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

wassie

One of my friends recently dropped nearly 5k on an electric guitar reasoning that in a fear years, the guitar will at least be worth something whilst the 5k will be guaranteed to be worth less.

By my reasoning €5K in cash a few years will still be worth €5k. Guaranteed.

The guitar, will be worth something but no where near €5k.

But I take your point on being concerned with inflation reducing the net present value of cash today into the future.

I would hold the opposite view but for different reasons. As a value investor, I feel asset (share) prices are over-priced in the main. I am more than willing to hold as much cash as I can so that I can take advantage of buying opportunities should the concerns surrounding a potential recession eventuate in the next couple of years. Any drop in my purchasing power caused by inflation should be more than offset by a corresponding drop in share prices.

As for house prices.....that Im not so sure of.

RichardAnd

https://www.boards.ie/discussion/comment/118912988#Comment_118912988

The 5k in cash will be 5k in cash, but it's buying power will have declined.

I agree that assets are inflated, and it's hard to know what to invest in, but I wouldn't sit on cash at the moment. Instruments, guitars at least, do actually hold value quiet well. I have a few basses that are approaching vintage age (25 years), and they're worth a little more than what they would have cost new. This isn't true for all instruments, of course.

My mate's guitar will stay close to the 5k mark as long as it's well cared for, but of course, he bought it to play it!

Timing belt

https://www.boards.ie/discussion/comment/118912988#Comment_118912988

We will have strike after strike come the summer/autumn as workers fight to get pay rises. It will be teachers, Garda, civil servants one after each other as gov will not give 8% pay rises and will probably cap it a 4%.

mean while jobs that are in demand in the mnc’s etc…will get the 8% which will only lead to further house price increases.

mcsean2163

https://www.boards.ie/discussion/comment/118912988#Comment_118912988

EU will set inflation not us. We're small fish.

someday2010

https://www.boards.ie/discussion/comment/118909484#Comment_118909484

It’s hard to predict. A series of left of field ECB rate hikes precipitated by events on the continent could cause a drop. However, the only thing that would cause a crash is a reversal of the supply/demand dynamic and the only way that will happen again is mass emigration and a massive MNC retrenchment which would only happen if the Fed goes nuts and raise US interest rates by 7%.

Amadan Dubh

https://www.boards.ie/discussion/comment/118909484#Comment_118909484

Personally, if that's the difference between your mortgage and rent, I would rather pay the mortgage. And I think that would almost be a no brainer. That is a huge difference and even in a stressed environment, with job losses or hours reduced, €1k pm as a mortgage is probably fine. But your key incentive is the big difference in mortgage and rent; €1k pm. Two caveats are that the place you would pay the mortgage on is somewhere you aren't settling for and you do actually like it. The other caveat is that you could fix the interest rate for a while and still pay around €1k but try to pay off more while the rates are fixed if you can.

But the key point would be that, even ignoring €2k rent per month (which you can't), a €1k pm mortgage would appear to be objectively sustainable.

RichardAnd

https://www.boards.ie/discussion/comment/118913483#Comment_118913483

Yeah that seems likely. Good old civil servants...

Wanderer78

https://www.boards.ie/discussion/comment/118914275#Comment_118914275

central banks are stuck in a low rate environment, they maybe forced to stop rate hikes, due to the pressures involved in economies, including the pressures the hikes are causing themselves, they may even be forced to reduce rates due to these accumulations, if central banks do go for significant hikes, they ll more than likely cause major recessions, they know this.....

J_1980

https://www.boards.ie/discussion/comment/118914730#Comment_118914730

A large part of the population would be better of in a disinflationary recession than the current left wing money printing nonsense.

at 15% recession unemployment, 84% (excl top1% and unemployed) are better of. Rampant inflation is far more destructive to society than austerity. It’s just the vocal left wing who make it sound otherwise.

someday2010

Not much chance of a disinflationary recession in the current climate. Stagflation here we come.

