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

mcsean2163

https://www.boards.ie/discussion/comment/118213353#Comment_118213353

I find you confusing. You keep talking about how you love social housing but seem to be ignoring affordable properties in d15.

Care to explain?

Villa05

https://www.boards.ie/discussion/comment/118211651#Comment_118211651

It's the 1st of 3 linked by Amadan Dubh yesterday

https://www.boards.ie/discussion/comment/118213930#Comment_118213930

I'm not sure what you mean? I look at houses that suit me, and my list of requirements.

There are lots of houses in lots of areas that I don't look at.

Ray Palmer

https://www.boards.ie/discussion/comment/118209362#Comment_118209362

the majority of prisoners in Mountjoy come from 4 council estates in Dublin. It isn't some hazy detail about anti-social behaviour in council estates versus private. You can get anti-social behaviour from anybody but is just a fact the less educated you are the less social responsibility you will have. The less educated the less you earn the more likely you will need social welfare accommodation. These are known things and it doesn't mean all people in these council estates are bad but they have their own social issues. One of the reason for mixed estates it to break up that concentration so peer pressure is balanced out.

I grew up near Coolock, never saw a burnt out car in our estate but when I went to Coolock there were multiple burnt out cars. The flats by Nortside shopping centre regularly had a fire going against the block and people would just add to it by throwing their furniture out. Blach has the highest drop out rate of schools in the entire country. If you don't think this is a result of poor social housing policies then you are ignoring reality.

https://www.boards.ie/discussion/comment/118214748#Comment_118214748

I agree with everything you said. I'm not ignoring anything.

We don't want big council estates, but yet we don't want social housing beside our houses in our private estates. What's the answer?

mcsean2163

https://www.boards.ie/discussion/comment/118214579#Comment_118214579

You keeping banging on about the benefits of social housing but seem to be avoiding social housing areas in Blanchard.

Pot, kettle, black.

https://www.boards.ie/discussion/comment/118214778#Comment_118214778

Don't be ridiculous. I avoid houses in Lucan also, but they're all private.

I saw a house in cabra the other day, is that ok?

What's your point?

Fattybojangles

https://www.boards.ie/discussion/comment/118214786#Comment_118214786

I'd love to live on the planet those fools live on.

Timing belt

https://www.boards.ie/discussion/comment/118214786#Comment_118214786

It’s undervalued based on rental prices in the report. It does doesn’t take into account that the majority in the rental sector can’t get a mortgage because of CBI rules.

iColdFusion

https://www.boards.ie/discussion/comment/118214764#Comment_118214764

Make those people to buy their own houses like everyone else? If they cant afford to buy in Dublin they need to move out to somewhere cheaper like working families have to, why should the taxpayer have to subsidise their housing? Why don't we subsidise housing for nurses instead, they actually contribute to society and have a very tough job?

There is something fundamentally wrong with the system when the economy is booming, massive employment opportunities for good wages but the social housing list keeps getting longer and longer.

Ray Palmer

https://www.boards.ie/discussion/comment/118214764#Comment_118214764

Some people don't want mixed estates and some people don't want big social housing estates. People will argue about it. There isn't an answer there is arguing and it won't go away so people will block it every way they can. SF won't be able to solve it and actively block developments of all kinds. I don't want social housing added to my area because the council sold the social housing in the area to the tenants. The area did it's time and gentrified. New estates should be mixed with a housing officer to remove problem tenants from social housing and put them in some form of sin bin and even eventual removal from all social housing if issues continue.

Sinn Fein won't solve anything, that's for sure!

Mad_maxx

https://www.boards.ie/discussion/comment/118214764#Comment_118214764

proper policing by both AGS and local authorities , currently we have little from either

https://www.boards.ie/discussion/comment/118215137#Comment_118215137

What do you suggest AGS do?

