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

mcsean2163

This seems a lot for a 2 bed bungalow in Wicklow...

https://www.myhome.ie/residential/brochure/32-delgany-park-greystones-wicklow-a63-ty32/4532005

No sign of propqueries crash going into October. The opposite in fact...

accensi0n

Even seems more like a one bed. I think the only back garden entrance is through the bedroom? So might have previously been a living room.

mcsean2163

https://www.boards.ie/discussion/comment/117934063#Comment_117934063

In fairness, it's lovely inside but €380k seems a lot for 63 sq metres.

https://www.boards.ie/discussion/comment/117938260#Comment_117938260

can’t believe they can away with calling that a 2 bed. The upstairs coupe barely be classed a habitable space. A young child’s play area maybe, at best

mcsean2163

https://www.boards.ie/discussion/comment/117938290#Comment_117938290

Meanwhile in China.

https://youtu.be/ibVW8t3qNMQ

Unless China and Europe are completely different, things are going to change soon.

Every time I think we're at the peak in Ireland, there's something new that floors me but 380 for a 2 bed in Wicklow seems very peaky...

Wanderer78

https://www.boards.ie/discussion/comment/117938403#Comment_117938403

china situation was inevitable, hopefully we arent too exposed, we ve had our 08, and it was enough to scare the sh1t out of us all

greenfield21

The everglades is nothing story. The only risk ahead in the short/medium term is the tax changes. No one knows how that works out. I would think there will be little change to anything with more cute hoorism from irish politicans.

Wanderer78

https://www.boards.ie/discussion/comment/117938558#Comment_117938558

some respected commentators say differently! we still dont truly understand the complexity of our global financial and economic systems, and how they are all complexly interlinked, this will more than likely reveal more to us, expect something!

mcsean2163

https://www.boards.ie/discussion/comment/117938459#Comment_117938459

Castles made of sand.

We're the 3rd most indebted per capita in the world and the most indebted per capita with no control over its currency.

If we don't do something when the tide comes in we'll be washed away. Huge public and private exposure to property in China. China could be the wave. I hope not.

Wanderer78

https://www.boards.ie/discussion/comment/117938687#Comment_117938687

once again, public debt has caused far few economic crisis, compared to private debt, globally, 08!

Credit and Debt USA.png

Ireland Debt.jpg

mcsean2163

https://www.boards.ie/discussion/comment/117938707#Comment_117938707

In china local government debt estimates are in the region of 6 trillion.

https://amp.scmp.com/economy/china-economy/article/3149406/china-debt-concerns-mounting-beijing-shifts-attention-hidden

debt to GDP is not a great indicator in Ireland due to multinationals... Public debt is the reason that the Troika came to Ireland in the last recession.

Wanderer78

https://www.boards.ie/discussion/comment/117938809#Comment_117938809

yup, but china used its public financial institutions where we used our private sector financial institutions, i.e. our banks, and done the exact same thing, encouraged and facilitated a credit fueled property boom, and surprise surprise, is now experiencing the same type of crash! believe it or not, the majority of all that private debt, in both the us and ireland, went straight into our property markets, pre 08, have a guess which debt ultimately caused the crash, public or private!

Bass Reeves

https://www.boards.ie/discussion/comment/117938809#Comment_117938809

That is not totally true. Public debt was as much an issue. We had expanded public services during the boom. We were running a deficit during a period when the economy was booming. Our tax base was totally dependent on construction revenues,vat, stamp duty, capital gains tax etc so when the bust came we could not afford to run the country.

Public debt and deficits in public spending was as much of a problem as the bail out money for banks. Day to day public spending was totally out of control

Bubbaclaus

https://www.boards.ie/discussion/comment/117939326#Comment_117939326

We were running a budget surplus consistently up until 2008.

mcsean2163

Nope. At no point was debt reduced ...

https://www.ntma.ie/business-areas/funding-and-debt-management/statistics/debt-projections

Increased by 3 billion in 2007

Bubbaclaus

https://www.boards.ie/discussion/comment/117940118#Comment_117940118

The link you shared shows our total national debt in 2006 being lower than 6 years earlier, not even factoring in inflation and the economy naturally growing which reduces debt in real terms.

mcsean2163

https://www.boards.ie/discussion/comment/117941723#Comment_117941723

It's easier to see in the tabular format on the same page.

2007 47 67%29%24%

2006 44 65%28%24%

2005 44 75%31%26%

2004 44 82%33%28%

2003 43 90%35%30%

2002 42 95%37%31%

2001 41 101%40%34%

2000 39

The above second column is government debt. Good point about inflation though.

Bubbaclaus

That's gross debt, national debt is the 3rd column.

