Irish Property Market chat II - *read mod note post #1 before posting*

https://www.boards.ie/discussion/comment/118181687#Comment_118181687

Years of data? Where?

Show me a link to anything that says your next door neighbour who is a social tenant is more likely to engage in anti social behaviour then your next door neighbour who is not a social tenant?

javaboy

With some people it's snobbery for sure but how do you think it feels to pay for the whole of your house out of your after tax income with either no help or some HTB that's partially absorbed by price increases anyway and then to see someone else move in next door who is paying comparatively little and taking on no risk for maintenance etc.?

I recognise the need for social housing and subsidies. It's the level of subsidy that's galling imo. Some social housing recipients are being levelled up to the housing "power" for want of a better word of people on hefty 6 figure salaries. It's hard to argue that's a fair system or that it encourages or rewards hard work.

Everyone recognises that as an adult nowadays you need a phone... and in reality a smartphone. If the govt. provided subsidised or free phones, would it be fair for them to provide iPhone 13s out of taxpayer money or simply a fairly good Android or older iPhone?

You'll see snobbery if you want to, I guess and maybe the above looks snobbish but it's the way the subsidising is so high and then just drops off a cliff rather than scaling down as incomes rise.

https://www.boards.ie/discussion/comment/118181812#Comment_118181812

I work and pay for everything I have myself. So, I know how it feels having no help from anyone.

It does not, nor should it, bother me what other people pay or don't pay for their homes.

Sierra Oscar

https://www.boards.ie/discussion/comment/118173169#Comment_118173169

Aren't you overlooking the fact that local authorities are buying significant amounts of properties in the second hand market, and providing them to AHB's for social housing?

Significant amounts of properties are being bought in estates and apartment developments that many would consider to be 'mature'. It's not confined to new build developments.

If you live in an estate or apartment complex in an urban area and your neighbour puts their property up for sale, then there's a very good chance your local authority is making inquiries. They have deep pockets too.

LJ12345

https://www.boards.ie/discussion/comment/118183113#Comment_118183113

and it’s also understood that authorities have a list of housing estates which they wish to buy into in order to keep their pre defined ratio of social housing and prevent ‘saturation’. There’s method to the madness.

Amadan Dubh

€1.25m for a tiny terrace in Sandymount, purchased for €720k in 2017. It looks quite nice for its size and I appreciate it's Sandymount but €1.25m is surely totally unrealistic as it looks like a terribly poor value family home but would still be targeting a family demographic.

https://www.irishtimes.com/life-and-style/homes-and-property/new-to-market/smart-family-home-with-workspace-on-londonbridge-road-for-1-245m-1.4729297?mode=amp

JimmyVik

https://www.boards.ie/discussion/comment/118183816#Comment_118183816

I actually have the list. They dont call it saturation when they have over 50% though, they call it "socially satisfied".

JimmyVik

https://www.boards.ie/discussion/comment/118181300#Comment_118181300

Im going to call that out as bullsh!t anyway.

What do you work at that of private owners would be calling you out for a disputes with other private owners?

iColdFusion

https://www.boards.ie/discussion/comment/118181300#Comment_118181300

The councils have effectively admitted it themselves, Part V requires 10% social housing in a new estate, developers used to give this as say 5 houses in a row at the end of a street but councils arnt accepting this anymore, they want single houses dispersed throughout the estate because social housing cant be put together without it turning into a ghetto.

Honestly a lot of it is attitude, people who get something for nothing have no respect for it and they are not invested in living in that area.

Villa05

The best place that I lived in is an area considered genuine working class as in median salary and below. The issue is that in our current government sponsored demand driven/supply choked system such areas are no longer developed.

Top dollar to own your own and for social housing hence the hammered young people in the middle renting and complete lack of the required social and affordable housing.

Plus those that own there own home are vastly overpaying

The whole system is designed to rip off our children

Amadan Dubh

https://www.boards.ie/discussion/comment/118180666#Comment_118180666

"Growing signs of exuberance" - 2018 wants its analysis back! The activity in housing, crypto and junk bonds has been euphoric for almost 2 years, since the pandemic restrictions began in early 2020, not just in the EU of course but also in the UK and U.S. I thought the "growth" had run out of steam in 2019, arguably it had, but the pandemic threw gasoline on the fire.

