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

yes i agree but you could spend what you like modernising it and landscaping etc, the location is great but its strong money for what it is.

Not sure how Daft.ie culls stale listings but from my own experience I would guess that many of those 1749-997=752 were long gone even back then. These sorts of numbers are already within statistical noise of zero for a region with a circa 1M population and I gave up any pretence of hope in the Dublin A&P market a long time ago.

Not sure about Clancy Quay but walked down the docks Wednesday evening and the small few lights on from Capital Dock and Hannover Quay(I think) is a sight to behold

Interesting paper published by the Bank of England, which given the similarities in our societies and housing markets, must equally apply to the Irish housing market. “Real house prices in the UK have almost quadrupled over the past 40 years, substantially outpacing real income growth. Meanwhile, rental yields have been trending downwards — particularly since the mid‑90s. This paper reconciles these observations by analysing the contributions of the drivers of house prices. It shows that the rise in house prices relative to incomes between 1985 and 2018 can be more than accounted for by the substantial decline in the real risk‑free interest rate observed over the period. This is slightly offset by net increases in home‑ownership costs from higher rates of tax. Changes in the risk‑free real rate are a crucial driver of changes in house prices — the model predicts that a 1% sustained increase in index‑linked gilt yields could ultimately (ie in the long run) result in a fall in real house prices of just under 20%.”

If you have the time and the head space, here is a link to the published paper : https://www.bankofengland.co.uk/-/media/boe/files/working-paper/2019/uk-house-prices-and-three-decades-of-decline-in-the-risk-free-real-interest-rate.pdf?la=en&hash=7C12A901353CB615C3FC1A58557918D50775E470

essentially, it is low interest rates, i.e. the low return on “risk free” govt gilts that determines the price of property. Landlords are accepting a lower return on property investments - rental return versus the cost of financing property - than at any time previously; and the paper’s authors have concluded that supply has very little impact on the price of housing. However, in Ireland the failure to properly tax REITS makes a return on investment of 2% - 3% even more attractive compared to yields of .02% and under on A rated gilts. It also makes it still a viable investment if many of the units are left vacant in order to avoid reducing rents, as even a yield of 1% far outstrips any other “safe as houses” investment out there.

Interesting data. What I take from this is that a large chunk of the capital currently tied up in the property market (which serves as a "money sink" for investors chasing yield) could move on to another asset class as soon as it is perceived as lower risk/higher yield than housing. That gives me hope that investors might find a new playground eventually and house prices correct back to where they should be in relation to incomes. I don't know which asset class that might be, though. Bonds seem to be an unlikely candidate in the foreseeable future...

im not convinced property prices will 'correct' at all, as theres actually no such thing as market equilibrium, thats just a concept humans created to try simplify our (mis)understanding of how the world actually works. theres astonishing complexities occurring, that are causing these divisions, particularly in relation to property prices and income levels, it wont be easy to resolve this, many employers simply cannot afford to increase pay, and lowering property prices would probably destabilise markets here and globally, and not just property markets, our whole global financial systems are ultimately based on rising property and land values

Look at the mean for interest rates... They have been falling for 40 years which is a long term trend.

most developed economies are falling into the trap of primarily fire sector lead and run, china is currently experiencing the major faults of such an approach and design, yes you are correct that global markets are not just solely based on this, but it plays a vital role in being, but again, its important to realise, central bank rates are only playing a limited role in this, the main controlling factor has been the actual access to credit to global markets, particularly for the purchase of property and land. we re still stuck in this approach, hence the continual rise of private debts globally, largely coming from global financial markets, its running out of steam, we have to radically change this approach or else.....

i will agree with you in regards rates though, i suspect central banks will be forced to maintain low rates, as increasing them, will more than likely cause economic slow down, possible recession inducing in some nations, forcing them to reduce once again, its a very difficult situation, and im not sure anyone truly knows what to do about it, i can understand the calling of debt jubilees, but that would also be fraught with serious problems, worrying stuff

yea we re stuck in a very dangerous game, if there is a massive default in private debt, it has the potential to destabilise global markets yet again.

its gonna take a while for supply to come onstream, so i cant see this happening anytime soon, we also have the rapidly rising materials cost to deal with, and i have a funny feeling, the state may have to also intervene here to. i have a funny feeling there are actually many canaries lurking around the place, some we dont even see yet, theres a lot of worrying stuff lurking around the place, and the electorate aint getting any happier in all of this!

i.e. property and land speculation has failed, and government policies encouraging to do so, are also continually failing

It is, but to get HAP you have to go on the social housing list, which presumably is what the above poster is referring to. At this point I don't know how you'd even really unwind HAP. Feels like it's done a lot more harm than good overall, but so many people have become reliant on it that if it was to end, it would really pull the rug out from under a lot of people.

Inflation and rising interest rates are one to watch out !

Personally, I think a lot of the reason that things like HAP have gone this far is because of the political backlash to homeless families. The quickest band-aid fix to that problem was to just give loads of people more money to spend on rent so they wouldn't be homeless anymore. I don't think it's that odd at all tbh with the way things have worked out. Possibly this tenant was one of those previous homeless families. Alternatively he was on HAP before all of this, but they aren't going to take it away now or he'll potentially be back onto the list of of homeless. Nobody ever really gets removed from housing lists for this reason.

Dublin (county) rental ads on Daft today stands at 956.

However (to highlight the lack of affordability and dearth of supply), of the 956;

105 are 1 beds costing at least €1,800 pm.

151 are 2 beds costing at least €2,500 pm.

84 are 3 beds costing at least €3,000 pm.

It is too much effort to count the student accommodation ads and places only available on a short-term basis but for most renters there are at most only 616 realistic ads for rentals in Dublin - despite us being under pandemic restrictions and workers predominantly WFH and therefore not back in the city. The rate of decline of available rentals has slowed from a few weeks ago but it is still declining.

Yes on this. I know a LL who recently was struggling to let her place. Was about to drop the AP on it. Low and behold someone who was on HAP came in and offered her what she was looking for.