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

Hubertj

Hubertj wrote: »

Any evidence of this and for what industries? Or are you making it up again?

Long time ago I heard ( Newstalk ) that in Wexford or Wicklow meat factory been closed because all brazilians had Covid
The problem was that 2 brazilians had one room and when one was working day shift the other was sleep in same bed before night shift

I also remember day when there was debates in parlament about cheap labor and 2000 brazilians was on way to country when country was on lockdown .

I also was working with some of them on building sites in 2017 were they was getting 10.50 per hour when guys was on 12.50 to 14.50

In face of those who say that labor is not enough and property prices rising due with high cost of labor

Just quick look over google

I go into work feeling scared’: Migrant meat plant workers tell their stories
Three Brazilian workers in Irish factories speak about poor conditions during Covid-19

https://www.irishtimes.com/news/social-affairs/i-go-into-work-feeling-scared-migrant-meat-plant-workers-tell-their-stories-1.4329344

As reported here a week ago, not only were work permits being issued to people coming from outside of the EU, but a large number had arrived in the first weeks of January from Brazil. Yes, from the country with the “deadly new strain” of the Covid virus.


https://gript.ie/100-cases-in-two-meat-factories-are-we-importing-covid-along-with-cheap-labour/

The population of Brazil over 200 millions so it should enough for long in Ireland low pay industry

The all what Ireland stand on is getting money from is Cheap Labor,Tax free zone for Multinationals and Building industry

When this Bubble will explode the sht will be everywere.

Mad_maxx

fliball123 wrote: »

Yeah and back when wages were no where near as high as now and people left and emigrated when they couldnt buy meaning a lot less demand and upward pressure on price. Then you had the all time high interest rates going close to 20% odd on what you borrowed not to mention the staggering near 70% income tax you paid on your wage, throw in the the social norms where the wife was supposed to be the home makers and nothing more so you had one wage to do it all on but yeah it was a completely different universe but it was still just as hard to buy in that time as well.

it wasnt just as hard to buy then , a single income times five could buy a house , that interest rates were much higher doesnt change this

Mad_maxx

Mad_maxx wrote: »

it wasnt just as hard to buy then , a single income times five could buy a house , that interest rates were much higher doesnt change this

You will never sell 100 houses 1 million each
To 80 buyers with 1 million in hand
And 20 with 500 000
You could play with rates and rules which will let borrow more but the more they will borrow the more price will rise !
Essential Classical Bubble ! With same End !

The other side the more people will have pay bigger mortgage the less they will have for car and wardrobe
The less they will have money for car and wardrobe the less company which selling cars will earn and the less cabinetmaker will earn
The less they will earn the more of them will not afford buy house !
Other words when you spend more for mortgage the less you have for food.
And then its starts from to.

The main problem on property market I think is rising poverty and unemployment when people cant afford buy house
And the international investors which play stock market games on property market

Revolution 1917

Revolution 1917 wrote: »

There is no supply or demand issues
The property price simply rising enough to make money on it that why they buy it
When recession will start they will drop property on market trying sell asap

In theory that's true. However, what you're overlooking is that even if property prices collapsed in the morning, most of the investor-bought properties were bought as they were being leased to the council/state for 25 years.

Those houses, as a result, can't appear back for sale again (not for 25 years, anyway).

EDIT: That said, if the govt. came out and banned the Councils from engaging in these leases, or made them less profitable by only offering 50% of market rent to the investors, and approved a vacant house levy, you'd see a sudden flood of property back onto the market, as anything that hadn't yet been leased to the Council is suddenly worthless to the investors.

The argument that people cannot afford to live where they want to, in Dublin anyway, is totally moot, because there are thousands of people who.cannot afford to live in Dublin already being housed by The state in those places.
So, actually, the state are pushing people out of city areas, to house people who cannot house themselves there instead.

hometruths

https://boards.ie/discussion/comment/117610873#Comment_117610873

There are 1000s of people who cannot afford to live in Dublin, living in Dublin, and not paying their mortgage.

It's crazy that we are saying to FTBs if you can't afford it, suck it up and move to Cavan, whilst simultaneously saying to mortgage holders, if you can't afford it, that's OK, you don't have to pay it, we'll work something out.

