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

Hard to see if inflation takes off that house prices will fall. If inflation rises all commodity prices will go up.aa well.

Really interesting off the cuff conversation with a women in her I say late sixties on Thursday in a cafe. She was reflecting on buying a house nearly fifty years ago.

She was newly married. They were short 7-800 pounds to buy a 4-5k house back then. They were getting a council loan and were short that money. Her sister worked in a bank and advised them to move in with an uncle who lived by himself.

In 12 months they saved the 800 pounds but the house ( estate being build by a small builder) was gone up by a thousand and even though there wages had increased and the council loan had increased the gap had not closed. She went to her sister and asked her to arrange a personal loan for that amount over five years.

Her sister was reluctant as she taught it would put them under pressure, however this lady and her husband insisted.

They got the money off the bank and struggled a bit but paid it off over five years. It got easier as each year went by as there wages increased because of inflation. By the time they had paid it off the houses being build in the area were costing 10k

You are reminiscing on a time when we were at or close to peak interest rates. We are currently at floor level for interest rates.

Could that possibly reverse the price trajectory of those elusive houses.

If house prices do fall and we have inflation of 5+% there will not be houses build. It's call a chicken and egg situation. Which comes first

Assuming the market prices assets correctly can be a costly error

It's rather reckless and naive to assume there will be no impact in the market, not everything is priced in and you will see there is a lot more despair to come in the stock market. Despite the worst start to the year for the NASDAQ, a huge amount of them are still over priced. There's layoffs happening in tech which trickles into other areas of the economy and when the numbers are released that the US is indeed in recession you will see markets panic again.

3rd world debt crisis not priced in, food shortage and spiraling food price for the next 3 to 4 years not priced in, I really believe the food shortage crisis thats comming will cause serious problems for society as a whole whatever about wall street.

Nice to see my favorite bank Deutsche bank in the **** again with DWS raided for greenwashing. Nothing more I'd love than to see them collapsing.

I suppose just on that, it was all through last year and even the start of this year where the ECB insisted it would not raise rates this year and was not confident they would even need to do it. Fast forward less than two months and that narrative had embarrassingly (though predictably) changed so the actions of the central banks can be a bit unpredictable and therefore markets may be subject to a larger repricing than expected.

Ukraine Russia has not even been baked into our quarterly inflation data as of yet which might surprise people as it means the inflation to date predates the war and we are still feeling the effects of government lockdowns.

Every western Institution will be affected negatively if there is a 3rd world default crisis. Trickle down contagion

Be careful what you wish for.

If that happens in a country with a housing shortage at present there will be some serious fundamental problems in the economy.

Unless we have a collapse of MNC's ( I am not saying it will not happen) and mass emigration ( where will they go to) we will have an issue with an issue with housing supply for at least the next ten years.

I think some on here must be in public service jobs and think any crash will not effect them or they have massive savings. In 2008-10 public servants taught the downturn would only effect them tax wise. In effect they took a 15ish% paycut. That can happen again.

The biggest issue at present is people fail to understand we cannot buy, build or crash our way out of the housing crisis. There is no magic wand to solve it.

This works both ways and many property owners and politicians don't seem to get this

Which do you think is more damaging to a country

House prices rising/falling by 20% in an 18 month period?

Rents rising by even more, as Elon musk said recessions are cleansing mechanisms and its been raining money on fools for the last decade. Consider that that money has been going in at the top

Some interesting takeaways in the BPFI Housing Market Monitor - Q1 2022 released today.

Existing property transactions dominate the housing market

New dwellings completed

New dwellings commenced

New dwelling planning permissions

Transaction prices

Rents

Property Transactions

From looking at the planning applications it’s all apartments that will be coming online in Dublin in coming years and hardly any houses

It's quite obvious to me how that impacts on housing and you have touched on it with your word, "unsustainable". All the events you have listed there are starting to paint a picture of tightened belts around the State and the individual.

The squeeze on housing during the last 2 years is the dead cat bounce; it was based on extremely flexible monetary policy, elevated savings deposits and paused supply (from government-mandated construction shutdown). I don't see any other factor in the increases of the last few years; and I see these factors disappearing.

Without a loosening of borrowing, therefore, it is likely for me that the resulting tightening of belts will ultimately result in less cash available to allocate to housing. Probably outside of the scope of this thread but I would be surprised if housing prices in 10 years are higher than they are today.

80% of under 34s weren't homeowners in 2016; I would say that the majority of the voting population won't be homeowners in the next ten years. What does this mean?

Quite simply, a rising rental/housing market is not something that the majority of people want so will actively look to vote with their feet towards parties and policies that seek to quench an ever-rising property market. This is inevitable as I see it.