Wanderer78

https://www.boards.ie/discussion/comment/118914761#Comment_118914761

'left wing', thats interesting! you seem to be well out of touch of modern political and economic ideologies there, tis far from left wing! again, our current inflationary issues are largely not related to money creation, but more so linked with supply chain issues, including energy supply chain issues. this is triggering 'inflationary expectations', a human behavioral issue, i.e. everyone is expecting prices to rise, so in turn, everyone is increasing prices, i.e. its a feedback loop. again, a significant proportion of money created in both the public and private domains has been used in helping further asset price inflation, qe etc.....

RichardAnd

https://www.boards.ie/discussion/comment/118914761#Comment_118914761

The Left / Right paradigm is not a helpful way to view the world. We're living in what is often called Neo-Liberalism or Globalism, and it is apolitical. The only thing that matters is profit.

The Left is pandered to an tolerated by the globalist establishment because they represent an ideology far more conducive to consumerism. The Right, being more conservative, are less inclined in this regard. Thus, the leftists are playing the role of "useful idiots". Rest assured, when a MNC changes its logo to a rainbow flag or tweets about BLM, it does so because it believes that it will aid its bottom line. If it were more profitable to back the Right, these companies would do just that.

Personally, I have no time for ideologues of any flavour...

fliball123

https://www.boards.ie/discussion/comment/118914966#Comment_118914966

At least with MNCs and any other offering from the right wing ideology/company/product you have options to pick and choose at a price point you want or the option not not to engage or buy. You cannot say the same when it comes to left wing ideologies, there is no choice the bleeding heart gets what it wants and any one dare try to call out the punitive measures that Ireland are currently experiencing when welfare is actively competing with jobs and those not working getting housing above those who are out there trying to earn a living is an example of how the tail wags the dog in this country and those who call it for what it is are blasted by all as someone who doesn't care about the poor its ridiculous. I think both sides right and left have eradicated the norm or the middle ground and yet its those in the middle that will suffer in order to indulge both wings.

Wanderer78

https://www.boards.ie/discussion/comment/118915034#Comment_118915034

pup should not have been abandoned, it was clearly supporting many businesses, keeping them open, by removing it, it has now placed all the pressure back onto these businesses, many will now simply fail....

we need to stop looking at such policies as a competing element with businesses, they can be of great help, as was proved, we could have easily kept it in play, slowly reducing it as needed, to reduce the pressure on these businesses, until normalisation of our economy occured, we have now jeopardized large parts of our economy by removing it.... this is where we re completely failing with such polices.

fliball123

https://www.boards.ie/discussion/comment/118915080#Comment_118915080

Well we will only know if that was the right thing to do in a couple of years, we tried austerity after 08 and let companies fail hand over fist with over 400k business hitting the wall and people had to be paid statutory redundancy and then dole money not to mention retraining and the price tag that came with. We will only know if PUP was the right way to go in a couple of years. At the very least it has given every company a chance to remain viable coming out of corona.

Wanderer78

https://www.boards.ie/discussion/comment/118915159#Comment_118915159

...and then theres the chance, we wont know, we may come to the conclusion that its inconclusive, i.e. its sometimes impossible to be sure such experiments are a success or not, im putting my money on inconclusive, but it made sense then, and it still makes sense right now, i.e. save as many businesses and jobs as possible, we really dont want to be dealing with the aftermath of the alternative!

L1011

Politics forum is elsewhere....

fliball123

https://www.boards.ie/discussion/comment/118915174#Comment_118915174

Well we will know. The measure will be our unemployment rate. If we have people working they are nett tax payers and if they are on the dole they are nett tax takers. So it will be very easy to spot if PUP and trying to keep everyone at work has paid off over the next 2 years or so.

Villa05

https://www.boards.ie/discussion/comment/118913483#Comment_118913483

It also means the day of reckoning gets much closer.

The wealth divide gets wider. The number of people requiring subsidies for basic living increases, state spending on salaries increases.

House price increases reduces the number of citizens that can cover their own accomodation costs. More people renting means more money disappearing out of the economy untaxed to foreign investment funds.