Welcome back all BTW! Hope everyone enjoyed the break!

mcsean2163

We've been in a bidding war with our latest bid now 115,000 above the opening bid. Everywhere I look in Dublin apartments are going up and there's 21% unemployment.

Do not understand the market at all. Great to see the thread back up😄 with emojis 🏳️‍🌈😭🎉. Are we bonkers bidding up the house?🧐

MacronvFrugals

The infamous Mullen Park in Maynooth will now be sold to owner occupiers and the council

https://twitter.com/DarraghOBrienTD/status/1415370608427290625?s=20

cnocbui

https://boards.ie/discussion/comment/117611829#Comment_117611829

This is not a phenomenon unique to ireland, it seems to be pretty much global in the developed world. Ireland's property price growth rate is minimal compared to other English speaking markets, so I would say you aren't mad.

Beigepaint

https://boards.ie/discussion/comment/117612370#Comment_117612370

A sense of stress and pressure from the embattled minister’s tweet. I suppose the recent poll numbers have made him worried.

I’d love to know what his advisors are telling him.

Here’s an idea Darragh: Until 2030, investors may build new builds. Investors may not buy new builds. In 2028, assess if we need to extend past 2030 or not.

Amadan Dubh

I have collected a few property news stories from the past week to get the discussion moving again and to help us catch up on what has been going on. I'll do my best to test the new way of posting to make it easier to read.

He who shall not be named - August 2021 "The Beginning of the End?"

The poster, whose name I shall not use, has been mentioning August 2021 as a time when the wheels will turn to start to dramatically increases supply with the hope of brining about more affordable house prices and rents. What exactly was so significant about August is becoming clear; the government parties are betting the house on their political survival (particularly in the wake of the shocking DBS result which has sent tremors through FF and FG). We're expecting something big very soon and pay attention to some of the financials below under the second story under this heading - we are looking at covid levels of emergency treatment of the housing issue.

https://www.irishtimes.com/opinion/cliff-taylor-the-government-is-about-to-go-really-big-on-housing-1.4615941?mode=amp

The Government is about to go really big on housing

Byelection loss will increase pressure, but will the new housing plan deliver?

The plan is being drawn up by Minister for Housing Daragh O’Brien, but it is clear that the Department of the Taoiseach is having a major input. And in turn Micheál Martin’s support – and his view of the vital position of housing in the coalition’s future – is driving a lot of this. While the finishing touches have still to be put to the strategy, the target numbers will be big – across the board. Very significant additional State resources will be committed.

This is all driven by the clear view in Government that housing is the vital political issue, and the key reason why Sinn Féin have been gaining in the polls. The loss of the Fine Gael seat in the Dublin byelection – and the poor result for Fianna Fáil – will only add to the political impetus.

It seems a particular focus of the plan will be getting more apartments built. The industry has complained that it is not economic to do so now at a reasonable cost – requiring developments to be pre-sold to funds and then rented out at very high cost. It looks like some more State subsidies or tax breaks are coming down the line here to close the affordability gap. We saw, during the boom years, how badly designed subsidies and tax breaks can lead to unintended consequences. Danger here, as George Hamilton would say.

It makes sense to have a housing strategy and to make this a national priority, in the way dealing with Covid-19 was. The danger is that political pressure turns it into an exercise in throwing paint at a wall and hoping enough of it will stick. 

https://www.irishtimes.com/business/economy/coalition-s-budgetary-policy-has-radically-altered-in-three-months-1.4620701?mode=amp

The Summer Economic Statement (SES) sets us on an entirely different fiscal path, envisaging a series of much bigger budget deficits, finishing with a deficit of €7.4 billion in 2025.

By contrast, the Stability Programme in April put forward by Minister for Finance Paschal Donohoe had pencilled in a deficit of just €800 million for 2025: for all intents and purposes a balanced budget.

The new estimates anticipate an additional €18.8 billion in borrowing over the next five years, due largely to borrowing that will be necessary to fund housing construction.

Commercial Property - the Canary in the Coal Mine?

In my opinion, it has been the canary in the coal mine and we are already looking at the ghost estates of the 10s around such places as the docks and Sandyford - unless the government can take charge some more and deflate the bubble gently before external factors crash our market. Green REIT exiting in 2019 was a stroke of genius and likely the top of the market. With property valuation write downs on Grafton Street at 20%+ so far, here was another example of the commercial sector in trouble.

https://www.thetimes.co.uk/article/unhealthy-office-market-vhi-portfolio-values-ireland-jmhq5l2mg

VHI has taken a €4.5 million hit on its property portfolio, blaming the pandemic and the trend towards working from home for depressing office valuations.

