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

Villa05

https://www.boards.ie/discussion/comment/119505161#Comment_119505161

Could you repost if you have to hand please?

Villa05

https://www.boards.ie/discussion/comment/119505027#Comment_119505027

There was alot of home heating oil panic buying in March when the price spiked.

I wonder was their a similar effect in business with regard to construction materials. Most material prices have fallen heavily since that spike

Bullwhip effect? As seen in USA retail in the last quarter

Glenveagh have not seen a spike of this level in there recent report, maybe they were smarter with their procurement

fliball123

https://www.boards.ie/discussion/comment/119505180#Comment_119505180

Well what is the alternative your kids to continue renting and wait for you to die to pay a shed load on tax for the property at least the mortgage they have will be half paid if not more and the debt built up by health, pensions and government will still be there one way or the other.. I cannot see how it will not become an option in the future if our trends in migration, building and political interference in the market continue.. The other side of this is people were betting on another property crash and have waited about a decade for this a lot of these people are in there 40s/50s and may not have any other option as banks normally only lend to someone up until they are 65.

Villa05

Leave as earlier post shows accomodation available in other countries. No point in staying in a country where your struggling to get on the secong rung of Maslovs Hierarchy of needs.

No country for young people

fliball123

https://www.boards.ie/discussion/comment/119506484#Comment_119506484

A lot of first world countries are also having issues with inflation and housing.

https://www.boards.ie/discussion/comment/119505180#Comment_119505180

You could look at it like that.

or you could look at it like informing your children that you are passing them a load of equity which you otherwise wouldn’t have been able to do

Properties (all kinds) available to rent on daft in my county has fallen to 6! It’s half of the lowest I’d ever previously seen

crazy

manniot2

https://www.boards.ie/discussion/comment/119506680#Comment_119506680

Blame the rent caps. Be worse when SF get in. Lots of small things gov could do to entice landlords but the tax income is too much of a gravy train and they can’t be seen to help the big bad landlords in the current age of wokeness and populism.

Ozark707

https://www.boards.ie/discussion/comment/119506554#Comment_119506554

The likes of Canada/US/Sweden/Oz/NZ (to name a few) seem to be having varying degrees of HP 'corrections'. Will we be similar?

Ozark707

https://www.boards.ie/discussion/comment/119506824#Comment_119506824

Well if it it down to 6 it can hardly get much worse if the Shinners get in, can it?

wassie

https://www.boards.ie/discussion/comment/119506824#Comment_119506824

Be worse when SF get in

Maybe, but put yourself in the position of many renters who would love to buy. You cant buy because of little supply available to the public and high prices. You are struggling pay rent, save for a deposit and have a quality of life at the same time. All the while fearing getting an eviction notice on your overpriced rental, knowing you face living in your car or back in with the parents if your lucky enough. How does it get worse?

Fundamentally it is a lack of supply at a time of increased demand. Rent caps were merely a reaction to this. I agree with your view on Rent caps. Whilst the idea may have merit - under certain conditions - they are just another market intervention with unintended consequences.

As supply dwindles, further measures are introduced to protect renters which are disadvantageous to small landlords. Given high prices now acheived, small landords are being effectively incentivised to sell often by realising a capital gain and losing a headache at the same time, which in turn is further reducing rental supply. And round and round it goes...

wassie

https://www.boards.ie/discussion/comment/119506869#Comment_119506869

Ireland is not as sensitive to interest rate rises - at the moment - as other countries. Many borrowers have fixed rates for the next few year.

But more significantly, as a direct result of the crash here and fearing another credit binge on housing, the Central Bank put in place curbs on lending, including restricting Loan to Income ratios of 3.5 for the masses to 4.5 max with an exemption. Most other countries mentioned dont have these. NZ & Oz for example, it has been reported many new borrowers in the last few years have LTIs of between 6 & 7 and occasionaly as high a 9. These borrowers on variable rates will be much more sensitive to rate rises which has an immediate dampening effect on prices.

jimmybobbyschweiz

https://www.boards.ie/discussion/comment/119507044#Comment_119507044

I think you'll find, due to the rental bubble (so big that when it pops the whole property market will tumble down), even with 4.5 times salary for borrowing, a lot of people buying justified their mortgage repayments on the basis that renting the same place would've cost a lot more, even if they balked at the cost of the mortgage relative to their salaries. As such, when we see rate rises go to about 1.5-2.5% in the next 6-12 months and this trickles down into €3/4/5/6/700+ extra in mortgage repayments per month, at a time when inflation will still be running hot (albeit not as hot as recent months), this will put a lot of those 4.5 times borrowers under water and unfortunately there won't be a queue of people to pay the price for those houses that they might have paid as potential buyers will themselves balk at the mortgage repayments, which means it will be a bit grim for those that bought particularly in the last 3 years.

