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

DataDude

https://www.boards.ie/discussion/comment/120680004#Comment_120680004

I agree with first part. People are generally worse off as inflation has outstripped wage growth.

But houses prices relative to income are reducing for about a year now and that is quickening as wages are growing quickly (4/5% per annum) while house prices are falling. So house prices relative to income as pure multiple are lower now than 6 months ago and I expect that to continue going forward, which would be great.

People might say that housing relative to income going down is irrelevant if inflation in other areas is soaking up the difference, but for many who are paying rents far higher than equivalent mortgages, it was never the affordability of housing it was their ability to borrow which was the limiting factor. Banks are lending higher amounts than ever to first time buyers despite rate increases.

So right now we factually have

wages going up

house prices going down

banks lending higher amounts to first time buyers.

It seems like a bit of a Goldilocks phase that these things can happen simultaneously, but they are. For so long we had house prices going up far faster than wages so hopefully this current trend will continue. I think it will.

Murph3000

https://www.boards.ie/discussion/comment/120680112#Comment_120680112

Its certainly interesting times.

But, I do believe the number one priority of central banks right now is to actually bring down wages and even cause job cuts. As bizarre as that sounds, thats the best way to hit their 2 percent inflation target.

Could we have an odd situation where house prices are falling, salaries are falling and intrerest rates remain high. It may be the bad tasting medicine that does good in the long term.

ingo1984

https://www.boards.ie/discussion/comment/120680157#Comment_120680157

Yep the whole policy of fighting inflation is nowhere near enough. Rates need to go higher. Wage inflation does nothing to curb the price inflation. It'll only prolong the problem. Money needs to be extracted from the economy not pumped into it with wage inflation or tax cuts as proposed by the circus government.

Bass Reeves

https://www.boards.ie/discussion/comment/120680112#Comment_120680112

https://www.boards.ie/discussion/comment/120680004#Comment_120680004

Ya definitely you are both right. The majority of people were way better off in 2009-2014, unemployment was running at 12-14% back then at present it's 3.5%.

Tax and service increases as well as wage cuts cost me and the better half nearly 8-10+k in real terms o er 2-3 years . Public servants saw about 15% wage cuts in real terms.

I would not qualify either of you as economic geniuses, I go so far to say if either of you gave me economic advice I do the exact opposite

DataDude

https://www.boards.ie/discussion/comment/120680648#Comment_120680648

My bad, I only skim read the original post seeing

‘People worse of now…after inflation…despite wage increases…as inflation outstripping those wage increases’

Assumed post was referring to recent inflation since there obviously had been close to no general inflation for the previous 10-15 years and wage inflation was miles higher.

My post was in context of comparing to two years ago where I suspect most were better off.

ingo1984

https://www.boards.ie/discussion/comment/120680648#Comment_120680648

Unemployment rate is fools gold when the median worker can barely survive and your average Joe needs government supports just to put a roof over their head.

Last year alone workers in Ireland took a 3.9% pay cut as wages lagged behind inflation.. Worse than the global average of 3.19%. Cumulative inflation of the past three/four years is running near 15%. Not everyone is getting pay increases of 15% plus.

fliball123

https://www.boards.ie/discussion/comment/120670812#Comment_120670812

When you think of how bloated GDP is with regards to the MNC money this is a stat that people should really be paying attention to.

fliball123

https://www.boards.ie/discussion/comment/120680112#Comment_120680112

What is forgotten about is its people under 30 who are struggling to buy most people in their 40s would have their homes. A person in their 20s in the round earns a lot less than someone in their 30s and someone in their 30s earns less then those 40+ Not one mention of the other cost of living factors that people have to pay for out of after tax profit, remember in a lot of cases these pay rises have been already half eaten by tax what other % goes on rent/interest rate increases, travel/petrol/deisel, food etc. While there are pay rises going on in some sectors a lot of people are not getting pay rises as well. New houses are unaffordable by the market that they are tailored for I mean you only have to look at the first time buyer measures that are there if all was so hunky dory and prices were affordable then there would be no need for them at all.

