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

Saving the EUR is easy:

end QE, hike rates mildly to 1.5%/2% and force countries to live within their means (ie no large fiscal deficits).

The whole western economic system is just a scam: print money no matter what (even when inflation at 10%) and buy the worlds goods (mainly china), services (Inidan callcenters etc) and natural resources (eg from Russia). I think this is the real reason for Putin’s war - he has enough of it and realised now is a golden opportunity to strike it down. And china, india and most of the EM space (Middle east refusing to increase oil output) are staying very quiet when taking sides here too.

Where to start with this one.

We did learn from 08 hense the new mortgage lending rules. House prices went well below the cost of construction after the last crash meaning they over corrected, they were always going to come back to a certain point well above the low ebb of 2012/13. I cant see the growth in the last 20 years going it would be a complete break from historical trends if it did, prices may slow/stop going up and may even drop but we wont see anything like 50/80% off like last time as the supply is simply not there. We are in a world were Mary and bob are competing it Anneka/Ruben from Poland and May ling and Wang from China and bobinhio and Maryinho from Brazil who in the last decade have decided Ireland is a very safe place to live and raise kids as apposed to our home land. They are also competing with Maura who has had 3 kids from 3 different daddies and expecting the state to play baby daddy and supply them a gaff (but only if its not to far away from mummy of course) The state is buying up left right and center and then you have the Conrad and Dustin the lads controlling the REITS and Vultures who are saying to their bosses - Ireland 25 years government back guarantee with wars breaking out and global viruses eating away at our cash lets buy here and have something solid that will give a good ROI and the likelyhood is in 25years time the asset will be worth more. Then you have other foreign investors from the likes of the UK and elsewhere seeing the ROI above and going where do I put my money. So long story short 20 years will not be stripped away as we have way too much demand and way too little supply. Homeowners will continue to rise in number by the amount of new houses being built cant see renters out numbering them for a good 50 years at least I think 10 years is way too short a time frame I could be wrong.

Your last paragraph is an actually really big reason why people in their late 30s and upwards should be buying as when they retire they will not be able to afford rent so your kind of making the point to buy in your last paragraph. Look I am only looking at the way things are going currently to predict the next 2/3 years sure mad Vlad could push the red button and blow up Dublin and all the talk of 2/3/25/50 years time is redundant. All we can do is give the global and local variables going on out there that will impact on our supply, demand and access to credit - these 3 variables are what will sway prices. I just think your wrong in saying people shouldn't buy as everyone will have their own unique set of circumstances on top of what ever else is going on in the world

Sort of a separate point but your last paragraph on cluster b personalities could quite easily be stated about the US. In that case, given their dominance within our Western economies, is it not possible that in fact we could be on an economic crash course for hitching our wagon to their policies?

There should be a balance between growth and inflation. Economies should strive to be globally competitive, not just run rampant inflation like Argentina.

if the euro pukes next week there might even be a rate hike very soon. Both front month euribor futures (march, june) are getting bit wobbly off the 100.50 (implying current -0.50) level. This is the the big government endgame.

march eurodollar looks more like 50bps next fed meeting too.

Is it just me or do they have roof tiles like you would have in a school or office ?

Do you still think the Ukraine crisis is just a scapegoat despite oil jumping to 120 a barrel?

We have had our eyes on two new-build developments, and have received correspondence saying they will be releasing these homes soon. I note that less than half of what was available initially is actually on offer for both of these developments. Is this normal? I'm assuming this is the 10/20 percent social/affordable and the rest is a fund?

Is there a benefit to the developer in selling to a fund? I would have thought it would make the estate less desireable. I know that it's a seller's-market, but given this, why sell to a fund?

Would it not be the case that a crash or some sort of correction is unavoidable at some point? No market can grow forever, and something will eventually come up to bring the whole thing down.

Regarding the expressed hopes for a crash, for many it is that case that if things do not change, they will be condemned to a lifetime of paying extortionate rent for poor accommodation. I don't want to see a repeat of the last recession, but the state has demonstrated that is has no interest or intention of stopping this, so something else has to.

This is especially a problem for apartments which are often let. Most owner occupiers are not looking for apartments. RPZ rules mean that rent cannot be raised by the new owner so a potential landlord won’t pay as much for an apartment with a below market rent as for an identical apartment getting market rent.

Not such an issue with houses because many of the potential buyers are owner occupiers.

It has not had any impact on inflation readings yet as it only began a couple of weeks ago. However, as I said, it is the perfect cover now for central banks to shoehorn in a change in narrative followed by a change in policy. I could see it a mile off when COVID was ending and they weren't taking their foot of the QE and low interest rate gas. It is clear they kept the engine running far too long and have lost control of the situation where, in a supply shock environment they boosted demand with their policies.

Do you not think we had high enough inflation before the crisis to require central bank action? The chickens of last year are only coming home to roost now as the inflation to date has been absorbed easily by people with little trouble. Wage increases have started to happen the last few months, with increases of around 2% seen over 2021, which factored in the months before inflation got going properly. There is room to run with inflation and this is without the Ukranian crisis.

Check out any announcements re cost rental. I've noticed a few of these are in developments that would have probably been in the pipeline before cost rental became part of government policy. Here's how cost rental is being provided in Kildare.

https://twitter.com/Fiona_Kildare/status/1490990359442509824?t=qN0sVVBABlQBzYdHz8gQHg&s=19

It is not possible to do this. To reduce it you would need no private housing at all. Even if this were the case external factors (those outside of Ireland) will still impact on build costs even if the State,were building.

If that were the case someone still has to pay for the imported raw materials. If there is no private ownership the tax payer has to cover any increase in raw material cost for public housing.

It is different this time compared to 2008 because then the boom was credit fuelled. This time it is not.

Thank you. Even if pressure was put on prices I suspect prices will not fall below what people can afford/want and as such people may need to adjust what they want to reflect what they can afford.

I personally think we are in for some very tough economic times over the next 5 to 10 yrs which will impact on all the players in the property market.

serious recession on the way all everyone can talk about is never ending price rises, war in ukraine and stagnant wages.. give it 6 months something is going to give... energy prices will go through the roof and the knock on effects will be real .. effect on houses will take a bit longer to be felt however..

100k according to the Irish Times:

Realistically, with numbers like that, the only option would be camps. However, I have little doubt that the wheels are already in motion for certain groups to profit from these people.