Blame the State for creating the rental bubble that has, due to its vastness and ignominy, created a filthy property bubble ripe for popping.

jimmybobbyschweiz

https://www.boards.ie/discussion/comment/119506824#Comment_119506824

Not just the rent caps; the total slog and soul destroying tenant protections even in the event of non-payment of rent. Can't pay or won't pay? No problem, you can stay there as long as it takes to get through the due legal process which can be 18 months or more and costs a bomb! Pat Farrel and friends used their allies to get some leverage on policy making but little did they know they would end up tilting the whole market in favour of just a few, small institutional players, at the expense of 99% of all other property market participants. FG, Inc. of course are mainly to thank for this small landlord destroying, institutional landlord focused state of affairs.

The only way to get the market to an equilibrium is to get the State out of the market. It is almost fully socialised at this point.

igCorcaigh

I have been offered a cost rental 2 bed apartment from Cluid today. Delighted. It's in Cork City, Western Road. The rent is €1.1K pm. My current private rent is only €850pm in the city centre (Cove Street), but the place is old and mouldy. I have been living here for 11 years with my partner.

I'm hoping to move in by November. Rents in the city here seem to be around €1.7/1.8. But only two city properties that I can see on Daft. I know that's nothing compared to Dublin. But I'm very happy with the news.

Villa05

https://www.boards.ie/discussion/comment/119506628#Comment_119506628

You know the topping out process is happening, when the likes of inter generational mortgages are being discussed.

Timing belt

https://www.boards.ie/discussion/comment/119507553#Comment_119507553

How will the rental bubble pop as demand is red hot and supply is more or less non existent. The only thing way that I could see more supply coming on line would be if there was large scale social housing built and hap renters moved to these. Saying that I don’t think we will see large scale social housing built in the short term because even if a decision was made today to do it would take 3-5 yrs min for them to come online. And that would be an optimistic time line because any large scale social housing projects would result in challenge after challenge in planning objections would be valid because the infrastructure would need to be put in place first.

interest rate rises wouldn’t hurt the people who were given a LTI exemption in the short term because the majority will have fixed rate mortgages for 5+ years. What would hurt is if rates continued to climb for 3-5 years but that seems highly unlikely unless oil and gas prices keep increasing at the rate we have seen because of Russia starting a war. We have already seen oil fall back in price because of the expectation of recession. And if we have a deep recession no central bank will continue to raise rates.

alias no.9

https://www.boards.ie/discussion/comment/119507553#Comment_119507553

Rentals are batshit, that's beyond doubt and something is going to break but your points about increasing mortgage rates are wide of the mark.

A quick look at AIB website shows 5 year fixed rates are still available at a significant discount to the current variable rate despite the outlook on ECB rates. 10 year fixed is available at a very marginal premium, the difference is less than the next expected ECB rate rise.

Anyone with a mortgage right now who gets caught out by an increase in variable rates is quite frankly asleep at the wheel.

Bass Reeves

https://www.boards.ie/discussion/comment/119508299#Comment_119508299

If interest rates climb for 3-5 years it means we have inflation. It unlikely that wages will remain static in that situation. Rising wages make repayment more affordable.

Ozark707

https://www.boards.ie/discussion/comment/119508299#Comment_119508299

There are signs now that the Fed will continue to raise rates (recession or no recession) until inflation is brought under control. I personally don't see the ECB doing the same but can see other CB's doing it.

