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

the.red.baron

https://www.boards.ie/discussion/comment/120817047#Comment_120817047

of course greed is part of it, again, this has probably already happened and will cap

have a look around, some say 9months a year, some say 2 years for it to fully work out

central banks say that

https://www.wsj.com/articles/why-interest-rates-dont-cool-inflation-enough-they-hit-the-wrong-places-890e5bba

it has been just over a year now since the ECB fed etc started this

Timing belt

Inflation will only cool once employment figures fall and employees can’t negotiate pay increases. It will probably fall back from high levels of energy prices are stable but the knock on impact of pay rises (including social security) will be felt in core inflation for some time to come.

the.red.baron

https://www.boards.ie/discussion/comment/120817150#Comment_120817150

this has very little to do with employee pay increases, wage inflation is way behind inflation and lags in a big way

JohnnyChimpo

https://www.boards.ie/discussion/comment/120817150#Comment_120817150

If you believe the wage-price spiral is a universal law of economic behaviour, then sure. No real indication that it's a major contributory factor in the current environment as far as I can see

CorkRed93

https://twitter.com/PickardJE/status/1673399859632545795

"the wage price spiral"

wassie

https://www.boards.ie/discussion/comment/120817116#Comment_120817116

I get that you are trying to say interest rates take a couple of years to feed through the economy to cool inflation, but all that article says to support that is;

As another explanation for sticky inflation, central banks’ own research says policy takes between 18 to 24 months to reverberate throughout the economy.

My takeway from that article is that the traditional theory of central banks being able to control inflation by monetary policy alone is proving to be extremely problematic.

the.red.baron

https://www.boards.ie/discussion/comment/120817222#Comment_120817222

it depends on what drives the inflation

in this case governments were too strict with lockdowns and Flaithiúlach with monetary supports to business during covid and then russia kicked off

hard to damp down both

wassie

Nothing new in this article - just reinforces why the housing crisis has failed a generation.

https://www.euronews.com/2023/07/06/irelands-housing-crisis-millennials-a-generation-sacrificed

I think this quote is rather telling;

"The reason I'm really considering emigration is because I want to have some resemblance of a personal and family life. I don't want to wake up one day in my forties, perhaps, and still in my childhood bedroom, without having had the chance to enjoy what I wanted from life", confided Sinead.

Timing belt

https://www.boards.ie/discussion/comment/120817161#Comment_120817161

wages are a cost so to maintain existing profitability the sale of a good or services needs to increase. On top of this business have built in a buffer for future prices increases leading to higher profits. Wages are as much a driver of inflation as energy or raw materials.

JohnnyChimpo

https://www.boards.ie/discussion/comment/120817636#Comment_120817636

Yeah you don't need to literally quote the wage-price spiral thinking at me, I understand the implication just fine, but it's not a factor at all in the current scenario as far as I can tell. If you want to understand what's actually driving inflation, look at the IMF graph a few posts above.

RichardAnd

https://www.boards.ie/discussion/comment/120817347#Comment_120817347

As a 36 year old, I'm perfectly happy to pay a 34 year mortgage on a house I don't like in a town I don't want to live in, pay 40% of my salary in taxes and work until I'm in my 80s to keep Generation Live Aid in pensions whilst paying for the decisions that they voted in. Why we owe that generation so much! Without them, we wouldn't be living in this globalist investment fund with a flag!**

**I'm aware that "boomer" meme is overly simplistic, but it sticks around for a reason.

grumpyperson

https://www.boards.ie/discussion/comment/120817347#Comment_120817347

"We are starting to see a decline in the birth rate among young people because it is obvious that in order to have children and feel safe, people want a safe home and they want to be able to see that they can have a safe home in the future. At present, young people have no certainty”.

Above is Rory Hearne from the article. It's sad, I see it happening.

Never do we hear Rory say rate of immigration needs to be moderated or for example, maximum length of asylum benefits one year and five years residency before getting on the social housing list.

grumpyperson

https://www.boards.ie/discussion/comment/120817057#Comment_120817057

I just don't see how we're going to break free in that space of time. 40 years oil left at current consumption.

https://www.sciencedirect.com/science/article/pii/S2666049022000524

Over half of conventional oil used up. There's a possibility for serious inflation going forward especially with the current USA versus China dynamic we're being sucked into. Who knows, maybe we'll discover oil/gas off the Irish coast and then we'll be laughing for a while.

Timing belt

https://www.boards.ie/discussion/comment/120818015#Comment_120818015

Do you think companies would be making excess profits if people weren’t in a position to pay….just saying that it is big bad corporates generating inflation is a simplistic view of what is happening and not looking at the root cause. Once a company needs to increase it sales price they will always build in a buffer for future rise in costs.

RichardAnd

https://www.boards.ie/discussion/comment/120818379#Comment_120818379

I think that the birth-rate here is something like 1.6 children per female, and I believe that is everyone on the island, and not just the native Irish. This is happening all over the West.