Point remains that the government wasn't running a deficit and in fact had a budget surplus throughout the early 00s.

jill_valentine

https://m.independent.ie/irish-news/news/house-prices-growing-twice-as-fast-outside-cities-in-covid-exodus-40891379.html

Lot of dramatic language in this but -

"In Stoneybatter, long a sought-after area for young professionals, REA Fitzgerald Chambers reports 100pc of its sales for the period were conducted on behalf of vendors who are moving out of Dublin."

- is fairly striking.

mariaalice

https://www.boards.ie/discussion/comment/117944098#Comment_117944098

Surely that is a good thing in some ways, buying somewhere just because of it hipster vibes or gentrification is what causes some of the issues in Dublin.

Wanderer78

https://www.boards.ie/discussion/comment/117942625#Comment_117942625

i personally think its much easier to see in graphical terms, once again.....

Ireland Debt.jpg

as others have explained.....

https://www.boards.ie/discussion/comment/117944098#Comment_117944098

I would imagine anyone who has been living and/or working in one of these tiny houses over lockdown, are dying to get out.

claustrophobic!!

mcsean2163

https://www.boards.ie/discussion/comment/117944133#Comment_117944133

My bad, I was looking at General Government Debt.

Still think debt to GDP is not a useful metric. If we're in a recession government debt to GDP will soar and if multinationals exit due to energy issues etc. we'll have the Troika back in Dublin maybe worse.

We're walking an imprudent tightrope IMHO but that's it from me. Back to property.... Nothing jumping out for us and seems properties are gaping up past our budget ~1 million. Ah well, at least we're not paying rent😀

Wanderer78

https://www.boards.ie/discussion/comment/117944432#Comment_117944432

some good points, but we re getting hung up on public debt again, its well proven now, its nothing to truly worry about, as it has caused far less economic issues and crashes, compared to private debt has, globally. but it is important to stress, public debt is also not problem free, we will need to carefully manage it going forward, but we need to embrace the perpetual deficit going forward, as we keep defaulting to a primarily private debt run economy, i.e. credit run, and this has now become extremely dangerous to do so, 08 being a perfect example of what happens in such situations.

yup gdp is an awful metric to measure our economies well being, also well documented, but it has its uses also, and yup, we need to do everything in our power to protect the economy now, in particular private sector businesses, its why i believe pup payments should remain to a degree, but thats really a conversation for another time. and id also agree to a degree with our energy needs, and its long term potential effects, but we re all under serious pressure on this front, im not currently convinced of our renewables plan, but again, a conversation for another day. i wouldnt be worrying to much about the troika, many of those folks are now actually openly admitting, their approach to dealing with 08 and its aftermath, has ultimately failed.

unfortunately our economies are always on a tightrope, but, another days work....

best of luck with the house hunt

Sunny Disposition

Three interesting reports this morning.

The Daft.ie one is particularly interesting, it forecasts strong demand for 30 years to come. I think that's too long to be making forecasts, but it is the way things are heading. Demographics are strong, we have immigration rather than emigration and a serious shortage of houses.

The REA one says there's a bit of an exodus from the cities. I wonder if given the other factors, the cities can still maintain the current prices, despite some people selling up. It's something that'll be interesting to see in the coming years.

cnocbui

https://www.boards.ie/discussion/comment/117938687#Comment_117938687

The debt you are eying isn't a sign or result of house prices, it's because the civil service pay and benefits are unsustainably generous and the sector is too large with too many employees. We are Greece.

But don't worry, according to experts public debt is nothing to worry about as the government can always just raise taxes. Along with the sheer unsustainability of impending tax rises to virtue signal about dealing with the climate emergency. Personally I think the experts are living in la la land and can stay and pay for it all, I don't intend to.

Wanderer78

https://www.boards.ie/discussion/comment/117944533#Comment_117944533

an understandable forecast from lyons, hes been shouting and screaming about the serious short fall in accommodation, particularly in the dublin region, since 08, hes been pretty much spot on all the time, and we truly do need to embrace critical long term plans and forecasts. i do think we should be creating buildings that are more flexible to conversations though, to accommodate our long term needs, from residential and commercial etc etc, not cheap id imagine though.

price growth is clearly unsustainable at current rates, unless theres radical changes to our economy, from income inflation, costs of living, taxation, etc etc etc, its not gonna be an easy task trying to fulfill all of these critical needs

Pussyhands

I think we could be in for a real rocky patch in the next 3 to 5 years in terms of the overall economy.

