 every year for the next ten years, we would need to build an average of about 54,000 houses p.a. to be at the EU average above (based on a current population of 4.2m). In 2005, we built 80,957 houses so that’s a decrease of about a third on our current output.

Given that about 12% of the population are involved in construction and about 2/3s of these are in housing that could equate to an additional 2.5% of the workforce looking for work (which in turn lead to a lower population growth vicious circle.) Except it would probably be worse as output would probably go 70,70,60,60,50,50, 45, 45, 45, 45.

And given that we are our economy is supposedly driven largely by consumer spending, imagine the knock on effects.

Current Pop 2006 Say 4,200,000 at 391 houses per th. 1,642,200
Proj pop 2015 Say 5,100,000 at 428 houses per th. 2,182,800

Houses needed 540,600
Annual average 54,060


P.S. The CSO only predict a population of 4.8m by 2021 so the above is actually quite optimistic.

ronbyrne2005

the madness continues,houseprices up 22% from an already very high price in a year!! sheer lunacy ,totally unsustainable and detached from economic reality.

article from rte news today
Dublin house prices up 22% in 2005

January 30, 2006 12:06
Figures from estate agent Douglas Newman Good (DNG) show that house prices in Dublin rose by an average of nearly 22% last year, the first time since 2002 growth has been above 20%.

DNG's house price gauge showed that prices of second-hand homes in Dublin rose by 4.3% in the final three months of 2005, double the rate for the same period in 2004.

DNG economist Paul Murgatroyd said the second half of 2005 was stronger than the traditionally busier period before the summer.

antoinolachtnai

Well, the workforce is more flexible than you are taking account of. A lot of the group at risk don't have ties here and will move somewhere else when the work dries up.

The immigrant workers don't actually hold up that much of the housing stock because they live in larger households than the average.

I accept that if there is a sudden, serious problem in the US, then we will have a real issue because the FDI-driven growth could stop quite quickly.

whizzbang

MG wrote:

Interesting stat from the CIF website today:

“Ireland has a stock of 391 houses per 1000 of population. The EU average number of houses per 1000 population is 428.”

Interestingly, if Ireland’s population were to increase by 100,000 every year for the next ten years, we would need to build an average of about 54,000 houses p.a. to be at the EU average above (based on a current population of 4.2m). In 2005, we built 80,957 houses so that’s a decrease of about a third on our current output.

Given that about 12% of the population are involved in construction and about 2/3s of these are in housing that could equate to an additional 2.5% of the workforce looking for work (which in turn lead to a lower population growth vicious circle.) Except it would probably be worse as output would probably go 70,70,60,60,50,50, 45, 45, 45, 45.

And given that we are our economy is supposedly driven largely by consumer spending, imagine the knock on effects.

Current Pop 2006 Say 4,200,000 at 391 houses per th. 1,642,200
Proj pop 2015 Say 5,100,000 at 428 houses per th. 2,182,800

Houses needed 540,600
Annual average 54,060


P.S. The CSO only predict a population of 4.8m by 2021 so the above is actually quite optimistic.

Is this not a bit over simplified? how big are the houses? how many people can sleep in them? if they have 428 single bedroom appartments per 1000 people and we have 391 four bedrooms houses per 1000 then we are ahead. I'm not saying we are, I'm just saying more information is needed before this is meaningful!

MG

The point on immigrants not driving much demand is probably quite true – but that would lessen the generous demand assumptions above even more. It’s also true that they are more flexible but we do not know how they will react. Even if they do go elsewhere, their earnings leave the country too and hit our consumer economy.

Is the above too simplistic? Yes and no. Of course it’s simplistic and we have not been building a sufficient variety of houses. However, broadly speaking they are not unrealistic (the central bank have been telling us for ages the equilibrium level of housing is between 50-60 k p.a.). I have learned from experience to stand back from such situations and do a reasonableness test such as above. I have sometimes been in meetings where management gave wonderful presentations only to be blown out of the water by such testing. It seems to me that the above test is very reasonable sanity check. I take your point about the type of home but its probably not the case as the main neglected market is in the > 3 bed market. To follow this through, picture this scenario - if the people in < 3 beds want to upgrade to a 4 bed, the 4 bed market might flourish but the bottom might also fall out of the < 3 bed market, swallowing their equity in the process.

More than that, what would you change to significantly alter the above statistics?

dochasach

MG wrote:

The point on immigrants not driving much demand is probably quite true – but that would lessen the generous demand assumptions above even more. It’s also true that they are more flexible but we do not know how they will react. Even if they do go elsewhere, their earnings leave the country too and hit our consumer economy.

Someone on this board once claimed that non-nationals without a full permanent visa couldn't buy a home in Ireland. But now I know this isn't true. I've met several non-nationals with short term (1-2 year) work permits and visas who have purchased property. Many, many others provide rental income for speculative landlords. If it is true, as some claim, that Irish property appetite is "different" to the point of a (self-destructive?) obsession with owning, then Irish landlords will have to rely on non-nationals for rental demand.

It's natural for any populist government to portray non-voting immigrants as a liability, but immigrants contribute to this consumer economy, they pay income, sales, road and stamp-duty taxes (at least one non-E.U. acquaintence will pay soon pay 9% stamp duty). They contribute to PRSI, but few will be allowed to live in Ireland long enough to collect.