fliball123

https://www.boards.ie/discussion/comment/120681286#Comment_120681286

I watched a very funny interview there on one of the news stations from the U.S and the presenter was talking to a waitress and asking her about how she feels about the economy. There was a polite back and forward until the presenter asked the question about, how she felt about the record number of jobs that have been created over the last decade. Her response was gold, "Yeah its great in order to afford my rent I am working 4 of the new jobs created" I reckon the presenter was close to a mic drop :)

Bass Reeves

https://www.boards.ie/discussion/comment/120681286#Comment_120681286

Who is better off an unemployed person in a recession earnings 200/ week( actually younger workers below 21 got 100/ week) with services cut all over the place. Or a full employment economy where at a minimum most workers are earning wages of 30k minimum, where many are on 40-50( average full time workers earnings 50k) .

PS pay cuts restored. Yes there are problems within the economy but it's much better than 2009-2014.

Murph3000

https://www.boards.ie/discussion/comment/120681451#Comment_120681451

Young people were better off in 2009. Sure, there was unemployment but there was opportunity, rent was cheap and cost of living was cheap.

Old people are better off in 2023. They hold the higher paying jobs, own the assets while young people struggle to get a foothold.

I know which year Id prefer to be 18 in.

DataDude

https://www.boards.ie/discussion/comment/120681486#Comment_120681486

The only cohort I think that would have been better off in 09-14 would be young highly educated with robust job prospects but very early in their career. A newly qualified accountant/lawyer maybe. Probably earning 20grand less than today but housing half the price so better off overall.

Under 25 in 2009 Ireland without an excellent education, you were very likely unemployed and heading for the airport.

Also, 70% of people own their own homes in Ireland so the overwhelming majority unaffected directly by house prices.

fliball123

https://www.boards.ie/discussion/comment/120681535#Comment_120681535

There has been a serious ramping up (since the lockdowns eased) of migration from our under 30s the one factor that was a hell of a lot better for this cohort was rent prices, if they want to stay they nearly have to share a bed with a stranger... The reason this is not reported on is because we are still at a deficit due to bringing in a multitude of migrants inwards and the differing reasoning for these people coming in go from fleeing the war to the welfare tourists who see this country as a soft touch and deep pockets.

Murph3000

https://www.boards.ie/discussion/comment/120681535#Comment_120681535

Show me an 18 year old that owns their own house.

I know several companies who are starting to struggle to hire young people, because they cant afford to live. Think about that.

More and more companies are moving part of their workforce abroad to places with cheap labour and cheap cost of living. And we have people silly enough to tell us, its never been better here. This is a dangerous trend for our young people.

ingo1984

https://www.boards.ie/discussion/comment/120681535#Comment_120681535

A home ownership figure that ranks 21st of of 28 countries in the EU.

DataDude

https://www.boards.ie/discussion/comment/120681592#Comment_120681592

I agree completely, there’s huge problems for younger people at the moment and things are far worse now for that cohort than 2015-2019. The comparison though was directly to 09-13/14. Things were not all rosey for young people then, that’s for sure.

https://www.boards.ie/discussion/comment/120681593#Comment_120681593

And there were 18 year olds in 2009, fresh out of their leaving certs taking mortgages and buying houses too 😂😂

Im not arguing things are better than ever now but you’re directly comparing to one of the toughest times in recent history. If you were 18 in 2009, absolute best case scenario you were going to college if your parents could afford to send you. Your living situation and quality of life was entirely dependent on your parents as decent part time jobs for young people were gold dust. And even if you had money from your parents, your mates probably didn’t. Life wasn’t all cheery, happy with young people frolicking around in their newly purchased homes in 2009.

Rose tinted glasses.

Murph3000

https://www.boards.ie/discussion/comment/120681626#Comment_120681626

No of course 18 year olds werent buying houses in 2009😂.

