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

Timing belt

https://www.boards.ie/discussion/comment/120379133#Comment_120379133

Insurance companies and pension funds Mainly

Bass Reeves

https://www.boards.ie/discussion/comment/120379288#Comment_120379288

Insurance companies maybe, pension funds should not be. Mostly private investigators through hedge funds I think.

Timing belt

https://www.boards.ie/discussion/comment/120379297#Comment_120379297

Do you have a source to say it is mainly private investors?

as when banks issued these notes the target audience would have been insurance and pension funds.

combat14

looks like a second wave of tech sector job losses on the cards alot of uncertainty out there now from US and European bank collapses to burned bond holders, continuing inflation increases and sustained interest rate rises a bit of stability would be nice

Amazon announces second wave of layoffs with 9,000 more workers to go

The tech giant, which employs 5,000 people here, has not yet specified what the cuts mean for Ireland.

https://m.independent.ie/business/technology/amazon-announces-second-wave-of-layoffs-with-9000-more-workers-to-go-42395540.html

Jonnyc135

https://www.boards.ie/discussion/comment/120380159#Comment_120380159

Not good, I'll have to make that Honeysuckle money last.

alwald

In the context of the Irish housing market, will layoffs, inflation, high interest rates and a potential "recession" impact both price and supply positively or not?

Zenify

https://www.boards.ie/discussion/comment/120380815#Comment_120380815

Don't forget a banking crises, war and mass strikes around lots of the world.

Beigepaint

I would imagine that tech layoffs could have an impact from foreign tech staff moving home or to another capital. And for the Irish tech staff they might get a lower paying job affecting the prices for a certain bracket of the market.

Dav010

https://www.boards.ie/discussion/comment/120380815#Comment_120380815

It will most definitely be good for people with large savings and jobs which are recession proof, but for those hoping for a recession so that houses become more affordable, they must be assuming their jobs/income would be unaffected. Also, developers will not build if house prices are falling.

fliball123

https://www.boards.ie/discussion/comment/120380982#Comment_120380982

What will they do then Dave they are making a tidy profit and there has been massive gouging going on in the sector they can afford some hit to their profit margin or sure let them hit the wall and let them be content with the dole

Donald Trump

https://www.boards.ie/discussion/comment/120381000#Comment_120381000

All this guff you hear about developers refusing to develop until prices go up - and hence prices won't drop - never seems to take into account that if construction slows down massively, you're going to have a lot of previously reasonably well-paid workers not taking home wages........

Get Real

I think people need to set aside what they may want to happen as opposed to anything that is happening.

People will find certain articles and that that reassure themselves or give hope to what they want.

For example, some wanting prices to fall, put up headlines of layoffs. They're of the belief that layoffs=reduced demand=reduced prices (but they themselves feel it won't impact their financial position and they'll be able to make use of the reduced prices)

Likewise, there will be others who don't want prices to rise, and will put out a certain narrative, such as auctioneers and press releases etc.

Imo, there's nothing to indicate dramatic falls, and it doesn't affect me either way whether there is or not. The supply simply isn't there at the moment. Those wishing a recession may just see themselves ending up burning the candle at both ends. Financially worse off, and in no better position to buy a house.

We're 3 years and more reading about dramatic price falls based on 1)people's desire, 2)people coming to conclusions adding things together from previous price falls and presuming it'll be the same this time and 3)people having a predetermined opinion and providing numbers to fit that opinion.

https://www.boards.ie/discussion/2058041687/property-market-2020/p1

Here's some 3 years ago predicting 10% drops annually. Before covid. Then covid happened and the drops were to happen then surely. None account for the difficulty in predicting human behaviour or lack of supply.

Donald Trump

https://www.boards.ie/discussion/comment/120381089#Comment_120381089

An awful lot of self-projection in that.

Dav010

https://www.boards.ie/discussion/comment/120381000#Comment_120381000

I suspect they will revert to type and wait for prices to rise again, even if that means sitting on sites and paying whatever taxes they have to for a few years. There are so many loopholes that many will avoid them anyway. Any developer commencing the process of developing a site has to take into account that it may be a couple of years before they will get any return on their investment unless they find an investor to forward finance or a county council to buy the lot. You can see how poor the uptake is for the apartment development grant because developers think it is too expensive to build and there is no longer that assurance that they will make a profit (there is also the issue that the grant is paid nearer the end than the start).

