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

Pussyhands · 02-12-2021 11:41am

https://www.boards.ie/discussion/comment/118255468#Comment_118255468

Bond prices don't increase because the yield drops. Yield is the % return you get from a bond. Why would demand go higher when the return is lowered? It goes the other way. Bond yield drops when prices increase.

People are flocking to bonds because when the US is buying so many bonds, this drives up demand and thus reduces the bond yield. When the US looks to be reducing its bond buying, that means others selling bonds will need to increase the interest rate on the bond to attract investors.

dubal · 02-12-2021 11:48am

Interesting new development, Avant to CUT interest rates, presumably they dont see any medium term upward pressure?

https://www.rte.ie/news/business/2021/1202/1264376-avant-money-to-cut-mortgage-interest-rates/

Amadan Dubh · 02-12-2021 11:49am

Only 3 years fixed at 2.2%? That's not great at all I think. It's suckering people in.

Timing belt · 02-12-2021 11:53am

https://www.boards.ie/discussion/comment/118255633#Comment_118255633

Bond prices have an inverse relationship with yield.

When yield goes down price goes up…when yield goes up price goes down.

The big driver of yield on fixed income/non government bonds is the 10 year treasuries.

As the stock market falls investors leave equity and look for safety in government bonds which increases the price of the bond and reduces the yield. This is what is happening at the moment because of fears of lockdowns.

If the fed tapers as it has said it will do... then they buy less bonds and the yield goes up... The expectation of this happening should send yields higher but instead we are seeing yields drop because of the flight to safety. Your list of top movers yesterday is mainly fixed income whether it be a bond/preference share. As the yield on government debt drops there is more demand for this fixed income and hence why the price rises. If the market was pricing in rate hikes then price of this fixed income should drop because difference in the interest rate to the rate on the fixed income reduces... This is not what we are seeing in the market. Instead we are seeing fear of lockdowns driving the yield lower on government bonds even after the fed announcement to tapper.

L1011 · 02-12-2021 2:04pm

Just another reminder that this thread is not for discussing refugees, immigration, welfare rates or welfare recipients.

dubal · 02-12-2021 2:48pm

https://www.boards.ie/discussion/comment/118255682#Comment_118255682

They have a range of rates and LTV etc, some currently as low as 1.95%, I guess the devil will be in the detail when they announce it next week.

fliball123 · 02-12-2021 3:34pm

https://www.boards.ie/discussion/comment/118249096#Comment_118249096

So using your 2.5 person per household if you go back to 2011 we had 4,588,252 people living here fast forward to 2021 a decade later we have 5,011,5001. Which means in the last decade alone we needed to build in order to accommodate everyone an extra 47838 but we would also have to put in restrictions on people having kids (like China) and only let someone have a kid when someone dies and also we would have to close up shop and not allow anyone else come into live in the country that where not born here or living here in the last decade The stats show that only 33,436 new dwellings where built between 2011 and 2016. Another 14407 in 2017, 18072 in 2018, 21241 in 2019, 20676 in 2020 and up until the end of q3 in 2021 13630 have been built. Add them all up and we have 1214623 built since the start of 2011. This is where the country finds itself demand wise and of course we cannot tell people not to come live here or to stop having kids and with Covid and builing related skilled labour shortages in this country I cannot see the supply side ramping up to what is needed.

https://www.cso.ie/en/releasesandpublications/ep/p-syi/psyi2018/bus/bcon/#:~:text=The%20number%20of%20new%20dwellings,%2C%20an%20increase%20of%2016.6%25.

https://www.cso.ie/en/media/csoie/census/documents/census2011pdr/Tables_and_Appendices.pdf

cso.ie/en/releasesandpublications/ep/p-pme/populationandmigrationestimatesapril2021/mainresults/

iColdFusion · 02-12-2021 4:14pm

https://www.boards.ie/discussion/comment/118255671#Comment_118255671

Avant only really want to lend in the major cities and their suburbs is what my mortgage broker told me, worth mentioning for anyone hoping to go with them for a rural house.

hometruths · 02-12-2021 4:21pm

https://www.boards.ie/discussion/comment/118257039#Comment_118257039

Of course we're not going to tell people to stop having kids.

When you say "this is where the country finds itself demand wise", do you mean that because we did not build enough to accommodate (average household size x population growth) over the last decade we have a massive bottle neck and thus have to build significantly in excess of (average household size x population growth) over the next decade just to catch up? Hence difficulty in the supply getting to where it needs to be?

dubal · 02-12-2021 4:26pm

https://www.boards.ie/discussion/comment/118257354#Comment_118257354

I am currently planning on using them, but I am in an urban centre. They are pretty risk averse in my experience.