But I said Id prefer to be 18 in 2009 and your answer was 70 percent of people own their own homes.....errrr. ok.

quokula

https://www.boards.ie/discussion/comment/120681599#Comment_120681599

The statistics that come from are so weird though. It's percentage of people who live in a household that is owned. Romania has the highest in Europe - for example 4 generations of Romanians under one roof would all be considered home owners, while a 22 year old university graduate getting a well paid job and moving into a nice apartment reduces the rate of home ownership, even though nobody at that age would want to either be locked into owning a home or to have so few prospects that they can't move out.

In general if you look through the stats it's all Eastern European countries at the top, Germany at the bottom and Ireland is bang in the middle of wealthy western nations alongside the likes of the Netherlands, Sweden and Finland.

DataDude

https://www.boards.ie/discussion/comment/120681647#Comment_120681647

The initial post that started this line of debate was

‘on average people are worse off now than in 2009’.

There was no reference to age. Not to you, but to the original poster, I was pointing out that when you say ‘on average’ you have to accept that the average person in Ireland doesn’t care about house prices or rents because they own their home.

https://www.boards.ie/discussion/comment/120681486#Comment_120681486

We're older people not generally always better off? The more experienced you were or further along in your career the better your earning potential.

15-20 years ago young adults also paid more for their houses than their parents had before them.

15-20 years ago starting off you would share a four bedroomed house with 6 others, garage and living room would have been converted so you were only paying 1/6 of the rent. Now 20 somethings want their own two bedroomed apartment when they get out of college.

Walk around the student parking in any university in the country half the cars are 3-4 year old mercs, audis and BMWs. Starting off 15-20 years ago you were happy to have a 10 year old corsa or focus under your backside.

Many struggle to get on the property ladder because of ireland becoming an affluent country but they have have also benefitted from the same affluence. They travel more, have all the latest tech, have nice cars, eat out often. Housing shortage aside one of the big issues is that buying a house isn't generally their priority until they get married in their mid thirties. Many have a tiny deposit saved after working for 15 years and there is more competition as they should be at a point where their earnings fairly good.

Murph3000

https://www.boards.ie/discussion/comment/120681675#Comment_120681675

Ok fair, only a misunderstanding then. You quoted me so I assumed you were responding.

I agree with you partly. I think its a great time to be an older Irish person with a good career. I just think its largely at the expense of young people.

Renting for young people is almost impossible. The system has been rigged to enrich the already wealthy at the expense of our young people.

DataDude

https://www.boards.ie/discussion/comment/120681691#Comment_120681691

Agreed 100%.

Ireland for many years by accident or design (lean accident as its a global phenomenon) has been progressively getting better for older (homeowners) and worse for young people. I’d draw that line at like 2015/16 though which was the sweet spot for most.

Things were pretty crap all round in the financial crisis.

Shame all our young have been hoodwinked into voting for a party that wants to abolish property taxes, reduce the pension age and increase income taxes. There’s never been a really clever movement by the young of Ireland to be properly represented.

Bass Reeves

https://www.boards.ie/discussion/comment/120681486#Comment_120681486

I not sure whether you are joking or deluded. From 2010 on there was no apprenticeships and many parents struggled to send children to college. Definitely if you failed a year( huge issue with first year) it became very expensive to repeat.

Jobs for college students were very poorly paid, most getting 2/3rds the minimum wage, training rate shops used to let trainees go after the statutory period and rehire new workers and you had to '' retrain'' again in another shop. Fees went from 1k to over 3k in 3-4 years, yes accomodation was cheap but earning were very low. CA was stopped at 18 instead of 21 which was there until 2008/9. Most students were lucky to earn 4-6k/ year

At present most students can earn 12-15k/ year fees have remained static ( actually they were reduced to 2k for last year), apprenticeships are there to be got for those that want them. Young adults in college now choose to stay in college accommodation even where the distance is very commutable and they have cars.