Mad_maxx

https://www.boards.ie/discussion/comment/118215171#Comment_118215171

well AGS need the support of government but penalties for the parents of youths engaged in repeated delinquent behaviour in estates in the way of welfare reduction would be a good start.

local authorities need to ban those evicted for life from the housing list or homeless services , if you terrorise your council estate , you live under a bridge or just pay your own way

we,ve had two generations of endless carrot at the behest of liberals , its failed miserably beit with tinkers or local authority estate residents who make life hell for their neighbours

https://www.boards.ie/discussion/comment/118215218#Comment_118215218

You can't take money from people because someone related to them engages in bad behaviour! Also, the state cannot just make people homeless.

Mad_maxx

https://www.boards.ie/discussion/comment/118215281#Comment_118215281

under my proposal , if local authority tenants breach conditions and are evicted , they presumably must seek shelter elsewhere , beit with relatives or privately , that isnt the " state making people homeless " but your reply does speak volumes , your concern is for the delinquents who have been removed from the locality where they are wreaking havoc

https://www.boards.ie/discussion/comment/118215356#Comment_118215356

I have no concerns for such people!

What do you suggest that we do with anti social house owners?

https://www.boards.ie/discussion/comment/118205646#Comment_118205646

Anecdotally, I am seeing this in the upper end of the market in South Dublin and North Wicklow. Having spoken to a couple of agents they have said it's gone quiet and unsure if due to seasonality.

At the lower end of the market it's still brisk.

L1011

Discussion of social housing tenants in the manner which has been happening for a few pages is against forum rules, and its also off topic. Stop it immediately.

Villa05

https://www.boards.ie/discussion/comment/118214786#Comment_118214786

I'd be bookmarking that report for when it blows up and the taxpayer is threatened with footing the bill.

Do they give any mention of rents being in a bubble?

Villa05

https://www.boards.ie/discussion/comment/118215780#Comment_118215780

Can we have a system where children and their parents in emergency accomodation be swapped out for anti social Tennant's

Is that feasible?

Have at least some sort of response to delinquent behaviour. Right to housing has to be balanced with respect for same

Amadan Dubh

https://www.boards.ie/discussion/comment/118215946#Comment_118215946

Yes, I'd love to see a similar report on whether rents are under or overvalued. Is there one?

I like that the report highlighted low interest rates and their link to house prices, also noting the risk of a correction should interest rates rise. On that point, there is a link between stocks and house prices and their value increasing, but there are a couple of things that make me think that stocks at least are in a bubble of sorts which is leading to uncertainty in some quarters; our own regulator is clamping down on certain investments that funds can enter into, particularly more speculative products. The other point is to do with the big players offloading their shareholdings; as posted last week and I see again today Musk is dumping more Tesla shares. Why would the regulator be getting nervous about speculative instruments and the rich guys offloading shares if the fundamentals were strong and there was room to run?

One last point is to do with McWilliams and his position that understanding bubbles is about understanding psychology and reading people's minds more than it is about pure economics. For the last while there is absolutely a mood that the only way is up and if some sort of correction occurred I think it is fair to say that a lot of people would claim that "no one saw it coming". That in itself is a warning for me! While I'm a renter I'd welcome a rental market crash, happy to admit that. But I also have parents who plan on selling their home and live off the proceeds for the rest of their retirement but unfortunately they are wedded to the idea that they could make more by holding out longer and also that they will only end up buying somewhere overpriced as well if they sell at the moment - not listening to the advice that "a bird in the hand" etc. Personally invested in the two camps.

Timing belt

https://www.boards.ie/discussion/comment/118215946#Comment_118215946

Even if houses prices crashed how would it translate to the taxpayer footing the bill. We could have a crash the same as 08 and banks would be ok this time around due to changes in regulation…they regularly stress test this and publish the results.

cnocbui

https://www.boards.ie/discussion/comment/118205106#Comment_118205106

The average salary for a single public sector worker in 2019 was €56,666. If there were two in a house, obviously you double that.

cnocbui

https://www.boards.ie/discussion/comment/118206070#Comment_118206070

I for one don't begrudge you a cent that you have and am glad you have been clever with your finances. Some call it a property ladder, but for those who make the right decisions and have some luck with timing, it can be closer to a property train.

straight

https://www.boards.ie/discussion/comment/118216985#Comment_118216985

As far as I am aware PTSB have never passed those stress tests.

