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

markodaly

https://www.boards.ie/discussion/comment/119027165#Comment_119027165

Is there anywhere that has this data? Would be nice to track it, if its there.

Mr Hindley

No, it's just a spreadsheet I've been maintaining myself, I'm afraid. I've captured a screengrab below. It's already out of date, we're on 15,273 today. It's all property of any kind, so includes sites, but as a rough measure, it's interesting.

Interestingly, and for the first time since I-can't-remember-when, I just got an alert from Daft about a price drop on a property that I had earmarked. This one was on at 395 in March, and has just dropped to 375. Now, at the time I thought that 395 was well over-priced, but was curious to see what it would go for. 375 is still overpriced, these would have been going for ~345 six to nine months ago, but it's a small crumb of reassurance that the market hasn't completely lost its mind.

https://www.daft.ie/for-sale/apartment-212-olcovar-shankill-dublin-18/3742213

Cantstandsya

Are interest rates as closely related to house prices in Ireland as in other countries?

I think people usually take out as much as the bank are prepared to loan them, which in the case of Ireland is generally 3.5 times annual income, as per central bank rules.

From what I can make out the calculations in the US are based on monthly repayments i.e. 28% of gross monthly income.

This would mean that the US mortgage loans are directly tied to interest rates (what someone can afford to pay) whereas Ireland is tied to income (3.5 times).

Am I wrong here? Is the idea that house prices go down when interest rates go up universal or is the whole world just parroting US talking points?

bluelamp

https://www.boards.ie/discussion/comment/119028931#Comment_119028931

On top of the 3.5x income rules, Irish banks calculate repayment capacity based on money left over after paying your mortgage. There is a set amount they deduct per child, a partner not working dependant on your wage, and other commitments like car loans etc. They also stress test your repayment capacity by checking it works out with a higher interest rate also.

There are set amounts they deduct off your net wage for each of the above but I'm not sure the exact amounts.

A younger couple with no kids are more bound by the 3.5x their wage calculation, whereas someone over 30 who can't take a 35 year mortgage, and has a couple of kids, could be caught by the repayment capacity.

So yeah the prices would be affected by rising interest rates, but to what extent I don't know.

combat14

https://www.boards.ie/discussion/comment/119028999#Comment_119028999

the rising interest rates will slowly, gradually cummulatively increase the amount to be repaid each month .. in some cases it wont make any difference in others it may eventually disqualify many would be buyers or force them to pay/offer less for a house or buy a cheaper house instead .. this will all bit by bit in some shape or form feed into house prices .. albeit in a market with low supply and the government in the form of county councils/local authorities and vulture funds with deeper pockets competing to snap up properties though they too may notice interest rate rises or at some point encounter changes to policy after an election similar to NI where sinn fein have just got 29% of the vote and are set perhaps to come into power.. at that point further changes could impact the market

newmember2

https://www.boards.ie/discussion/comment/119022039#Comment_119022039

or stop voting these fksters into office

MacronvFrugals

The IMF can be added to the list of bodies who disaporove of our shared-equity scheme.

Housing supply policies should be further strengthened, with a focus on boosting productivity in the construction sector and improving zoning and the permits processes. The government has launched the “Housing for All” program, which includes measures such as improving zoning, planning, land availability, and provision of social housing. We encourage timely implementation of this program and placing further emphasis on policies aimed at enhancing productivity and competition in the construction sector, further improving dissemination of data on local zoning, and simplifying the process to obtain permits. While the “First Home” affordable purchase shared-equity scheme (part of Housing for All) aims to support first-time home buyers, it does not address the key issue, which is the supply bottlenecks. Therefore, it would be important to keep the scheme narrowly targeted and limited in size to prevent further upward pressures on prices.

https://www.imf.org/en/News/Articles/2022/05/05/mcs-050522-ireland-staff-concluding-statement-of-the-2022-article-iv-mission#.YnRBSzPbbuA.twitter

https://www.boards.ie/discussion/comment/119032380#Comment_119032380

they had the same scheme in london sent prises of new apartments way up

Pussyhands

https://www.boards.ie/discussion/comment/119025400#Comment_119025400

They wouldn't HAVE to sell. But investors look for the best investment returns.

If they can make 5 million here and believe they'll make 10m elsewhere they'll go elsewhere. The reason so many build to rents are here is because our rental sector has boomed and they're making money hand over fist. 2% annual increase limit may not be to their liking either.

Pussyhands

https://www.boards.ie/discussion/comment/119026720#Comment_119026720

Saw a neighbour of mine change car. Got a new 221. Not a big job either. Clearly on PCP.

A lot of younger folk into their 30's and below don't know what living life was like pre 2008 and pre free money.

A lot of keeping up with the jones's going on in my opinion.