Much of the writedown is believed to relate to the health insurer’s headquarters on Abbey Street in Dublin, which were recently refurbished and extended to incorporate a 150-year-old former church, encasing it in a glass structure.

The property impairment comes just weeks after An Post wrote down the value of its GPO head office on nearby O’Connell Street to zero, with the historic building left largely vacant as staff work from home.

VHI had valued its property assets at €72 million before the writedown.Working from home could increase office vacancies in Dublin to over 11 per cent in 2022 and 2023 from 9 per cent at the end of last year, according to projections by Gerard Kennedy and Neill Killeen, two economists at the Central Bank of Ireland.

They warned, however, that more than 20 per cent of Dublin offices could be empty by 2023, even allowing for the reduced capacity that is expected to become a permanent feature of office layouts.

Renters versus Home Owners - The Growing Divide

This won't be news to anyone, but it puts out some figures on the cost differences between paying for a mortgage and paying rent. It is quite a significant difference and puts paid to the argument that demand for rentals is so high as that is what people want - incorrect, it is what people are being forced to do (by and large). There is a link in the article to the Central Bank of Ireland's request for opinions from the public on the mortgage lending restrictions which I would advise everyone to try to complete. Personally, I focused on the deposit rule (which should be relaxed) and the LTV restrictions (which should be 100%), also highlighting the substantial difference in cost of renting versus mortgage repayment.

https://www.irishtimes.com/life-and-style/homes-and-property/renters-who-buy-even-at-elevated-prices-will-see-their-housing-costs-plunge-1.4620543?mode=amp

It’s one thing paying far more for a house than you would like to due to rising house prices; it’s quite another, however, not even being able to do this, despite the fact you’re paying so much on rent, you could potentially make the mortgage repayments twice over.

Yes, as a report from the Residential Tenancies Board published on Wednesday shows, rent continues to eat up a substantial chunk of tenants’ take-home pay.

On average, tenants who responded to the report were spending 36 per cent of their net income on rent. In Dublin, for example, two-thirds said they were spending more than 30 per cent of their net income on rent. Further recent figures from Threshold show that about 12 per cent of renters give up between 40 and 50 per cent of their pay on rent each month.

It’s not just Ireland where the rent burden is an issue. Housing charity Trust for London, for example, says an average earner in London will give up 46.4 per cent of their take-home pay on the average one-bedroom home in the city.

But, while renters are entering “stressed” levels of repayments, homeowners are facing a lower burden.Yes, rent inflation has slowed of late. However, this comes on the back of years of significant growth. Figures from the European Commission show that between 2010 and 2019, rents in the European Union rose by 13 per cent. In Ireland, however, rents rose by a staggering 63 per cent – the third-largest increase reported across the area, behind only Estonia (+156 per cent) and Lithuania (+101 per cent).

At the same time upwards growth in earnings has been weaker; current average earnings still lag the high reached in 2009 of €51,488, for example.

This means that renters are bearing more of a burden on their income than homeowners.

Social Housing Leases and Institutional Investors - The Bailout Before the Crash?

Three infuriating articles on this devastating and insane policy whereby the State, rather than building housing itself, thinks it is better to enter into long-term leases with investment funds at 85-95% of the (current inflated) market levels, with strong covenants to ensure rent payment, with maintenance being the responsibility of the State and with the properties to be returned in good condition at the end of the lease. Why is this a bailout for the institutionals? Well, the 100% increases in rents in 9 years while salaries have increased no where near this level (and salaries are the relevant benchmark for rents as renters are salaried workers in the vast majority of cases) is totally unsustainable. Political pressure and populism is on the march, which will lead to dramatic changes in politics and the economy primarily due to this issue - rents increasing further or even not decreasing will continue to cause social destruction. As such, locking in 95% of current market rents for 25 years is something which anyone would bite your hand off to achieve.

https://www.irishtimes.com/news/social-affairs/investment-fund-in-social-housing-lease-for-40m-apartments-1.4619780?mode=amp

An investment fund, which bought 128 apartments in north Dublin for €40 million three years ago, is to lease the entire complex to housing organisation Tuath for 25 years.