They provide both labor supply and (buyer and rental) demand to this property boom/bubble. One possible scenario for deflating the bubble is for the government to cave in to isolationist, nationalist, protectionist hysteria and force non-nationals to sell (or abandon their rentals) at once. The labor party has already floated the possibility of discontinuing work visas for non-E.U. workers who earn less than 60,000/year. Since Irish politicians tend to be reactive, rather than proactive, I hope those with an interest in keeping the property "golden goose" alive will keep this in mind.

Since Irish property has "earned" more than the people who own it for every year since 1995, I'm surprised more people don't drop out of the labor market and let the immigrants do all the grunt work.

BTW, did anyone notice that the average and median home sale price fell in the U.S. in 2005. It's a good thing Ireland is different.

Sponge Bob

dochasach wrote:

Someone on this board once claimed that non-nationals without a full permanent visa couldn't buy a home in Ireland.

could not get a Mortgage in Ireland is probably the correct phrase.

If it is true, as some claim, that Irish property appetite is "different" to the point of a (self-destructive?) obsession with owning, then Irish landlords will have to rely on non-nationals for rental demand.

Many have relied on immigrants since the refugee boom , at least in certain towns and areas. Thats 5 years back.

It's natural for any populist government to portray non-voting immigrants as a liability, but immigrants contribute to this consumer economy, they pay income, sales, road and stamp-duty taxes (at least one non-E.U. acquaintence will pay soon pay 9% stamp duty). They contribute to PRSI, but few will be allowed to live in Ireland long enough to collect.

All Very true, assuming a 40 year working life and 5 years of that spent in Ireland you should be entitled to a 12% of the irish contributory pension at 65 but if you are not here then tough , you get nothing. We must sort that out.

They provide both labor supply and (buyer and rental) demand to this property boom/bubble. One possible scenario for deflating the bubble is for the government to cave in to isolationist, nationalist, protectionist hysteria and force non-nationals to sell (or abandon their rentals) at once. The labor party has already floated the possibility of discontinuing work visas for non-E.U. workers who earn less than 60,000/year. Since Irish politicians tend to be reactive, rather than proactive, I hope those with an interest in keeping the property "golden goose" alive will keep this in mind.

Hmmm, the bubble is an irrational exuberance of our own, I would leave the immigrants out of it.

BTW, did anyone notice that the average and median home sale price fell in the U.S. in 2005. It's a good thing Ireland is different.

Not for long, there is this thing called gravity you see

dochasach

Sponge Bob wrote:

could not get a Mortgage in Ireland is probably the correct phrase.

Actually, every non-national buyer I know has a mortgage. I think they are with Irish mortgage holders and I know no one who can come up with a few hundred thousand Euro cash.

Sponge Bob wrote:

Many have relied on immigrants since the refugee boom , at least in certain towns and areas. Thats 5 years back.

All Very true, assuming a 40 year working life and 5 years of that spent in Ireland you should be entitled to a 12% of the irish contributory pension at 65 but if you are not here then tough , you get nothing. We must sort that out.

Forgive me for drifting a bit on the topic, most non-E.U. non-nationals with children also pay full taxes but cannot avail of the new child care credit. Since Marxism doesn't work, the child credit will ultimately lead to higher child care costs. Non-E.U. workers will have to pay more out of their pocket for child care and still more in taxes to pay for the child care of E.U. and Irish nationals. Bertie, I think the wrong people are whining!

Sponge Bob wrote:

Hmmm, the bubble is an irrational exuberance of our own, I would leave the immigrants out of it.

Not for long, there is this thing called gravity you see

I forgot to mention that the property bubble is also bursting in Shanghi China.

Shanghai property bubble burst: UBS
http://news.xinhuanet.com/english/2006-01/26/content_4102930.htm

Surely Shanghai doesn't have the overpopulation and land shortage problem of Dublin ;-)

D'Peoples Voice

ronbyrne2005 wrote:

the madness continues,houseprices up 22% from an already very high price in a year!! sheer lunacy ,totally unsustainable and detached from economic reality.

From my experience in marketing, if you look at the figures, you will find that the article will zone in on one particular sector, namely second-hand houses that are being bought by first time buyers. They will ignore slow moving sectors like appartments. This is all legal. Also in many cases they will refuse to disclose out their sample size or details!

Sponge Bob wrote:

All Very true, assuming a 40 year working life and 5 years of that spent in Ireland you should be entitled to a 12% of the irish contributory pension at 65 but if you are not here then tough , you get nothing. We must sort that out.

You can carry your PRSI contributions around the EU with you!

MG wrote:

Interestingly, if Ireland’s population were to increase by 100,000 every year for the next ten years, we would need to build an average of about 54,000 houses p.a. to be at the EU average above (based on a current population of 4.2m). In 2005, we built 80,957 houses so that’s a decrease of about a third on our current output.

Section 23 appartments account for a very large amount of the units being built at the minute. (Hence why appartment prices are very slow moving.) The tax advantage ends for S23 properties in 2008, so expect a massive fall off in construction between 2005 and 2008. The construction figures for 2005 /2006 will be very mis-leading as a result.
What scares me is if you ask an investor, would they invest in a share of a company, whose profits per share will remain constant over the next few years, they laugh and say why would they. People only invest in shares where companies are growing their profit per share. Then you ask, would you invest in property given that the rental yield is constant at best, and they say, definitely, look at the capital gains! Then you think, how many of these investors do we have in the country, thinking that capital gains can continue when the underlying return is falling!