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

timmyntc

Yurt! wrote: »

Sorry, but holding up a historic housing explosion as an example of supply/demand framework operating as it should is not just toying with ignorance, you're in the deep end of ignorance with a snorkel.

But its proof that supply and demand fundamentally drive prices up (and down).

The nature of the demand is the issue, but fundamentally its supply and demand.
In the boomtime it was joe soap borrowing 100% mortgages to build and flip houses with the assumption prices would rise indefinitely - a pyramid scheme of sorts.
When the mortgage bubble burst, the demand plummeted and so did the prices - because the supply was constant, the demand changed. Supply and demand 101.

This time around we have more of a supply issue - although the institutional investors are definitely adding to demand and inflating prices. We have seen this in the last month quite prominently.

Ace2007

propertyseeker wrote: »

Fascinating twitter thread on Black Rock purchasing entire neighborhoods in America.
Exact same situation throughout West

https://twitter.com/APhilosophae/status/1402434266970140676?s=20

This must have been the 3rd or 4th time that this has been put up.

Yurt2

timmyntc wrote: »

But its proof that supply and demand fundamentally drive prices up (and down).

The nature of the demand is the issue, but fundamentally its supply and demand.
In the boomtime it was joe soap borrowing 100% mortgages to build and flip houses with the assumption prices would rise indefinitely - a pyramid scheme of sorts.
When the mortgage bubble burst, the demand plummeted and so did the prices - because the supply was constant, the demand changed. Supply and demand 101.

This time around we have more of a supply issue - although the institutional investors are definitely adding to demand and inflating prices. We have seen this in the last month quite prominently.

The point is simple. Supply alone, under current conditions will not, and it has been proven in markets all around the world - ameliorate the problem. This is fact. Anyone saying that supply and keeps on chanting 'supply and demand' brings down house prices like a drunk football fan on the terrace as a matter of course deserves an F.

Yurt2

Sheeps wrote: »

A classic appeal to authority, the sign of someone who has lost an argument.

As opposed to repeating 'supply and demand' like someone on a bad acid trip in the face of actual evidence?

SmokyMo

Amadan Dubh wrote: »

Apologies, it was a bit arbitrary, based on inflation hitting 4% combined with housing costs increasing I feel that a salary increase of 10% is what would be needed just to notice more money in your pocket, otherwise you're just about keeping pace with or else losing to the cost of living increase.

I wasn't looking for specific figures just factors.. 10% is big increase. Even 4%. Try to convince your boss or any textbook economists that there is inflation. They ll foam at the mouth denying it.

Timing belt

Dav010 wrote: »

MNCs accepting/allowing for the tax implications of people in other countries doing what employees in Irish offices used to do pre-pandemic.

You will probably find that it is a sub-set of roles that this will apply to. Possibly sales if they are going to tax at country of purchase. The research roles and roles with Intellectual properties will more than likely remain in Ireland for tax purposes

Marius34

Yurt! wrote: »

I'm trying not to be haughty here, but supply and demand theory is economics 101, and all things being equal, holds that transacting between buyer and seller will result in equilibrium. Bubbles and frankly thick transacting behavior due to exogenous variables to demand for goods violate the supply/demand theoretical framework. Which is why they are studied, and why have economists in governing institutions trying to save us from cowboys who just shout supply and demand when things go haywire.


If you want to hold that the beginning, middle and end cycles of the celtic tiger housing mess bore any relation to equilibrium and underlying demand for the public goods of housing in the behavior of transacting parties and the outcome for the country at large, go ahead. And at the risk of haughtyness again, anyone who's sat down in a first year economics tutorial who would try to make the case that supply and demand of housing was propelling the market and prices at the time would see their tutor with their head in their hands asking you to leave the room.

I think that professor should get fired for teaching first year students against basic laws of demands and supplies.

https://www.investopedia.com/ask/answers/040215/how-does-law-supply-and-demand-affect-housing-market.asp
"Real estate is a tangible asset made up of property and the land on which it sits, and while it is unmovable, real estate, like other assets, is also subject to supply and demand. This means that the prices of homes, like those of stocks and bonds, depend heavily on the law of supply and demand"

"The law of supply and demand is a basic economic principle that explains the relationship between supply and demand for a good or service, and how that interaction affects the price of that good or service."