Timing belt

https://www.boards.ie/discussion/comment/118216542#Comment_118216542

The regulator is concerned about speculative instruments because as investors chase yield they are taking on more and more risk and unless the investors is a sophisticated Investor they may know the level of risk they are undertaking. The same thing happened in banking in 08 where derivatives were sold to people that didn’t understand them and lost a fortune as a result. This time around it is the funds that are using them and investors may not be aware of the risks.

With regards the risk of the stock market crashing all the big banks have highlighted this risk. The problem is that people don’t know when it will crash. Greed and fear move markets and at the moment there is more greed than fear.

Amadan Dubh

https://www.boards.ie/discussion/comment/118217234#Comment_118217234

I think the regulators have already missed the boat on this, as mentioned before in the context of the staggering size of the shadow banking activity going through Ireland (in the trillions). In the build up to 08 you had a lot of fraud and risk; higher yielding fixed income instruments have grown at warp speed in recent years to become this absolute monster. We also have a lot of fraudulent activity and you can take your pick here; Chinese housing market; the entire crypto world but even with ETFs which to me are a bit of a con (especially around their liquidity).

I am worried for the post-pandemic unwinding of economic supports as I don't see how we can persist with the same conditions as we have not quite but almost gotten used to the last 18 months as it has supercharged asset price growth which cannot happen in isolation to the real economy or even disconnected to wages, without something giving. It's squeaky bum time as they say.

Timing belt

https://www.boards.ie/discussion/comment/118217113#Comment_118217113

PTSB is not deemed a systemically important bank. Maybe that will change when they take over some of the ulster bank book

Timing belt

https://www.boards.ie/discussion/comment/118217320#Comment_118217320

Which part of shadow banking do you see impacting the Irish economy? The majority of it is just the packaging up of debt and selling to global investors who are chasing yield and the only direct impact would be people working in this industry

Villa05

https://www.boards.ie/discussion/comment/118217113#Comment_118217113

Not that there was much confidence about in those tests at the time. Markets laid off the banks because of central banks actions rather than any confidence in the banks balance sheets

Timing belt

https://www.boards.ie/discussion/comment/118217544#Comment_118217544

That’s rubbish and there is no evidence to back up your claim.

All the banks implemented new regulations that made the banks safer and more robust.

Wanderer78

https://www.boards.ie/discussion/comment/118217637#Comment_118217637

you d be extremely naïve to think our banks are safer and more robust, virtually nothing has been done to deal with any sort of potential dangerous lending or other dangerous behaviors within the sector, again, nothing has been done about the insider trading activities within davys post 08, you can be damn sure nothing has changed within all the other financial institutions either. and again, according to former financial regulator bill black, its common for financial institutions that purchase such institutions, to be also engaging in highly questionable activities, i.e. BOI! so, watch this space!

Amadan Dubh

https://www.boards.ie/discussion/comment/118217390#Comment_118217390

It's bigger than the workers in law and accounting firms in Dublin and the other service providers involved in the area. A large asset manager runs a fund in Ireland into which many different types of investors invest including European pension funds and the Irish fund invests in a variety of investments including many "bonds" issued by Irish SPVs, by way of example. The bond is issued by an SPV and the performance and coupon is based on the performance of something underlying from which the investor is directly removed. The bond is given a listing and a promise to be repaid; for all intents and purposes it is a legitimate product with good liquidity. The investor receives a coupon from the bond and the proceeds from the issuing of the bond are then funnelled through to the underlying referenced thing whatever that may be. The key however and the gap in the regulator's oversight is that it could reference anything, there is no way of knowing what exactly it is from just looking at the bond, but one thing that is likely to be the case is that these bonds are connected to corporate debt which means that the corporate entity to which the debt relates can refinance its debt obligations quite easily in the current climate and trickle along, regardless of its fundamentals. From the perspective of the corporate entity, it is not really known who is buying its debt as there is a chain going all the way back up to the investors in the Irish fund or elsewhere that have contributed to its ability to refinance its debt. So on the investing and receiving sides there is little regulator oversight on how deep the rabbit hole goes.

