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

Pussyhands

The housing market is completely dysfunctional though and it's not sustainable.

My Bungalow Bliss has been on two weeks on RTE and each time the couples have found 100-200k extra almost overnight to increase their original budget by.

The couple the last night paid 325k for a house that was uninhabitable.

Inflation is causing a problem. The EU are now changing their views from "transitory" to "it will go on a bit longer than first thought". The problem the central banks have is, for example, the EU are still lending like mad to EU countries at cheap rates for the covid recovery. They almost can't up rates or countries will be crippled paying interest back.

So looks like they're taking a massive risk with inflation that it is "transitory". If we start running at 5/6% annually we're fcuked. All assets will inflate massively. Then there will be no option but to increase rates which will pop the balloon.

Was interesting listening to Robert Shortt, economics correspondent on RTE yesterday. He was saying the inflation was centred on energy and it's not reaching the wider economy yet in terms of wage demands etc. I can tell you from my experience, that everyone is talking about inflation. I am expecting at least 3% wage increase next year and all companies our company deals with are increasing prices.

Look at Three, they brought in a 4% annual increase. This will all feedback into itself and drive inflation up and up.

Wanderer78

https://www.boards.ie/discussion/comment/118299611#Comment_118299611

in order to have a functioning repossession process, we must first have functioning markets, in both the public and private domains, particularly in the public, we currently have neither, in fact its getting worse, so......

cnocbui

https://www.boards.ie/discussion/comment/118300585#Comment_118300585

Ahh, it all becomes clearer now - you are parroting Cramer. It might have been easier to just link to him. There's a lot of ifs in that, like the Chinese government allowing the Evergrande unwind contagion to damage a swathe of Chinese companies. I doubt they will let that happen. The Chinese goverment's aim is to burn the foreign debt holders, not their own.

Villa05

https://www.boards.ie/discussion/comment/118300660#Comment_118300660

If we are after a decade of close to 0% inflation. Is a few years at 5% a disaster.

The problem in Ireland has always been the protected sectors and housing

These are all under our own control and those with the power levers have chosen to use them to the detriment of the general public and the economy and for the benefit of powerful extreme minority vested interests

Pussyhands

https://www.boards.ie/discussion/comment/118300929#Comment_118300929

It is a problem when the whole world is hooked on cheap money.

Remember the last few years we've seen articles stating how there's record deposits in the bank? If you have 0% inflation, that's grand especially if you're a homeowner. Your 100k cash is worth 100k next year. But if inflation is at 5% then your 100k in the bank will essentially have 5k knocked off it's value next year. So those with big deposits are going to spend it. Either building extensions, cars, property, holidays.

Realistically anyways, even though inflation was officially low, housing isn't weighted properly. There's been much higher inflation than official records show. There was some reprieve for people when food, transport, energy was reasonable.

Wanderer78

https://www.boards.ie/discussion/comment/118301082#Comment_118301082

...or will people move their money towards alternatives, revolut, cryptos, precious metals, etc etc etc?

Pussyhands

https://www.boards.ie/discussion/comment/118301116#Comment_118301116

No because investing in anything other than property or through a pension broker is an alien concept for most in Ireland and two, tax structure is not good for investing in them.

Pussyhands

Inflation figures released in the US. A 40 year high.

Amadan Dubh

Delete

Amadan Dubh

https://www.boards.ie/discussion/comment/118300763#Comment_118300763

Cramer, the CNBC hack? My rule of thumb is that taking the opposite of what he predicts gives you a more accurate assessment!

Amadan Dubh

https://www.boards.ie/discussion/comment/118300660#Comment_118300660

There's room left to run - sky's the limit!

https://www.businesspost.ie/houses/dublin-house-prices-to-soar-by-25-per-cent-council-study-finds-99d58790

Dublin City Council commissioned a report recently, published in the media the last few days, showing that there is potential for growth in median house prices of 25% over the next 7 years in Dublin.

"No one saw it coming", IT quoting Owen Keegan in 2024, when confronted with the controversy of the government being on the hook for another 15/20 years for leases that are 130% of what are then current market rents.

"Our reports show that institutional investors are the only source of new housing in Ireland's major cities during 2024, we cannot continue to vilify international investors with emotive language and lynch pieces of political pantomine", Pat Farrell writing in the IT, pre-Budget 2025.

"It wasn't just Ireland that suffered from the pandemic fallout", Leo Varadker shoots back in tetchy exchanges with Mary Lou McDonald in Dail confrontation, October 2024.

"FDI got us out of the 08 crash and we need to go back to the capital markets to bail out the government once again", Pascal Donohue explains as he introduces new tax reforms for foreign capital into the Irish economy as part of his "last chance saloon for FF and FG" with his 2025 Budget.

Marius34

Planning permission for 2021 Q3 are out today on cso.

https://www.cso.ie/en/releasesandpublications/er/pp/planningpermissionsquarter32021/

From my point of view, very disappointing numbers for Multi-Development Houses for this year. Only 700 Units in Dublin County so far this year, 10 times less than apartments.

Apartments overly lower number than last year, but still very strong.

Quite significant increase in once-off houses. Largest increase in counties Donegal and Meath.

hometruths

https://www.boards.ie/discussion/comment/118300744#Comment_118300744

in order to have a functioning repossession process, we must first have functioning markets

Ask yourself which came first? The problems with the repo process or the problems with the market?

hometruths

https://www.boards.ie/discussion/comment/118263416#Comment_118263416

All holiday home stock has to be excluded from calculating available units; because they aren't and never will be active housing supply.

Interesting story in the Examiner: Killarney holiday apartments to be converted into private homes despite objections

Holiday homes. A potential source of housing supply. Who'd have thought it?

