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

Insurance:

unprofitable mainly because of the “duty of care” and the endless milking of the legal system by the profession and all the claimants who top up their dole cheered on by low-Iq Pearse Doherty etc.

banks:

most unprofitable in Europe due to unworkable mortgage market where homes cant be repossessed. You know everyone deserves a free home. Let’s tax DOB for it.

riddle with cronyism (legal profession, public sector), socialism (highest dole, free housing) and all their cheerleaders (hundreds of charities and all their public funded largesse)

the day the troika will be back, will be the best day in my life. This country needs to be externally sorted out for good.

I have no sympathy for irish people who can’t afford a house.

you always emigrate to UK, Aus, nz, usa (most capitalist, neoliberal countries in the world) and then claim how much better life is there. Once coming back everyone is pushing this country to the left. Bloody hypocrites….

Ireland has a sovereign wealth fund FYI, just for all the comments over the last page saying we should have one.

In the good times yes rather than a continuous loop of overheating the economy.

Lobbying by construction/development sector has been extremely harmful to the economy repeating the mistakes of the celtic tiger. We need a mid tier housing market that is affordable, profitable and linked to people's incomes. Stock stays within this bracket and is not sold to the private market.

People can move between these markets not the houses. An affordable rents/purchase within this segment replace all subsidies to build in the private market

yes we all know this, but again, this is the true problem, and not just here, its a global problem, we ve been pushing our economies back towards a primarily credit fueled one, by not embracing more public debt, as this is how we ve been supplying our economies with money, via credit, baring in mind, our own economy is now currently perfectly primed for another credit fueled property boom.....

there will probably be incredible pressure placed upon the central bank to truly kick start building, if they cave, we re screwed, increasing public debt is the only way to try prevent this

depends where these vaccines are though.....

its far more than just that, its in the interest of vested interests to maintain the status quo, i.e. rising prices.....

Anyone thinking that all these global stimulus projects will be put on ice considering the inflation in the associated sectors.

Would it be better to let the inevitable correction happen and then stimulate when prices are more reasnoble

How is a stimulus needed when there is such demand worldwide?

No that is not my point. There is a demand to live in urban and ultra urban areas. However very few people born in these area's want to work in manual or trade area's. As well they often want to live in the area that they came from. This puts building pressure in these area's. As manual and especially building labour and skills have to be imported into these areas this increases the cost of housing.

There are 5-6 major elements in housing costs. Mainly Labour, materials, land, finance, planning and services.

Managing to partially reduce 1-3 of the costs will not solve the issue. Neither will a crash admin a crash nothing gets build. Some people would want to be careful what they wish for

Your post shows exactly why we are in a bubble. So right yet so wrong

Buy at any cost, regardless of where the money is coming from. The system is so dysfunctional there are no consequences.

The bill will be passed on to our children and we will be grand.

This is the result of systems and policies implemented by people elected to act in the best interests of the country and its citizens.

Wealth fund me h***

This is the way it has always been for decades you need to talk to people who bought in the 80s/90s at horrendous rates of interest your talking double figures. I knew people who bought in the 80s who had to live on beans and toasts for about year after buying. How are we in bubble average wage in Ireland is 40,283 and the Irish banks are limited to giving borrowings of more than 3.5 your wage. Add up 10% deposit 20k FTB and then 3.5 times this figure = 140990 and the norm for the last 2/3 decades are people buying as a couple so you can double this figure. This means the average couple on the average wage can get a house of 330179 without going over the rules of the central bank. So that's a mortgage of 280k, 20k FTB and 30k deposit. Average house price is currently 287704 even with all the increases over the last 2/3 years.

We do have an issue with supply but to say we are in a bubble when the average couple out there can borrow and buy at 50k less than the average property price would suggest to me we are not in bubble territory yet.

The other comparison here is what people are paying in mortgages vs rent.

We've been sale agreed for a bit now but things are dragging along. Noticing a marked slowdown over the past month or so (I think?), although it's a bit polarized. Properties that would have had multiple offers within hours in March are sitting without offers for weeks now. A couple are still going wild though at €300k+ over asking. Not sure if it's just your usual cold feet with a life changing purchase or if there's really something at play, but we've been toying with the idea of backing out.

IF (big if) there is a significant cooldown happening atm, it's hard to know what the catalyst is? Supply is still incredibly low (13k on myhome) and confidence on wages/jobs must be at all time highs. Anyone else buying/selling at the moment have any real-time views on where things have changed over the past month (if at all)?

There is no affordable alternative to buying

Buying is only affordable to the top 20/30% of households, despite multiple incentives for buyers and developers. These buyers are competing with investment funds who pay no tax and have access to 0% capital. This requires the tapping of Bank of mom and pop for many

Those that are renting are economically neutralised

Average age of ftb in mid 30's and increasing.

