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

The Irish Times commercial property supplement comes out every Wednesday. You've got two weeks worth of articles there as you've an eight day 'week' (Wednesday to the next Wednesday inclusive)

That's an entirely normal volume of articles for most of the year - it just goes down to near nothing over summer. Same thing every year.

If you want to do a sheer listings comparison like another poster does for residential properties, remember that there is an even more significant summer and christmas slowdown in commercial listings. You'll need to YOY comparisons not any month on month to get useful figures.

You also need to take into account that a large number of international investors and occupiers are now able to undertake tours and building inspections which would have been difficult to do before covid restrictions were lifted.

With rules indicating 12+ houses/ acre, trying to squeeze these in detached form onto an acres takes imagination. As well you are trying to get a decent sized living area into .Basically they have done away with the front garden, put the parking at the side of the house. It would be interesting to see what size backgarden they have.

Mel Reynolds predicted this years ago saying student accommodation would eventually be homeless accommodation, maybe that was the goal!

Providers of Purpose-Built Student Accommodation Have Been Saying There’s a Lack of Demand for It

""Yet while students say they’re scrambling for somewhere to live, those who provide purpose-built student accommodation have been telling the council that they anticipated a lack of demand for it, and so they needed to convert it to short-term lets or co-living so they can fill it up with people.

Dublin City Council has granted planning permission to student accommodation providers in the city to allow them to convert as many as 1,055 student beds to be used as short-term lets up to 31 May 2022, suggest planning records.""

The wider economy is going gang busters for some time. There a job there for anyone that wants one.

Government policy of stoking demand and doing very little on supply in a low interest rate environment will guarantee maximum pain in the next recession

These times should be used to fast track projects that deliver a return or significantly reduce our liabilities into the future. Housing and public infrastructure are the obvious low hanging fruit. Our government(s) seem adament to borrow to drive up the cost of these and enter arrangements with the private sector that maximises the cost of delivering housing long into the future

Absolute kamakazie policies

I'm not trying to justify the status quo - just remarking that should demand fall by half, our prices would still be quite high. Currently there is a glut of demand and feck all supply, if the demand dropped there would still be feck all supply, but less demand. Prices would drop but we would not find ourselves in a 2012 style situation with prices again.

I think I posted when they first came out with the co-living rubbish that that was exactly where they were headed. For use as hostels and homeless shelters.

In the investment game success can be judged by how quickly a manager can extract themselves from a crowded market. Many developers set up separate companies for individual sites so risk can be spread.

Unlike the Bertie years where even mentioning the business cycle could get you branded as a doom monger the more experienced money always have an eye on the exit. Kennedy Wilson have been following booms and busts for decades, the Marlet group was set up specifically to flip nama sites etc...

Reminds my that some local resident biddy recently managed to win a planning appeal against a Dublin university that was intending to construct more student accommodation, because it would be visible from her home - presumably across the street - and would alter the visual amaenity of the university in a way not in keeping with her sensibilities and property value.

Will you get real. Sinn Fein are going to go the way of every other talking shop who has ever talked a good game pre-election. The money is not there to do what they want, you only have to look up north and have a gander at their record whilst in government of how they have phucked up in housing/rents/homelessness areas. Over 20k people homeless north of the boarder and 8k here in the south. Property prices have risen by 10% up there as well not to mention rents rising. So much for Sinn Fein knowing their a$$ from their elbow when it comes to the property market, they are just as bad as the rest.

House price

https://www.irishnews.com/business/2021/07/09/news/competition-for-reduced-housing-stock-continuing-to-drive-up-rent-and-house-prices-2380592/

rents

https://www.irishtimes.com/business/economy/house-prices-in-northern-ireland-rise-by-almost-10-1.4649292

homelessness

Only 8000 homeless in the the Republic

https://www.irishtimes.com/news/ireland/irish-news/number-of-homeless-people-in-ireland-rises-above-8-000-1.4635202

Not all European economy's are going "Gang Busters" and it is the ECB that control interest rates not the Irish Government.

Beats me how they could do it, but as a plan it does not seem any worse than what the current lot are doing. It was also a bit tongue-in-cheek because fear of such a happening is the only thing keeping FF/FG in office.