Ires Reit bought the apartments at Hampton Wood near the Ikea furniture store in Ballymun from developer Dwyer Nolan in 2018.

Ires began renting out the complex itself and in May 2018 marketed the unfurnished apartments at €1,500 for a one-bed apartment and €1,850, for two beds. It also sought two months’ rent as a deposit and one month’s rent in advance.

Neither Tuath nor Ires would disclose the cost of the lease.

https://www.businesspost.ie/houses/state-plan-to-lease-2400-homes-from-funds-is-set-to-cost-almost-eur1-billion-3704765b

It's quite clear that the arguments against SF's housing policies which focus on how it is to be funded are not applicable and I notice that the arguments mentioning "magic money tree" have gone quiet as it is clear that there is a magic money tree from FF and FG's approach to the housing market.

The government’s plan to lease 2,400 homes from institutional funds this year will cost close to €1 billion in total over the 25-year term of the deals, the Business Post can reveal.

https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/news/social-affairs/almost-1-000-social-homes-leased-from-investment-funds-in-dublin-1.4617445?mode=amp

One third of all tenancies in the State receive assistance in paying their rent from the State. This is directly pushing up rents, making the gains of the last few years to a large extent artificial. The rental market bubble has spilled over into the home buyer's market as funds hoover up all new build apartments in Dublin pushing a bigger pool of people into the home-buying market while supply of new homes to buy is non-existent.

Almost 1,000 homes across Dublin have been leased from investment funds and property developers for social housing in deals of up to 25 years brokered by the four Dublin local authorities.

The spotlight has fallen on the long-term leasing system after it emerged last week investment firms would not have to pay stamp duty surcharges on bulk-house purchases if they leased them to local authorities.

mcsean2163

Great summary just do not see a correction in the short term with FF FG committed to spending tomorrow to win the election. Shared equity is next, so how can August be the beginning of the crash?

Amadan Dubh

https://boards.ie/discussion/comment/117613221#Comment_117613221

I would say the crash is external to Ireland (low interest rates and QE) but the start of steady declines from August as the government gets the finger out. Hopefully the government measures which trigger significant supply and steady declines kick in before any crash so as to insulate the Irish taxpayer some more. The last few months have really shown how unsustainable it is to rely on a few MNCs for the bulk of our corporate tax so we really need to move away from this and look to further diversify the economy in order to create more padding for any economic crash.

mcsean2163

But of the parties continue to pay expensive leases, do shared equity for FTB and compete with FTB for property, how can property prices correct?

Amadan Dubh

https://boards.ie/discussion/comment/117613306#Comment_117613306

Significantly increase supply! Which is what the government is planning to do with this massive capital investment plan. For FF and FG, they may not exist as parties after the next election, that is how they see the housing issue.

cnocbui

The government has dug it's own grave by panic pandering to the very few loud voices bleating about social housing, and in doing so, have driven up the cost of houses while reducing the supply to negligible levels. They have sent a clear message they don't give a flying --- about FTBers, and only care about the recipients of taxpayer funded government largesse.

I have seen an article in the UK stating that the government don't want people to return to offices in London as that solves the housing pressure problem, so office buildings need to be converted to accommodation. Et tu Dublin?

Apartments cost more to build than houses, so of course they are an expensive option. Apart from greenie infrastructure efficiency obsessed armchair expert socialists, most people don't want an apartment. This is the wake-up bell Covid19 has been ringing for the last 12 months and which surprised and disappointed all the 'hoping and waiting for a property price crash' types.

Hubertj

https://boards.ie/discussion/comment/117613369#Comment_117613369

significantly increasing supply is easier said than done. There are finite resources available to construct. There is a skills shortage in Europe. Additional net inward migration? People were whining about this putting additional pressure on property. Unless NIMBYs and planning issues are sorted it will be medium term before we see significant increases in supply. We Laos have to consider that many of the public servants tasked with provision of services are not competent . The last 12 months has shown that across the entire public sector. Money alone isn’t the answer.

the genius you are referring to has been saying for about a year that the market was about to crash…. 50%-75% within 2 years….. goal posts keep moving….

bit if cop on required.

hometruths

State must build half a million homes by 2036, estate agent claims - https://www.irishtimes.com/business/economy/state-must-build-half-a-million-homes-by-2036-estate-agent-claims-1.4620590

According to SherryFitz we need to be turbo building because "demand for housing was being driven primarily by demographic trends"

One of these trends is immigration:

“This equates to over a million more people in the State and demand for approximately 37,000 residential units per annum out to 2036,” the company said in its latest review of the Irish property market. This equates to 555,000 additional homes over 15 years."