What people are not copping is that the pandemic supercharged growth isn't far off two years now, which is almost leading to an expectation that this is a form of new normal - make no mistake, what has happened the last 2 years is not normal or sustainable, with big tech, crypto and housing is mightily exposed to a correction. You have to look at what the rich guys are doing and what it looks like is that they are unloading shares and companies are undertaking buybacks rather than investing; essentially starting to get out. Specifically, I am referring to the likes of Elon Musk and his brother dumping shares of Tesla; Michael Burry (infamous housing market shorter pre-2008) has already moved out of big tech stocks and into cash; Zuckerberg has sold billions worth of Facebook shares in the last 12 months; Warren Buffett/Berkshire Hathaway; Google's founders have sold hundreds of millions worth of shares this year for the first time since 2017; and closer to home Glenveagh homebuilders recently announcing a share buyback rather than seeking to invest the cash in the company.

https://www.boards.ie/discussion/comment/118184335#Comment_118184335

Think about it

Marius34

https://www.boards.ie/discussion/comment/118185012#Comment_118185012

This is valid warning. And it's really insane what's going on with Tech market. And yes the current growth is not sustainable, it's interesting and worrying to see what's going to happen in coming years. I think it's very likely there will be some significant corrections/falls in Techs in coming couple of years, but not much in Residential properties.

https://www.boards.ie/discussion/comment/118184495#Comment_118184495

It's better for everybody to have mixed housing. Firstly it stops the discrimination towards social tenants. Mixed housing with tenants of various social backgrounds and incomes has been shown to be the best in other countries

https://www.boards.ie/discussion/comment/118185169#Comment_118185169

Professional assassin?

cnocbui

https://www.boards.ie/discussion/comment/118180666#Comment_118180666

Well if you lot hadn't pushed interest rates below zero, People who want or need yield might have more and safer choices. Somebody please buy them a mirror, it will make it a lot easier and quicker for them to find the causes of problems in the economy.

cnocbui

https://www.boards.ie/discussion/comment/118184335#Comment_118184335

Those blue lights you see flashing in your rear view mirror, may soon provide the answer you seek.

Amadan Dubh

https://www.boards.ie/discussion/comment/118180993#Comment_118180993

This ignores the whale activity in the market and places too much emphasis on what the individual buyer is up to - a reason I feel the regulators dropped the ball and are already looking at the empty stable after the horse has bolted. The problem with our housing bubble is that it has been inflated by the rental market; the yields available for investors in the PRS has meant that the home buyer market has also been lifted. John and Jane Doe taking on a mortgage 3.5/4.5 times their combined earnings are not "overleveraged" as they would've been in the build up to 2008, but they make up a small part of the activity in the market.

I posted before that;

"there's only in the region of 30-40k mortgages drawn down each year in Ireland the past 6 years since the mortgage limits were introduced (this was the equivalent of the mortgages drawn down in 2003 and 2004 alone) so it is a drop in the ocean as far as the property market is concerned. A well insulated and protected ocean, but only a small proportion of the market where the LTI/LTV limits are actually relevant."

I mean, it's good to know that individual buyers aren't going to be as overleveraged as before but who knows exactly what the impact will be in the event of a correction in the bubble areas (i.e. rental market) - a good guess would be the State with its long-term leases at 85/90% of bubble rents.

iColdFusion

https://www.boards.ie/discussion/comment/118185185#Comment_118185185

That's not reality though, look at any Irish city, they all have the swanky parts where houses prices are at least twice that in the less nice parts, people who can are more than happy to pay over the odds to live surrounded by their peers but the government and councils have so spectacularly failed to provide social housing estates they are buying up €500k houses at the taxpayers expense and competing with private buyers.

iColdFusion

Anyone know why the old council scheme of providing affordable sites to people doesn't seem to be making a comeback?

