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

Many items have been getting cheaper as a result of globalisation, expect a reversal in this. The situation with cars was just the start

Well SF could crash the economy as a way of fixing the housing crises.If they were to lets say get the likes of Google and other multinationals out with thier transient workforce alot will leave the country reducing pressure on accommodation.

Ireland has 5million people,so does Scotland. Ireland build 20k units pa and has a housing crises. Scotland build 8k units and hss no housing crises.Why because Scotland does not have aload of multinationals distorting its economy.

Two things in life is needed to survive. Food and shelter. Given Ireland is not providing one of the basics it is a failure. So gdp figures are meaningless if we cant provid shelter for our nation. I am not surprised if people will vote for a party that will take extream measures and activly crush the economy if it means people arent homeless.

Is it really fair that google or thh likes creates a 100k salary vacancy so takes in a person from france overnight when another person here who has been contributing to society for years cant get a home here. Some form of queuing system is needed for accommodation regardless of what you earn. If multinationals dont like this as they cant import workers here then they can leave.

Will be very interesting to see what happens if economic conditions start to rapidly deteriorate. They might be back to slashing rates again.

And around we go!

They will step in with pepp to help the likes of Italy but hiking will continue. They are in a mess as its not easy to set monetary policy for very different countries.

Good debate on renting, build to rent on the late debate last night. Starts 12 minutes in (Hillarious listener comment at the end for those patient enough to get that far)

1.22billion spent on private rent subsidies and leasing in 2021

2 thirds of housing will need to be subsidised by 2030

In 2021 82% of planning permissions were for build to rent in Dublin

Lots of valid arguments as to why these should be objected to other than nimbyism

It's hard to find official comparable data, but everything I can find in news articles, data from local homeless charities etc suggests the homeless rate is more than twice as high in Scotland as it is in Ireland so I'm not sure it's true that we have a bigger housing crisis. I've lived in Scotland and anecdotally it wouldn't surprise me at all to hear they have much higher homelessness, there was certainly vastly more poverty.

Sure, our houses are more expensive and we have a bigger housing crisis if that's your only metric, but as you've said we're not as supply constrained as Scotland so the higher prices are driven entirely by the fact that more people can afford to and are willing to pay more. You alluded to this being some specific cabal of multinational employees who've come in from abroad while all the locals have nowhere to live, but our relatively low homeless figures don't really support that theory.

Not a hope of double digit mortgage rates here, last time that happened was in the 90s, we had a whole other currency then too.

ECB rate rises are bounded by the impact they would have on the debts of Italy, Greece, Portugal, Spain (to a lesser extent, Ireland). Rates rise too high will cause pandemonium. They would rather see double digit inflation than double digit rates

They're obliged to keep inflation to under 2% by Masstrict despite other economic conditions. They will have to keep raising rates to get inflation down even if it leads to stagflation. They're breaking European law to leave inflation unchecked. They're not breaking the law by crippling the economy with high interest rates.

You've hit the nail on the head with you last sentence

Which is worse the debt or the inflation? An incredibly difficult balancing act. Stagflation for long periods the most likely outcome, I feel

So eurozone inflation is currently 8%. And worst case scenario you see the ECB going to 2.5%. I think this is optimistic. In 2008 the ecb had base rate at 4.25% and inflation was only running at 3% then. Over the last 10 years we have has unusually low rates but. Even a 2.5% base rate which you consider a worst case scenario now as high would historically be a very low rate.

All the printing of money over the last decade seems to be catching up on central banks now. People think they cant raise rates too much because it will hurt the economy but this is not the case. The ECB is obliged to keep inflation down even if it cripples the economy.

All that is pretty much out the window until the war in Ukraine ends and things return to normal-ish though, yeah sure they need to do something about inflation but not to extents they would during "normal" times and not anything that would weaken the EU against Russia, my impression is that the ECB is hoping the threat of future rate hikes will be enough to cool things down so they wont actually have to do anything drastic in the next few years.

Lets be honest the EU, its citizens and companies will have to do large amounts of borrowing in the next decade to meet the green targets for massively reduced energy usage in all sectors and the war in Ukraine has made that more urgent so increased borrowing costs would be totally counter productive.

To a large extent it is relatively easy to predict what is going to happen by just looking at what the rich are doing.

We saw in 2020/21 all of the wealthy owners of big tech companies in the U.S. (as well as Warren Buffet, Michael Burry etc.) sell off billions worth of shares. What happened towards the end of 2021 onwards? The valuations of these big companies has plummeted and looks like it could be terminal for even some massive companies like Facebook.

Who is the most successful hedge fund manager at the moment? Nancy Pelosi, the U.S. speaker of the house of representatives. She, of course, would almost certainly have what would be "inside information" if she was actually involved in the companies in which she is investing, via her political exposure.

As a general comment;

1. Markets are at least to some extent rigged so do not take at face value the comments from the central banks, politicians etc.
2. The rich are the ones who don't get burned ever so pay attention to what they are doing.
3. What happens in the U.S. likely happens in Ireland when it comes to economic and housing market performance.

To go back to property; what is happening in the U.S. market is shown in the DJ U.S. Real Estate Index. It is down 7% in the last 12 months but has plummeted 17% since its one year high reached in January 2022 (i.e. in the last 5 months).

https://www.spglobal.com/spdji/en/indices/equity/dow-jones-us-real-estate-index/#overview

Well one would hope so. Thankfully one positive thing to come out of the crash was the central bank putting borrowing limits on borrowers. It could become evident in the next few years how important that was. Even if mortgage rates did go near double digts people who borrowed 3.5x will still be able to afford the mortgage. If it had been like the celtic tiger days of 6 x income people would be defaulting when the mortgage rates were going over 6%

Dow Jones is real estate index is a measure of REITS performance and differs from the actual property price register…just look at early 2020 and you can see that it was totally out of step with US house prices.

likewise quoting the likes of Michael Burry indicates that he is always right but let’s not forget how much money he lost last year when his predictions failed to realise.