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

Power outages were not much of an issue. Sorted now.

They actually doing really well from covid effects. Production is booming. Shipping rates through the roof. Flat out pumping containers.

Their bigger issues are housing market, water supply and aging population. The latter will affect their output massively in the coming two decades.

A family member put a house for sale in a small town in Wexford last Thursday at 198k. Currently at 230k

Totally insane, those houses were selling in 2007 for that

I doesn't matter if you are sick of the mindset or not. Most people if they are paying and have a choice will want as few social housing units beside them as possible and will try to actively avoid social housing beside them at all. You getting upset about it is the equivalent of trying to hold back the tide, you are pissing into the wind imo

It's also my opinion that if you had to scrimp and save for a deposit in order to get a mortgage to buy a house whic h you will work like a slave to pay back over the next 30 years you will try to avoid anything that would bring down the value of that house, make it look bad or make it difficult to live in.

That's why there are good estates in every town and bad ones, good areas and bad ones.....you may try to spread out the issues but people will still find ways to get around it.....the reason the houses in the good areas command a premium is because there is more demand for them and less supply.....the non-assholes know there's no point fighting with the assholes and getting dragged down to their level and instead seek out more non-assholes they can live around and have some quality of life/privacy/peace..and people think there is a higher chance of assholes or asshole behaviour when people don't have to pay or pay much less for something than the going rate (I tend to believe that myself tbh...things given free/cheap seem to be abused/taken for granted/not respected, but if you have to earn something you tend to treat it with a lot more respect ..people thinking like that....not so crazy.....and it was ever thus imo.

Let me ask you this hypothetical question, You've got 500k to spend

You can buy a house in a nice mature area where there is very little crime or anti-social behaviour, the chances are when you go to sell, this house has a chance of making that money again or even more as this is a desirable area (even if its just due to snobbniness - that's where the demand is).....in the meantime there is also the least risk of crime, anti-social behaviour eye etc

Or

You can put your money where your opinion is and buy a cheaper house in an area with lots of social housing or a new estate with a high allocation of social housing .....where those allocated are paying a lot less and haven't had to work for it....and statistically there is more crime / anti-social activity happening.....theres a higher chance here you will get less than you paid here when you go to sell and regardless of what people think about forever homes you probably will sell at some stage....fair enough you might save yourself plenty for a good security set up and change for a savings account

Now I know things aren't as black and white as those two stark options above but that's the thought process and it's not entirely devoid of logic or evidence to back it up (and we haven't even began talking about parents wanting a safe environmenr to bring up kids)

Anyway if you had the option of either which would you choose?

The answer to what the majority would choose is in my opinion evident in the gap in prices between "good" areas and "bad" areas in every part of the globe......

1) Are pension funds/funds investing in property as the yield is better than bonds, stocks etc?

2) Is that yield a function of rental prices/rates?

(For commercial units as well)

3) Is it true that said funds would rather leave units lying idle than accept lower rents, drop rates and realise a much lower ROI/yield

If the answer to all 3 questions is yes then perhaps they are not full?

Or there is a shortage and even with less foreign students etc there's not enough supply to satisfy demand? And it might be a more severe crisis if there was no covid even with building materials costing less than they do now etc?

Maybe less people are leaving the country as well as people coming back as there's nowhere to go?....Its uncertain out there.....UK not the option it once was, no flights to states etc....id be nervous about leaving now if I had a family to support.

Your wish list while not wholly extravagant is well beyond the reach of most working people. What's been paid for social housing is a major contributing factor to that affordability issue.

You would get a nice south facing garden here for a good price.

You have 500k to spend on a house. That's well beyond what "most working people" can afford to spend on a house.

Median income for a 2 adults with no kids household as per https://www.cso.ie/en/releasesandpublications/ep/p-silc/surveyonincomeandlivingconditionssilc2019/income/ was just €50,809 in 2019. That equates to a mortgage at 3.5 LTI of <180,000. Stick a healthy deposit of ~50k on top and you're still only looking at €230,000. How many 3 beds that tick your boxes does that actually get you in Dublin? Even in those areas you listed, it doesn't go far. Throw in an extra ~100k of inheritance for fun. Daft has 25 3 beds under €325k in total across Crumlin/Drimnagh/Cabra/Dolphin's Barn.

What house can a household on that income afford to buy?

vs

What house can a social housing recipient live in?

Can you not accept that a) the social housing strategy is playing a part in driving prices up and competing with FTBs? and b) it's unfair that the median working household cannot afford to buy as nice a house/area as those who aren't working or earn a lot less?

It's not as expensive as you think. A couple buying a 500k house would have an above average deposit, where ever it came from we will assume 20% Inc GTB

If they get a derogation they would have 4 times income so combined income of 100k.

Repayments would be in the 1700 euro/months over 25 years or 1500/month over 30 years. They would have a household monthly income of 6200/month or 27% of income if the 25 year option is chosen.

Most working people do not have a combined income of 100k! - Certainly not most getting mortgages. Central bank has a breakdown of mortgage applicants each year, also includes Dublin specific stats also.

Also keep in mind there is a bias here in that only people who actually get the mortgage and the house are recorded here, those who didnt earn enough wont be counted in the stats which skews them higher.

Average lending rate in Dublin is 3.3 time LTV, rest of the country is 3.0.

In a so called heated market the metrics look ok.

Except for Dublin average house prices are not approaching 500k.

In midsized towns houses are around the 250-280k bracket largest urban centers 280-350k. In cities and in commuting area adjacent to Dublin about 250-400k is the go.

Most trades people ate now on 50k/year, most MNC's are paying that and above. So. Is in Dublin first year out of college and on 35k/ year with pension and health insurance kicking in from the new year on.

I really like to see figures for incomes excluding students who skew the overall figures. Those on single incomes of less than 35k in Dublin are entitled to HAP support and go on the housing list. The funny thing is most younger professionals don't apply for it even though they ate entitled to it

Like others I'm sure not coming to this forum as often but something I thought was interesting.

The close correlation between daft asking and CSO PPR has played through from my post last March

So what should we expect for Mar 2022 now (assuming a 6 month lag not my 1 year lag originally)

Latest daft report https://ww1.daft.ie/report/2021-Q3-houseprice-daftreport.pdf?d_rd=1

Asking prices dropped back between Aug and Sep (169.7 v's 168). Now asking prices same as June

All things being equal should translate to the CSO numbers trending towards flat Mar 2022

First time since 2013 that asking prices have dropped between these 2 months (fairly regular drop Oct -> Nov perhaps related to seasonality)

If you stalked me properly you would have read that yes I did grow up in a council estate and that i alo said that 90% pf people were just lovely, but that a few scum families destroyed the whole estate and also destroyed the lives of a fair proportion of the other nice families living there.

And I ended with saying I do not want to put my kids through that if I can help it at all.

I will say too that not all social tenants steal burn out cars, but Im willing to bet most who steal and burn out cars are children of social tenants who grew up in social housing.