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

I have snapped it up, as an evil LL, I will sublet it, I will get 30 Asians in it at 30 euro a head a week. That is 3900/ month. They pay cash as well. I am on DD at present buying up bunkbeds. It's a pity you cannot get 3 story bunkbeds as I would get 45 in there. However I will get a few with double beds at the bottom. Couple's will takes these at 50/ couple. That will take me over the 4k/ month.

Recruiting a few heavies at present for a bit of crowd control. The Viper wants 250/ week to be there on rent collection day for 2 hours. He is a bit dear at that. These are costs you come accross in business. Getting 6-8 buckets, 4 blue barrels for water and a few sheets to extent sanitary faculities.

30 Villa's maybe a Bass na

You have data on the central bank website but if you look at the banks financial statements it gives a better breakdown including a maturity profile. Yes there will be people impacted by a rate rise such as people on trackers but they will have a low LTV at this stage. And the majority of new mortgages are all fixed and these are the ones that would be at risk of default as rates rise as will have higher LTV.

The other thing that is worth looking at is the LTV of the overall mortgage books that is circa 50% which is substantially lower than in ‘08

It was the spread between base rate and 3 month Libor that caused the issues in ‘08. Basically the libor rate increase when the base rate didn’t because inter bank lending froze. This has all been replaced as the unsecured interbank has more or less disappeared since central banks moved away from an interest rate corridor and any lending between banks is done via repos which means collateral is backing up the lending.

Viewed gaf in Templeogue today.

On way into viewing estate agent: "It's at 540k".

On way out of viewing: "It's at 550k"

So rates expected to increase by 1.5% over 3 years bringing the ECB rate to 1%.

I don’t see rates getting to this as see the economy cooling before the ECB rates to 0.5%

The stock is almost entirely in Dublin and amongst the most expensive available. They would be unaffordable for the vast majority of Dublin workers. They in turn are pushed out to the regions with poor stock levels driving up the prices with Dublin salaries

Far from being irrelevant, they define the market

The government throwing more fuel onto the fire with its 200euro helicopter money to everyone, wealthy included. Of course, this won't further stoke the flames.

I think it is getting critical at this stage that some sort of pressure valve is released in the housing market as that would be the best way to ease inflation concerns if people could reallocate cash away from this unproductive asset into something more productive like food and energy. I was chatting with a friend in Microsoft this week and they are a bit more back in the office but he says a lot of people are out of the country and won't ever be back, especially because of the housing situation.

Like with liquidity in the markets which appears to be available and is there until it isn't (and right now I think there is only an illusion of liquidity in a lot of the market activity, personal observation), I think demand in the housing market is the same; it's there until it isn't. Demand isn't just "people need a home , therefore there is demand"; it is a question of "is there demand at these price levels for these properties?". By letting housing costs explode even beyond 2019 levels I think very quickly our BTR pipeline could turn out to have little demand if rents of €2-2.5k pm are the minimum cost of a place to rent. And since it is the rental market which is where the bubble is, lifting all house boats in the harbour, a cooling here would coop the market.

However, it is possible that the arse has already fallen out of the demand for rentals when we see the State supporting 1/3 of them and the typical new builds to rent are objectively unaffordable by default (they can't all be classed as luxury lets), with COVID and wfh being a sort of smoke and mirrors trick to delay the crash (things will "return" to 2019 levels of activity by 2023/24 is what we hear but do these dinosaurs not realise that, with wages flat the last two years, there is no "return" to pre-pandemic activity in housing unless housing costs, particularly rents, drop 15-20%, which means there is no going back anymore).

2000-2500 pcm is easily affordable for a working couple. Spending 1/3 of net on rent would be 1000-1250 per person, ie a net salary of 3000 each. This is not ridiculous and very much professional average income.

rent levels in dublin have been fairly stale (dropped in 2020 and now back up to 17-19 levels) but salaries have inflated up quite a bit. This is very much the London situation where rents have largely been flat since 2007-2010 which made it more affordable every year through salary inflation.

I can’t see rents rising any further from here (unless we get into hyper inflation territory)

Not everyone has the benefit of the 'average professional income'. We are already seeing an issue in lower paid employment across the hospitality sector. Do we just wait until all the professional couples realise they can't get an expresso to go, because Starbucks and Costa never mind the bespoke coffee shops are unable to even open?

I know it's only my own experience but as it was pre Covid, I'm seeing many deciding not to venture to Dublin because of their inability to get something at what they feel is an affordable price - and those who have ventured, are appalled at the standard being offered still by some landlords.

Are these people officially out of the country. Has it been OK'ed by there company. I expect not. O e of my lads went out to Spain on a week's break. Went to see a friend who was doing just that. The reopening after COVID has left him with a worry. He has hoped to get to May/ June out there, however now he expected to be back at n Ireland in 4-8 weeks and that was 2 weeks ago.

What was more enlightening was another lad he met. When it reopened in late January. He was requested to be back in for a meeting the week after reopening. He had to come clean with his manager. Manager said he could cover for him for 4-6 weeks but he has to relocate back.

It's odd that many use the opposite analogy to describe persistently low interest rates.

The market on heroin.

It's going to be interesting to see who is right

We are in big trouble. Between the lawyer Lagarde and career civil servants Lane and Mahklouf, our central bankers are perhaps still fighting the last war. Mahklouf trotting out the line about not raising rates in order to ensure they don't hamper a recovery - again; a recovery from what?!? These guys are looking at something and completely misinterpreting it; there is no "recovery" from the pandemic as any sort of correction or crash was prevented.

Wages starting to rise, unemployment low, house prices high, pensions yielding good returns, insolvencies low, Ireland' tax take and GDP remaining high - how are they talking about wanting to hamper a recovery when we have exploding living costs?! This won't end well and it will probably result in higher interest rate rises being necessary than if they just took action earlier.

https://www.irishtimes.com/business/economy/central-bank-governor-damps-down-unrealistic-talk-of-june-rate-rise-1.4801080

In my area I know that those of us with mortgages or else renting have not seen increases in our monthly housing repayments, but we have seen 15-25% bonuses and 5-10% salary increases the past 12 months, which means any energy or food price increases have been easily absorbed thus far. As such, I think there is plenty of road to run with inflation this year and we have not even seen the mass resignations as of yet (but we will likely see them if employers do insist on employees returning to the office without fully engaging with the employees). Things are for sure booming and getting "boomer", with people thinking things are going to keep getting more expensive, is the sense I get, whether it be energy, food, housing costs.

The amount of nice cars on the road and teens/twenty-somethings not bothered getting part-time jobs as they are making easy money (fair play to them btw if they can do it) from their phones/sitting at home with crypto and share investing are two slightly quirky things that make me think that this is all too good to be true.

Properties for sale on Daft for Dublin County