"The housing market, too, relies heavily on supply and demand, which is why it is a much looked-at indicator in the industry. Each housing transaction, of course, involves a buyer and a seller. The buyer places an offer to buy a property, leaving the seller to accept or reject the offer."

"One of the main causes of the Great Recession that followed the financial crisis in the mid-2000s was that the housing market crashed. This was due to the law of supply and demand.

During the lead-up to the financial crisis, consumers were enjoying relatively low borrowing rates. Banks began to offer lower rates on mortgages and were also encouraged to relax their lending standards. People who weren't otherwise able to afford a home before, suddenly found themselves able to realize their dreams of homeownership. Many of these consumers, called sub-prime borrowers, were able to snag a home with very low down payments even though they had very low credit scores.

During this time, speculative buyers also began entering the market, driving up demand for housing and, at the same time, cutting into the available supply. All of this, in turn, drove prices up to lofty levels."

Yurt2

Marius34 wrote: »

I think that professor should get fired for teaching first year students against basic laws of demands and supplies.

https://www.investopedia.com/ask/answers/040215/how-does-law-supply-and-demand-affect-housing-market.asp
"Real estate is a tangible asset made up of property and the land on which it sits, and while it is unmovable, real estate, like other assets, is also subject to supply and demand. This means that the prices of homes, like those of stocks and bonds, depend heavily on the law of supply and demand"

"The law of supply and demand is a basic economic principle that explains the relationship between supply and demand for a good or service, and how that interaction affects the price of that good or service."

"The housing market, too, relies heavily on supply and demand, which is why it is a much looked-at indicator in the industry. Each housing transaction, of course, involves a buyer and a seller. The buyer places an offer to buy a property, leaving the seller to accept or reject the offer."

"One of the main causes of the Great Recession that followed the financial crisis in the mid-2000s was that the housing market crashed. This was due to the law of supply and demand.

During the lead-up to the financial crisis, consumers were enjoying relatively low borrowing rates. Banks began to offer lower rates on mortgages and were also encouraged to relax their lending standards. People who weren't otherwise able to afford a home before, suddenly found themselves able to realize their dreams of homeownership. Many of these consumers, called sub-prime borrowers, were able to snag a home with very low down payments even though they had very low credit scores.

During this time, speculative buyers also began entering the market, driving up demand for housing and, at the same time, cutting into the available supply. All of this, in turn, drove prices up to lofty levels."

I'll leave you to your investopedia links. Honestly...

timmyntc

Yurt! wrote: »

The point is simple. Supply alone, under current conditions will not, and it has been proven in markets all around the world - ameliorate the problem. This is fact. Anyone saying that supply and keeps on chanting 'supply and demand' brings down house prices like a drunk football fan on the terrace as a matter of course deserves an F.

Okay o learned one, if its not supply that will fix this, then what will?
Since supply and demand has been debunked, what dictates the prices in the market?

timmyntc

timmyntc wrote: »

Okay o learned one, if its not supply that will fix this, then what will?
Since supply and demand has been debunked, what dictates the prices in the market?

A multitude of interlinked factors, that is why it is such a difficult problem to solve, and will most definitely not be solved just by changing Government.

SmokyMo

Dav010 wrote: »

A multitude of interlinked factors, that is why it is such a difficult problem to solve, and will most definitely not be solved just by changing Government.

Changing government can be a start thought.

Amadan Dubh

SmokyMo wrote: »

I wasn't looking for specific figures just factors.. 10% is big increase. Even 4%. Try to convince your boss or any textbook economists that there is inflation. They ll foam at the mouth denying it.

Especially if they're a baby Boomer!

https://www.google.com/amp/s/amp.ft.com/content/77473002-ebb8-48ba-8af1-317b03623244

Very interesting article today in the FT about German inflation being talked down by the embattled finance minister Olaf Schulz. If not temporary in Germany it could go over 5% which will give them the heebie jeebies and ECB interest rates may have to rise.