Would have thought them buying up a field, re-zoning it, sticking in a road and utilities then selling sites at cost price to people able to get a mortgage to build would have been a key part of Housing for All and would be a great fudge come election time as they can say they have provided 2000 sites to people when they could have only built 200 houses themselves in that time. Also has some green merits as they could be encouraging people to build in small towns rather than out in the countryside, most towns have little scope to get planning as the development boundaries are so restricted and any zoned land is normally already owned by the local rich lad who is buddies with the local planner.

https://www.boards.ie/discussion/comment/118185484#Comment_118185484

This is how it's done in Finland, it's a great system. Anyone who wants to build their own house can buy the site with the roads, lights, services all in place.

They can then choose from a number of different house types that are allowed in that area.

Amadan Dubh

https://www.boards.ie/discussion/comment/118185545#Comment_118185545

Combine that with the sustainability of modular housing and it would be a great initiative to (re)introduce.

Cyrus

https://www.boards.ie/discussion/comment/118183885#Comment_118183885

1.25m doesnt get much any more, and to be fair id imagine the total spend by the owners including the refurbs etc would be a million and the rest so the uplift isnt as stark.

Its 1800 sq feet in a desirable location and turnkey, id be surprised if it sells for much less.

Although give me sandycove over sandymount any day of the week!

enricoh

https://www.boards.ie/discussion/comment/118185181#Comment_118185181

House prices in Ireland rose 12% in the last year, not exactly sustainable either. The dough from multinationals pays for almost everything in Ireland, corporation tax is looking iffy enough into the future, Ireland will surely be less tempting for MNCs from now on.

Anyone got the figures of the combined councils, hap, cluid, mc verry etc etc etc for house purchases and rentals last year? Surely corporation tax is the only thing keeping that spend going?

Here's a excerpt below that says cluid alone have over 300 houses in laois!-https://www.leinsterexpress.ie/news/property/694620/50-million-contract-for-new-social-housing-in-portlaoise.html

Clúid Housing which already owns over 300 houses in Laois rented out to council tenants.

Bass Reeves

https://www.boards.ie/discussion/comment/118185724#Comment_118185724

When you consider it cost 720k in 2017, has house price gone up by 40% I those 4 and a half years. That brings it to a million.

Renovation look like at least 250k and that is not allowing for present house building inflation.

Any buyer will have to make choice in trying to buy a doer upper and comparing the cost.

Marius34

https://www.boards.ie/discussion/comment/118185734#Comment_118185734

Double digit increase is not sustainable, but that doesn't mean that this should lead to significant fall in coming few years.

Corporate tax is not the only public revenue. Revenue from Income tax and VAT is higher than Corporate tax.

javaboy

https://www.boards.ie/discussion/comment/118183062#Comment_118183062

I don't care if someone next door to me wins their house, inherits it, or is gifted it by an eccentric billionaire. It's none of my business.

What I do care about and I cannot understand why any citizen, especially taxpayers, wouldn't is that this is taxpayer's money being spent in an extremely inefficient and unfair way. The social housing system is essential. It should provide for a reasonable standard of housing for people who cannot afford to do so alone. What it shouldn't do is leapfrog those people above others who aren't getting any support from the government/council.

There are so many people buying outside of their preferred areas or away from family or with long commutes or unable to buy at all. Meanwhile, people who either aren't working or are eligible for some kind of help can be far more selective. That is inherently unfair.

Amadan Dubh

https://www.boards.ie/discussion/comment/118181579#Comment_118181579

People from Sandymount/Sydney Parade I knew used to make that joke back when I was a teenager - it's sad hearing an adult make these jokes as you can tell they believe them to an extent.

Timing belt

https://www.boards.ie/discussion/comment/118185012#Comment_118185012

Just because a company is buying back shares doesn’t mean it’s not investing in the company.

It makes sense to buy back shares and issue debt instead for capital investment in companies seeing as debt is the cheapest it has ever been.

Timing belt

https://www.boards.ie/discussion/comment/118185391#Comment_118185391

I agree that the rental market is pushing house prices up. I don't think I would call it a bubble as it is unlikely to pop anytime soon as people will need to live somewhere and supply is slow to come to market. The only time rents will decrease is when there is a over-supply out there and landlords will need to lower prices to attract tenants. To me it seems like we are a long way off this happening.

