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

Marius34

https://www.boards.ie/discussion/comment/117903864#Comment_117903864

I'm curious how do you know what percent Capital dock has been rented out?

Browney7

https://www.boards.ie/discussion/comment/117904538#Comment_117904538

Kennedy Wilson's Q2 21 earnings report - in the lease up section.

DataDude

https://www.boards.ie/discussion/comment/117904450#Comment_117904450

Still looking outside Dublin. One took a new job (full WfH) and bought way outside commutable distance (near family home) Myself and the other are looking on commuter belt as have/aspire to have management roles which likely requires 2 days office presence (for now anyway).

Although current chatter is whether life would be better on 25-35% less money in a fully remote role where the house search could go outside commuter belt! I think probably yes, but reluctant to make the jump right now as it feels like a very permanent decision.

Amadan Dubh

The REITs (eg i-RES Reit) need occupancy as they require cash flow. However, Greystar, Round Hill, Kennedy Wilson etc. owned properties do not have the same urgent need for cash flow so they sit on the vacant properties. Kennedy Wilson really are vultures in my opinion.

mcsean2163

Wow, huge jump in property for sale on myhome.

10-Sept-2021

All - 12509

Wicklow - 475

Kildare - 450

Dun laoghaire - 28

Glenageary - 25

18-Sept-2021

All - 13435

Wicklow - 509

Kildare - 523

Propqueries was saying October. I'm beginning to wonder now. There's also the elephant in the room....

Bass Reeves

https://www.boards.ie/discussion/comment/117909602#Comment_117909602

Did he say October, I taught he only said January, February, March, April, May, June, July, August, September, November and December. Did he say October as well. He might have got it right so

mcsean2163

https://www.boards.ie/discussion/comment/117909645#Comment_117909645

I believe before he/she got banned it was late September/ Oct.

stampydmonkey

https://www.boards.ie/discussion/comment/117909645#Comment_117909645

Exactly this.

Having said that, seeing a lot more adds going up on our search lists

Sarn

It’s normal to see an uptick in properties for sale after the summer. With many people having held off due to COVID, and things getting back to normal now, a bigger jump is unsurprising.

Cyrus

https://www.boards.ie/discussion/comment/117909602#Comment_117909602

It's selling season again and so far I haven't seen any 50 to 75 percent price drops so I see no basis to conclude he was right about anything.

Marius34

Back in March I said I'll get back in August 2021 to remind about Props forecast.

https://www.boards.ie/discussion/comment/116539177#Comment_116539177

Economic outlook deteriorating - failed

Population growth being reversed - failed

Demand falling - failed

Mortgage approvals falling - failed

Supply increasing and outpacing demand - failed

Interest rates rising - failed

For some, what ever load of rubbish you spill, it's sounds right as log as it fits their own narrative.

Bass Reeves

https://www.boards.ie/discussion/comment/117909745#Comment_117909745

I think you miss the point PQ predicting a property collapse was a moveable feast. Since last year he was predicting a collapse 4-6 months in advance l the time. If he was still here he be predicting the same thing a stopped clock is right twice a day, it still no good for to tell the time

Even if you got a 10-15% price correction now prices would only be back to last year's prices

mcsean2163

Looks like it was a glitch or something on myhome last night. Supply 12711 now.

I got a huge surprise when I saw 13435 last night. Whether true or not I get a feeling funds are not buying to the same degree. They may be waiting to assess the China outcome.

Marius34

https://www.boards.ie/discussion/comment/117910295#Comment_117910295

Don't think it's a glitch, it's more likely you accessing myhome in different ways. Check that you accessing with the same link.

All together currently there are 13410 properties for sale on myhome.

https://www.boards.ie/discussion/comment/117910295#Comment_117910295

I'm seeing 13,434 this morning

Villa05

SBP reporting that Ireland has fallen down the list of potential sites for the new superfab facility which would deliver 10,000 jobs. Germany appears to be the frontrunner

Intel have concerns around Ireland's energy grid. Those data centres could prove very costly plus the cut in capital investment as a result of a recession caused by high property prices.

Timely reminder as we are in the process of constructing another property bust.

Sustainability is just not this countries speciality

mcsean2163

https://www.boards.ie/discussion/comment/117910306#Comment_117910306

I'm going here.

https://www.myhome.ie/residential/ireland/property-for-sale

I get 12,712 when using my android mobile.