Timing belt

https://www.boards.ie/discussion/comment/119508424#Comment_119508424

The labour market is still hot in the US so they will keep raising till it cools and it will cool. We won’t see year on year inflation like we have this year unless the price of oil and gas has a similar increase next year to this year. Which I can’t see happening unless there is another war. Because of this the cpi will drop or remain flat and the fed will claim victory over inflation and stop raising rates despite the secondary round of inflation in food and commodities being very high. The other scenario is that there will be wage inflation which will sustain high inflation and rates will rise but I think this has a lower probability due to the rate rises that are happening now and the cooling that will come to the labour market. If this did happen then it would mean more house price inflation and anyone that bought in the past few years would be in a very good position as there debt gets eroded by inflation.

The ECB would have no option to raise rates if the USA continued to raise rates over the mid term because if they didn’t the euro would loose value and make imports more expensive and as all oil is in USD it mean more inflation.

For Irish house prices I can see them increasing over the next year despite any interest rate rises as it appears that wage increases are expected and that will get worse once the budget take the lead and increase social welfare which will mean that minimum wage jobs will need to pay more to keep workers and so and so up the chain. Just to be clear people will not be financially better off but the amount they can borrow for housing will increase as the LTI limit is on gross pay. And this will mean house price inflation.

AdamD

https://www.boards.ie/discussion/comment/119507877#Comment_119507877

They aren't being discussed by anyone serious though

Villa05

https://www.boards.ie/discussion/comment/119507800#Comment_119507800

Congrats, out of interest does it remove that urge to buy (if it existed) now that you have security of tenure and affordable rent

Villa05

https://www.boards.ie/discussion/comment/119508533#Comment_119508533

For the vast majority wage increases will be below inflation for some time which will leave less disposable income.

The US is a strange one as there is more people jobs with less persons for those jobs, many are doing 2 jobs to get by which would imply deeper issues. Not as healthy as many believe

If rates continue to rise the investment funds who are driving Irish house prices will pull the plug as greater returns may be available in the bond market

Timing belt

https://www.boards.ie/discussion/comment/119508820#Comment_119508820

Regardless of wage increases being bellow inflation and people having a less disposable income the fact remains that they will be able to borrow more because LTI rules don’t look at disposable income and is based on gross income. That means more money available to buy at a time where there is a shortage of supply which equals an increase in house prices.

hometruths

https://www.boards.ie/discussion/comment/119508533#Comment_119508533

If I remember correctly a few months ago you were pretty adamant that inflation was transitory and there was very little chance of interest rate rises. Presumably you have reconsidered this view on transitory inflation now?

kayfabe

https://www.boards.ie/discussion/comment/119486732#Comment_119486732

It's why I am voting SF as I am opting to burn it all to the ground. For a long time i wondered how the likes of brexit / trump happened but not anymore.

Once you disenfranchise enough people who have nothing to lose this will be the inevitable result.

The crazyhouseprices IG account posted an email this morning from an auctioneer (Bridge Auctioneers) asking that people who want to go on a ‘priority’ wait list for a new development (Gleann an Ghairdin) pay a €2000 deposit (no details of its refund-ability…..like whether you lose it if you pull out voluntarily). They whip up a hysteria by talking about the demand. They actually use the phrase ‘when they’re gone they’re gone’

no site plan, no specifications, no timeline, no prices. Nothing. Just a request for money so you can get your ‘priority’ place in line

Im no snowflake, but that is shocking

like the above poster said, you disenfranchise enough voters, and they’re going to burn the house down. Any logic will have understandably left the building (that'a a great pun.....very happy with that!)

hometruths

https://www.boards.ie/discussion/comment/119509131#Comment_119509131

You've hit the nail on the head here.

A whole pile of property owners sitting comfortably in their houses rubbing their hands in glee at ever increasing prices, are also scratching their heads why a younger generation could possibly consider voting SF.

What they fail to realise is that younger voters will not vote SF because they think SF have a silver bullet for the housing crisis, but because the only option left to them is to give two fingers to the politicians who have caused this mess, as well the "I'm alright Jack crowd" who have delighted in it.

awec

https://www.boards.ie/discussion/comment/119509523#Comment_119509523

You understand that in the event it burns to the ground, it will be the people at the bottom who bear the worst of it, yes?

I understand people voting for SF for change in the hope they find a magic solution to the housing crisis, but voting for them in the hope they burn it down is stupid. There is no other word for it really. It's completely nonsensical and self-defeating.

We live in a trickle down economy, except when it goes tits up, then it's a rolling snowball.