What was interesting about the ECB report is that other EU countries are having the exact same problems with housing but they are seeing a deterioration in lending standards with higher LTV & LTI which is helping fuel housing prices. If the central bank rules were not in place here we would be seeing the same issues.

Villa05

https://www.boards.ie/discussion/comment/118186847#Comment_118186847

Could you have said something roundly similar in 2005?

It needs a trigger event and with so many different assets in a bubble, a trigger event is far more likely.

Just to add to earlier post Michael o Leary made a significant transaction on shares last week. If cash is such a bad asset why are so many at the top making that choice

Timing belt

https://www.boards.ie/discussion/comment/118186892#Comment_118186892

In 2005 there was plenty of supply of rental accommodation as every tom, dick and harry and purchased at least one second home as an investment because banks were willing to lend.

Yes every bubble needs a trigger event to pop but even if the stock market crashed massively it would have limited impact on housing unless the stock market crash saw companies going to the wall and large scale unemployment in Ireland or massive emigration. At the end of the day people still need to live somewhere and if they can't afford to buy there only other option is to rent and without a choice of places to rent they are forced to pay top dollar.

Cash is always King.... but at the moment we are seeing inflation and low rates which means that people are loosing money by keeping cash.

javaboy

https://www.boards.ie/discussion/comment/118186892#Comment_118186892

Other than denial of a bubble, I don't think you'd have said anything similar in 2005 at all. What trigger event would cause a price crash in Ireland?

Interest rate rises - they would take some buyers out of the market but many would be FTBs are paying way more on rent than they would on a mortgage already. There are enough of those who could absorb a decent rate rise and mop up the pitiful supply.

REITs leaving - they're unlikely to dump hundreds or thousands of properties on the market all at once and cause a price crash they would directly suffer from

Corp Tax increase->MNCs leaving - this would hurt for sure but a lot of them would need to leave very quickly

I just don't see it. The supply is so so small right now that just about any shock could be absorbed because there are a queue of buyers for every home going. Maybe a more lethal pandemic or Thanos clicking his fingers would do it.

CEOs and top executives make enormous transactions all the time. Whether it's diversification, liquefying assets to pay taxes/living costs, or very often a pre-scheduled sale within certain allowed trading periods. They sometimes make the headlines and it looks like a CEO losing faith in their company but usually it isn't.

Cyrus

https://www.boards.ie/discussion/comment/118186710#Comment_118186710

to be fair its no longer really north side south side its more east and west dublin.

Villa05

https://www.boards.ie/discussion/comment/118186962#Comment_118186962

Trigger events will be international not local. Ireland is not the centre of the world economy. We are extremely open economy so are highly vulnerable to international shock waves particularly in I. T. And finance and real estate

Where are the bubbles?

iColdFusion

https://www.boards.ie/discussion/comment/118186962#Comment_118186962

You can add Sinn fein getting into power to that list!

The Student

https://www.boards.ie/discussion/comment/118181717#Comment_118181717

Ballymun, Tallaght, St Michael's estate Inchicore, Fatima Mansions, Oliver bond flats to mention just a few. These are all well known areas with anti social issues. Guess what they have in common?

Ironically it is only a handful of people in these areas who completely destroy areas.

mcsean2163

https://www.boards.ie/discussion/comment/118185012#Comment_118185012

https://www.boards.ie/discussion/comment/118183062#Comment_118183062

Michael Burry also liquidated his short positions. It's very uncertain at the moment. If there is a housing crisis in China and China sells its US bonds and middle East sells oil in currency other than dollar, it could be serious inflation time. In such an environment shares would probably be a better store of value.

Have you looked at the price of a laptop lately?

mcsean2163

https://www.boards.ie/discussion/comment/118187295#Comment_118187295

Yes, China looking shaky in the real estate front. How would REIT redemptions work in a rising rate environment and what if Facebook Google left at the same time?

hometruths

https://www.boards.ie/discussion/comment/118186947#Comment_118186947

but at the moment we are seeing inflation...