Interestingly over 7,000 still sale agreed...

stampydmonkey

13411 for me at the link above

Jmc25

Just wondering re the myhome figures, do they include new houses for sale? I know the numbers dipped a lot over the last year or so but is that due mainly to lack of new homes being constructed or lack of second hand or both? I see a number of new homes being advertised on daft now which I hadn't seen in quiet a while.

Pussyhands

I have seen 4 properties for my alert come onto daft in the last 3 days (Wed-Fri)

It's outside the norm, I would see maybe 1 every couple of weeks.

Pussyhands

https://www.boards.ie/discussion/comment/117910475#Comment_117910475

We were always unlikely to get the new superfab.

1. Intel want around 8bn in government subsidies. We're not giving them free land and 8bn in subsidies.
2. Lack of construction workers and rising wage costs
3. It would make sense for a new greenfield construction to be on mainland europe. Having all EU chipmaking in one country is higher risk, if there were any supply chain issues, security threats, change in government policy etc.

Ireland was only on the shortlist because we "could" be a possible destination. They had requests from 50 sites in Europe. They're never going to build in somewhere like Romania or Lithuania.

Villa05

Regardless the data centres energy consumption and runaway house prices are a barrier to investment and growth.

This hampers the countries prospects of escaping the debt mountain we have inherited from run away house prices in the recent past

Mr Hindley

https://www.boards.ie/discussion/comment/117913297#Comment_117913297

I started tracking the number of properties matching my filter back in early July, and the figure rapidly fell from ~75 to ~55 and languished there. Now back up to 73. The total number of properties on Daft (incl sites) has just tipped over the 16,000 mark for the first time since I started keeping track. So supply definitely seems to be increasing.

timmyntc

https://www.boards.ie/discussion/comment/117913319#Comment_117913319

Intel have campuses in Romania you know - its a well educated country with a low cost of living. They absolutely should and would have been considered.

Amadan Dubh

https://www.boards.ie/discussion/comment/117910475#Comment_117910475

This is where our housing crisis has lead us to - the "growth" of MNCs in Ireland is no guarantee to further growth and it is now looking like the chickens of allowing the housing crisis fester the last decade without proper public infrastructure investment are coming home to roost. The stories of Facebook, Tik Tok and others adding thousands of jobs is also at risk (I am in favour of these jobs if we have the infrastructure to handle the population increase btw) due to the housing crisis making it more unattractive to live here each year it continues. It's sad that it will take these big companies stalling or slowing their growth in Ireland but it looks like that is what it is going to take for the government and the public to get the finger out and accept that we need housing costs to plummet with supply of all types of suitable properties to significantly increase; or else we won't be able to sustain further growth in these big companies and the jobs they will create.

I posted in the "Significant drops in rents" thread about the dearth of rentals available the last 2 months and it is continuing to plummet. There are only a little over 1,000 rentals in Dublin now on Daft, with offices not even back properly. Whatever about the risks to developed Western economies (of which there are many and some are quite significant), we have our own local risks which now need to be considered; and I think it lies with big companies stalling further growth while at the same time we lose the projected €2bn corporate tax revenue.

JimmyVik

https://www.boards.ie/discussion/comment/117913946#Comment_117913946

I was talking to a friend at the weekend.

Hi tenant left at the start of the first lockdown. His apartment was then empty for about 9 months, but at that point he decided might as well leave it empty and go the 2 years and blow off the rent cap and rent it then.

He only has a few months to go now, but now they have decided that they are selling it now.

I guess any buyer who would be interested in renting it would also look at how long is left before blowing off the rent cap.

Though I think there are very few investors in the market these days anyway, so that wont matter.

Bass Reeves

Corporate tax revenue is nearly 12 billion not 2 billion. 10 large MNC's made up 50% last year however small companies were badly impacted by COVID which will be a factor in CT this year as well.

PommieBast

https://www.boards.ie/discussion/comment/117913319#Comment_117913319

Did the site even have planning permission? Anywhere that the diggers could not roll in tomorrow would fall off the list pretty quickly..

Pussyhands

https://www.boards.ie/discussion/comment/117913876#Comment_117913876

Sales and Marketing, not cutting edge tech campuses.

Pussyhands

This evergrande story from China looks like it has legs.

My stocks are getting hammered. Down several % pre market. This could be the start of the ripple.

timmyntc

https://www.boards.ie/discussion/comment/117914688#Comment_117914688

It's almost all software engineering there, not sales & marketing.

