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

agree with most of these tbh. Hand over responsibility to revenue for vacant site/unit tax and you'd get something done, councils are useless. looking at some streets in cork city centre (north main st in particular) that have been left rot, when they could be used for housing would make you sick.

Mortgage repossesion is something that needs to be looked at alright, i think maybe a 1 or 2 year max on arrears. everyone can fall on hard times i wouldnt like to not give someone time to get themselves in order but some of these stories of people, whether rich or less well off, getting away without paying mortgages for 8/9/10 years is insane. Nails everyone else with higher costs.

There are 4-5 separate issues as to why people struggle to get to buy a house.

Regulation has increased building prices substantially. It has increased the standard of houses and there running costs. However running costs of these houses is not as substantially less as many believe. A Ber C or D house is not as substantially more expensive to run as an A or B house. It's when you get down to E or F houses you will notice the difference in running costs.

There is definately a problem with the cost of site's in larger Urban area's. This can often be due to derelict or semi derelict houses owned by individuals who are unwilling to either do up the houses or sell them. A proper property or vacant house tax could force these to be released. However I not sure it will succeed. It's too easy to put an adult child's PPS number against a house.

Houses gone out of commission. These would be houses that have had older people living in them or have been vacant a long time. Single glazed or aluminium windows, bathrooms gone into disrepair or not n extension added onto the house 30-40+ years ago, no or virtually no central heating. Complete electrical and plumbing overhaul needed, dampness and insulation issues needed addressing. Problem is these houses need to be bought up to Ber A rating, planning may be required and planners will put stipulation on features to be retained or modernization to look the same as orginal features. This adds to costs. Doing up houses like this is as or more expensive than new builds.

Overhead shops and pubs were living area's 20+ years ago in urban areas now because of fire regulations and insurance costs it's impossible to develop these area's. Allow business and individual ( most tax efficient for them) who make these habitable again to maybe claim back vat and/ or write the cost off against rental or personal tax over a timeframe.

Finance, builders are finding it impossible to get competitive finance to scale up production. In the case of apartments this is only coming from REITs who finance the complete project. In the case of housing it is preventing some builders from building houses.

Labour is one of the biggest issues. Its costs has escalated to higher than Celtic Tiger peak costs and we are nowhere near reaching building requirements at present. Of the building trades people I know who's chikdren are between 20-30 none of there children have done trades, three are doing QS courses, one has a sports course done, one is a mechanical engineer, one is doing building management, two are fitters, two work in Factories after third level courses. Children from a farming background were also a source of building labour again these are going towards engineering or teaching qualifications. Even if we pushed apprenticeship at present it would be hard to get young adults into the wet trades.

Builders/ developers, we lost many after the last recession. None have been replaced. At present as well I see a few smaller developers on smaller rural projects sitting on small developments completed as they expect the price of the houses to rise substantially over the next twelve months.

Finally there is a core of young adults who expect housing to be supplied at well below the costs of production. They have large discressionary spending habits. They slip from college to jobs and on and expect to have a lifestyle where they do not really need to save. The 10% mortgage deposit is minimum target. It's not impossible to save 20-30% of a mortgage as we had to do 30+years ago. While 2.5 times one income was the mortgage you got in the 70's and 2.5+1 in the 80's and 90's houses had a large gap between that and cost. Most people were saving 20%+as a mortgage, and guess what very few single people in until there late 30's or 40's bought houses by themselves. On saving yes the f@@king coffee counts. The basic premise with saving is mind the pennies the pounds look after themselves. A takeaway coffee by a couple each day going to work costs 1500 euro+( If the do it going to work they do it on holidays). Changing a phone every two years costs 2-300/ year or if you buy it within a plan that phone plan costs 6-700+/ year. TV subscription ( Netflix's, Disney+, NOW, or a fire stick sky 80-150each), weekend away Ireland or abroad 2-500 euro,.abroad, holiday abroad 400-2k, stag or hen weekends 200-500 euro, going to a wedding 300-500+.

And then we have wanting to choose where you lived. How many in there early thirties could have bought a houses or apartment in the period from 2911-2016 period but choose not to. You did not need a mortgage to finance a 25-100 k apartment or house if you put your mind to it. A CU loan and a bit of savings would get you over the line even on **** incomes back then.

It has always been difficult for under 30’s to be mortgage ready without help from parents etc. as they are generally only starting out in their careers after years studying and getting work experience.

younger People will always have different spending habits to older generations that doesn’t mean they everyone in the younger generation is unable save or are unwise with money. It’s just they spend differently to older generations.

saying that the youth of today will have debt from college is irrelevant as previous generations also had costs for 3rd level education (prior to 1996 you had to pay for 3rd level education)

For myself the option of going to college in a different city was never an option because of the cost and even if I wanted to study something that was available locally it wasn’t an option. I am sure that is still the case for lots of people today and not every student is living in expensive campus accommodation.

saying one generation had it easier than another is just a waste of time as circumstances were different. It has always been difficult to get on the property ladder in Ireland whether it was low pay, high rates, high taxes or the cost of houses. The only time it was relatively easier was in the Celtic tigger era because banks would lend but look how that ended.

Early-mid 30's here.

Tesco mobile €15 a month, same phone for 4 years, married, 2 kids (hypocritcal older gens say we should have waited until we buy a home...... you know, past menopause). Netflix (7.99 a month)but no cable tv subscription. Drive a 15 year old Prius. = Low tax, low insurance.

