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

Accessing pension savings sounds like robbing Peter to pay Paul.

It's only natural that these ideas are suggested at this point . We've had years upon years of this housing model - an entire adult life for many people - and multi general mortgages etc is the logical next step if we continue to follow the model of ever increasing prices, where each generation purchases at significantly higher real costs than the last, in the hope that they'll look back in 20 years and consider the price a bargain compared to the prices of the day.

We had one crash, sure, but that was very much the exception. The underlying trend of the housing market in Ireland and most of the western world has been increases above the rate of inflation and wage growth over a prolonged period.

It's not sustainable, but if you were to try and sustain it, loosening the lending rules (a resounding success last time) longer/multi-generational mortgages would be the things you'd be suggesting.

Essentially I think where we are at the moment is something of a crossroads. Where we go from here will come down to is whether there's more votes to be gotten by maintaining the status quo and keeping homeowners happy, or explicitly pursuing a policy of reductions in house prices, and obviously making those who don't own a home at the moment happy.

I pulled out of investor sale last week - investor dragging heels despite being sale agreed a long time. I originally went on the market in October 2020 - had a few viewings. One couple didn’t want house wanted a different area - anyway had first viewing last night - much more interest - same couple turned up and are making a bid today . One lady who’s local actually asked agent to not go to bidding war and for me to basically name a price

I would have assumed that developers would charge the max they feel they can achieve, regardless of their costs.

If they can't make money at the market rate due to increased costs then I'd expect to see a slowdown in building activity rather than houses going up at prices beyond what people will pay for them.

Similarly if costs went down I wouldn't expect to see a reduction in prices - developers would continue to charge the max the market will pay and simply pocket the reduced costs.

We already know the pre-pandemic house prices were well above the cost to build.

We also know that the most expensive part of house builds is labour - not materials. I very much doubt that the increase in material costs have eroded that massive profit margin that was there pre-pandemic for new builds.

Good luck finding anywhere 3km from another house in Ireland that isn't in absolute wild countryside. Sewage treatment plants have to be near where the sewage is being produced.

So here's a hypothetical situation based on a relative's dilemma (single, single income)

a) Buy a shoebox apartment now in a fairly grim town that they could have paid off in five years, but would more or less guarantee being stuck in a not nice town and their horrible job until then - this is a limited time offer though, because the seller is a friend.

b) Try going through Rebuilding Ireland, which would boost buying power to about 180-190k in Dublin County somewhere, putting other work options on the table - but would be at least next year before the app was processed.

Prices aren't coming down or stock going up in a hurry so I'd be inclined to say a), go with the bird in the hand, and at least build equity. And having tried going through RIHL myself, it's a long and messy process and I wouldn't be at all confident that vendors would be willing to accept it even if it was the best offer. I'm dubious you'll get anything in Dublin for 180k by then at all tbh.

I've toyed with the idea of a) myself here before on and off, but it's different when it's you going to be living it I suppose. And it would mean losing your first time buyer privileges.

Just curious for other thoughts seeing as I haven't been on the board for a while.

What is the profit margin? Got any links?

That's not a hypothetical, it's an opinion that's not really relevant to the question. Fairly tired of the "Just move out of Dublin!" thing, people have reasons for doing that beyond just forgetting that's an option.

Myself and my family are all from the country or small towns, nobody's labouring under illusions. In this specific case it would very definitely represent a drop in quality of life. The question is whether the trade off is worth it.

I would say in most part of Dublin, residential land would cost more than labor. But it as well depends what we consider Dublin. I would agree that overall country wise, residential land would be lower than labor costs.

The countries run by lobbyists is it any surprise, in saying that it would be shocking if Makhlouf went ahead with this knowing it would overheat the market further.

Justin Trudeau has promised to put a 2 year ban on foreign investors buying property in Canada if he is re-elected in an effort to solve the affordability issue there.

Another Canadian party has promised a 20% tax on foreign investors in property.

I wonder if a similar approach would work here?