FromADistance

timmyntc wrote: »

Okay o learned one, if its not supply that will fix this, then what will?
Since supply and demand has been debunked, what dictates the prices in the market?

The level of elasticity in the market frames the supply and demand "question". If only increasing supply was the answer - no point increasing supply in places where no one wants to buy. The basic premise of supply and demand still exists but there's many factors feeding into the market which in turn determines the price. Even back in 2005-8 there was plenty of property supply but there was also a cheap supply of money, 100% mortgages and so on. We all know that eventually the market caught up with itself but during the years that followed practically nothing was built. The bottom line is until the main component factors that make up the cost of a house are tackled (IMO mainly the cost of land & the planning process / regulation environment but there are others) affordability will still be an issue for some years to come. Also, Government (IMO) cannot continue to outsource their responsibilities to the private sector to provide housing. How to tackle all this is the 64 thousand dollar question.

Amadan Dubh

Further news on the Facebook decision, with quotes from two employment lawyers, Ibec spokesperson and a Facebook representative.

I don't need to quote them but I would be curious to know more beyond the quote from the Ibec rep below.

https://www.irishtimes.com/business/economy/facebook-s-remote-work-move-means-floodgates-have-opened-1.4589770?mode=amp

Maeve McElwee, director of employer relations at Ibec, said it was aware of a number of companies who were considering allowing employees to work remotely from outside the State.

“We understand what some companies are currently considering is a right to request to work remotely from abroad, limited to certain specific roles and certain jurisdictions – and for some it would be for a limited period of time per year,” she said.

Hubertj

Amadan Dubh wrote: »

Further news on the Facebook decision, with quotes from two employment lawyers, Ibec spokesperson and a Facebook representative.

I don't need to quote them but I would be curious to know more beyond the quote from the Ibec rep below.

https://www.irishtimes.com/business/economy/facebook-s-remote-work-move-means-floodgates-have-opened-1.4589770?mode=amp

I will dial into the next AmCham call and see what others have to say. As posted earlier Hubspot are allowing remote from anywhere 3 months per year. Did Indeed.com also announce something similar?

fliball123

timmyntc wrote: »

Okay o learned one, if its not supply that will fix this, then what will?
Since supply and demand has been debunked, what dictates the prices in the market?

Timmy I mean if he/she cant see that we have both a supply and demand issue unique in this country and they are both pushing prices up there is no talking to him/her. We have had a pandemic over the last 18 months and prices have gone up in the face of this. Too much competition with the state and vultures competing with indigenous home buyers and not enough new supply coming on stream. These are the 2 main reasons why Irish property are where they are and will continue going in the same way until one or both issues are sorted.

Marius34

Yurt! wrote: »

I'll leave you to your investopedia links. Honestly...

Well I don't know your first year economics professor. And since we talk about first years fundamentals in to economics, and how this applies to Irish Property Market, Wikipedia/Investopedia is absolutely fine to get basics. Even lecturers use it, no need to get into science published research.

Yurt2

Marius34 wrote: »

Well I don't know your first year economics professor. And since we talk about first years fundamentals in to economics, and how this applies to Irish Property Market, Wikipedia/Investopedia is absolutely fine to get basics. Even lecturers use it, no need to get into science published research.

They most certainly do not

fliball123

Yurt! wrote: »

They most certainly do not

OK Yurt if its not a supply and demand issue , why are house prices going up??

Marius34

Yurt! wrote: »

They most certainly do not

Well they certainly use it, and I have experience with it, not in their publications though. Many lecturers nowadays are not very academic, and working in business, and are not very different from other private sector collegues, especially in IT/Bussiness.

combat14

Facebook to allow Irish staff work from other European countries
In a change to company policy, CEO Mark Zuckerberg told staff that they will soon be allowed apply to work from other European countries, including the UK.

https://m.independent.ie/business/technology/facebook-to-allow-irish-staff-work-from-other-european-countries-40521728.html

huge news, if this takes place over the next couple of years there will be a bigger push for the same arrangement across the it sector here given nose bleed extortionate rents in dublin

Timing belt

Yurt! wrote: »

The point is simple. Supply alone, under current conditions will not, and it has been proven in markets all around the world - ameliorate the problem. This is fact. Anyone saying that supply and keeps on chanting 'supply and demand' brings down house prices like a drunk football fan on the terrace as a matter of course deserves an F.