Ultimately, I want a low fixed rate. They were the lowest but I think they've been matched now, so hopefully they will go lower next week to compete.

Dubal

fliball123 · 02-12-2021 4:27pm

https://www.boards.ie/discussion/comment/118257387#Comment_118257387

That is what I am seeing, I am seeing an ever increasing housing list and homeless list and the term housing crisis is used infinitum. Throw in the record low number of houses for sale and rent over the last 2 years or so. There definitely seems to be an issue in this country with regards to housing

hometruths · 02-12-2021 4:52pm

https://www.boards.ie/discussion/comment/118257416#Comment_118257416

Sure, I see the ever increasing housing list and housing crisis cries too.

The logic of calculating future supply and demand requirements by (average household size x population growth) only makes sense if you also accept that the present demand and supply situation is accurately represented by the (average household size x current total population).

Would you accept that?

fliball123 · 02-12-2021 4:59pm

https://www.boards.ie/discussion/comment/118257556#Comment_118257556

Well I have calculated the population change over the last decade and divided it by the the 2.5 average dwellers across all households and then taken away the new builds that have been built in that time and it leaves us needing housing for nearly 50k people and it does not take into account housing that have been demolished or dwellings built in areas that are more or less inhabitable as in no or poor infrastructure and no amenities close to the dwelling in that time either.

hometruths · 02-12-2021 5:18pm

https://www.boards.ie/discussion/comment/118257608#Comment_118257608

I understand the calculation you have done, and how you arrived at the conclusion "it leaves us needing housing for nearly 50k people".

I am just saying that the claims you are making based on your calculation would only have any validity if the current total stock of habitable housing x current average household size also showed a deficit of housing for nearly 50k people.

Which oddly enough it doesn't. It in fact shows we have a fairly significant surplus.

Hence by your calculations there should actually be very little difficulty in getting supply where it supposedly needs to be.

It doesn't make a lot of sense to say future housing demand is very simple, its average household size and population growth, you can't argue with the figures and simultaneously say, pfft ignore the figures, I don't care what average household size and current population is, you can't argue with the headlines.

fliball123 · 02-12-2021 6:01pm

https://www.boards.ie/discussion/comment/118257712#Comment_118257712

Have you anything to back that up and does it take into account housing demolished or inhabitable and that are built in areas that have little or no infrastructure?? If not then your facts are skewed and I would take the current housing list, homeless list and the absolute clammer from people saying that they cant buy or rent a property in this country over a stat that includes a large amount of dwellings that are not fit for purpose in this country

rob316 · 02-12-2021 6:16pm

I see Allianz are pulling out of the investment property market. We are in real danger of becoming a bad place to do business. Like it or not we need institutional money to build housing. The reality is, the small landlords are leaving the market in their droves, we need rental properties so who else is going to meet the demand.

We really need to build at all costs, sure we'd love the state to build us all a house but its not remotely realistic.

CorkRed93 · 02-12-2021 6:47pm

https://www.boards.ie/discussion/comment/118258032#Comment_118258032

theyve denied the claim in an article on the business post.

wassie · 02-12-2021 6:49pm

https://www.boards.ie/discussion/comment/118257411#Comment_118257411

Avant's lending criteria is such that they are only lending to the top prime borrowers. Essentially they are only picking the low hanging fruit in the Irish mortgage market which is not exactly great for competition given the majority of borrowers dont meet their criteria.

hometruths · 02-12-2021 6:54pm

https://www.boards.ie/discussion/comment/118257946#Comment_118257946

Have you anything to back that up and does it take into account housing demolished or inhabitable and that are built in areas that have little or no infrastructure??

Sure. It's pretty simple.

According to the most recent calculation, the total stock of habitable residential dwellings in Ireland was 2,052,429.

Not sure where the average household size of 2.5 you mentioned came from, all official sources I have seen say it is 2.75 (eg the Housing Agency)

Total housing capacity = 2.75 x 2,052,429 = 5,644,180 people

Total current population = 5,011,500 (your figures which I'd broadly agree with)

Capacity for 5,644,180 people minus 5,011,500 total people = 632,680 spare capacity or 230,065 spare houses (632,680/2.75). Some way off a 50k deficit as you suggested.

Using your 2.5 figure you get housing capacity of 5,131,073 and 119,573 spare capacity or 47,289 spare houses. Still some way off a 50k deficit.

If I made a mistake in the above, let me know? How are you coming up with the claim we are 50k houses short based on population figures and average household sizes?

