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

Dav010

https://www.boards.ie/discussion/comment/119680552#Comment_119680552

The developers in those estates are more than likely long gone, their companies liquidated. You can try suing the company, but you are throwing good money after bad.

Have you ever read a Homebond policy? It is not an all inclusive document, it has exclusions. Saying Homebond should have paid the owners is fine, but do you know if they are paying for something that is included in their range of cover?

Villa05

https://www.boards.ie/discussion/comment/119680580#Comment_119680580

Is it not still common practice for a company to dissolve after a building is completed rendering the current expensive oversight useless

Timing belt

https://www.boards.ie/discussion/comment/119680450#Comment_119680450

if input costs increase such as the energy cost in concrete the price won’t drop bellow the cost to produce.

flexcon

I'll probably leave these thread as it's honestly affecting my mental space.

I'm thoroughly disgusted. Looks like the house is out of reach again for another few years. Just heart breaking.

Timing belt

https://www.boards.ie/discussion/comment/119680443#Comment_119680443

Thats what should have happened after ‘08 but Germany and the IMF wouldn’t allow it. If it did we would have retained workers in the sector and wouldn’t have the sh1t shower we have now.

will be interesting to see what peoples opinions are if the cost of building social housing is more than the value of there own houses…..

fliball123

https://www.boards.ie/discussion/comment/119680785#Comment_119680785

I cannot see costs staying up. Global slowdown of construction. People who want to remain employed in the sector for either raw materials or building will have to become more competitive or hit the wall , just like every other industry. I mean look at China construction will be gone from here for the guts of a decade with the crap going on there, those workers and those raw materials that would of been used will have to be picked up by someone else there is also a cost in storing these materials, so like I say compete or hit the wall the idea that prices will continue to rise is crazy people cannot afford it as it is. So there will be a period of head shaking going on in the construction sector before the reality bites.

Bass Reeves

https://www.boards.ie/discussion/comment/119679648#Comment_119679648

No this will be the first of the pain for businesses and consumers in Ireland. Banks absorbed the first two rate rises with the exception of trackers. Even at that rates for personal lending may not rise as these rates are exceptionally hight at 6.5-7%+ in Ireland

Bass Reeves

https://www.boards.ie/discussion/comment/119679752#Comment_119679752

Homebond never had the money to pay out f@@kall. It was ran for the benifit of those working in it. It's used to try to get builders and developers to rectify issues.

It's not insurance companies job to mop up building issues. There presumption is that the build is structurally sound

Timing belt

https://www.boards.ie/discussion/comment/119680935#Comment_119680935

Just like a restaurant that has a huge energy bill…demand dropping won’t make them lower there prices if they’re operating at a loss. They will shut up shop.

Construction is no different…if it costs more to cut down a tree and turn it into building material due to high oil prices they won’t be cut down. Steel/concrete both high energy users so will be expensive to produce.

unless energy prices drop prices won’t drop…what you are describing is deflation in the economy which is the exact opposite to what we currently see

fliball123

https://www.boards.ie/discussion/comment/119681200#Comment_119681200

Energy will not remain as high as it is, it cant its not affordable as can be seen by the budget, already before this crisis there was a shift to countries turning to wind and solar (not sure how far away we are from this) and this has been escalated with the war. If your looking at the 2 industries you just mentioned for every restaurant/house their are customers if the customer does not see value in the menu or in the building they wont go to the restaurant and the person will not buy the house and the restaurant and the construction company will shut more because demand is gone, the person owning and working in the restaurant/construction company has the choice of closing up or trying to lower their prices there is a lot of profit that goes into a builders pocket for example and its not like construction workers can head off to other countries as their is a global slow down in that particular area so do they retrain in to another field.

Timing belt

https://www.boards.ie/discussion/comment/119681269#Comment_119681269

You totally miss the point by assuming energy prices will drop. Energy prices are high because of geopolitical events not because of supply and demand. And the lead time to change to alternative forms of energy takes a long time. As long as there is conflict with Russia energy prices will remain high. As long as energy prices are high it will feed into construction costs.

IWW2900

https://www.boards.ie/discussion/comment/119681307#Comment_119681307

While Russia sped up process somewhat, we were always headed towards an energy crisis due to government policy.