A whole load of zombie corporations are hooked on this cheap debt restructuring facilitated via the shadow banking industry which is fuelled by yield hungry investors. Liquidity is just an illusion in this world. Raising interests rates could result in the yield hungry investors pulling back to traditional bonds which could collapse the corporates hooked on cheap debt. However, more importantly there could be a systemic risk posed by what is happening in the shadow banking world and how it might affect the Irish economy is of course hard to predict, but the regulator seems to finally be starting to take notice.

What might happen to the Irish economy; Perhaps the corporates in Ireland who employee a lot of people reduce headcount or go under as it turns out their debt was unsustainable. Maybe interest rates rise to cool what is happening in the shadow banking industry which then impacts house prices. Irish pension funds could be exposed as they too sought higher yielding investments. Alternatively, the eurozone struggles as its corporates struggle and interest rates stay low which fuels further hosue price increases. All part of the everything bubble.

Timing belt

https://www.boards.ie/discussion/comment/118217699#Comment_118217699

so the

• implementation of CRDIV where risky lending attracts high RWA’s and means that banks have to hold more capital and has resulted in banks reducing their risky lending. (There is a reason why developers turned to funds to finance developments because the banks don’t lend big time on CRE anymore)
• the introduction of Bail in Bonds that would recapitalise a bank if it failed so governments would not need to step in again
• the introduction of liquidity and capital buffers
• the fact that Irish banks have spent 100’s of millions implementing new regulations
• the fact that if the same crisis as 08 hit the banks are financially sound to withstand it.

all this is ‘virtually nothing’ ?

Timing belt

https://www.boards.ie/discussion/comment/118217707#Comment_118217707

Are you talking about CLO’s and the risks that are attached to them?

The reason I ask is because it is not the job of the regulator to say that the underlying assets are liquid and safe. That is the job for the rating agencies.

The only concern of regulators is if there was systematic risk. If a fund or pension fund makes a bad investment it’s not the job of the regulator to ensure that what they are buying is quality.

The use of CLO’s is normally where a corporate couldn’t get a loan from a bank or were not strong enough to issue its own debt which are much cheaper sources of capital and are not used much by irish trading companies for this reason.

Amadan Dubh

https://www.boards.ie/discussion/comment/118217870#Comment_118217870

Not even as funky as a CLO, just something that for the purpose of ticking boxes meets the criteria of a bond. Normally vaguely referred to in fund documents and fact sheets as "investment grade, high yield corporate bonds". What these seem to be are nothing more exotic than a simple bond. It's very easy to get them listed and ratings agencies will just throw a rating on them.

Where the regulators should be involved and are trying to get involved is in respect of the regulated entities which invest in these bonds and they are particularly concerned about the liquidity in these bonds, reminding the various entities of their legal obligations in relation to liquidity. However, there are other areas which the regulators could do more on.

Ultimately as you say it's not the job of the regulators to regulate bad investments but financial stability is absolutely subject to elevated risk from the shadow banking activity which has gone on and the level of activity in Ireland being in the trillions of euro is certainly something which should terrify us, especially in the context of it barely being regulated and having little transparency.

Timing belt

https://www.boards.ie/discussion/comment/118218933#Comment_118218933

They are called high yield bonds for a reason because they need to pay higher rates to attract investors because of the higher risk of default. The yield on investment grade bonds is lower because of the lower risk and the demand (lower yield, higher Bond price)

Due to QE and low interest rate environment investors have been chasing yield and as a result have taken on more risk. This is well documented.