Timing belt · 02-12-2021 7:18pm

https://www.boards.ie/discussion/comment/118258266#Comment_118258266

and the conversation slowly moves into the topic that has been banned as it has been done to death…lol

hometruths · 02-12-2021 7:57pm

https://www.boards.ie/discussion/comment/118258388#Comment_118258388

Lol indeed. 🙄 🙄

M_Murphy57 · 02-12-2021 8:13pm

https://www.boards.ie/discussion/comment/118257354#Comment_118257354

What is the reasoning for that?

L1011 · 02-12-2021 8:22pm

https://www.boards.ie/discussion/comment/118258615#Comment_118258615

An assumption that urban/suburban will hold value better. There's arguments for and against that.

Houses without fibre are going to be less and less attractive; in future there will probably be significantly heavier taxation on having your own car, having a septic tank/domestic WWT system, etc.

M_Murphy57 · 02-12-2021 8:47pm

https://www.boards.ie/discussion/comment/118258661#Comment_118258661

I suppose, but the vast majority of people pay their mortgage ie repossessions are rare. Seems overly cautious, but what do I know I'm not a number cruncher.

Timing belt · 02-12-2021 8:49pm

https://www.boards.ie/discussion/comment/118258531#Comment_118258531

It’s funny because once you account for the 90k vacant properties (which has been pretty consistent for some time and are vacant for a variety of reasons which can’t be discussed here). and 40k holiday homes your surplus of 47k becomes a deficit of 83k properties based on 2.5 people per property.

L1011 · 02-12-2021 8:51pm

https://www.boards.ie/discussion/comment/118258796#Comment_118258796

Repossessions are still exceptionally difficult to obtain.

Amadan Dubh · 02-12-2021 8:56pm

The problem with traditional metrics used by our established regulators and government is found in stories like this and their being wedded to the likes of debt:GDP, household wealth etc as barometers of economic prosperity is directly correlating to a rise in populism and economic uncertainty. If things are so hunky dory then why are FF and FG, being responsible for the current situation, doing atrociously in the polls? Why is it so difficult to raise new taxes (i.e. taxes on this booming household wealth)? It really seems like there is a complacency and a mood of "this time it's different".

https://www.irishtimes.com/business/economy/irish-families-wealth-is-surging-helped-by-house-prices-1.4744937

If Irish household wealth keeps increasing at current rates, it will exceed €1 trillion in 2022. In the middle of this year, thelatest Central Bank figures showed that net wealth – households’ assets minus borrowings – stood at €935 million, exactly €100 million higher than one year previously and more than €125 million above pre-pandemic levels. This equates to €186,589 per capita, though as the Central Bank points out, this says nothing about the distribution between households.

Back before the financial crash, Irish households held gross housing assets valued, at the price peak in late 2007, at around €610 billion. Total wealth at the time was just over €700 billion. It was all about property. Total household borrowings, most of it mortgage driven, was around €200 billion.

The problem, of course, was the value placed on property at the time was unrealistic. By 2013, the value of housing wealth had dropped to less than €300 billion.

Now housing wealth, at €587 billion, is approaching the Celtic Tiger highs. With significant economic growth in the meantime and a rising population, economists in the ESRI have estimated that while house prices were overvalued in 2007, they are more in line with economic fundamentals now.

hometruths · 02-12-2021 9:05pm

https://www.boards.ie/discussion/comment/118258804#Comment_118258804

That entire subject has been banned. Not just the reasons. So probably best to steer clear of it.

Sure based on average household size of 2.5 people, it's not too difficult to talk your way into a deficit, based on a few ifs, buts and maybes. I only included the 2.5 household size figure because that is what fliball said he used to calculate.

The most credible figure, as per the CSO, and as such most often quoted is 2.75.

So how does it look on 2.75 as average household size? Probably not so funny.

Timing belt · 02-12-2021 9:36pm

https://www.boards.ie/discussion/comment/118258900#Comment_118258900

we will wait till we get the census data next year to see average household size as projections are that they are falling and the 2.75 figure is from 5 years ago. you repeatedly try to talk about it without stating it. Having said last year that you don’t believe there is a housing crisis says everything. So yes it is funny 😆

hometruths · 02-12-2021 10:02pm

https://www.boards.ie/discussion/comment/118259166#Comment_118259166

we will wait till we get the census data next year to see average household size as projections are that they are falling and the 2.75 figure is from 5 years ago. you repeatedly try to talk about it without stating it.

Wait and see if the average household size decreases? In a rapidly increasing population with a chronic shortage of houses? I guess we can just chalk that up to another one of these odd anomalies of the Irish housing crisis! LOL indeed. 🙄

I'm not repeatedly trying to talk about something without stating it, I was simply commenting on the flaw in fliballs logic re calculating demand using average household size and population growth.

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

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