I knew you'd come round eventually ;)

Timing belt

https://www.boards.ie/discussion/comment/118188292#Comment_118188292

Lol.... :-)

Timing belt

https://www.boards.ie/discussion/comment/118188227#Comment_118188227

That's a lot of what if's.....

China is always looking shaky but yet we get 75% of our goods from there and that won't change unless there is some sort of protest about climate action that looks for a boycott. The Chinese government are the ones that are deliberately causing the real estate to be shaky as they try to slow the housing market.

REIT/Fund redemptions have plenty of clauses that would stop a run with investors pulling funds. These have all been strengthened following Q1 2020. The ECB say rates won't rise till at least 2023 and when they do rise it will be in very small increments and will be nowhere near the yield on property so should not impact.

If there is a crash in the stock market then you will see investors flee to liquid assets such as government bonds which will result in downward pressure on the yields and in turn on rates. If the stock market crash causes contagion then you will see the central banks step in with more QE to calm the markets which in turn will put downward pressure on rates.

The biggest risk to the whole financial system is the introduction of a E-Currency being globally adopted and resulting in the USD no longer being the global currency.... If that happened then you would definitely see hyper inflation in the states.... but the likely-hood of that happening is remote.

The most likely thing to happen is that there will be more QE taking place to finance the Green revolution once the global economy starts to stutter in 2022/2023.

mcsean2163

Interesting commentary here on Evergrande non payment to German bond owner and the Chinese derivative market.

https://youtu.be/cNMhfbanDhE

I could see Xi being quite happy to knock down the house of cards.

Timing belt

https://www.boards.ie/discussion/comment/118188451#Comment_118188451

They talk about the impact on Global banks by issuing CDS's but they don't take into account the fact that following 08 banks need to hold capital in case these default and in a lot of cases OTC's with a foreign corporate will attract a minimum risk weighting of at least 100%. Which means that a bank has capital put aside to cover any losses when they issue the CDS's. The winners will be the funds that bought the CDS's a couple of years ago if Evergrande does officially go bankrupt and the Chinese Government stand back and let it happen. But I don't see that happening as it would lead to the one thing that they are scared off.... civil unrest of the masses.

Furthermore back in Sept Evergrande bonds were no longer accept as collateral which yet again reduces the impact of direct contagion.

The biggest risk from China at the moment is a slow down in output due to power outages which will generate inflation as there will be less goods available and prices will rise on the back of it.

mcsean2163

https://www.boards.ie/discussion/comment/118188718#Comment_118188718

I only recently read Cixin Liu. If it's any reflection on the CCP mindset, I except Xi does not care about civil unrest. They recently issued edicts controlling when and for how long video games can be played as well as outlawing tutoring.

Good points on CDS.

I don't really know where China wants to go but if it decides to flex, it's well set to topple the US....

JimmyVik

https://www.boards.ie/discussion/comment/118185312#Comment_118185312

:)

That was the only thing i could think someone might work at to have that exposure. But im still betting that if they worked near council estates theyd be far busier in them than in the private estates. 4 private estates and one council estate near where i live. Patrol cars always in and out of the council estate. Friends living there confirm that too. I think ive seen one in one of the private estates in the last 5 years.

SmokyMo

https://www.boards.ie/discussion/comment/118188718#Comment_118188718

Power outages were not much of an issue. Sorted now.

They actually doing really well from covid effects. Production is booming. Shipping rates through the roof. Flat out pumping containers.

Their bigger issues are housing market, water supply and aging population. The latter will affect their output massively in the coming two decades.

Have spent plenty of time in council estates over the years.

Most disputes between neighbours happen in private estates.

Gael23

A family member put a house for sale in a small town in Wexford last Thursday at 198k. Currently at 230k

Totally insane, those houses were selling in 2007 for that

Bass Reeves

https://www.boards.ie/discussion/comment/118190778#Comment_118190778

With present cost of building supplies and labour as well as planning and regulatory costs unless that house is a kip it's still below the cost go build it.