• A change to our corporate tax rate will not lead to a mass exodus immediately but if you think it will not have any impact at all, you'll be mistaken.
• Remote working. As someone who is remote working, I'm not sure it'll work out good for me long term. During 2020 when the whole working from home situation was new, I listened to some very high ranking employees of some large companies answer the question about if long term this was going to stay. They said they didn't know but there could be opportunities to hire employees from lower cost regions.
• Inflation. Inflation is ramping up for the first time in many peoples lives. The EU Central Bank is going to leave it as long as possible before they raise rates. By the time they do, it could be too late to prevent massive damage. We've got a two tier society. Professionals who are getting pay rises yearly and other workers like cleaners, waiters, hotel staff etc who are not. If everyone gets a 5% wage increase, the low paid workers are worse off.
• Energy/Climate action. Yesterday I heard on the radio companies were asked 1300 times this year to reduce demand due to high levels of energy use. Shutting down of carbon based fuels to tackle climate change could cost us big time. Will there be load shedding/blackouts this winter? I think it could well happen.

The printing of money non stop for the last decade without any impact on inflation was perfect for banks. This is something that really is hard to imagine. Now we're seeing the effects of printing money non stop. With rising inflation we could see people get very worried about their cash and lump it into property to hedge inflation. It could be one last pump before it all comes shuttering down.

People can talk about demand and supply all they want. But there's a difference between supply of people and supply of cash. You can have 100,000 people wanting to buy a house with a supply of 1,000 but if the richest person of the 100,000 can only afford for example 100k, house prices won't exceed that. Corps are ruthless. Their costs are going to rise and rise and rise now. I wouldn't be surprised if we see big cost saving measures by some in the next couple years.

Wanderer78

https://www.boards.ie/discussion/comment/117944752#Comment_117944752

why havent corporations been moving in high number to other european countries in which already have lower rates than ours?

i think the hybrid model is absolutely the way to go, and will benefit us all

current inflation rates maybe just a short term blip, primarily due to major supply chain shocks due to covid, its also important to remember, rates have very little influence in economic outcomes, the main influence being due to the availability of credit to our economies, which ultimately comes from private sector banks, so we re just waiting for those gates to be opened, before the real mental stuff arrives, i.e. possibly even higher asset price inflation, property, land etc!

no, i dont expect widescale blackouts anytime soon, but could well occur in the future, possibly due to capacity constraints, i.e. being unable to produce enough energy for demand.

most money created by central banks, i.e qe, has propped up asset markets, including property markets, it ll be interesting to see what happens when its eventually tapered.

yes we could very well see people running towards property markets again, but i suspect thats more likely if we truly do open the gates of credit

yes, you are right, the money supply is still playing a critical role in property prices, but we re still playing the credit game here, this is in fact still the primary source of money used in property markets, so if we open those gates again, for example, altering, reducing, relaxing central bank rules etc, expect big problems!

oh large corporations are doing just fine, they still have access to essentially free money, qe etc, and are of course are using it for 'productive means', i.e. 'share buy backs', where everyone wins! yippee!

cnocbui

https://www.boards.ie/discussion/comment/117944576#Comment_117944576

Price rises in Ireland have been less than 23 other OECD countries. I doubt they are any more sustainable in those countries either, but I don't see what is going to rein in the trend. https://data.oecd.org/price/housing-prices.htm

Wanderer78

https://www.boards.ie/discussion/comment/117944870#Comment_117944870

yup, we re caught in whats called a 'positive feedback loop' in regards pricing, this is becoming an extremely serious problem for us all, and im not sure we truly know what to do about it, but clearly, we just need to crack on with building, but even thats now a serious problem. this is extremely worrying stuff, i think a more involved state is truly the only solution, but even that wont be easy

cnocbui

My personal belief is that only individuals should be allowed to buy, own and invest in residential property. Allowing commercial interests a look in was a huge mistake. Governments listen to corporations a lot, and their constituencies, not at all.

Pussyhands

On RTÉ's Morning Ireland Mr Davitt said that low interest rates and fixed interest rates with longer terms are encouraging more people to get on the property ladder.

He said buyers "don't mind paying extra because they are paying it over the long term".

Very interesting words and exactly what I thought. People happy to pay way over the odds just to secure a property. Price doesn't even matter anymore. Not exactly a sign of a healthy market...It's an irrational market. And it will become rational again.

Wanderer78

https://www.boards.ie/discussion/comment/117944922#Comment_117944922

https://www.boards.ie/discussion/comment/117945235#Comment_117945235

yup, the joys of democracy(plutocracy)!

you gotta love the lobbyists from the fire sectors! any chance you can show us examples of rational markets, particularly in relation to property?

mcsean2163

https://www.myhome.ie/residential/brochure/garden-cottage-tinnahinch-enniskerry-co-wicklow-a98-x899/4532421

€1.8 million for site in enniskerry. It's a beautiful garden....

JimmyVik

Berlin voting to compel investors to sell properties.

Where does that lead to i wonder?

awec

https://www.boards.ie/discussion/comment/117945511#Comment_117945511

Given that almost every photo is of the garden I am betting that the house isn't looking too great inside.

Villa05

https://www.boards.ie/discussion/comment/117945235#Comment_117945235

The rent bubble, if your paying 2k in rent, 2k in mortgage repayments seems logical

Problem is your locking record high rent prices caused by a supply issue for the rest of your lives.

