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

TheSheriff

https://boards.ie/discussion/comment/117618661#Comment_117618661

My god, this is still be thrown out.

This is absolutely terrible advice, you have no idea where prices will be in 2-5 years, they could be up another 10% and people will be worse off.

People have literally been saying this for years on this forum......the great equalisation in the housing market is only ever a few years away and people should just keep on saving......

Time to get real. Owing property is the best hedge against inflation, it's also the best personal hedge against further lockdowns. It's not decreasing significantly anytime soon.

Amadan Dubh

https://boards.ie/discussion/comment/117625172#Comment_117625172

ECB print money, buy Ireland debt, in few year ECB cancel debt and make euro on balance sheet disappear.

Amadan Dubh

https://boards.ie/discussion/comment/117626175#Comment_117626175

I would strongly advise anyone not to follow this. And I'm putting my own money where my mouth is when I say this.

Right now we are in one of the worst buyer's markets we've ever had. Supply is at rock bottom and demand is sky high. It could barely be any worse.

We have had sellers holding off because of Brexit, builders sitting on their arses for months on end not building anything, rent freezes, a frozen economy with savings soaring the past year and nothing to spend them on except property. It could not be a worse time to buy now. There is so much planning permission granted or in the pipeline that supply will undoubtedly be far better in 2 years, continuing to climb beyond that.

At the same time, it could not be a better time to sell now and, assuming covid restrictions end in a few weeks, things will get back to normal and supply will gradually pick up again. Already, the savings are not being accumulated as much as during lockdown according to the Central Bank.

TheSheriff

https://boards.ie/discussion/comment/117626188#Comment_117626188

This is the perfect example of confirmation bias.

All you see are facts which support your point of view.

I am neither buying nor selling, but I have been following these threads for years and it's always the same advice.....just a few more months/seasons/years and you'll get that house cheaper.

Its absolutely terrible advice, if you can afford a house you should buy it. Anything else is gambling with the market.

Amadan Dubh

https://boards.ie/discussion/comment/117626203#Comment_117626203

Wow.

This is shocking ignorance. I'll frame this post I think!

TheSheriff

https://boards.ie/discussion/comment/117626209#Comment_117626209

I think if you read back from the 2018 thread onwards you'll find my previous advice of "buy the house if you can afford it" is possibly the best advice to would be purchasers on this forum.

Its certainly far better than wait five years and you MIGHT get something cheaper.

Timing belt

https://boards.ie/discussion/comment/117626176#Comment_117626176

The average bond is 10+ years and when this matures Ireland need to pay back the ECB the bond.. in 99% of the cases Ireland will rollover this debt for another 10 years. If the ECB start tapering they will only buy a % of the rollover debt say 90% for example. This leaves the market with an extra 10% which means more supply with the same demand which will reduce the bond price and increase the yield on the debt which has the same impact of a rate increase.

A increase in yield on the government debt will make the debt servicing costs increase and may attract investors to exit other assets such as property and back into bonds. But yields would need to rise significantly for this to happen and if the do rise significantly EU Countries will have trouble serving their debt which would result in higher taxes which would kill the economies of the EU member states.

If the ECB just stopped buying anymore debt it would be the equivalent of the ECB interest rate jumping from jumping from1% to 10% for example.

Either we will see QE continue for the next 10 years with the ECB holding gradually decreasing or we have a total collapse of all EU countries.

If you think QE will end in the next year or two and house prices will collapse off the back of it I think you are mistaken. Even if we see big inflation all that will happen is the ECB will taper a bit faster to stop the economies from overheating.

either way the bond doesn’t just disappear from the ECB’s balance sheet as you suggest. It needs to be repaid by Ireland in full when it matures and in all likelihood it will be repaid from the issuance of new debt which the ECB will step in as part of its QE

MacronvFrugals

Speaking of bonds, good old paddy is offering better yields than any other country on the planet!

Funds ‘drive up cost of social housing by €50k per unit’

Housing body Respond said institutional funds were buying up stock in the hope of leasing it back to the state

Declan Dunne, the chief executive of Respond, said the popularity of social housing as an investment for institutional funds was driving up the average cost for his agency to deliver a home from €297,000 to nearly €350,000.

in other news looks it looks like Housing For All will attempt to wean the market off leases

New leases for social housing will be phased out over the lifetime of this government, and local authorities will be asked to embark on a major compulsory purchase spree of vacant units as part of the new Housing For All strategy, the Business Post can reveal.

https://www.businesspost.ie/houses/policy-of-leasing-social-housing-from-investment-funds-to-be-phased-out-during-this-government-aee2e8ac

https://www.businesspost.ie/houses/funds-drive-up-cost-of-social-housing-by-eur50k-per-unit-cf96cf8c

https://boards.ie/discussion/comment/117626175#Comment_117626175

So what you gona do when price will decrease and you will need money ? How much will worrh your hedge fund then ?

