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

Your big assumption is that there's a house that someone wants which they can afford out there right now - your advice is always applicable "if there's a house you want and can afford now go for it". My point is that there almost certainly is not such a house in the current market with supply at the lowest it's been since 2011! People are in a frenzy with buying that they are compromising on what they actually want and where they want it because of the FOMO they have. I don't know how you could defend the current environment for buyers, it's objectively an absolute sh*tshow. Especially if it involves invoking maximum permitted borrowing and the mortgage rate is only fixed for something like 5 years. A 1% interest rate rise on a 200,000 mortgage would be an extra 2,000 per year to be paid.

A stated policy of People Before Profit is to ban corporates from the property market.

After the 2020 GE election when SF ended up with the most votes Irish homebuilders Glenveagh Properties PLC and Cairn Homes PLC saw their shares fall by 11.3% and 8.1%, respectively, Irish Residential Properties REIT PLC's shares dropped by 8.5% and Hibernia REIT PLC fell 7.2%.

These two parties combined have 38.4% and 35.6% of the votes of the 18-24 and 25-34 year olds respectively. It is not crazy to expect that SF could be in government in the next 4 years with a coalition which includes PBP and the scenario with international capital getting spooked could manifest. There won't be any QE to support the economy, like with covid, just because we elect some lefties!

The whole issues around tax, Brexit and the ending of qe and rising interest rates seem to have never materialise to give a fall in prices. So Any significant price decrease will never happen.

Don’t think anyone thinks QE and negative rates is the ideal way to run an economy but it is no different to cutting base rate which has been done for the past 40 years. The effect of both has the same consequences on the housing market.

A 75% price rise 😲

This was on at 425 earlier in the year, now on at 495

https://www.daft.ie/for-sale/terraced-house-9-granite-terrace-inchicore-dublin-8/3466513

But it's easy for someone to find outlier for Ireland for one or other direction, if taken extremes of 2007 or 2012.

And if prices go up further and don't come down?

You lose out, big time.

Yes, just off Merrion Square a fund had been trying to buy up the owner occupier apartments in a pretty old building. Not the Northumberland but around where Mamma Mia Italian is. Gone quiet the last few months however.

In the IT letters today we have Alan Shatter writing about the long term social housing leases being entered into;

There was a good letter from someone who I think acts for a management company of a few small landlord properties as we had a man of the same name from Howth as our agent at one point (excellent relationship with him), writing about the RTB Amárach report published recently;

When the IT letters pages are persistently and unanimously attacking the government's catastrophic failure on housing, something is going to give as there is little to no support for the current road of consistent price and rent increases with muted supply.

I bought a house last year. And before I had even started doing it up to move into the agent who sold it to me contacted me and said an unnamed person was offering way, way more than i paid for it if i then sold it to them.

So I did.

House bought and sold without even moving in and a tidy profit made.

I found out later that it was the council who bought it.

Where in the developed world are house prices going down? Rising house prices are a near global phenomenon. I get that you are hoping for a global financial crash/recession type event to crush prices, which is ok if you are young and very patient, as in willing to wait decades, but the long term trend for house prices, like stock markets, is one of increase. It's a very poor strategy because you are betting against a clear, near unfaltering trend.

Most people borrow to buy a house and their borrowing capacity is linked to their salary. Based on this fundamental factor, prices flatlined from 2018-2020.

Incomes haven't risen since then but people have been able to save significant sums during the lockdowns which are now being spent on property.

Unless people can keep saving at the rate they did during the lockdowns, they won't have this additional money above what they can borrow to throw at property in the future.

It seems to me that 2018 prices are where prices "should" be right now, based on people's incomes. Everything else is down to factors which are unique and won't last forever ie historically limited supply and large amounts of savings.

Agree this might take a number of years to play out.

Worrying about a price crash within the next 10 years is one thing, but what if this is to be your family home for the next three decades? Surely that perspective comes in to it?

We've waited and waited since the start of the pandemic. For the much predicted pandemic dip. All we've seen is prices constantly rising, and bidding getting increasingly competitive, and supply getting worse and worse. I think the only thing that could happen in the next two years is that supply may improve as people move on from pandemic fear. But I don't see a huge drop in prices coming as a result, maybe a moderate one and more choice of housing, that's about it.

In the mean time, we're getting older, living between rental and parents homes, and putting off having children due to not having the space for them, while already in our late 30's. This is a situation faced by many right now. Perhaps paying a premium if you can afford it would be worth it in this case.

It feels like an impossible situation at the moment for people who are just trying to get a family home.