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

I heard that this morning, and if I'd not already become drunk on cynicism, I may well have raised an eyebrow. I'm not against helping people displayed by war, but if the shoe were on the other foot, would the Ukrainian state build houses to give to Irish refugees who didn't want to return home?

Also, if the state CAN build these houses (which I doubt), why did they not do it before now whilst materials were cheaper and then sell them to working people like myself who have paid billions in tax over the years?

Of course, we all know what will likely happen to many of the Ukrainians who stay here. They will join the ranks of many unfortunate foreigners who came here to seek a better life only to find themselves consigned to be income cattle to slumlords. This country is ethically bankrupt, and I have a feeling that bankruptcy of the financial ilk will not be far behind.

Saw that earlier. Add that to the upto 200,000 or so that were already needed beforehand..

Bloomberg are also using the R-word:

I think that economic woes are inevitable at this stage, and likely they would have been with or with the situation in Ukraine. What will happen to house prices? Well it's possible that a serious recession could kill demand, and thus cause a crash, but I'm rather more of the opinion that we could be headed for a stagflation. Imagine 2008, but with rising costs of everything.

I don't get this. In 2021 and 2020 despite covid we still constructed about 20k new dwellings, the same as 2019.

So the question I have for you. If we are building the same now as 2019. Why is the number of existing housing stock for sale about 40% lower than 2019?

Homeowners due to covid stopped selling. The number of existing housing stock for sale is half what it should be in a normal market so more eventually will have to come on the market. This squeeze in property for sale seems to have been a global phenomenon since covid and not just an Ireland problem.

Stagflation could probably be worse than the recession of 2008. Imagine being unemployed and the price of every necessity rising around you. I said it before and ill say it again the western world is not near as Unioinsed as it was during the last Stagflationary period of 70s 80s. Wage price spiral will not happen overall maybe some in demand jobs but wage growth overall will not not increase that much, demand will drop as consumer spending will be down big time, then we slowly slip into a recession by the end of the 3rd quarter of this year. Once this happens of course we will see companies cut back in particular the inflated tech sector that is nearly solely based around advertising and marketing (Meta). I do believe when this happens it may help the energy price inflation as demand will drop but the food price inflation come the tail end of this year and start of next year when we are eating this seasons crops with the 350% fertilizer and diesel costs built in will really prolong the inflation till summer 2023, then hopefully we may see some end in sight for rising inflation %, but food price will never come back down it will always stay at that price for years to come.

would it really be like 2008 though? are banks as exposed as they were then?

France

surely ECB will raise rates sooner rather than later.

You are 100% correct there. The talk in my place (full of financial services professionals) is if you own a house to upsize asap.

Someone mentioned buy an investment property but noone will do that these days.

There's a whiff of SSIAs in 05/06 about it.

Lane and Lagarde will be saluting in their ships of high house prices and pensions as they sink, having convinced themselves that what they believe and the actions they did were for the good of society. It would be an almighty state of affairs for the ECB to turn around and raise rates this year after all their statements less than a year ago about transitory inflation. Truly this would be a career-ending, heads should roll type of reversal in policy approach from the ECB.

What is funny is that the Russia Ukraine crisis only began at the end of February so it can't even be blamed for the crazy rise in the cost of living we have been experiencing the last 12 months, but it will be used by them (being the chancers and spoofers they are) to explain and justify their humiliating and dramatic change in policy approach.

Price stability is the mandate of the ECB which applies to mean that they must take action to try to influence and ensure price stability, typically with QE and interest rates, but it is evident that raising interest rates will cool markets and house prices which, if they decline, would indicate a type of paper recession and therefore the ECB would have caused a "recession" by raising interest rates. But that is where this is going; higher rates and more appropriate valuations - the post-mortem, in due course, will seek to determine whether the delay in taking action was ignorant and/or intentional. Perhaps the delay was to enable the big players in the markets to recalibrate and reposition, where necessary, to hedge from the impending "recession".

Not much to argue with their except that the oversupply filtered in during 06/07

And the "recovery" was aided by removing and drip feeding that supply back to market.

What if scenario?

Suppose we ramped up construction to accommodate refugees. I heard the minister talking about emergency measures that could be available to him ( he did not detail what they were)

Build loads of houses with materials at hyperinflated prices, suppose there is an end to the war and materials reset to normal valuations. What happens then. Stock of overpriced houses with the market able to build at the lower rates that undercut the glut built for refugees. End of war most refugees would return home

From what I'm hearing most are eager to work, They will be housed in clusters I'd imagine. Organise childcare within there own community or through existing infrastructure and let those who wish to work do so

We already discussed the ageing demographics of the EU. The influx of children and teenagers would be a shot in the arm exactly where the EU needs it from a population that aspire to be EU citizens

Being eager to work, and the jobs actually being available are two very different things. Hopefully they can find work, but until they do I will be sceptical

Its irrelevant wherever they get it from, because social housing is not intended for resale. Obviously cheaper acquisition is better from state budget standpoint, but once its been built/bought the valuation of that house is irrelevant as it is no longer state policy to sell on social houses.

These houses will not reappear on the market because they are social houses

Their is a lot of work out there especially in lower paid jobs where every drive thru you go through apologises for delays due to labour shortages, where shops are thinking about changing opening times as they can't get staff etc...

That's not saying that this is the only work that would be available to the refugees as I am sure that a % will be skilled that could help fill jobs in other areas.

What it will do is remove upward pressure on wage growth and as a result will help cool inflation.

Whether the removal of pressure on wages slows down house price increases or not will all depend on the level of skills etc..... If they had IT skills that were transferable then it would put downward pressure on wage increases in the IT sector. Without it you will see wage increases and as a result house prices will increase because people will be able to borrow more due to higher wages.