Jonnyc135

https://www.boards.ie/discussion/comment/119681307#Comment_119681307

Correct the era of cheap energy especially electricity powered by Russian gas is over and never comming back. We will just have to get used of higher electricity prices.

Timing belt

https://www.boards.ie/discussion/comment/119681398#Comment_119681398

Of course it will fast track things but it still takes a few years to build an offshore wind farm or move over to an alternative fuel

IWW2900

https://www.boards.ie/discussion/comment/119681435#Comment_119681435

....

Timing belt

https://www.boards.ie/discussion/comment/119681427#Comment_119681427

And higher energy prices mean more inflation as it feeds into the price of everything. Just look at food…high energy makes it more expensive as machines use diesel and fertiliser needs a lot of energy….then right up the chain you get add costs with production and transport increases due to energy.

you either change the model by using less energy (if possible) or pass on the costs to the consumer

mcsean2163

https://www.boards.ie/discussion/comment/119681435#Comment_119681435

What happens at night when the wind doesn't blow? Renewables that have a ten year lifetime and cost significant energy to manufacture do not solve the storage problem. We need nuclear, geothermal or hydro, something that can be guaranteed without leaving us exposed to countries that are unreliable.

fliball123

https://www.boards.ie/discussion/comment/119681307#Comment_119681307

We seen with covid how fast things that historically we were told will take ages to do or change but it didn't take long at all. I believe that after the winter things will go even quicker with regards to energy and the emphasis on finding a much cheaper solution. You miss the point that geopolitical events did lead into both supply (covid and the war both will be a thing of the past hopefully sooner rather than later) and now due these events we also have inflation (a result of the money printing for covid) which is eroding demand as the majority of people simply are not making enough money to keep up at some point prices have to drop or companies will go to the wall. Its not like its just high energy prices, its high food, interest rates and cost for everything competing for peoples money and wages have not risen anywhere near enough to keep up.

Timing belt

https://www.boards.ie/discussion/comment/119681688#Comment_119681688

And why do you think the price of food has increased? input costs… mainly energy and a lot of that has yet to hit food prices. Along with a smaller supply of food as crop yields are much lower due to less fertiliser.

Even if the war ended tomorrow energy prices would still be elevated as things will never go back to the way they were being reliant on Russia. The only way I could see energy prices dropping quickly is if a new government was put in place in Russia and current government locked up for war crimes. The likelihood of that happening is extremely remote.

The simple fact is that most construction material needs a lot of energy so prices won’t drop massively. Instead building projects will be put on hold.

drogon.

https://www.boards.ie/discussion/comment/119681427#Comment_119681427

Along with cheap energy, I personally believe cheap credit is coming to an end as well. Don't see my self seeing the ECB going back to negative interest rates considering how much the Euro has lost against the Dollar lately.

newmember2

WTf...Is this the recession thread or the property thread??

fliball123

https://www.boards.ie/discussion/comment/119682107#Comment_119682107

I agree with you with regards to food and your right its because of input costs for food but energy prices will not remain high. The 3 main factors for energy is the war, brexit and covid and all 3 will be a thing of the past at some point in the future. Wages globally have not gone up to match inflation and simply cant match it as the globe is hitting a recession so in straightened times do you think people will have excess money? No they wont they cut their clothe and proof will be in the pudding lets see how many people stop using excess energy this winter due to the costs involved. Lets see how many businesses hit the wall, you cannot get blood from a stone and the affordability aspect means a lot of people will just have to do without unfortunately. So the argument between us here is basically is will wage go up to match inflation or will inflation come back down to become affordable. I think with things like interest rates going up. I can see inflation coming back down as businesses in the round cannot afford to much more with regards to cost increases.

fergus1001

https://www.boards.ie/discussion/comment/119680738#Comment_119680738

True but the current cost is way above the cost of production it was inflated by demand, I know a couple of block manufacturers that are on 3 day weeks at the moment as demand has fallen off a cliff

Timing belt

https://www.boards.ie/discussion/comment/119683495#Comment_119683495

I’m not saying wages will go up to match inflation nor am I arguing that demand will decline. I am just saying that energy costs have pushed the price up of construction costs and the price won’t fall bellow cost. If the demand isn’t there for the cost then the goods won’t be produced. We are already seeing this happen. The result is less building activity.

