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

Dav010 · 13-03-2023 9:33am

https://www.boards.ie/discussion/comment/120351959#Comment_120351959

And you need a dose of reality.

What is the most valuable asset most of us own? Our home. So homeowners in the country will not support policies which have the potential to crash the price of their main asset making them poorer.

When SF make all these promises about how they are going to improve our health system, give free health care, solve the housing crisis etc, most intelligent people, and all journalists will be asking where all the money needed is going to come from.

Whether you want to admit it, not everyone is doing so badly that they want change.

Villa05 · 13-03-2023 9:34am

https://www.boards.ie/discussion/comment/120348281#Comment_120348281

Missed the boat on long term US bonds, now too risky

Villa05 · 13-03-2023 9:52am

https://www.boards.ie/discussion/comment/120352033#Comment_120352033

Where did I campaign or promote SF.

The reality is that if we continue on present course, we will crash house prices and the economy, only this time we will be entering the crash with one of the largest debts in the world. We know where this goes and we have run out of generations to pass the debt onto.

Do homeowners want to pay tax to fund long term leases that would build 3 homes. Do homeowners want to pay tax to drive up prices/rents resulting in their children being unable to grow and develop.

We all loose except the very very wealthy as they will be driving the next bubble while your left fixing (if possible) the previous bubble

All you are is their cheerleader

Dav010 · 13-03-2023 10:02am

https://www.boards.ie/discussion/comment/120352082#Comment_120352082

Not a cheerleader, I just don’t share your fatalistic viewpoint on our economic outlook. You have been the most prolific poster on this, and other Irish property threads, yet to date few if any of your prophesies have come true. Ups and downs in an economy like ours are to be expected, I very much doubt anyone here expects the up to continue indefinately, maybe you think that by shouting “the sky is falling” every day, some say you might be right and you can say to us all, “I told you so, that day and that day and that day etc”

MacronvFrugals · 13-03-2023 10:19am

The amount of ex FG'ers up to their neck in lobbying but this one seems partcularly mad!

Ex-FG minister urged O’Brien to intervene in Wicklow property dispute

Last year, Wicklow County Council backed out of a deal to lease homes from Arresico Ireland after it ‘consistently failed’ to deliver social housing units on time

https://www.businesspost.ie/news/ex-fg-minister-urged-obrien-to-intervene-in-wicklow-property-dispute/

Bass Reeves · 13-03-2023 10:45am

https://www.boards.ie/discussion/comment/120351763#Comment_120351763

https://www.boards.ie/discussion/comment/120351873#Comment_120351873

I think a lot of people misunderstand what happened with these banks. What they did would not have seem reckless when they did it.

We can not all see the problem with coming out of low interest rates. Institutions invested in government bonds. For instance pension funds are not allowed to invest in virtually anything but government bonds with annuity money.

Remember in the EU we had negative interest rates and annuity providers would have chased very low returns in 10 year government bonds.

However going back to the two banks they had a surplus of cash and unlike BOI or AIB were not regulated that they could not invest this money. The banks invested in low interest bonds which might not have seemed reckless at the time

This has nothing to do with socialism, actually done would have you believe that the democratic party is to the left of Mao Zedong. The reality is they are probably to the right if the British conservative party

The banking system is based on the fact that depositor believe that they money is safe whether it 10 euro or 10 billion on deposit. Ya wipe out share holders and bondholders but the basic premise that depositor money is safe is always required.

The perception that you gaurantee 100k or 200 k or 2 million is flawed. We have only 2% of physical money on circulation and that is a figure from 10 years ago it probably significantly less nowadays.

With electronic banking how do you manage the expectations of depositors that they money is safe. Is it realistic for a small business that may have a payroll reguirement of 100k per month and has invoices of 4-500k a month to be received or paid to have 2-3 or more different bank accounts and manage them

Timing belt · 13-03-2023 11:13am

https://www.boards.ie/discussion/comment/120352262#Comment_120352262

These banks were regulated.

AIB and BOI also hold a ton of bonds in their liquidity buffer. The difference will be how much risk they took and how long they went out the yield curve and if they did go long whether they hedged the interest rate risk via IRD’s or asset swaps.

Saying that I think most of the European banks will have parked most of their excess liquidity with ECB as interest corridors were scrapped following’08 so there was no financial penalty for doing so unlike in the US banking system

Villa05 · 13-03-2023 11:40am

https://www.boards.ie/discussion/comment/120352103#Comment_120352103

Your reading my posts with those blinkers on again.