Wanderer78

https://www.boards.ie/discussion/comment/118301142#Comment_118301142

....are you sure of that? theres plenty of people starting to move their money towards alternatives in ireland, yes some will indeed invest their money in traditional ways, but i suspect many younger people are moving towards these alternatives, its why i think an increase in use of methods such as negative rates would ultimately fail, as i suspect they already are

https://www.boards.ie/discussion/comment/118301661#Comment_118301661

hard to tell, but could be peas in a pod, both may have occurred together, but now both are creating a positive feedback towards each other, accelerating dysfunction in both

hometruths

https://www.boards.ie/discussion/comment/118301717#Comment_118301717

hard to tell, but could be peas in a pod, both may have occurred together, but now both are creating a positive feedback towards each other, accelerating dysfunction in both

I agree they are now compounding each other, but in my opinion, of all the problems, the softly softly no repo policy is the single biggest cause of the current problems in the housing market.

Wanderer78

https://www.boards.ie/discussion/comment/118301785#Comment_118301785

i somewhat disagree there, the whole thing is a mess, and there doesnt seem to be any real solutions to any of it, we clearly need to ramp up supply, and very quickly, but we dont even know how to do that, so....

again, since theres a serious lack of supply, and no true functioning alternatives, particularly in the public domain, we re simply stuck....

but having functioning repo processes is also critical to have, as dysfunction triggers dysfunctions in financial markets

L1011

https://www.boards.ie/discussion/comment/118301680#Comment_118301680

That's part of a hotel being converted. Not privately held holiday houses.

You still haven't explained how you intend to return privately held holiday houses to the market.

cnocbui

https://www.boards.ie/discussion/comment/118301364#Comment_118301364

https://www.cnbc.com/2021/09/20/cramer-says-take-crypto-profits-cites-evergrande-related-tether-risks.html

Ha, ha...

hometruths

https://www.boards.ie/discussion/comment/118301810#Comment_118301810

It's not part of the hotel. The hotel objected to the conversion!!

L1011

https://www.boards.ie/discussion/comment/118301829#Comment_118301829

Its purpose built rental accommodation on a hotel site. That the hotel owners wanted them kept as that doesn't make it not part of a hotel!

Now, how do you propose to return privately held holiday homes to the market? If you haven't got a workable proposal for this, its absolutely pointless trying to pretend that they can be.

Timing belt

https://www.boards.ie/discussion/comment/118300929#Comment_118300929

If inflation is running at 5% for a few years then houses prices will rise further.

hometruths

https://www.boards.ie/discussion/comment/118301839#Comment_118301839

purpose built holiday rental accommodation that has applied for, and been granted, change of use, and will now become full time residential accommodation. Not a difficult scenario to understand.

not sure how this example is somehow the exception that proves the rule every single holiday home in the country must be excluded from any calculation of potential residential housing supply!

i have no proposal on how to return holidays homes to the market, nor am I trying to pretend anything.

My only point is that it is ridiculous to say all 40,000 holidays homes must be excluded from any calculation of potential future housing supply.

Timing belt

https://www.boards.ie/discussion/comment/118301116#Comment_118301116

Is this not what has been happening with Joe Soap not earning anything with deposits in the bank so they start buying shares and crypto. This in turn pushes prices higher which attracts more Joe Soaps as they see there friends making money..... Add on top funds pushing prices higher and taking profit regularly so that even if the market crashes they don't loose out.

I see sheep

https://www.boards.ie/discussion/comment/118300593#Comment_118300593

Of that 60% how many have children and/or grandchildren who either can't afford to buy at all or have to move a long way away to buy?

I don't know any figures on it but it's a lot of people imo, and many will turn their back on FF/FG who obviously have no solutions.

Villa05

https://www.boards.ie/discussion/comment/118301839#Comment_118301839

Those that own holiday homes may choose to live their and sell their current primary residence.

Many were picked up for a pittance during the crash (on my side of the island at least)

L1011

https://www.boards.ie/discussion/comment/118301937#Comment_118301937

One event doesn't prove or disprove anything.

Trying to put holiday home stock down as potential primary residence supply is just trying to fudge numbers. Its just as much - and as little - potential housing as every single field, farm and existing commercial building is potential housing. So not valid to count.

Otherwise you could just make up numbers for potential new builds, potential renovations of derelict and so on.

hometruths

https://www.boards.ie/discussion/comment/118302115#Comment_118302115

Trying to put holiday home stock down as potential primary residence supply is just trying to fudge numbers. Its just as much - and as little - potential housing as every single field, farm and existing commercial building is potential housing. So not valid to count.

Not talking about all holiday home stock, clearly some of it - chalets in wexford for example are not suitable. But to disregard the entire 40,000 properties as unsuitable for primary residences in insane. Some of them were primary residences before they were holiday homes!

The designation of holiday home as per the count, is simply what the owner does with it, not some classification that means it cannot be a PPR. To suggest otherwise is total nonsense.

L1011

https://www.boards.ie/discussion/comment/118302273#Comment_118302273

I've never said they cannot be a PPR. But they aren't going to be. They are no more a potential PPR than an empty field is.

Unless you propose a carrot and/or stick to encourage their sale and prevent the purchase just being for further holiday use

cnocbui

https://www.boards.ie/discussion/comment/118302273#Comment_118302273

My HH was never a PPR and it's in too remote and odd a location to make it a likely candidate as one. Built in 1893, metre thick stone walls, no heating other than open fireplaces that do SFA. The likely cost to turn it into something year round habitable and suitable is probably about the same as to build a modern home from scratch. So that's one off the list.

Holiday homes are often in places which are not ideal as a PPR in modern times.