Ff left us in the worst possible position going into the last recession, Fg have repeated the feat and the next one is very close

Wanderer78

https://www.boards.ie/discussion/comment/118915191#Comment_118915191

disagree, i believe this is an over simplification of the issue, many factors are at play regarding employment and unemployment, from national issues to international, and everything in between, taxation is only one entity, as is things such as monetary polices etc, tis incredible complicated stuff to the point we truly dont know what ultimately causes these issues, and may never fully

fliball123

https://www.boards.ie/discussion/comment/118915222#Comment_118915222

https://www.boards.ie/discussion/comment/118915178#Comment_118915178

Well we will have to agree to disagree and L1011 has asked us to move on so move the talk back to property.

Wanderer78

https://www.boards.ie/discussion/comment/118915255#Comment_118915255

funnily enough, we actually are talking about property markets also, but.....

Villa05

https://www.boards.ie/discussion/comment/118914761#Comment_118914761

Money printing has been around for over a decade and is a significant contributer to asset price inflation and the main reason housing is unaffordable to so many of our young.

It would be very odd for that to be left wing policy.

fliball123

https://www.boards.ie/discussion/comment/118915296#Comment_118915296

Maybe the fact that a lot of property is not available to our young/old workers due to people on welfare being prioritized above workers this is a very left wing policy and one that is very unfair. If the supply used for social housing was available for all, prices would surely not be as high.

Wanderer78

https://www.boards.ie/discussion/comment/118915394#Comment_118915394

again, an over simplification of the issue, theres clearly serious supply issues, but theres clearly other serious issues, all interacting, causing these outcomes, and clearly, the overall money supply from both the private and public domains, i.e. qe etc, is also playing vital roles....

fliball123

https://www.boards.ie/discussion/comment/118915420#Comment_118915420

Eh no it is very simple people on welfare/housing list and REITS/Vultures are being prioritized over private citizens trying to get a property. Its very very clear. Both sets of agendas from both the right and left need to be put in the queue behind workers to allow people who are living and working here to get a property at a cheaper price point than what is currently out there. Any other narrative is playing to an agenda. I find it galling that people working are being asked to pay more and more tax so that private entities can come in and buy full or the vast majority of developments in one go and then the government are also competing with these private individuals for properties in order to allow the Jennies of this world to have 3 kids with 2 different daddies, daddies name not on the birth cert but Jenny can ask for a gaff beside mumsy (doesn't matter where Mumsy lives by the way) with a south facing garden as you know she will need mumsy to look after the kids on micky money day when she collects her welfare payment. Its actually quite disgusting when your sitting back and looking at this. I do believe that people should be helped who are struggling with life and money but not at the expense of allowing them stand on other peoples head who want to work and that is what is playing out here currently.

Wanderer78

https://www.boards.ie/discussion/comment/118915486#Comment_118915486

again, as others have mentioned, modern political and economic ideologies ultimately ends in a 'your it' situation, i.e. the debts and taxes required are your problem, and your problem alone, we re now experiencing the collapse of these ideologies..... and nobody knows what to do about it.....

fliball123

https://www.boards.ie/discussion/comment/118915506#Comment_118915506

Well the situation we are in is mirrored by our political sphere as everyone is waiting for the Shinners to get into power no one knows what they will do, there numbers do not stack up and there is no quick fix no matter what Mary Lou thinks. Its a case of vote for them as they cant be any worse than the last crowd and they may well be a million times worse. So what do we replace the current situation with. Austerity didn't work. So what other options are there? Also the government of the day has the power to stop REITS/Vultures buying and they can also stop people on a housing list dictating where they are allowed to live. They should be offered housing in less affluent and less desirable areas. People paying income tax and looking to buy should be the priority.

someday2010

https://www.boards.ie/discussion/comment/118915486#Comment_118915486

That’s the Irish way reward Jenny(s) and shower them with freebies but when someone tries to get ahead with hard work, crucify them with tax. The middle is getting a terrible deal. The other two ends are getting a good deal.

The question is what are you going to do about it ? Vote SF/PBP or some other left wing conglomerate?

AySeeDoubleYeh

https://www.boards.ie/discussion/comment/118915685#Comment_118915685

You wouldn't happen to have the answer to that question, would you? You'd be helping the rest of us out!