Supply and Demand does impact housing. It's basic economics.....

If you want to look at it more in-dept then you look at:

• the impact QE has had with investors snapping up as much property as they can get their hands on due to low yield of other asset classes but fundamentally all this is an increase in Demand.
• You can look at whether a new build property is a substitute for a second hand property. Most will say it is however there are people who will not buy a new property and would prefer a second hand property in an established area because they fear that the new property will be predominately social housing. There is a limited supply of second hand properties in established areas so you are back to supply and demand.
• You can look at the impact on investors on the housing market... in an elastic market where new property can be brought to the market quickly you find that the investors stimulate the housing market making it profitable to build new houses and supply increases and in turn rent falls. yet again it is supply and demand.
• You can look at HAP and argue that the government are keeping rents artificially high by providing a floor but yet again there must be demand and a lack of supply to sustain this.
• You can argue that properties are being kept vacant to restrict supply... yet again it is supply and demand.
• You can argue that you are more intelligent than the average boards poster..... This has noting to do with supply and Demand.

As Ernest Hemingway wrote: “Happiness in intelligent people is the rarest thing I know.”

cnocbui

combat14 wrote: »

Facebook to allow Irish staff work from other European countries
In a change to company policy, CEO Mark Zuckerberg told staff that they will soon be allowed apply to work from other European countries, including the UK.

https://m.independent.ie/business/technology/facebook-to-allow-irish-staff-work-from-other-european-countries-40521728.html

huge news, if this takes place over the next couple of years there will be a bigger push for the same arrangement across the it sector here given nose bleed extortionate rents in dublin

It's not as big a move as it seems. These workers would still qualify as being tax resident in Ireland, which means they would have to work in Ireland for 183 days a year, or more, so they would need to maintain a residence in Ireland.

if they were working permanently in another country, they would no longer be Irish employees and the company would probably have to treat them as having been transferred, which they can do already.

Timing belt

Timing belt wrote: »

Supply and Demand does impact housing. It's basic economics.....

If you want to look at it more in-dept then you look at:

• the impact QE has had with investors snapping up as much property as they can get their hands on due to low yield of other asset classes but fundamentally all this is an increase in Demand.
• You can look at whether a new build property is a substitute for a second hand property. Most will say it is however there are people who will not buy a new property and would prefer a second hand property in an established area because they fear that the new property will be predominately social housing. There is a limited supply of second hand properties in established areas so you are back to supply and demand.
• You can look at the impact on investors on the housing market... in an elastic market where new property can be brought to the market quickly you find that the investors stimulate the housing market making it profitable to build new houses and supply increases and in turn rent falls. yet again it is supply and demand.
• You can look at HAP and argue that the government are keeping rents artificially high by providing a floor but yet again there must be demand and a lack of supply to sustain this.
• You can argue that properties are being kept vacant to restrict supply... yet again it is supply and demand.
• You can argue that you are more intelligent than the average boards poster..... This has noting to do with supply and Demand.

As Ernest Hemingway wrote: “Happiness in intelligent people is the rarest thing I know.”

That supply and demand affects price is beyond doubt, what is in doubt is whether people who state that, understand that it is in itself an oversimplification of the situation. There are a multitude of factors which affect both supply and demand which must be considered in tandem with your statement. If Hemingway was alive, no doubt he would have a quotable line to describe those who are intelligent enough to understand the obvious, but not quite enough to understand the reasons why it might be more complex.

Amadan Dubh

combat14 wrote: »

Facebook to allow Irish staff work from other European countries
In a change to company policy, CEO Mark Zuckerberg told staff that they will soon be allowed apply to work from other European countries, including the UK.

https://m.independent.ie/business/technology/facebook-to-allow-irish-staff-work-from-other-european-countries-40521728.html

huge news, if this takes place over the next couple of years there will be a bigger push for the same arrangement across the it sector here given nose bleed extortionate rents in dublin

11am called and wants its news back.