Pussyhands

https://www.boards.ie/discussion/comment/119027165#Comment_119027165

I often see a flurry every so often. I don't know why it happens but I'll often see nothing for weeks or even months and then see 3 or 4 in the space of a few weeks. (in my price range)

Timing belt

https://www.boards.ie/discussion/comment/119034278#Comment_119034278

Any investor in a property fund will be tied into that investment for a number of years till the hurdle is passed.

If they were looking at buying cheap in USA then would be looking for additional investment in a separate fund.

Timing belt

https://www.boards.ie/discussion/comment/119034290#Comment_119034290

There have been big pay rises and bonuses in some sectors so may not be PCP

jo187

https://www.boards.ie/discussion/comment/119034290#Comment_119034290

https://www.boards.ie/discussion/comment/119034290#Comment_119034290

What's PCP? There people always into keeping up appearances, no more or less then this generation.

markodaly

https://www.boards.ie/discussion/comment/119028931#Comment_119028931

I did read about 2 years ago when interest rates were crashing down, that the banks were able to give a little bit more to prospective mortgage holders as their repayment capacity would have gone up.

Will be interesting to see if the banks reign it in now.

Timing belt

https://www.boards.ie/discussion/comment/119030461#Comment_119030461

Rising rates has an impact on everyone but to varying degrees. Take someone on a variable mortgage they will see mortgage payments increase straight away whereas someone on a fixed mortgage may not be directly impacted but the fact that less money is being spent in the economy could see these people impacted in employment especially if they are exposed to a sector that relies on spending from disposable income.

Yurt2

https://www.boards.ie/discussion/comment/119009453#Comment_119009453

In all seriousness, golf courses in urban or suburban areas are an obscene waste of land. You're completely correct about the amount of golf courses in that area. It's ridiculous. And it's not as if they are a green lung to general and open community benefit.

mcsean2163

https://www.thejournal.ie//readme/ireland-investment-housing-5428746-May2021/?utm_source=shortlink&cb=comment_deeplink&section=comment#comment

I think Rory spells it out pretty well....

JimmyVik

https://www.boards.ie/discussion/comment/119024431#Comment_119024431

And people that pretend they are somehow a genius or even just clairvoyant will post a graph or two every now and again to stress how they actually do have the super human power of being able to predict markets long term.

Anyone , even a 10 year old can look up links and graphs to beat the band to support any argument they like on the web.

What would impress me most, instead of internet links to graphs would be a picture of you sitting in the seychelles where you now have onbe of your sunny properties having actually made money from being so good at prediction :)

Someone posting on boards is not proof of any masterful knowledge of the economy or or the housing market. It is just someone copying and pastinng links. ITs no different to two old men talking about the housing market in the pub - great craic and fun, but thats as far as it goes. And the old man who keeps repeating his own opinion, well, i dont have to explain that one .... :)

Villa05

https://www.boards.ie/discussion/comment/119034834#Comment_119034834

What would impress me most, instead of internet links to graphs would be a picture of you sitting in the seychelles where you now have onbe of your sunny properties having actually made money from being so good at prediction :)

Do you understand that the game is rigged?

Central banks policies as mohamed el erian explains means that investors will buy anything knowing there's a greater fool who doesn't care about price that will underwrite everything

Do you understand that government policies adds another greater fool to the Irish market where the revenue and capital gains go untaxed and social housing fills up many of there assets at prices most working people can't afford.

To be sunning yourself in the Seychelles you need to be the beneficiary of these policies, not the person paying for it through your taxes

Villa05

It would appear that Greater fool 1 has run out of road. Greater fool 2 will be taken out with the after shock

https://www.irishtimes.com/opinion/cliff-taylor-the-penny-has-dropped-that-free-money-party-is-over-1.4871331?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fopinion%2Fcliff-taylor-the-week-the-penny-started-to-drop-that-the-free-money-party-is-over-1.4871331

Amadan Dubh

https://www.boards.ie/discussion/comment/119034834#Comment_119034834

I will be emigrating in a few months and will post my perspective then if that helps, explaining and demonstrating how Ireland is very much on a different level of dysfunction?

JimmyVik

Make no mistake, What anyone posts here doesnt help anyone :)

Its pub chat and lots of people sharing what they think is the issue and what should be done about it, and should be taken as no more. Its no different to guys in the pub saying what they would have done last night that the manager, whos job it actually is, and is vastly experienced, has done. Yet we all think we would have been a better manager :)

Amadan Dubh

https://www.boards.ie/discussion/comment/119035040#Comment_119035040

This is an a attitude that is resigned to the status quo, but the status quo is changing and there is a choice to move with it or be left behind.

JimmyVik

https://www.boards.ie/discussion/comment/119035114#Comment_119035114

Look im not saying you are wrong. In fact im not saying anyones opinion in all 10000 posts in this thread are wrong at all.

