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

The two newest hotels in the capital, the 421-bedroom Holiday Inn at Dublin Airport and the 393-bed Travelodge Plus in the city centre, were hired by Ipas for refugees early in the year, when it said the total number of hotels rooms in the State set aside for this purpose neared 5,500. Since then, more than 4,000 hotel rooms are said to have been hired on short-term contracts for Ukrainian refugees.

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Prior to the Ukrainian invasion, Ipas was doing deals to hire entire hotels at up to 100 per cent occupancy, often at nightly room rates of €100 and above. Such agreements seemed attractive to some hoteliers in the dead of winter because they eliminated any future risk to revenues of closure from virus resurgences.

However, as tourism recovers and high season approaches, such deals now appear less attractive. In some locations traditionally reliant on tourism, local businesses are uneasy at the bulk of capacity going to refugees instead of tourists who will spend heavily in the local economy. Some hoteliers are also beginning to hint that Ipas may need to increase its rates this summer when many short-term contracts run out.

The Irish Times recently reported from Rosslare in Wexford, where the manager of the Darby hotel said it would be “difficult” to extend its contract with Ipas this summer unless rates went up, because it was depressing its bar and restaurants sales and displacing tourists who would pay higher rates.

p5: House and rental prices continue to accelerate due to persistent shortfalls in housing supply.

At the same time, Commission models based on a long-term average of house prices have yet to identify signs of overvaluation.

In the short term, the gap between housing supply and demand is expected to remain wide (see Annex 17).

Worsening housing affordability, rising rents in 2021 and pandemic-induced delays in construction activity have exacerbated the problem. Rent increases and insufficient social and affordable housing are still a concern, and have created the conditions for a high number of homeless people by historical standards

p.12 The government has announced the ‘housing for all’ plan to help tackle the housing crisis resulting from persistent shortfalls in housing supply.

While 20 500 new housing units were completed in 2021, this falls short of the government’s estimate (21) that an average of 33 000 new homes would be needed each year from 2021 to 2030 (see Graph 3.4). The new ‘housing for all’ plan aims to meet this need. Its financing will exceed EUR 20 billion over the next five years. Almost a third of the homes to be delivered under this plan would be new social homes. In addition, one in six homes to be delivered would be affordable purchase or cost rental homes (22).

Some of these commitments are reflected in dedicated targets in the Irish RRP. However, the ‘housing for all’ plan is still at risk of not being implemented effectively, due in particular to labour workforce constraints (e.g. it is estimated that the workforce employed in housing construction needs to expand by over 50% by the middle of the decade) and the rising cost of materials (23).

p15: The legacy of the financial crisis and features of Ireland’s insolvency framework may be factors contributing to elevated interest rates on loans to households and SMEs.

The global financial crisis particularly impacted the Irish economy and resulted in a substantial fall in real estate prices. Furthermore, in cases of borrowers’ defaults, banks and other lenders recover on average a smaller share of their loans than in most other Member States, and it takes more time for this recovery to take place (28).

These factors may lead banks and other lenders to assess their loans as more risky and hence to charge a higher interest rate on them.