2 per cent per year inflation will eat your savings 50 years.There will be at least 3 global recessions which will bring value of your savings back

From statistics of poverty there is no even smell of inflation.Money are printed for banks not for people

The price of the property same as chaos in people heads with shortage of critical thinking are rised by media

The printed money in USA invested into coockoo and investment funds are lifting prices in Ireland not the ordinary people money.

Hubertj

https://boards.ie/discussion/comment/117626441#Comment_117626441

So what are you suggesting? People don’t buy? Or they keep waiting? Did you buy in Louth last year?

what if someone finds a house they really like and can afford? Are you saying they shouldn’t buy?

https://boards.ie/discussion/comment/117626469#Comment_117626469

I am carpenter by trade and I bought wals and roof.

The cost of renovation for me will equal to cost of materials.Today investment to this house worth more than in overpriced property with doors and windows.

I bought for cash because did not listen anybody

The two main saying says

Dont spend more than you earn ( what mean save money because today property overpriced)

Buy when cheap and sell when price will up (today not good time to buy today because property overpriced but good time to sell )

I stoped buy anything except food creating gold parashute for recession coming.

So my answer Dont buy unless is cheap and you can afford it or save ,save,save until you can afford it !

Yes your quality of life will be litle bit worst but your quality of life will be a lot worst when you will be unemployed with mortgage for overpriced property on your neck and no food on table.Some people actualy lost them lifes because choose borrow money which they didnt earned and spent them buying happy lifes .

Dont trust media guys.

Media not on your side in this game

Media on side of those who want your votes on elections and those who want make money selling you overpriced property

Amadan Dubh

https://boards.ie/discussion/comment/117626216#Comment_117626216

Supply is at a 10 year low. We can all see that covid shuttered new building. Now that building sites are open again, supply will start to tick up again. Similarly with Brexit and covid, these events aren't over yet and I know they were blamed for sellers holding off putting their homes on the market. The other point is of course politics; government intervention which remains to be seen what it will do and also the potential for SF being in government. I have people in my peer group that genuinely think the sky will fall if SF get into government. My parents have the view that SF will want to take their house off them or make it lose its value.

Prices should gradually decline with the increase in supply but the main reason for waiting is to at least have a better selection. If you can wait a couple of years before starting to look and then be able to lurk for another couple of years thereafter, the selection of houses available for similar prices to today will at least be better.

TheSheriff

https://boards.ie/discussion/comment/117626601#Comment_117626601

Ok, I understand your point, but it's all hypothetical.

But it we look at facts, the people proclaiming in 2017/2018 to hold off for a year or two and wait for prices to come down (then over Brexit) were completely wrong.

If someone can afford a house today they should buy it.

https://boards.ie/discussion/comment/117626601#Comment_117626601

Unfortunately we had shortage of supply and high demand before prices of property started falling down just before Covid in 2019

House prices in Ireland decline for first time since 2012

https://www.irishtimes.com/business/economy/house-prices-in-ireland-decline-for-first-time-since-2012-1.4126842

What happened after ? Were demand came from when half economy were dead ,the 25 per cent were on PUP and the rest 25 per cent had jobs ?

I tell you were money came from .They came from investing and cockoo funds inflated by printed dollars in USA

The more supply the more investing funds will buy playing on property market of Ireland as on shares market inflating prices and selling to another players

Government will do nothing because this money coming from abroad and give jobs and taxes to building industry and taxes

The only way prices will "gradually " collapsing when another bubble on stock markets will explode and investors will selling property in Ireland because if they will not do this quickly they will have wait for price rise another 15 years

The next thing labor shortage.The government want send school kids to building sites as Mao sent kids build communism in China

Shortage of apprentices delaying house building

https://www.irishtimes.com/business/construction/shortage-of-apprentices-delaying-house-building-1.4622660

The supply and demand market rules are not working in this country.The rules of the Game are wrote by those who play own Game.