It's a fair few pages back now but was given a good seeing to when posted this morning!

fliball123

Dav010 wrote: »

That supply and demand affects price is beyond doubt, what is in doubt is whether people who state that, understand that it is in itself an oversimplification of the situation. There are a multitude of factors which affect both supply and demand which must be considered in tandem with your statement. If Hemingway was alive, no doubt he would have a quotable line to describe those who are intelligent enough to understand the obvious, but not quite enough to understand the reasons why it might be more complex.

It is far more complex but Yurt is arguing that supply and demand play feck all part in how the price of property is made up. All of what your talking about the multitude of factors either hit on the stream in (supply) or the stream out (demand) I don't think anyone ever said it was not complex but to state it has nothing to do with supply and demand is bonkers

cubatahavana

Hubertj wrote: »

Are you and your wife from Spain? It must be really good to have that to plan for.

I’m Spanish and she’s polish, but she really wants to move to Spain. She works in a global role, so language wouldn’t be a barrier in the office

awec

cubatahavana wrote: »

I’m Spanish and she’s polish, but she really wants to move to Spain. She works in a global role, so language wouldn’t be a barrier in the office

Surely you'd miss our amazing weather?

JimmyVik

fliball123 wrote: »

It is far more complex but Yurt is arguing that supply and demand play feck all part in how the price of property is made up. All of what your talking about the multitude of factors either hit on the stream in (supply) or the stream out (demand) I don't think anyone ever said it was not complex but to state it has nothing to do with supply and demand is bonkers

I think everyone else agrees thats supply and demand was and is the key.
And supply in the wrong places was also a problem last time as there was no demand there after the crash.

Leave poor old Yurt alone though. He was out the day his lecturer covered demand.
He seems to understand supply though so he must have been in that day:)

PropQueries

More information on the potential impact of the Facebook move in the Irish Times today and it looks like the government is getting worried. The other obvious side of the coin is the potential impact on the Dublin residential market come September IMO

"Behind the scenes, there is considerable alarm at the Department of Finance at the move by Facebook, with discussions understood to be ongoing between Merrion Street and Revenue. Sources pointed to the possible loss of income tax from workers who are not resident here, and there is worry that the Facebook move would set a precedent for other companies. One source described the move as “hugely worrying” and said that if it turned into a trend, it would present “enormous challenges to the revenue base”.

Three quarters of the article is made up of tax etc. adviors using the excuses given here in the past about why it can't work. But, I would think that's just a fearful reaction given the obvious implications, not just from a government income tax revenue point of view but also from demand for housing going forward. Remember, the projections of demand for housing are based on c. 30,000 net inward migration per year.

The truth is that facebook is doing this. They don't believe it has tax implications for their Irish HQ base and all other similar services based multinationals now have c. three months to look into what facebook is doing and to see if they can do it too before office workers are meant to start returning to the office around September.

Link to article in Irish Times here: https://www.irishtimes.com/business/economy/work-from-abroad-initiative-won-t-alter-tax-status-in-ireland-facebook-1.4590104

In another article in the Irish Times today, it says: "Facebook’s remote work move means floodgates have opened. Lawyer says decision could have more impact on Ireland Inc than corporate tax reform".

The floodgates have obviously opened. It will very interesting to see how this will impact the Dublin City property market come September and going forward, especially at the higher property values end of the market.

Link to this article in Irish Times here: https://www.irishtimes.com/business/economy/facebook-s-remote-work-move-means-floodgates-have-opened-1.4589770

timmyntc

PropQueries wrote: »

More information on the potential impact of the Facebook move in the Irish Times today and it looks like the government is getting worried. The other obvious side of the coin is the potential impact on the Dublin residential market come September IMO

"Behind the scenes, there is considerable alarm at the Department of Finance at the move by Facebook, with discussions understood to be ongoing between Merrion Street and Revenue. Sources pointed to the possible loss of income tax from workers who are not resident here, and there is worry that the Facebook move would set a precedent for other companies. One source described the move as “hugely worrying” and said that if it turned into a trend, it would present “enormous challenges to the revenue base”.

