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

Remember during the heights of the Celtic tiger bubble, intergenerational mortgages were put forward as a mechanism for propping up prices,

Would that have been a better outcome than the complete dysfunction we have currently.

Pathway to homeownership at least for your children. Think of what awaits those children whose parents become lifelong renters at extortionate prices. Who'll pay for healthcare when "fair deal" is milked dry and the debts from decades of dysfunction is placed on those children.

Some achievement from a period of our greatest wealth

The thing is, the gravy train of high paid MNC jobs is over. Slightly over 300 rentals of all types in Dublin city means, quite simply, no new jobs will be created in Dublin, at least to anywhere near the same extent we had pre-covid. If you disagree and think, eg Tik Tokand Workday will bring 1,000+ new jobs to the city, then I would like to know how you have managed to solve the housing crisis.

Cheap tech working Indians or SA students cramming 6 into a two bed apartment or Ukranian refugees with extremely low paid labour won't sustain our rental market since the high paid jobs are now lost. It is just a matter of the data catching up with this reality which shows that the economy has turned.

A recession will only make a difference to the housing market if it results in people leaving the country and freeing up property

Do you envisage rents holding up assuming a reduction in tax receipts and increase in debt interest repayments.

The number of people employed in private domestic industry and services far exceeds the number in mnc and public sector combined. This demographic is most at risk in a recession.

I'd be very surprised if mnc in the IT sector were not affected by a downturn and stagflation environment. For instance, would apples margins and subscription services hold up

Debt interest payments won’t be an issue for at least 2 years the NTMA took advantage of the low rate environment and restructure most of debt resulting in one of longest maturity profile in the EU.

Yes rents will hold up we are in an inflationary environment if anything there will be pressure on them to increase in line with higher tax receipts on a nominal basis. In real terms I.e. inflation adjusted both rent and tax will fall but not in nominal terms which means rents will be sustained.

The only thing that would make a difference is if there was a recession which resulted in a lower population due to less immigration combine with emigration. People renting will still need to live somewhere and due to supply they will have no option but to pay or get assistance from the state.

Demand is one thing but ability to service rent / mortgage has to come into play eventually. Crazy construction wages fed into it last time. There were plasterers landing back to Donegal every weekend putting cheques for a couple grand behind the bar. That disappeared overnight. Inflation and measures to cool inflation will have the same effect now but at a slower pace. Example: tourists now being charged 3k to rent a basic car for 10 days. A 2k increase on 3 years ago. Its insane. They are turning away from Ireland. Inflation will eat into everything eventually and push down spending power for the government and the public. We're a basket case in the making and running out of road. Theres only so much debt the government can play with to keep things going. It will run out soon and property will come down. It cant go on forever.

The ability to service a mortgage will become a big issue if rate keep rising over a long period because people with a fixed rate mortgage would see a massive increase in one go when the fixed period ends. This could result in a fire sale if there was alternative housing options such as renting (currently this is not an option due to supply) but we all know you would be mad to sell if you got into financial difficulty unless there was a change to repossession in Ireland because regardless of what happens you would have a roof over your head.

Wicklow is more or less Included in the Dublin housing market as are surrounding counties.

What do you think will happen to the non Dublin housing market as the Dublin wage enters the local housing market. Less properties available to buy as more properties enter the rental market because the can charge higher rents.

New developments will be bought by investors at the expense of FTB’s and rented out at higher rents

Mortgage approvals will make little difference as investors will hover up properties especially if the property wasn’t rented previously because they will be able charge higher rents which people or the government will need to pay or be homeless.

With regards repossession the law more or less makes this impossible if it means that the owners have no where to live.

Agree with you on interest rates having an effect, but less certain on a recession contributing.

Our last one was for many in their late 20s/early 30s the only one of their adult life (including mine) where we saw deflation generally, (less serious examples such as pint specials for 2.50, 9c a kilo carrots and a 1.49 chicken roll)

As we know, this same downturn brought about a dramatic fall in house prices, in some cases being able to buy for 80k inside the M50.

We know the background/causes of that in terms of unsustainable loans given in the years prior, as well as a drought in that same lending, and emigration.

I'm not sure to what extent a recession will impact house prices this time around. Mortgages the past decade have been less reckless. And even if a recession occurs, it still comes down to supply and demand.

Demand was driven by speculation last time, a second or third mortgage etc. Now demand and price rises are driven simply by population and the lack of supply.

We could have a recession where house prices remain fairly constant or increase. All it would do is further impact the income/House price ratio.

In the same recession period as us, remember the trouble Greece was also in, they had inflation then too. And a more extreme example is Venezuela in 2014 with a recession of - 4% and inflation of 69%. Inflation there now is gone ridiculous and no official GDP growth stats available after 2014. Recession doesn't automatically mean deflation.

Edit: I could be completely wrong in my theory, I'm just an idiot who follows these things out of interest 😁

we have already seen this with intel choosing germany as we have no more houses for workers here