You might call it gouging, but it is all about making profit and moving on to the next development. If you are expecting developers to sell for anything less than the most they can get for their properties, then you are kidding yourself. Too many of them went bust during the last recession and no one had anything but bad words for them, you just posted the same yourself, so property development is all business, nothing less.

RichardAnd

https://www.boards.ie/discussion/comment/120381089#Comment_120381089

All humans have a confirmation bias. If one is seeking reassurance for any assumption, it’s not hard to find something that will provide that. Indeed, these days in just about every field it seems that we start with the desired result and then look for “evidence”. 

That said, I think that the housing market that we see today is anything but natural. The state has pumped billions into it, encouraged enormous levels of immigration and fiddled endlessly with the law in order to inflate the market. Normally, at this point, someone would say “we’re heading towards a disaster”, but I won’t do that because we already have a disaster.  

Villa05

Number 5 is Limericks biggest employer by some margin. Is there anything to be concerned about here?

https://twitter.com/KobeissiLetter/status/1637791417069101057?t=MEV0Xfsty1iJx4hwCYhlag&s=19

Villa05

https://www.boards.ie/discussion/comment/120381089#Comment_120381089

3 years ago almost everyone predicted at least a 10% drop during Covid. A 20% increase in that time should be a red flag.

Actions have consequences, we are starting to see the consequences now of all that money printing and free money not just over covid but for more than a decade. Inflation, bank failures, pensions failures, Blackrock defaulting on loans and even war. (war is about the control of resources)

fliball123

https://www.boards.ie/discussion/comment/120381250#Comment_120381250

Your forgetting that the % of people working in construction that are not sitting on sites far out weigh those who are, only a small % are up at the top sitting on sites so what do these workers do who have no sites to sit on?? Sit there and wait go from earning 40/50/60/70k a year to the dole??? I dont think so Dave there will be pressure put on these people from all angles from employees looking to work to the government who will be ramping up those vacant site taxes this has already been flagged. Not to mention if the modular homes take off in any meaningful way over the next 12 to 18 months their dinner will be eaten by this sector as the building of new supply will be less of a priority for the government trying to house people and a hell of lot less expensive for the tax payer. Dave it is gouging prices of raw materials have been dropping for the guts of the last 6 months (its akin to the energy companies the price have come for gas and oil but your bill has not, yet prices go up very quickly and are always stickier coming down than going up) and it has not been reflected in their prices so there is no other word for it.

Lets get one thing clear their is a huge difference between the last bust when we had a shocking over supply of houses including the ghost estates so anyone building would of just been chucking more supply onto the pile of supply that was already there and there would of been very little profit and at that time people had not got the financial leverage to buy either. There is a market for new builds at the moment but people cannot afford the prices so business is business and if you project your prices at a price point that the vast majority of your buyers cant afford its not exactly a solid business strategy.

fliball123

https://www.boards.ie/discussion/comment/120382172#Comment_120382172

3 years ago I was saying property prices would continue to rise even with covid due to supply and demand. I changed my opinion once interest rates started rising as affordability was always going to diminish demand and if the price drops recently seen continues my prediction will be spot on.

DownByTheGarden

https://www.boards.ie/discussion/comment/120380815#Comment_120380815

You would think so wouldnt you. But on the flip side there are not enough houses already to buy. Not enough houses available to rent. Not enough builders to build enough houses (in a recession they wont be building them anyway). So anything bug enough to cause house prices to go down is going to be big enough to have a massive effect on employment rates. And with no jobs who is going to be buying the houses? Oh yeah, the remaining people with jobs with higher taxes.

What a mess.

fliball123

https://www.boards.ie/discussion/comment/120382447#Comment_120382447

Well lets see if the last price drop continues we may have seen the tipping point for property prices.

DownByTheGarden

https://www.boards.ie/discussion/comment/120382366#Comment_120382366

After the last recession nobody is going to hang money out in the hotzone if the economic outlook is bad.

Banks wont lend for building. Builders wont want to build because they might lose everything like last time. They will wait it out til its safer to invest.

The only entity capable of building will be the state. And to do that they must tax the already highly taxed workers who are lucky enough to hold on to a job even more. Thaqt wont go down well at all, so expect more talk and can kicking but minimal building.

DownByTheGarden

https://www.boards.ie/discussion/comment/120382452#Comment_120382452

I believe we are in for a massive economic shock alright. I dont believe its going to be the answer to peoples prayers that they think it is.