This equates to an average household size of 1.8. Curious how they come up with this figure given that our current average household size is 2.75 and we have the mist underoccupied housing stock in Europe.

In addition:

"The company also calculated that “latent” demand in the market – the number of households whose demand for homes has not been met due to the lack of supply – now stood at approximately 117,000."

Again this is curious. Given all their talk of demographic trends I wonder if they've considered the demographics of our elderly population.

Time and again vested interests trot out these figures based on estimates of how our population demographics might look in the future and estimates of pent up demand. I've yet to see any of them adequately factor in what our population demographics look like now and estimates of pent up supply.

cnocbui

Reduce the level of immigration, maybe? I take such predictions with 2 pinches of salt.

phunkadelic

Some crazy prices recently paid on a street near me in Drumcondra. Houses going for €800k and one of them needs about €200k of work.

Seems like a new peak. Might be partly down to supply, and also the fact that mortgage approvals & exemptions are about to expire. So they panic and buy, so they don't have to re-apply and put themselves back 3 months. And in the case of mortgage exemptions (to the central bank 3.5x salary rule), banks have run out of exemptions for the year, so they would have to wait over 6months to try next January.

That's how it was for me in 2018 when I bought. Lots of bidding wars in the first half of the year, and hardly any bids in the 2nd half of the year after the annual mortgage exemptions had been used up.

hometruths

Very irritating to no longer be able to just quote a portion of a users post!

@Amadan Dubh I wonder was our dear departed friend's August predictions anything to do with the release of the Summer Economic Statement. Up until yesterday, we were led to believe it would be brutally frugal and paint a clear austerity roadmap, with possibly some of the state's generosity to prop up the housing market diminished.

However it looks like the wisdom of Darragh O'Brien ultimately trumped the wisdom of Paschal Donohoe.

Hubertj

https://boards.ie/discussion/comment/117613768#Comment_117613768

People really thought austerity was on the way? Mad stuff altogether

hometruths

https://boards.ie/discussion/comment/117613811#Comment_117613811

https://www.irishtimes.com/business/economy/q-a-why-has-the-government-changed-its-economic-policy-1.4621294

"By contrast, the Stability Programme in April put forward by the Minister for Finance Paschal Donohoe had pencilled in a deficit of just €800 million for 2025: basically a balanced budget"

Not unreasonable to want our Finance Minister to get our debt under control. And definitely not unreasonable to think that's what he intended to do when that's exactly what he said he intended to do.

He could not have managed that without some spending cuts.

Hubertj

https://boards.ie/discussion/comment/117613864#Comment_117613864

Spending cuts = austerity…(socialists view?)

or spending cuts = not p*sing money down the drain? (Common sense?)

Amadan Dubh

https://boards.ie/discussion/comment/117613811#Comment_117613811

Well, if you look at that article which discusses the fiscal policy changes we were projecting to run effectively a balanced budget (€800m deficit) in April but now it will be a deficit in the billions!

Marius34

https://boards.ie/discussion/comment/117613369#Comment_117613369

Those things doesn't move so quick. Won't see any cool down in August.

hometruths

https://boards.ie/discussion/comment/117613995#Comment_117613995

Fine, doesn't matter what way you view spending cuts.

The point I was making was that spending cuts were undoubtedly on the way, and in Props' opinion, a fair chunk were likely to come out of housing. Hence I was wondering was his focus on August anything to do with the release of the Summer Economic Statement.

Timing belt

https://boards.ie/discussion/comment/117614151#Comment_117614151

Don't think it has anything to do with Summer Economic Statement as his predication was June... then July.... then August.