Exactly that's why they need to engage their brain cells to help alleviate overheating and exploding the economy.

We need housing at affordable rate built for the state that the state can actually make revenue positive

They have the land, cheap capital and with economies of scale could surely negotiate a competitive build price

I wonder are we losing much FDI because of the housing/rental market?

Housing must be top budget focus for Donohoe, says KPMG

These complexes have already been used for large scale Airbnbing, if not primarily Airbnbing, for years. Applications for change of use were already going in by 2019 - so clearly student demand was not filling them. And yet, more have been applied for since.

I think it would be extremely naive to think developers misjudged demand in advance when existing stuff was already clearly sitting idle.

I think it's far more likely it was thrown up under student planning regs, with unfeasibly high rents that nobody ever expected anyone to pay, knowing fine well eventually they could use that vacancy as an excuse for change of use. They were never student apartments, they were co-living units in the pipeline, their construction was a speculative investment that in a country as incompetent and greedy as Ireland was a near sure thing.

Any such applications should now be denied to force them to engage with the student sector they were ostensibly meant for. Bring down the rent until it meets the market or your asset is dead and nobody else will want it either.

How do you achieve an increased supply with decreased housing costs unless the government step in and start building houses directly themselves.

Yes they could do this but it would take time to achieve but I doubt that they would be able to reduce costs even applying economies of scale as in this country any project being delivered by the government is seen as gravy train. But then again thinking about it might lead to lower building costs elsewhere as there would be a instant black market of building materials. (tongue and cheek)

If we are to have a secure and sustainable housing market then supply needs to be increased (Or we reduce people coming to the country and encourage people to leave). Only once supply has increased and there is a glut of available rental property will rent's start to decrease.

Once rents start to decrease we will see investors exit the market (Assuming that rates increase during this time and investors can get a better return elsewhere). As investors exit more property will become available putting downward pressure on house prices.

The biggest issue I see is how you ensure that we don't have stop/start building and a constant supply of new builds year on year to meet the housing needs of the population.

We know that if prices fall to much it will put a stop to building as it will no longer be profitable to build and some incentive would be required to get properties built whether it was specific tax cuts on building materials or some form of a grant (that wouldn't apply upward price pressure).

Before people jump on me for suggesting that we need to provide an incentive to build they should look back at the full history of housing in Ireland from 1920 and not just concentrate on current policies or the Celtic tiger era. I am talking about a situation where you ensure that regardless of house prices that houses are built year on year to provide the projected housing needs of the population.

I understand your point, but recessions are a correction of unsustainable practices.

People need to view unsustainable practices as negatively as recessions. The world's financial might was thrown at the issue of house prices falling by double digit percentile.

When rents and prices plus stocks rise to unsustainable levels. It appears we can't take away the gravy even very slowly and let economies stand on their own 2 feet.

This ends one way, what countries do to plan for it determines the level of pain. Ireland has chosen to maximise it

Recessions are not a correction of unsustainable practices..... Recessions are brought about by fear and the first thing people do is stop spending and start saving.

QE is there to keep people in jobs and prop up the Economy.... It is no different to a interest rate cut. The world economy would not be able to stand on its own 2 feet at present and hence why the FED/ECB/BOE have not tapered their QE yet. The Irish economy may look like is healthy but when you strip away all the government support such as the EWSS etc....75% of businesses (Excluding the multinationals) would have heavy losses.

Wealth consolidation is the real purpose of QE. Low and real negative rates allow the already-wealthy to borrow cheaply to effectively buy up the world.

BlackRock/Vanguard buying up housing. Bill Gates buying up farmland all over the US. Central banks and private interests buying up the world's physical gold supply etc, etc

By the time it is replaced by a different monetary system the people at the top of the pyramid will own near everything.

I think SF are sh!tting themselves.

They are terrified of getting into poer and having to do something constructive.

Moaning for a living will get you so far, and has worked for them while in opposition. They are screwed if they are in government.

Not to get political and defend the party with a dubious reputation and drag thread off topic but did you even read the article you linked on homelessness? The 20k and 8k numbers and wholly incomparable due to the metric they are capturing and you're being disingenuous equating the two.