The fact that the a lot of this activity is undertaken in the IFSC does not mean that it has a direct link with Irish Non Financial Corporations. The majority of investors are overseas and the majority of issuer's are UK & US even if there was a big crash it is unlikely to directly impact the real Irish economy with the exception of people employed in asset management and funds furthermore the main trigger for a crash in this sector would be the downgrading of multiple companies at the same time who have issued the bonds. This was a risk back in 2020 and is becoming less of a risk now as the economy opens up. The biggest risk I see in relation to this is for a badly run fund not to manage the risk of rising rates. A well run fund should be able to make money in a rising rates environment and the ECB, the FED and BOE have all been very vocal on forward guidance so there should be no surprises.

I understand you concerns about transparency and funds, fund of funds etc don't help. But at the end of the day the BOND is a traded security and the onus is on the investor to know what he is getting into. It's no different to someone buying a shares.... If they have done there homework and understand the market and risks they should make money... If they are just jumping in and buying shares because everyone else is and are believing twitter or Reddit as people pump the shares then they will loose big time.

I can see a link with financial stability and house prices.... And the market has taken on more risk but at the end of the day these are traded securities that have their risks assessed and monitored by the rating agencies. If a investor gets burned because they have been sold a lemon then that is their fault but the chances of all of these Bonds defaulting at the same time is very remote and is monitored by the ERSB. (have a look at the most recent ERSB dashboard). Finally if there was a crash the Irish government would not need to bail out any of these funds so no increases in tax and cut's in expenditure like in '08. As I have said before if there was a crash the most likely thing to happen would be more QE which would push asset prices (including Irish Property) higher.

Villa05

https://www.boards.ie/discussion/comment/118216542#Comment_118216542

If Paddy power did housing.......

Villa05

Ftb priced out of new homes

40% of new build mortgages were for self build

FTB getting older

https://bpfi.ie/publications/mortgage-market-profile-report-h1-2021/

Villa05

An example of how rampent house price inflation hinder local economies and sustainable jobs

And how innovative solutions are being blocked by the state apparatus in hindering the development of a rated family homes at a cost of 150k

https://www.irishexaminer.com/news/munster/arid-40751706.html

iColdFusion

https://www.boards.ie/discussion/comment/118219452#Comment_118219452

Don't think they are priced out of new homes except maybe in Dublin or swanky parts of the main cities but they definitely can't compete with investment funds and social housing bodies buying up chunks if not all of new developments.

javaboy

https://www.boards.ie/discussion/comment/118217072#Comment_118217072

I deliberately used the mean household income as per the CSO because the post I was responding to used the phrase

well within the reach of most working people

A household with a combined gross income of €113k is not representative of most working people.

fliball123

https://www.boards.ie/discussion/comment/118216542#Comment_118216542

McWilliams is just like the rest of us he talks a good game but ultimately he is guessing he was predicting a bubble pre 2017 and was convinced it was going to burst in 2017 he got lucky with 2008 when he called it right but got it wrong with his prediction on prices post 2017. I would be careful listening to any of these lads you only have to look at his so called show where he has jazz singers and forms of entertainment like impersonators he was trying to go into mainstream as an entertainer and had moved miles away from being an economist.

fliball123

https://www.boards.ie/discussion/comment/118217699#Comment_118217699

Nothing really so since 2008 we no longer have 110% mortgages, FTBs have to have 10% and STBs have to have 20% and you can only borrow 3.5 times your salary. Not to mention the amount of documentation you have to go through if your going for a mortgage, you also need to explain any irregularities with regards to large amounts going into your account and going out. To say nothing has been done is false. Anyone who has applied for a mortgage will tell you how hard the banks have made the process.

Wanderer78

https://www.boards.ie/discussion/comment/118217776#Comment_118217776

yes, its important to realise, our whole financial sector has become highly predatory and parasitic, it no longer truly provides society with its needs, it no longer behaves as it was initially designed for, its truly just feeding itself now, creating money via credit creation, in order to push up the value of pre-existing assets. the financial sector was created to provide us with the finances to create what we need, it now no longer truly does this, you can clearly see that this is the case, with the severe lack of building and other financialised activities such as share buy backs etc etc, bailing the financial sectors out has ultimately failed. the measures implemented, as you mentioned, are in fact no guarantee that we are protected from future financial crisis, some in fact believe for example, that if bank bail ins are enacted in future crisis, that depositors will in fact be on the hook, i.e. some deposits maybe bailed into the system, in order to protect the banks, we ve no clue if this is the case, we ll only find out if and when this occurs.

