Softening house market?

Hello Minister O'Brien.

Our FFG led Govt have been saying this for 10 years now.

Canada has a real problem, with a massive housing bubble. The problem is very big in cities like Toronto and Vancouver, it's way more down to earth in Alberta, though. There is also a lot of "dirty money" from immigrants with shady backgrounds, Chinese Mafia, drug money, possibly Oligarch laundering, etc... Ireland doesn't seem to have these kind of issues.

The Bank of Canada is committed to raise interest rates, making lending more expensive, thus the market will cool. Also foreign buyers, anybody who isn't citizen or immigrant, is bared from buying for 2 years.

The Canadian bubble is a classical bubble something like Ireland used to have up until 2008.

Ireland mainly has a nepotism problem, few construction companies, few land developed, old friends knowing each other, limiting supply, etc.... and lots of demand by internationals who work ( sometimes in alibi roles) for one of these IT companies making use of Irelands low tax laws.

What I am guessing is going to happen in Ireland is that the market will slow, will soften, but prices won't go down much, if at all, for the sole reason, that supply is limited. Also, those who are renting are renting for a reason, like can't get mortgages, can't buy, so they won't be pushing demand up as well.

china re-inflated its economy post 08 by creating one of the largest credit bubbles in human history, its coming to an end now.....

There will be a very hard landing and the bubble has already popped. Watch this space!

It could result in a flood of extra cheap Chinese exports to the West when they stop fussing over COVID but also significantly cheaper raw materials for building considering the amount of raw materials used in the Chinese property market.

It's purely anecdotal but there are roughly 20% more properties for sale on daft this week than in recent months in my area.

I'm hoping to buy next year so I've been keeping an eye on what's available over 2 years now, as I say though it's a small sample size.

A narrow search I have is up 20% in the past few weeks. South Dublin. Quite a few drops coming through now

If things start to go south, construction will switch off very quickly if the returns aren't there. People who may have traded up or down will stay put. If its anything like the last crash, there'll be some fire sales of unsold new stock but after that it'll be executor sales and distressed assets. Given the shortage of rental stock and the limited new entrants to the market in recent years outside of institutional investors, the proportion of over leveraged investors will be much smaller this time.

What is there to be anxious about if you have a house? You have a roof over your head, if you lose your job our country dont do family home repossessions. There is a lot of anxious people trying to buy and rent. I think people waiting for another 2008 style crash will be left waiting the numbers for the supply and demand for both rentals and for sale are horrendously skewed in favour of demand. There aint any ghost estates being built this time around. The report that there are a high number of vacant houses may give some relief but until we see that figure and a plan to get them on stream I think we have a way to go for the Euphoria stage. I mean if the the mortgage rules were let loose our house prices would rocket up again. Interesting times ahead with the above, Sinn Fein coming into power and interest rates rising.

Construction is already switching off. Mate of mine got let go on Friday as the site is closing down. They are only finishing off some of the houses already started and are starting no new ones. They have put some of the half finished ones on the back burner too. Hes happy enough. Hes going off to Spain for a couple of weeks and will have another job by the time he decides he wants to come home.

I bought a house last near in a new estate and have noticed a big drop off in construction activity on the site in the past fortnight. This morning was crazy, 2 cars there. 2 fellas working. There are 14 houses under construction currently but progress has really stalled. Guessing it's material shortages.

...and/or people starting to back out of buying!

...only that current inflationary pressures are not truly related to the money supply, its largely a supply and energy crisis, raising rates wont resolve these issues, theyre just going to further compound them, this is gonna get very very messy.... raising rates may in fact further increase these supply and energy problems, as economies contract, as businesses and people reduce borrowing. we ultimately need states to expand their involvement in markets, but since our ideologies are stuck in the opposite thinking, we potentially could be facing serious problems!

I dont think the average Irish person knows what happens to REITs when they see prices/rents fall. They seem to think that X company who bought loads of apartments in Dublin and will stick it out for the long term and accept falling rents. They dont seem to understand that cash reserves won't cover the mad rush of investors who will be pulling out asap.

Interest rate risk

The biggest risk to REITs is when interest rates rise, which reduces demand for REITs. In a rising-rate environment, investors typically opt for safer income plays, such as U.S. Treasuries. Treasuries are government-guaranteed, and most pay a fixed rate of interest. As a result, when rates rise, REITs sell off and the bond market rallies as investment capital flows into bonds.

https://www.investopedia.com/articles/investing/031915/what-are-risks-reits.asp