We save €1,500 a month. Havent been to a stag in 8 years. No holiday abroad for 5 years. None of my friends (early 30's) had a wedding because they can't afford it. Registry office it is. We have saved so much money that we can't even fit it into numerous credit union accounts. Still can't buy a house as the rate of increase on a simple 3 bed semi outstrips €1,500 a month. We have never had any parental help neither do any of our friends. We work constantly, and save every penny for a house. We have done for many, many years. We are the "core" you speak of. What a stereotype!! Stop blaming us please and thank you. The system for housing is broken and much like the economy we inherited, we didn't create this mess from our pushchairs back 30 years ago.

P.S saving 20% to 30% 30 years ago was much, much less proportionately than it is today. It's basic math. Alas, the generation who pumped up the price of that same house they bought for buttons having this attitude is just classic. Alas, blame the victim.

If wages were significantly lower and cost of living of basic items (with the exception of rent) more or less the same today. How was it proportionately easier?

As for blaming a previous generation for pumping prices surely you should also be blaming your own generation for pumping prices up the past few years as the same applies. Should they have not bought houses at current prices because it pushes prices higher for future generations. It’s swings and roundabouts.

You have only shown one variable which is house prices v average industrial wage. It doesn’t take into account any of the other factors such as disposable income, interest rates, supply of housing etc. looking at something in isolation can lead to unhelpful comments such as Advo toast or it’s previous generations fault.

in reality all that has happened is that interest rates have gone lower which has pushed up the asset value. The issue at the moment is that central bank LTI rules (which stop prices going higher) make it harder to get on the property ladder because they handicap’s people that need to borrow compared with cash buyers or funds have access to debt. Compounding this problem is the fact that investors are chasing yield which pushes them into property which pushes prices higher as there is a limited supply. This makes it more difficult for someone that needs a mortgage because they can still only borrow a set amount and require a larger deposit to get on the property market.

As one of those people, I'm well aware. Unfortunately even though my family have saved well above the 20% required (second time buyers, as we previously owned a home abroad in our early twenties - fair enough), and even though we satisfy lti, additional affordability ratios implemented by banks throw us out of contention. Mostly due to having children.

Being old enough to be haunted by 2009 (which forced me out of the country), I then wonder if it would even be wise to buy at the current price. The quality of available properties is very bad. Many properties are shed-like and even if we bought a new build, and pumped in that level of equity, we still be head under water should history once again come to pass. I'm extremely prudent and wouldn't be interested in taking a loan for any more than the current lti limites regardless.

Therin lies the problems and the solutions.

I do believe that apprenticeships are picking up lately, one of the big deterrents to take up is the boom bust nature of construction and terms and conditions of employment and even issues with payment in the bust.

Many experienced tradespeole locally build up a pool of private customers and won't take on any further work. Why? Tried and tested, guaranteed payment, loyal customers. Sub contracting is a much more high risk space that they won't touch it anymore.

It's quiet clear from income levels that those that enter apprenticeships at 16/17 have a huge head start on their piers that follow the college route.

I would add an extra week holiday leave a year for the heavy trades to encourage take up as they have a longer working life, this would help balance it out and make the career more attractive.

We roughly have a consistent demand for 20k houses per year plus commercial sector and public infrastructure. We need a system where construction employment has a significant pernament element to it be that semi state/private or a combination.

This will help balance labour supply

The problem is that it will take time and needs a the government to step in and provide work to keep people in the industry during times of recession. By doing so the impact of any recession would be reduced.

I also think that societies attitude needs to change and appreciate jobs that contribute to society and not just look at how much some earns and judge them on wealth.

The root cause of boom bust is greed and fear and this is what drives every market. whether that greed is at an individual level or at a institutional level because investors/shareholders doesn’t matter as it is human nature that is at the root of it.

likewise blaming governments for high house prices is not looking at the root cause as house prices in every developed country have increased massively so the government can’t be the root cause as they have all adopted different policies. Yes some of there decisions make it worse but it is not the root cause. The root cause is lower interest rates Globally.

To borrow a famous quote from the celtic tiger bubble peak

"its never the wrong time to do the right thing"

Much cheaper to build a children's hospital, retrofit houses, build infrastructure during a recession/downturn.

Save in times of boom, spend when its quiet. We have been doing the opposite for decades

Fear still exists as any bank that is considered systematic and to big to fail needs to have a resolution plan in place that would keep the bank operating without the need for a bailout by the government. These resolution plans are normally Coco bonds that are issued to investors whereby the bond gets converted to equity to bail the bank out and the investor looses his investment. This applies to all g-sibs.

Where fear has disappeared in some investors eyes is that they believe that the central bank will step in but that won’t always be the case as if the financial markets are over optimistic compared to the real economy central banks will not step in. China is a good example of this whereby they have deliberately let evergrande go to the wall.

Was reading in the Indo today that corporation tax today is what stamp duty was for the government coffers in 2007.

Interest rates on government borrowings are set to increase also with Ireland massively exposed. It sounds like the game is up from reading the article, maybe someone can link it ,I don't have a subscription.

Knowing Ireland house prices will probably rise double digits this year all the same!

You went straight from the leaving certificate into the bank as a Bank Clerk at as young as 17 years of age. By your twenties you would be on serious money as a bank Clerk. You also had access to preferential bank loans not just on interest rates but also multiples lend to bank staff.

DD would not have been the average bank clerk either.