And you can choose only 2 options or be Watcher or be a Gamer because role to be a House owner are not in this game

TheSheriff

https://boards.ie/discussion/comment/117626498#Comment_117626498

So, when you were here under a different name previously telling everyone to wait for the covid crash, I'm curious, you say you bought... So did you get the three bed house in Drogheda (or Dundalk, can't remember) for 44k like you said you would be able to?

Genuine question, as you felt quite strongly about it before.

hometruths

https://boards.ie/discussion/comment/117626176#Comment_117626176

Buy gold so.

cnocbui

https://boards.ie/discussion/comment/117626175#Comment_117626175

A couple of times I've gently asked the question of how many property price crashes there have been? No replies so far. Australia hasn't had a property price crash in the past 60 years, and some people there, despite the evidence to the contrary, have been predicting imminent price corrections, for at least the last 20 years. I really wonder how people here would cope mentally processing the scale of property price appreciation being experienced in other parts of the English speaking world. NZ currently has an annual property price increase rate of 16% PA.

cnocbui

https://boards.ie/discussion/comment/117626890#Comment_117626890

I think bitcoin is a better bet, personally, but would advise not putting all your eggs in that basket, as with all investments.

https://boards.ie/discussion/comment/117626712#Comment_117626712

I have no idea what property you are talking about

Yes,I spoke about covid crash but it was completely wrong and I was not right

I simply looked at housing problem under different corner and understood were money coming from and who need it

I strongly recommend you read history of Great Depression and how everything happened

We are in completely same situation as people in USA before

People invested to ETFs,early retirement ,stock market index so widely that even dogs could invest to stock markets products

Completely same situation as in 1920s

When markets will collapse nobody will have money and I think somebody interested in it because nobody want hyper inflation

And because housing market of Ireland directly depend from stock market and investment funds this gona be great show !

I actually even left work as carpenter and went to industry which will be less hit when this will happen.Because builders will be first who will lose jobs

As property market are under different rules of the game there is no reason continue speak about supply and demand anymore.The investment funds play them games in Ireland and only they know what gona happen here.

hometruths

https://boards.ie/discussion/comment/117627398#Comment_117627398

Each to their own, would not surprise me if bitcoin hit some of the lofty targets bandied about but I'm not sure I have the stomach to handle the volatility!!

Amadan Dubh

https://boards.ie/discussion/comment/117626237#Comment_117626237

The first thing to say is that this is entirely speculative on my part so I appreciate the detailed reply.

But your post is in line with what I said - the debt Ireland is taking on from the ECB is not going to be repaid. As you note in your last paragraph, it is on the ECB's balance sheet - when the time comes, the bonds bought by the ECB will expire and the ECB will either write it off or buy a new bond to replace that one. However, in the same way the ECB created money from nothing to buy Irish (and other European) bonds, they will make the Euro on their own balance sheet disappear eventually. It is unprecedented and ludicrous (and of course speculative) but normal financial rules do not apply to the global financial system the last 10 years with the fallout from the 08 crash just being a can that was kicked down the road by QE in Ireland and the US. By any metric the asset bubble is staggering and totally unsustainable - it is entirely driven by central bank QE and low interest rates. I think it helps not to think rationally when viewing these things.

fliball123

https://boards.ie/discussion/comment/117626601#Comment_117626601

https://boards.ie/discussion/comment/117626601#Comment_117626601

Amadan Dubh

https://boards.ie/discussion/comment/117626631#Comment_117626631

Yes, maybe I did in fact mention price but that was confusing my main point which was that waiting a few years to enable supply to pick up was the main reason for waiting. My stance is that house prices at the affordable limits (i.e. under €700k - based on mortgage lending restrictions and what couples could borrow), especially new builds, with H2B and mortgage lending restrictions are actually not overvalued, generally speaking. I think maybe the expectation of people to be able to save in a couple of years and be able to buy is what drives the price gripes usually. A lot of people can afford to buy new builds, if anything I think there is a bit of flexibility to raise mortgage lending restrictions to 4/5 times salaries even with enabling 100% mortgages. The issue is supply - appropriate starter homes for families and apartments for pre-families.

Separately, top story on the business section of the IT - more heat on the terrible policy of social housing, long-term leases being entered into by the local councils.

https://www.irishtimes.com/business/economy/state-increasing-reliance-on-costly-social-housing-leases-1.4623972

State increasing reliance on ‘costly’ social housing leases

To date this year, 918 new social units leased, while 1,000 leased in all of 2020

The number of social housing units being leased to local authorities on a long-term basis has increased significantly this year despite criticism of the cost involved. A total of 918 homes have been leased so far this year; just over 1,000 social homes were leased in the whole of 2020.