Why would they locate sales & marketing in a non-English speaking country?

Amadan Dubh

https://www.boards.ie/discussion/comment/117914428#Comment_117914428

The €2bn is the current projected annual loss to our corporate tax take at risk from some of the global tax reform efforts. I mean, at the same time, it's a pittance when looking at our national "debt" of €240bn. I use inverted commas around "debt" as I question whether this is in fact debt or if some or all of it is just "free money" from the hyper QE of the ECB - I mean, €240bn debt for a country the size of Ireland does not make much sense and even attempting to pay it off is not sustainable in any way. In short, I am not losing much sleep worrying about a couple billion hit to our corporate tax revenue in the context of our ridiculous, almost comical national debt level.

I think we are at the point of euphoria turning to anxiety in terms of market sentiment so we will see what will happen fairly soon in terms of whether our projections for economic growth are for it to continue to be so strong and how that feeds into budgets and tax hikes, even though I think it is pointless to try to look at reducing our €240bn debt while we can still get free money for public investment from the ECB.

Hubertj

https://www.boards.ie/discussion/comment/117914696#Comment_117914696

Can’t remember where I read or heard over the weekend - someone wrote and article in 2012 claiming evergrande was insolvent and engaged in aggressive accounting policies… insane that they were allowed to run up such levels of debt. Understandable why the authorities introduced regulations around this. There was Laos talk that the Chinese government might have step in to prevent a total collapse.

found article

https://www.institutionalinvestor.com/article/b1sz8v1gt3f5rh/Andrew-Left-Was-Banned-From-Trading-in-Hong-Kong-for-Saying-China-Evergrande-Group-Was-Insolvent-Was-He-Right-All-Along

Pussyhands

https://www.boards.ie/discussion/comment/117914705#Comment_117914705

They're not building a massive cutting edge campus in a country where they only currently have a couple hundred employees.

Outside of Germany etc, the only eastern european country with a chance would be Poland.

Amadan Dubh

https://www.boards.ie/discussion/comment/117914718#Comment_117914718

It's not surprising at all to see a whistleblower silenced by the Chinese regime, but I'd be curious as to whether the Chinese government will prop up/bail out the company/sector as real estate accounts for 25% of Chinese GDP. I don't know if others recall but I remember reading/learning about "ghost cities" in China as far back as the 00s; where they had built these huge skyscrapers and big urban areas from nothing but they were totally uninhabited. I wonder if this Evergrande collapse is essentially the inevitable follow-on from their ghost cities in the 00s and for whatever reason the real estate sector never collapsed before.

The real estate sector should be insulated from the wider economy in general to ensure that there is little contagion risk if anything were to go wrong. The Chinese real estate sector should not pose any contagion risk to Western markets and economies. However, due to greedy Western investors with hard-ons for emerging markets return potential we shall see what sort of contagion occurs following the impending collapse (as I understand that last week they have already stated they will not repay the interest or the principal on the debt falling due this week).

To bring it back to Irish property; investors in the investors in Irish property could be exposed to the Evergrande collapse and this could, COULD, be where the risk lies to us.

PommieBast

https://www.boards.ie/discussion/comment/117913946#Comment_117913946

The canary was how Ireland's Brexit Bonanza of relocations from the UK never materialized. Price-gouging in plain sight so the companies (mostly) stayed away. From memory the office that Tiktok took came with some pretty beefy sweeteners..

Villa05

https://www.boards.ie/discussion/comment/117914714#Comment_117914714

The problem is the inflationary effect of all the borrowing and how it's being spent

Inflation linked long term leases increase the states liabilities as well as the borrowing cost.

Borrowing should only be engaged in where it is spent on projects that generate returns that cover the cost or greater. Instead we are borrowing to increase liabilities long into the future

timmyntc

https://www.boards.ie/discussion/comment/117914741#Comment_117914741

So all of a sudden the existing workforce does matter in their decision - in another thread on the subject you were adamant Irelands existing staff & campus were not a draw.

Anyways this is not really on-topic so I'll leave it there.

https://www.boards.ie/discussion/comment/117915039#Comment_117915039

All normal fiscal rules and sensibilities have been thrown out the window over the last 12 months. And with upcoming big spending plans and house building due to be announced, there will certainly be an inflationary impact on property too. More money in the sector, but no more workers? A price hike waiting to happen.