Three quarters of the article is made up of tax etc. adviors using the excuses given here in the past about why it can't work. But, I would think that's just a fearful reaction given the obvious implications, not just from a government income tax revenue point of view but also from demand for housing going forward. Remember, the projections of demand for housing are based on c. 30,000 net inward migration per year.

The truth is that facebook is doing this. They don't believe it has tax implications for their Irish HQ base and all other similar services based multinationals now have c. three months to look into what facebook is doing and to see if they can do it too before office workers are meant to start returning to the office around September.

Link to article in Irish Times here: https://www.irishtimes.com/business/economy/work-from-abroad-initiative-won-t-alter-tax-status-in-ireland-facebook-1.4590104

In another article in the Irish Times today, it says: "Facebook’s remote work move means floodgates have opened. Lawyer says decision could have more impact on Ireland Inc than corporate tax reform".

The floodgates have obviously opened. It will very interesting to see how this will impact the Dublin City property market come September and going forward, especially at the higher property values end of the market.

Link to this article in Irish Times here: https://www.irishtimes.com/business/economy/facebook-s-remote-work-move-means-floodgates-have-opened-1.4589770

If people are still tax resident here then there will be no income tax loss - the bigger loss will be from spending. Businesses in particular would be worried, as its the footfall they rely on. Take that away for up to half of the year and they will be seeing big holes in their revenue.

Villa05

JimmyVik wrote:

No. Its all correct. It was a demand driven boom. All was well until the demand left. Then you were left with massive over supply. Same will happen again. But this time at least normal people wont be over stretched as much as last time.

Are you sure?
The lobbyists representing investment funds are big supporters of the shared ownership scheme. If there supporting that, its part of there exit plan.
Shared ownership by its nature is loans for housing to people the system believes can't afford the price. The state is the underwriter so the public will have to pay up. A built in bail out, so to speak at maximum price

SmokyMo wrote:

Changing government can be a start thought.

Changing gov/policy is critical. We saw in tralee how policy facilitated investment funds buy property at prices that would be affordable to local workers. They further took advantage of Gov policy to double the price of that property effectively putting outside the affordability range of local workers. Tax dodgers are favoured over locals who help sustain the town and contribute to

How come we can facilitate investment funds to buy property at affordable rates but not citizens

I think it really underlines that government by far is the most significant contributer to the problem

Timing belt wrote:

You can look at HAP and argue that the government are keeping rents artificially high by providing a floor but yet again there must be demand and a lack of supply to sustain this.

The argument that HAP provides a floor on prices is obsolete its now driving rent prices to new heights for city centre apartments that the private market can't afford
We will become a case study on bubbles in future economics classes

Nijmegen

timmyntc wrote: »

If people are still tax resident here then there will be no income tax loss - the bigger loss will be from spending. Businesses in particular would be worried, as its the footfall they rely on. Take that away for up to half of the year and they will be seeing big holes in their revenue.

If! And if Facebook has them operating abroad for a time and it's working, and they're having the headache of dealing with both Revenue and a third country tax department to keep it all in order (even counting days here and there), I can see them just letting the employees be abroad.

Villa05

PropQueries wrote:

More information on the potential impact of the Facebook move in the Irish Times today and it looks like the government is getting worried.

The head of the IDA was on radio this morning and came across as being troubled by the decision

AlmightyCushion

timmyntc wrote: »

If people are still tax resident here then there will be no income tax loss - the bigger loss will be from spending. Businesses in particular would be worried, as its the footfall they rely on. Take that away for up to half of the year and they will be seeing big holes in their revenue.

These people will be moving to a different country so there will be income tax losses as they will be tax resident elsewhere. Saying that, Facebook say they will be expanding their workforce here and expect it to grow even with this decision.

Nijmegen

AlmightyCushion wrote: »

These people will be moving to a different country so there will be income tax losses as they will be tax resident elsewhere. Saying that, Facebook say they will be expanding their workforce here and expect it to grow even with this decision.