Amadan Dubh

https://boards.ie/discussion/comment/117614150#Comment_117614150

No of course not. But I am expecting to see ambitious housing targets published by August, for example, targeting 15,000 per year homes directly built by the State and private leases for social tenants with investors not being the norm ("it will still play a part" will be the shpiel to not spook the institutionals) along with some other ambitious targets with the purse strings being loosened to do whatever it takes to ensure these targets are met. Net outcome will be stated to be significant increase in supply with affordability being a key component - sustainable communities for the future will be the overarching wishy washy argument justifying the extreme measures.

hometruths

https://boards.ie/discussion/comment/117614739#Comment_117614739

It all depends on what the governments idea of affordable is. It doesn't matter how many 'affordable' houses they build, there is very little demand for them at 350k for example.

Marius34

https://boards.ie/discussion/comment/117614739#Comment_117614739

Even if government start promising of targets to build 15K homes a year or so, it won't cool the market in August.

MacronvFrugals

I wonder if why Mullen park to the investors fell through because they knew then the council leasing these homes would be completely untenable from a public relations perspective

MacronvFrugals

Listening to a podcast with Darragh O Brien and in response to a comment by Mel Reynolds saying "We've hooked the market on HAP" the minister replied "he's right"

hometruths

https://boards.ie/discussion/comment/117615188#Comment_117615188

What's the podcast?

MacronvFrugals

https://boards.ie/discussion/comment/117615406#Comment_117615406

Its Patreon only for now but should become available on Spotify/Apple pods etc within a week or two

https://twitter.com/Trickstersworld/status/1415642458701058048?s=20

Jmc25

It will be very interesting to see which parts of the Housing for All strategy will be fudged/ambiguous and which will be solid commitments. That might tell us all we need to know in terms of whether the Government are actually serious in changing direction or if they just want people to think they're serious.

Assuming it's the former (big assumption I know), it'll likely be at least a couple of years before any results or price reductions are seen. Maybe there'll be some unrelated price dips sooner as people run out of Covid savings but I wouldn't expect anything major. I would say though that for people who can afford to wait 2-3 years to buy, it might actually be worth waiting it out and seeing how things are panning out this time next year, if there are any indicators at that stage. I could very well eat my words but it feels like we'll hit the peak of this surge this year/early next year. I totally get that most people can't put their life on hold to wait it out but for those who can, I'd say do.

timmyntc

https://boards.ie/discussion/comment/117618487#Comment_117618487

Housing for All will be nothing more than an attempt to funnel money out of the Irish state and into the pockets of private enterprise.

Expect schemes totally open for abuse, tax cuts for investment funds if they build X number of houses, reducing building standards so houses can be built quicker (and worse), and maybe some transfers of state landbanks to private funds - state could step in and force LDA to transfer land directly to bypass councils.

Amadan Dubh

I agree with waiting 2-5 years if you can. Bigger deposit, more supply, clarity as to whether SF will be in power (which could dramatically shift economic outlook).

Sierra Oscar

https://boards.ie/discussion/comment/117618661#Comment_117618661

What would make buyers nervous though is we have been hearing the same 'wait two or three years' mantra for nearly ten years now. First it was house prices will drop further following the financial crisis, then it was a dead cat bounce recovery and now it's an overheated market. Life moves on for people so it's not surprising that people are desperate to purchase their first home, even when the market is hectic.

Timing belt

https://boards.ie/discussion/comment/117618487#Comment_117618487

If there is large scale building it will take 3-5 years to be delivered assuming there are no court cases for planning. When/if this supply hits the market it will put downward pressure on rents but realistically we will not see any meaningful change for 3-5 years. The only way I see a price reduction prior to this is if there is a reduction in disposable income (Whether brought about by recession or an increase in tax) or if there is large scale emigration out of Ireland.

The other factor that needs to be considered is inflation.... If this is not transitory and leads to wage inflation then property prices will increase.... Add on top of that rent paid during the 2-3 years would be approx. 65k (1800 x 36 months) means that waiting may result in costing up to 86k [65k paid in rent Plus 21k of a price rise over 3 years (Based on a 350k property @ 2% per year)]

GoldFour4

2-3 years could be circa €50k in rent paid while waiting for a potential drop in prices. On top of that you are likely putting away a similar amount to your rent each month in saving for a deposit.