Supply issue has to be resolved, what happens rents when it is?

We are in a property bubble caused by choked supply. How long more can we accept choking supply, eventually the numbers locked out of housing are greater than those that own

Can't see the current political parties being in power much longer.

Varadkers comments last week ref balance between landlord income and renters plight particularly insightful. Foreign Corporate landlords tax free and citizen landlords paying rates of up to 50%+, while renters are squeezed for every available penny. A wholly disappointing leader from a position of considerable potential.

Pussyhands

https://www.boards.ie/discussion/comment/117945803#Comment_117945803

Exactly. Buying a house at any cost looks like good business at this point.

But 8% p/a price rises are not sustainable.

Amadan Dubh

https://www.boards.ie/discussion/comment/117944533#Comment_117944533

It's a ridiculous projection. The 30 year projected population growth is primarily due to immigration. 30 years of strong demand? 30 years ago we had net emigration up until 25 years ago. Only 7 years ago we had net emigration again!

At the same time, if housing supply ramps up based on these large projected population growth numbers that is fine by me! Oversupply is a good thing.

fliball123

https://www.boards.ie/discussion/comment/117946231#Comment_117946231

Well bringing the time down that will allow refugees go from undocumented to documented from 8 years to 4 months is going to bring a flood of people here. We are currently ranked 2nd in quality of life by the UN. So people can say what they want about Ireland but it is also one of the safest places in the world to live. It also offers welfare at one of the highest rates in the world when you take every thing into account. We are also currently in need of expansion in our public servant numbers and going gang busters in ares like IT and Pharma. Companies are importing talent as the head count is not here. I can see population growth continuing to rise due to emigration inwards and our birth vs death rates have always swayed heavily on the birth rates even during a global pandemic which killed thousands.

Pussyhands

https://www.boards.ie/discussion/comment/117946231#Comment_117946231

The ESRI, who's job it actually is to research things and make projections projected in 2020 that house prices would fall by 12% in 2021.

And we have guys out here making 30 year projections. 🤡🤡🤡

fliball123

https://www.boards.ie/discussion/comment/117946275#Comment_117946275

Just are ridiculous as the doomsdayers on here saying we need a recession as they cant get on the property ladder and others projecting year on year that next year the crash is coming.😎

javaboy

https://www.boards.ie/discussion/comment/117946275#Comment_117946275

Historically, it’s actually probably been much safer to make long term predictions than short term ones. There’s a fairly generous margin of error on a 30 year prediction compared to short term predictions.

That 12% fall though … 😂

Wanderer78

https://www.boards.ie/discussion/comment/117946497#Comment_117946497

yup, our short term approach is effectively failing in nearly everyway we ve done it, its why we re truly in our current mess, again lyons himself realised this many years ago

Jmc25

https://www.boards.ie/discussion/comment/117946497#Comment_117946497

For as long as I've paid attention to these industry/think tank predictions, it's generally been a case of if prices are currently going up, the predictions are that they will continue to do so, and if they're going down, the predictions are that they will continue to do so.

It's basically like the weather forecaster telling you it's going to keep raining because he looks outside and sees rain.

Obviously to justify their existence the authors of these reports dress them up with language that makes them sound authoritive. But the truth is no one actually knows what's coming around the corner and if economic crashes could be predicted we probably wouldn't have any.

And yeah, the one time the ESRI deviated from the "is it currently raining" method they couldn't have been much more wrong....

Wanderer78

https://www.boards.ie/discussion/comment/117946632#Comment_117946632

no we cannot accurately predict future outcomes such as crashes, and we may never be truly able to, but mainstream economic predictions are woefully wrong, disturbingly so, but it is true, 'all models are wrong, but some are useful'

Timing belt

https://www.boards.ie/discussion/comment/117944133#Comment_117944133

According to the central bank statistics Irish Private debt in the banking system has been falling since 2009 and is now at the same value it was in 2003.

If you look at Loans for house purchases the total outstanding amount at July 2021 was 68.8 Billion the same level it was back in Sept 2004. It peaked at 123.9 Billion in oct 2008 and has been falling ever since which means more money has been repaid on mortgages than has been lent out on new mortgages.

It's the public debt and debt outside the banking system that has been on the rise and it is both of these areas that are helping to push up prices on property.

Marius34

https://www.boards.ie/discussion/comment/117946275#Comment_117946275

They failed quite a lot on their projection.

But on other note, their projection was between 0% to 12% fall, which average to 6% of fall between 2020 Q1 and 2021 Q4.

6% of a fall would be considered as to optimistic in this group. So their projections was bad, but it's relatively good, when compared with most members of this group, and many other forecasts.

JimmyVik

Nobody, Not even experts whos job it is, can predict property price changes.

Funny though how everyone thinks they can. :)