183 days will become a magic number that we all forgot after the last recession (remember cinderella flights for millionaires...)

The tax wedge is one thing. The "for every FDI job we get x further jobs in the economy" is the other. Big structural changes we potentially know not of to come... Or maybe it'll be a big bust! But either way choppy waters.

awec

AlmightyCushion wrote: »

These people will be moving to a different country so there will be income tax losses as they will be tax resident elsewhere. Saying that, Facebook say they will be expanding their workforce here and expect it to grow even with this decision.

Is that in the Irish Times article?

AlmightyCushion

Nijmegen wrote: »

183 days will become a magic number that we all forgot after the last recession (remember cinderella flights for millionaires...)

The tax wedge is one thing. The "for every FDI job we get x further jobs in the economy" is the other. Big structural changes we potentially know not of to come... Or maybe it'll be a big bust! But either way choppy waters.

They are moving country. They won't be here for 183 days so they won't be tax resident here. They will be tax resident in what ever country they move to.

coolshannagh28

AlmightyCushion wrote: »

These people will be moving to a different country so there will be income tax losses as they will be tax resident elsewhere. Saying that, Facebook say they will be expanding their workforce here and expect it to grow even with this decision.

This is the first step towards outsourcing of WFH to really low cost economies another threat to employment in general.

AlmightyCushion

awec wrote: »

Is that in the Irish Times article?

Yes.

Asked whether such moves would lead to corporation tax issues if a large portion of its workforce was no longer based in Ireland, Facebook said it still wanted to grow its Irish operation. There was no change to plans for a new campus at Ballsbridge, Dublin, which would accommodate up to 7,000 staff on the site of the former AIB bank centre, it said.

“Remote work will not have any impact on the substance of our operations here or employee numbers on balance,” Facebook said in reply to questions.

“Furthermore, we don’t expect employee numbers to decrease. If anything we expect them to grow as we continue to hire in Ireland.”

awec

AlmightyCushion wrote: »

Yes.

Strange how this was completely omitted from PropQueries synopsis of the article.

I should probably buy an IT sub.

I suggested before that remote work will allow these companies to grow beyond their current headcount as they can do it relatively cheaply, since they no longer need to invest big capital in increasing office space up front. Sounds like this is what they are looking at.

AlmightyCushion

awec wrote: »

Strange how this was completely omitted from PropQueries synopsis of the article.

I should probably buy an IT sub.

Right click link > open in private window. I just saved you a euro a month. Go buy yourself a bag of crisps with it :pac:

awec

AlmightyCushion wrote: »

They are moving country. They won't be here for 183 days so they won't be tax resident here. They will be tax resident in what ever country they move to.

Yes tax resident wherever they live and also subject to the employment laws of wherever they live.

In reality what happens is their employment moves from Facebook Ireland to Facebook Wherever, and they get the local salary, local benefits, local perks etc.

Cyrus

PropQueries wrote: »

More information on the potential impact of the Facebook move in the Irish Times today and it looks like the government is getting worried. The other obvious side of the coin is the potential impact on the Dublin residential market come September IMO

"Behind the scenes, there is considerable alarm at the Department of Finance at the move by Facebook, with discussions understood to be ongoing between Merrion Street and Revenue. Sources pointed to the possible loss of income tax from workers who are not resident here, and there is worry that the Facebook move would set a precedent for other companies. One source described the move as “hugely worrying” and said that if it turned into a trend, it would present “enormous challenges to the revenue base”.

Three quarters of the article is made up of tax etc. adviors using the excuses given here in the past about why it can't work. But, I would think that's just a fearful reaction given the obvious implications, not just from a government income tax revenue point of view but also from demand for housing going forward. Remember, the projections of demand for housing are based on c. 30,000 net inward migration per year.

The truth is that facebook is doing this. They don't believe it has tax implications for their Irish HQ base and all other similar services based multinationals now have c. three months to look into what facebook is doing and to see if they can do it too before office workers are meant to start returning to the office around September.