Recessions and high interest rates are bad for everyone, even if house prices fall. You need people to want to/can sell and you people who want to /can buy. Both will diminish with a recession.

fliball123

https://www.boards.ie/discussion/comment/120382522#Comment_120382522

Lets be clear they stopped building as their was an oversupply I mean ghost estates how many had to be demolished, prices had dropped from 50 to 80% of their pre bust values and there was no money in it. Currently we need more supply but people cannot afford the price point this is evident in the amount of government supports for FTBs and there are now real threats to their long term viability from modular homes and the vacant site levy (which will be ramped up if the big boys set their face against building) to losing their pool of employees to other countries. If those that have the land and are ready to build think that jimmy the brickie and joe the plasterer will hang around on the dole for a year or 2 waiting for the big bad boss to give the order "to build" they have another thing coming. These lads have a really nice life style I had work done by a construction company back in 2020 and the lad doing the build (not the boss now) had the best of gear, brand new Jeep and during the 6 months of the construction he brought the kids to Lapland to see Santa, as well as a 3 week stay in Barbados and of course the 2 weeks in Lanzarote. These lads now have a taste of the high life and it will be hard to readjust to a day trip to Dollymount beach with sandy sambos due to only being paid the dole.

DownByTheGarden

https://www.boards.ie/discussion/comment/120382554#Comment_120382554

Lets be even more clear. They stopped building because there was no money to build and the value of their sites, half finished buildings and so on went through the floor. Even though property prices dropped, people were unwilling or unable to buy, making the whole thing spiral.

Now if you were a biulder would leave all your money hanging out in that kind of weather or would you take it in and wait til summer?

They are not going to keep building because people want them to. They are businessmen first and will protect their assets. None of them will gamble like they did last time. Future recessions will be everyone pulling in the oars and waiting out the storm. That includes, Builders, buyers and sellers.

fliball123

https://www.boards.ie/discussion/comment/120382753#Comment_120382753

The other difference is there was an oversupply last time and now we have an undersupply.. The last recession seen prices plummet there was no money in building. Currently there is money to be made which is the biggest difference between the 2 eras.

The other difference is the vacant site tax at 3% kicking in at the end of the year now these sites if they have planning will be worth a fortune so I can see a lot of very unhappy construction company owners having to pay this. I can also see the government upping this % in the next budget if the builders are sitting on their hands up until then. So there will be a real gun to the builders heads to use it or lose it. As I said before people cannot afford the price point currently so if the builders think sure we will just pass that 3% on then the spiral will keep happening the property becomes more unaffordable so less demand and less work for the builders. So either way the builders cash is hanging out there they can build and get a slimmer profit margin or lose 3% or more at the turn of next year.

Your also forgetting that it is a business and this nonsense that they can sit on their hand ad infinitum or until the government give them more gravy is ridiculous. They have to make money or hit the wall. Their employees have to get a pay check or they leave.

So if I was a builder and had a site with planning ready to go I would be pulling out all of the stops to get my slice of the pie before demand is quelled via other mechanisms, I pointed to a few already as in Modular homes, more interest rate rises and the emigration valve. The fact is that if the current paradigm continues the majority of our population under the age of 30 will never be able to afford to buy or rent so they will be left with one option that our ancestors had to use.

DownByTheGarden

https://www.boards.ie/discussion/comment/120382814#Comment_120382814

I know builders. Lots of them. I know what I think will happen. And no, they wont be paying their employees when they pull up the drawbridge, because they wont have any at that point. Lets agree to disagree and leave it at that.

fliball123

https://www.boards.ie/discussion/comment/120382824#Comment_120382824

So how far up will this go will all construction workers just hit the dole queue and do you think the employees will skip some stones waiting for what ever mechanism the boss is waiting on for him to start building. I dont think so the lads will be gone and this will inevitably cause even more delay for the site owners with regards to trying to get a profit from an asset which if they do nothing will cost them 3%+ on a yearly basis and how long will they allow 3% of their site value leave in a tax.??. Trying to compare the construction game to 2008 is not a real comparison and guessing what they will do based on that is a fallacy the game has changed and significantly so

alwald

https://www.boards.ie/discussion/comment/120382412#Comment_120382412

Interest rate will affect both buyers and builders. I can't see how new builds will get cheaper with high interest rate, this will have a knock on effect on the entire housing market IMO (new and old).

herbalplants

Monopoly

https://www.irishexaminer.com/business/economy/arid-41097937.html