Unless the govt also announce a massive increase in recruitment for building trades, expect things to get worse in the short term, not better.

cnocbui

I am back from signing the contracts on the sale of a property. Not every property for sale is on DAFT and not every transaction is falling through.

Pussyhands

https://www.boards.ie/discussion/comment/117915274#Comment_117915274

It's not the workforce. It's the whole government and country.

Romania isn't a place where large tech companies make big investments. Eastern Europe is politically unstable, they have a massive anti vax sentiment, GDP isn't big, currency risk aswell.

cnocbui

https://www.boards.ie/discussion/comment/117914741#Comment_117914741

Czech Republic should be on any list of advanced east european economies.

Timing belt

https://www.boards.ie/discussion/comment/117914768#Comment_117914768

You assume the only contagion exists only in the debt markets... If Evergrande goes under then there will be a lot of suppliers that will be in trouble not to mention the 1+million people that have paid a deposit for property. The biggest risk of Contagion is that the funding model (pre-payment of property) fails with people no longer willing to pay a deposit on a property not yet built. This would bring down every other property developer in China as the funding model they use goes out the window.

If China does not step in you will have a massive fall in China GDP which in turn slows the world economy. The price of commodities will/have dropped on the back of this which will have a deflationary impact globally and will mean that we are in Lower for Longer interest rate environment which will help prop up house prices at there current levels. If the global economy does slow we might even see more QE undertaken as it is the only tool left that the central banks have to use. And we have all see the impact of QE on Asset prices including property.

Amadan Dubh

https://www.boards.ie/discussion/comment/117916202#Comment_117916202

To be honest, I'm beginning to think the global risks from a China real estate slowdown are being jumped on by those who benefit from QE/low rate fuelled asset inflation and know that the only way to keep the music playing is to keep QE and low interest rates.

Low for long rates and QE is dwindling in its justification as we come out of covid and has therefore been a solution looking looking for a problem as covid restrictions have eased. Like night follows day, we will probably see contagion risk from the Chinese real estate sector struggles to the global economy spouted a lot in the coming weeks and months, ultimately culminating in decisions to keep interest rates low and the free money printers whirring.

Timing belt

https://www.boards.ie/discussion/comment/117916285#Comment_117916285

Market in free fall at the moment.... stocks with exposure to china being hit the hardest with some down 10+%

Amadan Dubh

https://www.boards.ie/discussion/comment/117916349#Comment_117916349

That is top-of-the-market anxiety in my view with less to do with actual exposure to China and more to do with profit-taking at the top of the market. There is scope for a material correction in asset valuations (20%) without too much long term issues, so I think what we're seeing today could be with us for a while.

Timing belt

https://www.boards.ie/discussion/comment/117916384#Comment_117916384

If you look at the shares that are taking the biggest hit they are the shares that have exposure to china.

Prudential PLC Down 8%

Standard Chartered Down 7%

HSBC Down 5%

Invesco Down 8%

Caterpillar Down 5%

If it was just market anxiety on the back of the fed meeting we would see a more a different mix of shares tumble.

Regardless of what the cause is it we are seeing investors moving back into bonds for safety which is pushing down yields so if what we are seeing today could be with us for a while it will result in a lower chance of central banks tampering their QE positions. Which yet again leads to a lower for longer interest rate environment which will result in increased demand on the housing market.

Amadan Dubh

https://www.boards.ie/discussion/comment/117916508#Comment_117916508

But again it starts with property and Chinese property with that so the question I still have is how sustainable it is to have property so interlinked with the rest of the economy that a slowdown in property would have such a big impact on the economy? More QE and low interest rates is again can-kicking and throwing fuel on the fire to keep the bubble inflated but there has to be a reckoning and a showdown eventually surely.

Timing belt

https://www.boards.ie/discussion/comment/117916589#Comment_117916589

Interest rates have been falling for the past 40 years so as you put they have been kicking the can down the road for a long time.

The only time you will see come to an end is when there is a sustained period of wage inflation of the back of inflation in the wider economy. Inflation without wage inflation will be meaningless as people won't be able to pay and the inflation will be short lived.

mcsean2163

https://www.boards.ie/discussion/comment/117916508#Comment_117916508

Not if Chinese investors/ funds start dumping property in Europe. Even redemptions from companies affected by China etc.

Villa05

https://www.boards.ie/discussion/comment/117915274#Comment_117915274

In Ireland fiscal rules and sensibilities have been thrown out the window for 12 years nevermind 12 months