Billions of taxpayers money spent subsidising rents and fighting homelessness. People called in on Saturday may be paying less tax had we a fit for purpose housing system. This from a position of surplus housing supply less than 10 years ago.

Price trends imply people are moving further and further away from work to secure housing. This suggests the cities prices are out of reach and price trends in rural towns will now be out of kilter with the local economy pushing workers there further away. All this leads to development away from where its needed and building a new crop of ghost estates at the highest possible price for the next bust.

All very predictable, all symptoms of or re-engineered mechanisms of the last bubble.

Oh, beans on toast in the 80's was a treat for many

In a very similar situation to you. Sale agreed a couple of months now but things are dragging due to some issues on the seller's side. We're willing to wait. The place needs work but we're happy to DIY as much as possible and take our time. We think the current high price of materials has definitely put people off the likes of a fixer-upper like ours.

What we've seen is an even worse slowdown in supply for the areas we're looking for. March-July very intense and quick bidding like you said. A few heartbreaks during that time. August-October a lot quieter - less homes on the market, less bidders around. It's not even that these homes are being listed at asking 100k-200k more than what they would have been a few years back, they're just not going on sale - there is no supply. We have seen a few properties hanging around a while, like yourself. We decided to go for a fixer-upper during that time and we're happy with the decision so far. The contracts are taking a really long time to issue but we're still thinking positively.

I was wondering if it's the case that the desperate bidders have now come and gone, have spent their extra savings?

For us, we can see this weird cool-off/extra scarcity happening BUT it isn't phasing us from our decision - at the end of the day, this home is right in the middle of an area we'd be happy to spend the rest of our lives in. It has room for expansion should we need it. And we need to get on with starting a family. Currently lucky enough to be staying with parents while we try to save enough to keep up with the increased costs of property & materials. So for us, we're willing to push for this one, and eat the baked beans for a year or two when we're in. Fingers crossed we can get a close date soon. 🤞

Yep, I see the exact same. There has never been fewer houses in our area, yet most of the bidding pressure has come off. Seems odd.

I also think you're right on the fixer uppers, and even had a few EAs say as much and that people are now beginning to really factor increased costs when bidding on properties needing work.

I could definitely live with a 10-15% reduction over the next year or two, in fact, I'd welcome it. We'll likely never leave this house. Would feel fairly sick if things dropped 30% by Christmas though! I think we have probably paid c.10-15% more than we would have paid in 2019, but also 5% less than we bid on the same property 6 months ago, so kind of feels like a win. I can imagine a scenario where supply picks up in Spring and the 15-25% inflation over the last 12 months coming off quite quickly (as you say maybe that was down to stuff like excess saving). But it's hard to envisage prices going back down to 2017 and prior nominal prices anytime soon with the job market this strong.

Best of luck with the purchase, hope it goes well from here.

The average house price is still attainable for the average couple working for 50k under the current financial paradigm that people use to buy a property in this day and age. Beans on toast may be a treat but not when its your one and only meal of the day for a year I think you will find that treat has outstayed its welcome. Not mention the damage being done to your sphincter muscles :)... We really need to stop confusing our supply issue with affordability.

Also 10 years ago we had 1/2 million less people living here. Your right about people moving out of the cities and this is what is known as urban sprawl a phenomena that has been going for decades all over the globe - why do you think Ireland should be immune to this given our new population size and our decision to stop building for people on welfare. I mean if you want to live somewhere desirable you have to pay the price as other people also want to live there this is economics 101.

As for the average age for people buying a property this also has a lot to do with people wanting to live more as apposed to being saddled with a mortgage, same goes with the average age of having kids and getting married they have all increased. It has very little to do with affordability with the exception of maybe earning more in your 30s as apposed to your 20s. but the younger generation have other things on their mind when it comes to spending your money goes on things like the latest phone, car or a 3rd or 4th holiday this year. (Now the covid years have been an exception for holidays.)

You keep saying we are in a bubble I don't see it not yet anyways. I do see prices going up higher due to a supply issue that is not a bubble. Your drawing conclusions with comparisons to 08 well think of this comparison if the availability was the same as that of say 07 when we had a huge over supply and in 07 prices were still increasing if we had that oversupply differential now prices would not be going up - well thats my opinion. Hopefully they can build enough houses to prove my theory.

Speaking of greystones am I missing something or is this not relatively reasonable value ?

https://www.myhome.ie/residential/brochure/burlington-lodge-victoria-road-greystones-co-wicklow-a63av82/4530648