there was a major push to reenact the glass steagall act post 08, but this was heavily lobbed against by the financial sector, you d have to wonder why! the protective measures implemented, clearly didnt go far enough, theres clearly all sorts of highly questionable activities still occurring within the sector

again, id pay far more attention to the opinion and experiences of commentators such as black over such matters, nothing has truly changed within the global financial sectors, including our own, and the fact our economy is now perfectly primed for another credit fueled building boom, so watch this space!

Wanderer78

https://www.boards.ie/discussion/comment/118219661#Comment_118219661

lads such as mcwilliams were watching what most dont watch, ultimately the levels of rising private debt, as historically, rapidly rising private debt has generally caused far more serious and frequent crashes, but most orthodoxic economists, also known as neoclassical economists, largely ignore private debt, and are strangely overly obsessed with public debt, which in fact has caused far less frequent, and far less serious crashes. neoclassical economics also has a refusal to accept the critical role banks, money and debt play in a modern economy, and the fact banks themselves actually create this form of money, we call this credit, when they make loans, we re actually still stuck in this situation today. mcwilliams was in fact one of many that realised the 08 crash was in the post prior to it, due to these facts, pettifor realising in 03, and keen in 05/06.

its important to realise, private debt is now currently at an all time high globally, we ve no real clue whats gonna happen next, as humanity has never been in this situation before, central banks are pretty much stuck, if they raise rates, which they probably will start doing soon, they may start crashing economies all over the shop, and probably largely due to these levels of private debts, as we become unable to service these debts, due to these raising rates. its a very interesting time, but also very worrying to, its a wait and see

Timing belt

https://www.boards.ie/discussion/comment/118219795#Comment_118219795

i agree that in the USA and Europe reform didn’t go far enough and they should have separated retail banks from investment banks but in the UK they did this with the ring fencing legislation (which is the equivalent of glass steal all act). If the USA and Europe did implement the equivalent it would have been a belt and braces approach to banking stability. But even without this the regulation that they have implemented has made the banks 1000 times more safer and as I said before if the exact same scenario as '08 played out the banks would not need to be bailed out by the governments.

I disagree with your point that depositors will be on the hook if a bank collapsed because every systematic bank is required under the new legislation to have a resolution plan in the event of a collapse to prove that retail depositors would not be impacted in the winding up of the bank. In order to ensure that this banks have sufficient funds to repay retail depositors they are required to issue bail in bonds that convert to equity in the event of the bank entering resolution thereby ensuring that there is enough cash to repay retail depositors. All this has been implemented sine '08 so to say that 'virtual noting' has been done is false.

I would also disagree with you on the fact that our economy is now perfectly primed for another credit fueled building boom because believe it or not the banks can't find enough customers that they are allowed lend to due to regulation implemented since '08. The banks are awash with liquidity and would love to lend as this excess liquidity is a real drag on their profits.

Most of the money creation that has taken part in the past 10 years has been off the back of QE and it has predominately stayed within the finance sector because their was no fiscal spending to accompany it. By creating the money and leaving it in the financial sector of course it is going to lead to asset inflation and not generate inflation in the wider economy because the cash never gets out there.

Timing belt

https://www.boards.ie/discussion/comment/118219879#Comment_118219879

Private debt has been falling in Ireland for the last 10 years and it is not just banks that create money any form of lending whether it be in the public sector, private or banks is creating "money".

If rates do rise it will because of inflation and if there is persistent inflation then the value of the private debt will be eroded over time just the same as how you argue that government debt will be eroded with inflation so it's not a doomsday scenario. Also over the past two years with record low rates a lot of the private debt has been refinanced and put on low fixed rate which also provides a cushion to consumers when rates rise. Just look at the no of fixed rate mortgages for greater than 5 years compared to 10 years ago.