If you can afford to buy now then you should imo.

https://boards.ie/discussion/comment/117613561#Comment_117613561

An estate agent hoping for more continued mass immigration into a country which already has one of the largest immigrant populations per capita in the world in order to keep house prices rising and their business booming. Fix our broken immigration system and start implementing some controls. We have had net immigration between 2014-2019 of 200,000 people, the equivalent to almost 3 Galway cities.

DataDude

https://boards.ie/discussion/comment/117618874#Comment_117618874

Focus needs to be on difference between rent and interest repayment rather than rent in absolute terms (and potentially lost investment returns on deposit if you want to get aggressive). There's a widely held view that all mortgage payments = good, all rent payment = dead money. But assuming a 320k loan in your example at 2.5% for 35 years. There would be €23k in interest repayments over the first three years (dead money) which need to be factored in also. Of course, in your example it doesn't get you all the way there, but it's a material factor for sure especially if you plan to buy a house which is significantly more valuable than the place you are currently renting which is the case for many people.

Amadan Dubh

The main reason is supply. I don't believe the new builds, pre-covid anyway, to be substantially overpriced. Particularly with HTB. But the main reason for waiting is to enable supply to get going so you're not buying some tiny kip and/or some where that needs a lot of work. There is so little on the market right now and it will remain this way for at least a year after covid restrictions end but we will see an uplift in supply in a few years.

What's an additional 2/3 years from now in a 20-30 year mortgage to give supply a chance to at least pick up from what it is now and give yourself a better selection? Demand is red hot right now, supply is totally dulled due to Brexit (the fallout is still going to be worse than it has been to date), covid (both new build supply and older people not wanting to move from their home until it subsides) and the State (and charities) competing with individuals too much for housing (which is going to change with the Housing For All startegy).

MacronvFrugals

Sold new in Donabate for 317k in July 2018

Was on the market for 320k until last week and yesterday increased by 90k to 430k 🔥

https://www.myhome.ie/residential/brochure/16-beresford-gardens-donabate-county-dublin/4515485

Timing belt

https://boards.ie/discussion/comment/117618971#Comment_117618971

I agree with what you are calling out.... But if you wait 2-3 years and continue to rent and buy a property at the same price as today... you will still be paying the interest unless you are in a position to save more of a deposit during that time. For the vast majority of people they are paying more in Rent than they would be paying on mortgage repayments. (Obviously if you look at the higher end of the market this will not be the case)

DataDude

https://boards.ie/discussion/comment/117619541#Comment_117619541

It doesn't matter when you buy from the pure maths perspective, if you go through and example and compare the equity you've built up in house and increased savings under each scenario, it all works out. The annual comparison between renting and buying must be the difference between rental yields (c.5%-6% of house value) vs mortgage costs (c.2.5%). The vast majority of people simply look at the 5%-6% rental cost which is mathematically incorrect.

Eclectic Econometrics

I was a couple of days away from starting a fight with the postman about whether it is cheaper to build inside or outside of Dublin. Luckily you are all back now.

Here is a video that with resonate or antagonize -

https://www.youtube.com/watch?v=lOBupYPtdY8

Timing belt

https://boards.ie/discussion/comment/117619608#Comment_117619608

If you buy today you will have 2-3 years less of a mortgage to pay in the future.

If you are in a position where you can save significantly during the 2-3 years (whilst paying rent) to reduce the amount of a mortgage you require then yes it won't make that much of a difference. The only problem is that that there is a small minority of people who would be able to do this whilst paying rent and for the vast majority they would probably end up with the same mortgage required in 2-3 years time as required today.

DataDude

https://boards.ie/discussion/comment/117619720#Comment_117619720

It's just a calculation. What I'm pointing out is a mathematical fact. Quick simplified example. €400k house, 5% rental cost (€20k per year, €1667pm). Mortgage for full amount (2.5% over 35 years) = €1,423.94 pm , €17.1k per annum

After 3 years:

Rent - 60k paid out, equity gained 0k, dead money 60k

Mortgage - €51.2k paid out, equity gained 21.7k (+ or - any house price movement), dead money €29.5k

So in the mortgage you'll have €8.8k of additional cash in the bank and €21.7k equity (plus or minus the change in house value). So you're 29.5k better off in this example. In your workings you just took the rent figure of €60k which is incorrect. Simple way to get to where I got is (house value)*(rental yield - mortgage rates). The remaining term on your mortgage etc. is all a red herring and has no impact on the calculation.