Figures provided by Minister for Housing Darragh O’Brien, in response to a parliamentary question from Sinn Féin’s Eoin Ó Broin, also show that the average per-unit cost of the leases was €17,000. That works out at over €425,000 over a typical 25-year term.

While this is on a par with the cost of buying or developing social housing units directly, the councils will not own the properties after the lease expires and will have to enter into another leasing arrangement. That makes them a very costly proposition.

The figures come amid reports that the Government plans to discontinue these types of leasing arrangements as part of its new Housing For All strategy in favour of purchase agreements.

Timing belt

https://boards.ie/discussion/comment/117631123#Comment_117631123

I think you are missing one important point which is that the ECB do not write off the debt. Ireland would need to repay it in full.

fliball123

All of what you say Amadan is true about low supply etc. but I would be wary of giving advice on buying or selling as was pointed out people waiting 2/3 years could be paying over 50k in rent. You , I or anyone else dont know what way prices will go long term. Short term (1-3 years) with current government policy, global competition, our ROI on rentals, the swelling of Irish savings and swelling of demand that has built up since Brexit started looming large back at the tail end of 2018 and the supply issue, not to mention the rising costs of both the labour and materials needed for building would suggest that prices will remain on an upward trajectory for the remainder of the government term (at the very least). So prices after this will have to drop by 20/30+% odd in order for someone who is currently in a position to buy and who holds off for the 2/3 years to make it financially positive for them. That is some risk. Throw in the supply issue which will remain an issue for at least another 5 years and the factors that flow into that are lack of builders as well as the new refugee time frame cut from 8 years to 4 months which will mean in 2022 onward we are going to see an absolute swell of immigrants coming into the country and with our left leaning political sphere they will all need housing. My advice is take your own circumstances into play and if your paying more in rent than on a mortgage I would go and buy. The REITS/Vultures and government are locking in long term leases from 20 - 25 years and with this kind of lease coming more and more the majority and the small landlord fleeing the market this would suggest rents are not coming down any time soon - ergo the artificial price on rents will also keep property prices high. That is before you factor in the law of the land making it almost impossible for a bank to repossess a family home.

Risks for buying are

Recession - ????

Interest rates rising - Certainly will happen but could be 5+ years

Political change - Certainly going to happen - 2/3 years time

That is my 2 cents worth I have been watching the Irish market since 08 and I made a killing with a property I bought back in 2012 at the bottom of the dip and sold there about a month ago. Anyone buying/selling look at your micro potion your own finances your own personal circumstances this should be more of a deterrent or incentive to buy or not to buy. I wouldn't tell you what to do but the above are the facts as they currently are.

Amadan Dubh

https://boards.ie/discussion/comment/117631164#Comment_117631164

They created the money out of thin air and they can simply make a few clicks on their computers to perpetually roll over the debt - the ECB is our Central Bank, we do not need to repay them. This is how I see the Fed, ECB and BoE operating - seeking repayment is not an option as it will destroy economies which will cascade into social breakdown.

The two questions to be asked are;

What was the mechanism to enable the the ECB to buy the bonds in the first place?

Why does the ECB need to repaid?

hometruths

https://boards.ie/discussion/comment/117631346#Comment_117631346

The ECB is not only our Central Bank, it also serves Germany, Netherlands, France to name but a few. They might hold an entirely different view as to whether or not Ireland needs to repay them.

Amadan Dubh

https://boards.ie/discussion/comment/117631365#Comment_117631365

Of course and there are countries like Italy who are at far more risk than Ireland.

Timing belt

https://boards.ie/discussion/comment/117631346#Comment_117631346

The ECB need to be repaid because there is a legally binding contract and if they don't Ireland or any other EU Country that didn't repay would technically default on their debt and there credit rating would be severely impacted which would prevent investors from buying Irish Bonds causing the yield on Bonds to go through the roof.

We 100% need to repay the bond as does any country that does not want to default and then be at the mercy of the Markets who would blead the country dry.

Timing belt

https://boards.ie/discussion/comment/117631406#Comment_117631406

I think you are missing the point..... When the ECB undertakes QE they devalue the euro which makes importing goods more expensive and cheaper to export goods. Add on top of that they lower the interest rate making it cheaper for companies to borrow and invest/expand their business.... i.e. it stimulates the economy of all EU member states.

If the debt of one country was written off then it would be all the other member states that would take the financial hit.