I post as a homeowner, worker and family member. A sustainable property market is in my interests. I've seen how forced sellers got exploited in the last crash.

Ups and downs in an economy like ours are to be expected, I very much doubt anyone here expects the up to continue indefinately

Those ups and downs can be quiet violent which is why the ups should be used to iron out the imbalances in the economy so that the damage is minimised in the downcycle. We are on a path to the opposite. That's what causes the violent swings. The amount of damage caused by a downturn is a choice not an accident

I've continuesly advised mortgage customers to fix there rates for as long as possible while rates were at 0 or negative and for the government to use that environment to address the supply imbalance

Villa05 · 13-03-2023 11:51am

https://www.boards.ie/discussion/comment/120352160#Comment_120352160

Mainstream media

"Look over there, its Gary Lineker"

Villa05 · 13-03-2023 11:55am

https://www.boards.ie/discussion/comment/120352358#Comment_120352358

Can you explain the last paragraph please. I was under the assumption that pension funds and banks were paying to hold excess capital as in negative base rates

growleaves · 13-03-2023 11:59am

https://www.boards.ie/discussion/comment/120351263#Comment_120351263

The UK's FPTP system prevented fringe parties like UKIP from gaining any kind of established electoral foothold, and that was meant to be one of its advantages, but what happened was that the Euro-secessionist tendency ended up running through a reluctant Tory party instead.

Ireland has traditionally relied on emigration to maintain the status quo so that dissatisfied people - like potential SF voters - literally just left the country.

If there is widespread dissatisfaction (I'm not necessarily saying there is, but hypothetically) it should, in a democratic systems, find political expression in some form regardless of the particular structures in places.

RichardAnd · 13-03-2023 12:22pm

https://www.boards.ie/discussion/comment/120352554#Comment_120352554

Agreed.

Taking the UK as an example, the Tories were elected with a mandate to reduce immigration. They not only did not do this, immigration massively increased in the last few years. This leaves the voter with two options to ponder. Firstly, the mandate given to the Tories was simply ignored and they pursued another agenda or, secondly, the Tory party were and are unable to alter the neoliberal agenda. I personally think that it’s a little bit of both, but regardless, the end result is the same. Simply put, the major parties are either impotent or mendacious, so people will turn to alternatives. This is what we’re seeing over in the UK.

Ireland does not have what could reasonably be called a conservative party. FG and FF are sometimes called “centre right”, but beyond the realm of economics, this simply is not the case. No mainstream party espouses socially conservative policy. No mainstream party wants to talk about immigration. No mainstream party offers anything other than neoliberalism or globalism, though they all wrap it up in a different way.

Discontent is growing here. For now, I think that life is still sufficiently comfortable such that the worst of social angst will be contained, but that may not last. As life becomes increasingly difficult for an increasing number of people, they will be less and less likely to sit quietly whilst they are fleeced by the state. This is where extremism sets in, and it may be on the Right or the Left. If things do not improve, we may be in big trouble.

Anyways, these are my thoughts…

Timing belt · 13-03-2023 12:26pm

https://www.boards.ie/discussion/comment/120352532#Comment_120352532

Yes banks had to pay when negative interest rates were in play. They could have avoided this by buy going out the yield curve and buying longer dated bonds that were paying a small return like SVB did. The problem with this is that you are locked into a low rate for 10+ years and introduce interest rate risk to the banking book. Most banks internal risk policies won’t allow this unless you hedge the interest rate risk via an asset swap or interest rate derivative.

Europe is different to the USA as interest corridors were scrapped so they could park excess liquidity with ECB on a variable rate. The USA banking system still uses interest corridors so they go to the bond market with their excess liquidity.

PommieBast · 13-03-2023 12:50pm

https://www.boards.ie/discussion/comment/120351908#Comment_120351908

Those on the ladder will go for status-quo but overall I don't see how FG can top what vote they got in 2020. Anyway really getting off-topic so i'll leave it at that...

herbalplants · 13-03-2023 2:53pm

Wonder if it will happen.

https://markets.businessinsider.com/news/stocks/silicon-valley-bank-fed-rate-hikes-mohamed-el-erian-2023-3

Eclectic Econometrics · 13-03-2023 3:27pm

https://www.boards.ie/discussion/comment/120351263#Comment_120351263

I was monitoring the SVB situation this weekend and outside of tech and finance the sentiment was 100% let it burn. Even when people believed there was a chance of contagion it remained let it burn, D's and R's. It reminded me of Brexit insofar as people seemingly giving up on thinking their lot can improve and the second best thing is to see someone with more money getting a good kicking.