What I am saying is tyou havent fixed anything with the economy or property market in your entire life. You are not likely to fix it now, even in the unlikely event that you are the only opinion in this thread that is correct. You are not an expert, neither are 99% of the people posting here, including myself. So our musings are purely fun banter at the end of the day. We all just need to realize that.

fliball123

https://www.boards.ie/discussion/comment/119035133#Comment_119035133

I completely agree with you. Lads on here talking about the game being rigged could be right but on a fundamental basis no one here has answered the one basic question that needs answering but the question needs to be asked in the way it is framed in how the property market is in this country. So for the likes of Amadan and Villa can you show me a solution to the following.

Currently we have a huge amount of demand - This can be seen by things like the housing list, mortgage approvals. We are not building enough houses to currently house our population. We may see another 50 - 100k emigration inwards and that is only the Ukrainian issue in the next 2 years this on top of an already increase of 500k over the last decade in our population size and we built feck all houses.. We still have a birth rate that is outstripping deaths in the country. Already the economy in the last 5 years have had 3 shocks to the system - Brexit, Covid and the War in Ukraine and in the face of this property prices are still going up. The fundamental issue is the gap in our population size and the amount of properties available. We need to build yet our government are hamstrung by our debt and with the soon to come interest rate rise we could be paying anywhere from 2 - 12 Billion a year on interest for our debts as a country taken more annually out of the accounts. We are already seeing our fiscal space being eaten away by our lefties in wants for welfare and public sector pay rises and at the same time there is already an over burden on income tax and there is a real need to cut income taxes. So in the face of the above paradigm how do we build the properties needed for the numbers that we have or will have in the next 2 - 5 years when building materials and labour are flying up to a point where a lot of construction companies are stalling due to agreeing a figure for a property with a customer to purchase say 6 months ago and their profit margin completely disappearing when they are costing the actual build it totted up. Add in the additional competition in the last decade of REITS, Vultures,government and basically anyone around the world can see that our property market with its ROI from rent is seen as very favorable. I dont think either of you are wrong in how we got here by the way but the saying of "we are where we are" needs to factor in and from the place we find ourselves how do we get out of it. The big unknown is Sinn Fein.

Bass Reeves

https://www.boards.ie/discussion/comment/119035133#Comment_119035133

You are totally correct. The problem is most are looking for the one big fix. The last few posts it the golf courses within the M50. This in a city with the lowest population density of virtually any major city in the developed world.

Lads put up a link to a piece of paid analysis for some right it left wing entity in the US or linking houses prices in Timbuktu wondering why we cannot build them here for that price.

JimmyVik

https://www.boards.ie/discussion/comment/119035256#Comment_119035256

One of the biggest issues here is that the middle income tax payer is choked to death already. The only place money for all these big idea is to choke him even more. Thats not sustainable. There are so many stealth taxes and income taxes in Ireland i just dont know who is going to pay for all the grand ideas. See another government kite, along with the shills mobilized in the comments section, about water charges, went up on the journal this morning too. They are trying every tax avenue they can to get money together. But at the end of the day middle ireland will be crucified even more

Amadan Dubh

https://www.boards.ie/discussion/comment/119035240#Comment_119035240

Demand destruction is a concept that we will all become familiar with soon, if not already. How it applies in our housing market is that affordability becomes so poor that demand starts to crumble. Where we are seeing this manifest already is in the rental market with the new builds; 1 bedroom apartments for €2k+ pm or 2 bed apartments for €3k+ pm etc.; these are the standard prices for the new BTR. However, we can't have luxury new builds as the ONLY rental being built as there are a tiny portion of people that can afford this rent. Therefore, how do the people not on big tech salaries pay their rent? This would apply to Ukranian refugees, non-EU students, Indian tech workers and anyone not on huge salaries (even normal working families with decent jobs cannot afford these apartments).

So while on paper there is strong demand for housing, I maintain that it only exists to a certain price point for the vast majority of market participants and quite simply the demand does not exist above this price point. This is where the line "no one saw it coming" will be trotted out soon when the market starts to correct; "the fundamentals (i.e. high demand) were solid" etc. It will take a big name MNC to announce something before people start to get fearful but it is going to happen.

Bass Reeves

https://www.boards.ie/discussion/comment/119035298#Comment_119035298

I agree with you. It was interesting that about 6+8 weeks ago that Leo suggested we needed to bring in a middle tax rate of 30% (20k allowance) for the 35-55k income bracket. Roisin Shorthall threw the clothes off herself on the Claire Byrne radio show one morning. She was on about those on welfare and those on the minimum wage.

No part of the left will put money in the wickets of middle income Ireland.

As Fliball posted the problem is mainly supply. How we get more houses, apartments etc build. David McWilliams said about 4-6 months ago in an article that to achieve this we need to not let the ''perfect get in the way of the Good''. He was alluding to those that prevent solutions being put in place as they are not perfect.

This was picking up on situations like those that tried to stop the build to rent, those that try to prevent the LA's getting builders to do mixed developments etc.