Ya when they go out into the real world it's slightly different they must now get the finger out and work.

https://www.boards.ie/discussion/comment/120681592#Comment_120681592

The reason migration has ramped up is many young adults could not travel during COVID. There has been a build up of those wishing to travel. Two friend of my eldest lad are gone one is gone for a six month career break from a factory job and the other lad has a two year career break from his employer.

Another lad has just jacked the job and gone with them. The lad on the six months break is on the way back. Another friend of my eldest lad who went with him to Australia, (my lad came back last year) is staying in Australia until his residency is sorted and he then is returning to the UK where his GF is from.

A lot of the hype about migration is just BS

fliball123

https://www.boards.ie/discussion/comment/120682148#Comment_120682148

Ah great I will tell the 2 nieces that are emigrating to oz next month and not going for a year but for good that its all BS as in their words they cant live in a country where your taxed so much and then have to pay so much to live somewhere out of after tax money. But I will tell then that Bass off of boards has anecdotally put up an opinion and their experience in Ireland is not reality.

Fitz*

Extremely limited number of new builds in Galway City now and it shows. 2 full new developments have been 100% council owned in the last 2 years. Very scare development other than that.

One development under construction at the moment of 3 & 4 beds. The 3 beds are €420k. Didn't even ask about 4 beds as the the 3 beds are already extremely overpriced. The houses are at the opposite side of the major employment hubs, so you're looking at a 30 min commute.

Can't see any other developments at the moment. bleak.

awec

https://www.boards.ie/discussion/comment/120682467#Comment_120682467

You realise your nieces are also anecdotal, right?

The latest data the CSO have on this (i.e the 2022 data) is that emigration of people aged 25-44 is the same as it was in 2018, but is still a lot lower than what it was 2009-2017.

On the other side of the fence, immigration of 25-44 year olds was higher in 2022 than it has ever been. It was over double the emigration figure, seeing a positive net migration of over 30,000 25-44 year olds.

Blut2

https://www.boards.ie/discussion/comment/120682635#Comment_120682635

Its not just anecdotal, there are plenty of hard statistics on skilled emigration spiking hugely currently. For example:

"“We train around 700 doctors a year, last year 432 of them applied for visas and went to Australia. We don’t know how many have gone to other countries."

https://www.thejournal.ie/overseas-healthcare-workers-in-ireland-5997905-Feb2023/

Its not remotely sustainable. We're importing close to 100,000 people a year, a large % of which have no higher level education and will never do more than menial jobs, while our own best and brightest are being forced to leave. The housing crisis is an absolutely massive push factor for under 30s these days.

The overall immigration/emmigration statistics are still going to be positive because of that, and look a lot better than in 2009-2017, but what are the emigration statistics for strictly Irish nationals in the compared years? Thats more relevant here.

wassie

But not all of these are lost for good. Its also fair to say a high proportion of these people will return back to Ireland with very good overseas experience and expertise which is beneficial to a small country as ours.

You only need to look at our construction industry. You would be had pressed not to find an Engineer, QS or Surveyor etc in their late 30s & 40s who are now in senior positions all having spent time overseas, particularly Aus & Canada following the crash and have returned home in the last few years. Sure some wont return, but a lot will.

Blut2

62% of the doctors who qualified in Ireland last year moved to Australia. Nevermind however many moved to the entire rest of the planet - being very conservative that would bump the figure to anywhere from 70-80%.

It doesn't matter if not all of those are lost for good, thats an absolutely catastrophic figure for the Irish health service in the immediate future. We're already short staffed for junior doctors, the fact some percentage of those may come back in 5-10 years time is both not remotely guaranteed and absolutely no help right now.

AdamD

https://www.boards.ie/discussion/comment/120684356#Comment_120684356

Few if any moved elsewhere. I'd argue the doctor situation is closer to being an Australian led issue than Irish. The just pay far far more than any other country where you can relatively easily get a visa. Similarly teachers going to Dubai for tax-free income, not entirely sure how we're supposed to compete with that. Housing is obviously an issue but I don't think its driving these doctors out, its the double/tripling of their salaries for better working conditions.