The state will never curtail immigration because immigration adds to GDP growth. They may say things like "diversity" and the rest, but the reality is that the state simply wants more people as that means more consumption, which means more growth, consequences be damned. For how much longer can this be perpetuated? Who knows, but the damage is done, and it's only going to get worse.

Growth cannot continue forever on a finite planet.

JohnnyChimpo

https://www.boards.ie/discussion/comment/120818443#Comment_120818443

It really turns on what exactly you mean by "in a position to pay", which is a kind of linguistic jack-in-the-box that you can use to spring all manner of rhetorical traps. I'll pass, if it's all the same.

Major irony in you accusing me of having a simplistic view - I've barely expressed a view on the root causes of this inflationary crisis, whereas you're the one spouting hoary fables from early 20th century economics as if they are God's holy writ.

timmyntc

https://www.boards.ie/discussion/comment/120818443#Comment_120818443

Burning through ones savings or taking on debt is technically "in a position to pay", but paints a very different picture to the one you are trying to portray.

the.red.baron

https://www.boards.ie/discussion/comment/120818435#Comment_120818435

sure big strides have been made already and its only been a half arsed attempt

you might be able to replace Aviation Kerosene with BIO fuel and the rest with fixed leccy and then batteries

ingo1984

https://www.boards.ie/discussion/comment/120818597#Comment_120818597

There's not enought natural resources available in the world to make the transition to green energy and meet 2030 targets.

the.red.baron

https://www.boards.ie/discussion/comment/120818731#Comment_120818731

Its not about meeting targets

you don't need to get to zero oil by 2030

on the raw materials, you'd have to flesh that out, it is important to make the whole process as recyclable as possible, although in general terms recycling is very problematic and as big a long term issue as anything

ingo1984

https://www.boards.ie/discussion/comment/120818765#Comment_120818765

Extractive activities like mining for lithium and cobalt which are integral components in solar panels and electric batteries currently account for 90% of biodiversity loss and more than half of global carbon emissions. Nevermind labour exploitation and dispossession of indigenous territory. You are literally robbing Peter to pay Paul. You mitigate nothing in the carbon emissions on fossil fuels because it's offset by the carbon emissions expended in trying to replace fossil fuels. It's a zero sum game.

the.red.baron

https://www.boards.ie/discussion/comment/120818855#Comment_120818855

you will need some links for that because it doesn't look right

as you din't provide links to the last slightly out there claim I'm dubious about this one

it will cost to get the raw materials but we need to focus strongly on making the process as recycleable as possible

the process of getting oil has been incredibly damaging also same with coal, not just to the planet but also to the people getting it

timmyntc

Property?

L1011

Environment, mining, ESG etc stuff is not on topic for this thread or indeed forum .

newmember2

Thread keeps morphing into the global recession thread every now and then.

drogon.

https://www.boards.ie/discussion/comment/120810892#Comment_120810892

I totally agree with you here. But most people seem to be under the impression that Central Banks will raise interest rates as quickly as possible, the issue will resolve and then they will start reducing the rates as quickly as they raised it. Most US analyst earlier this year even predicted the rate decrease by late this year. I personally call BS on this.

We are going to see high rates sure, but I don't think they will get to 17% in a short period of time, as that will most likely crash the entire economy! ECB are going to get to around 4.5% I reckon, and the rates will stay high for a period of a year or two before they start reducing it once inflation is back to 2%, which some predict could be around 2025!

Unlike the UK, at least the EU inflation is slowly creeping down, which is a good sign. But don't expect any rate decrease this year or even early next year is my prediction. But time will tell.

Ozark707

https://www.boards.ie/discussion/comment/120819581#Comment_120819581

Core inflation in the EU is not budging much, until that happens IR's will probably keep rising.

drogon.

https://www.boards.ie/discussion/comment/120820867#Comment_120820867

If you hike rates, it will take time to see its effects. I remember reading somewhere that a 0.5% hike will take about 6 months to filter through the economy others have suggested it can take up to a year for rate hike to be see any impact in the economy. It was end of July last year when they started hiking the rates, going from negative to 0% for deposit and lending rates went up from 0% to .75% in September of 2023. So it still hasn't been a whole year since our rates went positive !

Again I am not saying rates won't go up, they will. But going up too high too quickly will have consequences. My thinking is they will stop rate hikes for a while, same as the FED is doing and will look at raising rates later in the year again if inflation is still high. Saying core inflation isn't budging isn't very accurate, it did peak in March 23 and seems to be very slowly creeping down. But they need to let IR soak into the market to see any benefits. Not hike it up too quickly, issue resolves and then lower it back to the rates of last year - this is just a dream.

newmember2

Interest rates be damned

PommieBast

https://www.boards.ie/discussion/comment/120819524#Comment_120819524

This thread tends to branch into general economics quite a lot, much to the chagrin of the mods. On the plus side it is mostly the same old crowd so things uaually stay civil.