JPM have predicted that the rate rise that was going to happen now won't go ahead. Interesting to see what happens in Europe now.

Eclectic Econometrics · 13-03-2023 3:29pm

https://www.boards.ie/discussion/comment/120353337#Comment_120353337

Sorry, I didn't see you posted this.

Will be interesting to see if they stay the course or not.

Jonnyc135 · 13-03-2023 3:54pm

https://www.boards.ie/discussion/comment/120352618#Comment_120352618

Well said, the greater the divide between the have and have nots in our society the more the discontent will grow and the more our society shifts to extremism either of the left or the right - either way its bad bad news. We are not the only ones, most developed western societies are turning like this. People wonder how did we come to this - very simple answer QE and ultra low interest rates. The chief policy makers implemented these ideologies and the money just got stuck in fiancial assets and never trickled down to benefit the greater society and its coming home to roost now. Instead of these benefiting the greater society, they just inflated asset prices causing the social divides to grow at an unprecedented rate.

If I'm not mistaken the IMF have done loads of research that in conclusion acknowledges this.

Ozark707 · 13-03-2023 4:10pm

https://www.boards.ie/discussion/comment/120353651#Comment_120353651

Inflation hasn't gone away so if they abandon rate rises for the foreseeable then it will be quite telling.

herbalplants · 13-03-2023 6:14pm

Something else that is happening at the moment and won't be reflected in the price drops. Houses who drop in price change the estate agent.

One dropped today by 70k. Because it changed the estate agent, new pictures and all, it won't be reflected in the price drops.

Ozark707 · 13-03-2023 6:17pm

https://www.boards.ie/discussion/comment/120354472#Comment_120354472

This is very common. I have seen it even with the same EA (on myhome at least, though with the recent changes with their site and App is it almost making the boards upgrade of a year or so ago seem good!!!)

CorkRed93 · 13-03-2023 8:19pm

https://www.boards.ie/discussion/comment/120354472#Comment_120354472

anecdotal but i'll go on since EA's were mentioned. listing in cork city maybe around 10 min drive from the centre in a very popular area/address. old house would need a lot of work done but it would probably be liveable for now, not much done since 70s/80s judging by interiors. listed for 380 , called them last week and they'd sell for 300. EA's chancing their arms big time still by the looks of things

Ozark707 · 13-03-2023 8:53pm

Another player in the market jacks up fixed mtge rates

https://www.independent.ie/business/irish/finance-ireland-hikes-interest-rates-above-6pc-for-key-fixed-mortgages-42383880.html

RichardAnd · 13-03-2023 10:19pm

https://www.boards.ie/discussion/comment/120353852#Comment_120353852

There are all sorts of erudite and florid ways to express the current situation, but I prefer to keep it simple and say that the grift is over. The problems that created the 2008 financial meltdown were never really fixed. Rather, the states of the West printed money and lowered interest rates to the negative in some places. Here we are 15 years later, and it may well be happening again, but I don't think that the bailouts are coming this time.

FernandoTorres · 13-03-2023 10:22pm

The FED has been jacking up interest rates to tame inflation. A few banks blowing up because of poor risk management hardly gets rid of the inflation problem so it's hard to see why they'd completely change their tune now. If they do then it's very fishy. The reality is nobody really knows bar the FED members themselves. Every single "expert" and commentator has a vested interest when they make these predictions.

Zenify · 13-03-2023 11:13pm

If First Republic and Western Alliance go this week too. Do people think it will spread to over here?

Timing belt · 13-03-2023 11:26pm

https://www.boards.ie/discussion/comment/120355578#Comment_120355578

No don’t think it will spread to Europe as European banks have a lot of their cash parked at the ecb on call with a variable rate unlike in the US so aren’t exposes to the same risk.

the biggest risk in Europe is credit Swiss and DB but they have been problematic for a long time.

The BOE demonstrated that their resolution plans are working by facilitating the sale to HSBC over the weekend.

biggest risk I see is all the people that took a flight to safety today and bought bonds pushing the yield lower will get burned when the value of the bonds drop as yields rise due to the fed continuing with rate hikes. CPI release tomorrow will tell a lot.