Softening house market?

We are in for a recession and a drop in house price maybe a crash. 

There is huge building of buy to let apartments, perfect for the government to house Ukrainians in, these will come on stream over the next 12+ months. Building cost have gotten to tight so developers will pause for a while so all those tradesmen will be out of work.  

Energy and fuel costs are to high, so that’s one less night out or family day out a month, it’s OK in the summer you can do a family picnic in the forest or park. But curtailed consumer spending will tight.  

Generation rent is feeling the pain and will switch from spend mode to save mode. 

Companies will feel the pain of energy and inflation costs, this will eat into their margin and they will try to do more with less so and will not be hiring as much or even letting people go. 

Service sector will feel the pain, my cousin manages a small café, chicken has gone up 40% this year so their margins a cut, consumers are spending less – I’ve started bringing my lunch to work, even if I do that half the time. Lots of others are doing the same. 

Interest rates will rise, that will feed into rent too. 

All it will take is another social or economic shock, stock markets will panic, war, Russia, energy cost, monkeypox…..

When we have to pay back all the money spent during covid.

The current government know they are going into opposition next election, if they fix housing (not likely given 20+years of this) they will get no credit for it. Better let SF deal with it and if they aren’t able to fix it they will get the blame.

Interesting to see the lumber price moderate on financial markets also. Still well above pre pandemic highs but has fallen almost 40% since the start of the year. Potential indicator that the materials price crunch may abate somewhat in the coming months.

asked on another thread but getting a lot more emails about new listings hitting the market in cork. pity i wasnt logging it but over the past 10 days it seems like a bit more than normal has hit the market. heres hoping, rental market is still grim here mind you.

on other countries , oz is one to watch i think? never really took the hit other places did in the last global housing bubble. oz government seem to have kept propping up the market with incentives for years. wonder what'll happen out there.

Its not just the media, its the housing list, the government, its looking at daft/myhome & EAS, its the day to day reports on social media and word of mouth from relatives and friends. There is a real lack of both rentals and places to buy. The stock market and property do not mirror each other. While you can buy and sell stocks, you cant live in one and essentially we have over 5 million people in the country and not enough viable homes. Are all of the above reports wrong?

We have to start living in the real world in the last decade our population grew by over 1/2 million, we stopped building houses for the majority of that period. We are now looking at 30/50k Ukranians coming to live here. We have a materials supply shortage meaning a lot of the new housing which are supposed to be delivered this year will not be happening. There are other unknowns such as the shinners getting into power, will interest rates rising mean people will no longer want to buy but what is their alternitive as rentals are in even shorter supply than property to buy. So do you think the reports on lack of housing is just a conspiracy theory?

Do you know how much Irish property is owned by investors? This can shift quickly as Irish policy and world macro changes.

We dont have an issue with supply, we have an issue with Irish property being used as a wealth generating ponzi and being deliberately squeezed for the last decade.

Majority is from UK, but the US is significant share as the 4th biggest source of timber to irish market

Benelux, Germany, France also big suppliers here - likely seeing greater demand for their timber across mainland europe as russian timber is phased out.

The interest rate rises are necessary but the rest of your post highlights how the rate rises will effectively induce a recession as there are a lot of uncertainties at the moment and nothing is categorically stable with respect to our economic outlook. However, what will be good for society as a whole will be for a significant correction to happen in the asset bubble and therefore I think this is why raising interest rates in this context will still be pursued.

That is, unless, something happens that requires the magic money printers to be turned back on and interest rate rises to be delayed...I see rate raises and QT happening, deflating the asset bubble, unless "something" delays this sequence of events.

once again, ideologies primarily based in so called free market polices has ultimately brought us to this point, so yes, you are correct, as most governments, past and present have been, and current are, engaged in this thinking! so we need governments that effectively arent!

once again, current inflationary pressures are effectively not related to the money supply, they are primarily supply and energy market related, increasing rates will not resolve these issues!

wage inflation has remained low, stagnant in many cases, particular amongst female workers, this is another critical element of why we are where we are, i.e. low wage inflation v's high asset price inflation, which in turn as lead to rapid wealth inequality

Which part?

By housing supply issue, I think he means how quickly this could disappear, with a story like this, perhaps? Combined with the large pipeline of new developments being built and at planning permission approval stage. Together with a hit to demand which comes from (1) affordability ceiling being reached and (2) MNC growth plans being a lot slower than they were the last decade.

Minister for Housing Darragh O’Brien has said the Government plans to introduce a vacant property tax in Budget 2023 which could impact on an estimated 137,000 properties

I thought I’d read they were backtracking on this, it seems to still be on the table. I hope the vacancy tax is punitive for investors who choose to leave property empty rather than have them utilised... although I’d like to see a carrot approach alongside the stick approach to reassure people letting out property that their rights are not abused by non paying, disruptive tenants.

https://www.newstalk.com/news/vacant-property-tax-will-be-in-budget-2023-housing-minister-says-1346031

Ah yes, of course, the government should just house the whole country, what could possibly go wrong.

And you will note that I said government and investors.

I think you are 100% wrong here. Look at core inflation that strips away energy prices as an example, still way higher than the 2% benchmark rate.

As to the rest of it, the past 10-20 years we have had China absorb global inflation and Central Banks usher in a new era of ultra low-interest rates, and we are where we are now... Its going to be tricky to get out of it.