fliball123

https://www.boards.ie/discussion/comment/119683911#Comment_119683911

So people/companies will instead of working in construction they will just give up on their field of expertise? So are we going to see an exodus of construction workers from the industry as stated the construction issues are global so they cant go to the UK, US, Canada or Oz or anywhere else where the same issues will be facing the industry. I agree some places have shut down and may never reopen but what happens when the war is over, supply issues completely gone and energy prices come back down to reality. I can see demand for goods that need construction falling a lot more quickly than the number of people/companies in the construction industry. Proof is in the pudding as I say we will have to come back to this argument in say 18/24 months time.

Just as a precursor to the next 18/24 months already Ireland's inflation is slowing as IMO we are a very expensive country to live in and property in particular is very expensive when compared to wage, things cannot continue to go up and up without wage rising to meet it, at some point people just do without or in the case of property they emigrate.

https://www.irishtimes.com/business/2022/09/30/euro-zone-inflation-at-double-digit-record-piles-pressure-on-ecb/

jimmybobbyschweiz

https://www.boards.ie/discussion/comment/119679648#Comment_119679648

Rates to 3.5-4.5% before they stop is my guess. That will take some heat out of the economy and the property market. My only issue is that they are too slow to get there. Mortgage rates will be close to 5% in Ireland when this mess is finally cleared.

The pool of buyers at the price point we have will dry up and then prices will start to fall. This is happening now and will follow through the winter. It will be called a slowdown in activity based on other economic factors but it is also the case that demand destruction has kicked in. Into the spring next year, activity will be down in the property market and then data in Q2/Q3 will reflect this. By Q4 we will have data that says the property market definitely cooled in 2023. Supply will keep ticking up the whole time.

After 2023? Some analysis predicts something breaking in the system requiring a pausing of interest rate increases in late 2023/2024 which to me would indicate more of a slowdown in the property market through 2024 and 2025. We'll be halfway through the decade and prices will be lower than they were at the start of the decade in 2020.

Villa05

https://www.boards.ie/discussion/comment/119680779#Comment_119680779

It's always darkest before the dawn. Dublin economy is dominated by by finance and I.T

Both sectors are facing serious headwinds. Facebook, Google and most recently Apple have raised concerns about the future and it would appear that growth in employment will be slowed if not reversed

Financial markets will be a difficult place to make money under current and foreseeable conditions so we can expect similar here

Med/bio med and pharma should insulate the economy from the worst effects of the recession

There is a realisation that too much money was injected into the system during Covid and asset prices simply need to correct to at least pre covid levels

If you recall property prices stabilised between 2018 and 2020. I think there is a good chance that interest rate rises and slowdown in employment (incoming migration) plus a push in supply will bring us back to those levels at least.

I feel a correction is inevitable and welcome for both homeowners and buyers. A bubble does not benefit either and certainly not the economy

Timing belt

https://www.boards.ie/discussion/comment/119683960#Comment_119683960

I am not talking about workers leaving construction…they have F all to do with the cost of construction materials.

where did I once mention labour costs?

Bass Reeves

https://www.boards.ie/discussion/comment/119683960#Comment_119683960

The building will not stop completely. However inœstead of tradespeople working 6 day weeks they will drop back to 4-5 day weeks. Larger companies producing building supplies will reduce output. You will probably see more extensions and smaller projects consentrated on. Trades people will take on smaller or partial cash projects to cut out tax and Vat on there labour costs.

Completions will be pushed out by 6-12 months. Larger REITs projects will continue but again completion date will push out.

If the number of units to be build reduces by 30-50% back to 12-15k units where will the prices even out at

The building costs in Ireland is high with the regulations in place. However refurbishment's are not caught by the same regulations if people can fund it through savings or/and personal borrowing rather than mortgage type lending.

If we go through 18-24 months of limited activity any upturn should see prices rise exponentially as there will probably be a limited availability of materials

combat14

https://www.boards.ie/discussion/comment/119683981#Comment_119683981

exactly of course there is a shortage of properties now - we all want houses - but who can afford to buy at current prices with significantly higher interest and inflation rates remains to be seen - house prices will ultimately have to fall back as disposable income is crushed again next year