Link to article in Irish Times here: https://www.irishtimes.com/business/economy/work-from-abroad-initiative-won-t-alter-tax-status-in-ireland-facebook-1.4590104

In another article in the Irish Times today, it says: "Facebook’s remote work move means floodgates have opened. Lawyer says decision could have more impact on Ireland Inc than corporate tax reform".

The floodgates have obviously opened. It will very interesting to see how this will impact the Dublin City property market come September and going forward, especially at the higher property values end of the market.

Link to this article in Irish Times here: https://www.irishtimes.com/business/economy/facebook-s-remote-work-move-means-floodgates-have-opened-1.4589770

so facebook have said they will be growing headcount in ireland and that those working remotely will become employees in other jurisdictions, thats the summary right?

not quite the floodgates opening.

Ace2007

Cyrus wrote: »

so facebook have said they will be growing headcount in ireland and that those working remotely will become employees in other jurisdictions, thats the summary right?

not quite the floodgates opening.

Also those who move abroad would be having their salaries changed to take account of said new location - you know - lower standard of living = pay cut - but again that's being left out of a lot of posts...

fliball123

Ace2007 wrote: »

Also those who move abroad would be having their salaries changed to take account of said new location - you know - lower standard of living = pay cut - but again that's being left out of a lot of posts...

Doe it say that in the article?

JimmyVik

Ace2007 wrote: »

Also those who move abroad would be having their salaries changed to take account of said new location - you know - lower standard of living = pay cut - but again that's being left out of a lot of posts...

When this is done ion our company you get the choice of the local pay scale straight away or you can to keep your Irish salary for the first year and then you have to move to the local pay grade.
In practice the people who have moved have always kept the Irish salary as the pay for their jobs is crap compared to the Irish salary in the other countries.
You also lose your pension benefits straight away on moving abroad.

MacronvFrugals

If what FB are doing takes off we really have to ask ourselves can Dublin compete with our European counterparts, in my opinion it wildly lacks in basic services such as transport, heck even being to some of the lower income EU capital's i'm always blown away by how nice the city is to travel around etc


Just 14% of Dublin houses built within walking distance of public transport


In an article from Reuter's today they also highlight this competition issue in regards to housing

The parts of Ireland's economy that rely on the continued success of its multinational jobs machine are betting the deep roots some of the world's biggest companies have laid down can see off the threat of a global corporate tax overhaul.

However a softening of Ireland's decades-long tax advantage will show up deficiencies elsewhere when competing for foreign direct investment, most notably a persistent dearth of affordable housing.

"The biggest issue is the housing situation," said Nowlan, whose tenants include Twitter (TWTR.N) and U.S. software company HubSpot Inc (HUBS.N). "We really need to get on top of resolving that."

https://www.irishtimes.com/news/environment/just-14-of-dublin-houses-built-within-walking-distance-of-public-transport-1.4589964

SmokyMo

Right now its popular for companies to say they will be offering full wfh, choose your flexi hours bla bla bla.. same like the pledges for going carbon neutral by whatever year.... Employees think they finally have to power to dictate their hours and work environments
Reality on the ground is different, critical roles will mean revert to office culture again. What do you think is gonna happen to your career when everyone in your team is the office and you chose to wfh?

jill_valentine

MacronvFrugals wrote: »

If what FB are doing takes off we really have to ask ourselves can Dublin compete with our European counterparts, in my opinion it wildly lacks in basic services such as transport, heck even being to some of the lower income EU capital's i'm always blown away by how nice the city is to travel around etc


Just 14% of Dublin houses built within walking distance of public transport


https://www.irishtimes.com/news/environment/just-14-of-dublin-houses-built-within-walking-distance-of-public-transport-1.4589964

This is it. People might point to lower local wages, but what kind of city are they getting in return? Dublin has **** all going for it in terms of facilities, public transport, even public spaces. Bins and toilets are the tip of the iceberg.

If you're talking about somebody with the marketability - and now mobility - to live anywhere, does Dublin offer them a better basic standard of city life before considering pay differential than Barcelona, Munich etc? I really don't think so.

Our fairly adversarial attitude to public utility could come back to haunt us in years to come. Dublin's just not a very nice city to live in. Individual salaries don't change that.