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

We can't afford to keep borrowing. We still have to pay for debts of 2008 financial crash, covid and the impact of the war in the Ukraine. I always find comments like these bizarre.

We are a small open economy who need to import materials for building. We can't control the prices of these raw materials. Who exactly do you expect to pay for all of these costs and borrowings?

oh ffs, this crap again! public debt is not dangerous, particularly for a developed economy such as ours, and the fact we have the backing of the ecb to do so, the only way to try prevent a downturn, or reduce its effects, is to ramp up public borrowing, as the private sector is simply unwilling or able to do so. this debt can be used to stimulate the economy, especially the private sector, as a significant amount of public works and needs are carried out by the private sector.....

its clearly obvious now, running limited deficits is in fact dangerous, as we become over reliant on the credit supply in order to run our economies, a significant proportion of private debt/credit is now used to just inflate asset prices, such as, stocks, shares, bonds, 'real estate'!!!! therefore increasing wealth inequalities.....

by not increasing the public money supply, i.e. the deficit, you significantly increase the likelihood of a recession, and all that entails.....

so, craic on with the borrowing, keep the economy going, or else.....

I hope they check rents and house prices before they get here :)

https://scsi.ie/consumer/build/house-rebuild-calculator/ giving me 563k without any extras for 250sqm

Okay I will ask the question again. Who exactly is going to pay for all the borrowings? Borrowing whether its private or publicly funded still has to be paid back. Its borrowing! its not grants its still has to be paid back.

Who exactly do you think has to pay back public debt? The tax payer

A debt to one is an asset to another the liability does not just disappear. We borrowed to stave off the effects on the economy during Covid. We still don't know how the removal of these supports will impact the economy. We don't have an unlimited supply of funds to stimulate the economy.

Well considering that many of the investment funds that operate here are pension funds, we can deduce precisely how the older generations intend to keep themselves in pensions. The plan seems to be that those of us not in this group will be paying rent in perpetuity to keep this system in place.  This simply is not going to work. Ethically, it is utterly reprehensible, but as the older generations gradually transition out of holding the reins of power and younger people take their place, the appetite to continue will erode. 

As for the shrinking of the welfare state, I agree with you. If it were to be rolled back, many people would be condemned to poverty.  However, the welfare state is already failing. There is not enough social housing to go around, and the only way to suppose the current levels is to cripple working people with taxes whilst simultaneously driving up the cost of housing and thus locking them out of the market. In that situation, younger people will put off starting families or, as in my own case, they just won’t bother. Thus, one can add demographic decline to the mix, hence the state’s predilection for immigration. It has nothing to do with “diversity”…

I honestly have no idea how to fix this mess. This is off topic, but if I could be indulged for a moment, I will say that I’m starting to come to the conclusion that the West has simply had its time as the dominant civilisation. Historically, civilisations eventually begin to decay as they run out of “steam” and newer groups rise to take their place.  Rome didn’t fall because the barbarians invaded a healthy empire; it declined over time as it began to rot from the inside as the circumstances that made it changed and the people lost their way.

Anyways, that’s all off topic, so I’ll leave it at that. Alea iacta est…

Borrowing for infrastructure that delivers a return or offsets outgoings makes sense, but probably should have started 6 years ago and maybe that train has left the station.

Our governance specifically in relation to housing and energy has again left us in the worst possible position going into a crisis

Strap yourselves in, its going to be bumpy ride

I would qualify this and state that any debt owed to the ECB will not be paid back. In the same way that money can be created out of nothing by the ECB, so too can it turn debt to nothing. And it will have to do this or sink the whole Eurozone project.

Latest financial analysis from Paul Sommerville, well worth a listen

Ok we get your position on public v private debt…Can you outline exactly what the government need to at present with the extra money you want them to borrow?

is it to increase social welfare, build new social houses or give fuel credits or do you have a different plan?

bearing in mind that inflation needs to come under control and is the constraint on MMT policy. You also need to take into account the rate the government can borrow at has risen by 1% and likely to rise more which means that the government has to options to cover debt servicing costs.

1) grow the economy so tax take increases…but bearing in mind this will increase inflation and that there are constraints on the labour market which means that we have a shortage of certain labour such as builders.

2) cut budget spending or increase taxes which will impact middle classes more than others.

just curious how you make a round peg fit in a square hole without making the situation worse than it already is.

There would be all the additional costs in directly employing builders as public servants. I dont see that being cheaper but rather adding another cost layer. And if they are just contracting builders in then still a cost layer. They need to tackle why it is so dear here to build and it's highly unlikely to be because of builders and trades who I feel unfairly get finger pointed at them. Costs are rising in all countries. I say this as someone who is looking to build soon and is watching their savings go up in smoke. Personally I think low interest rates have been biggest driver of house price growth and it will be a rise in interest rates that slows growth or leads to price decline.

250 sqM is about 2760 sqft. . I saw quotes in Rural Limerick for a 3300 sqft house at 540k and 580k.

Ball park figure to builders finish( no Kitchen, Flooring, fireplace, stoves, painting, build in wardrobes) at about 550K. Landscaping has to be done as well

Seen planning for houses that are 3k+ sqft, about 270 sq meters that will be very hard to get build. People were looking for planning for houses that could be build for 280-300 k a few years ago.