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

Irish inflation estimated at 9.6% in June - Eurostat

maybe the latest rises in house prices 14% are no so bad in real terms after all..

where the economy goes this winter is another matter...

Lane and Lagarde calling inflation transitory a year ago when the Russian Ukraine crisis only recently started showing in inflation data means we are being driven in a bus by drivers at the ECB that drunk the coolade for so long that they are too inebriated to engineer a soft landing. Winter is coming, to borrow a Game of Thrones reference.

Further 30% rise in gas and 10% increase in electricity with electric ireland from next month..

the writing is on the wall for the economy if this keeps up .. no wonder small landlords are selling now .. get out while one can ..

"We’re heading into next winter with gas and electricity prices at absolutely astronomical levels. And it might even get worse.” Darragh Cassidy Bonkers.ie (irish Indo - 4th Electric Ireland Price Rise in a Year)

I'll fight any man that comes near my turf bank. The bite will be felt this winter in a big way. It was gona be bad enough when the kero tanks need filled but these increases are outrageous. Where's the energy regulator? Didn't the ESB record several hundred million in profit recently? This is madness.

Fair enough. We will know soon enough.

While Micheál Martin says additional PRSI contributions will be needed to ensure the pension age is not increased

They really can fcuk off with tax increases when we see that it ends up being wasted on HAP and other property market bubble inflating schemes. We have unexpected billions in corporate taxes and still have easy access to borrowing as a State, it would be criminal to hit the taxpayer right now with tax increases in this context and is the exact opposite of what should be done. Taxes should be cut and suspended in order to boost spending in the economy, but of course the useless 70s civil servants like John Fitzgerald in the ESRI etc can't see the wood from the trees so will continue to advise on the basis that governments can and should balance budgets.

Wages will need to climb quite significantly this year for workers (if you're not getting 10-15% you should be looking for another job) and it is clear that for this not to happen will put the Irish economy firmly in a bad place through the winter. However, housing costs plummeting would help most people and the broader economy out in a big way as more cash will be available to slosh around the economy and workers won't need salary increases to the same extent. It almost seems like it would be a win win for the fight against inflation of housing costs come down as it will also make workers hsppier. If I was a betting man I would be surprised if housing costs are not the low hanging fruit that come down in the next 12 months as an avenue to target rampant inflation which is eroding the wealth of the average worker. My suspicion is that it will be an orchestrated outcome but of course the fingers of politicians won't be in the pie when it happens, the central bankers will take the hit.

have you consider the impact on inflation on your proposals? Not to mention the impact on the housing market of 10-15% increases in pay. You really can’t see the wood from the trees when asking for this and at the same time expecting house prices to fall in value.

Well, as I said, if you aren't getting a substantial wage increase, you are in big trouble and should look to move while the labour market is still tight. It isn't wages that caused inflation but excessive central bank money printing for too long that didn't trickle down into the real economy, instead getting trapped in assets. So now the punch is finally making its way around the party and it is just and right that people have a drink.

It would indicate a broken system and way of approaching economics if wage increases for workers is seen as a negative thing so to argue that they should not happen would be to essentially hang your hat on a broken system and it would only be a matter of time before it collapses as the weight of inequality is tilted significantly towards the vast majority of participants with only the few benefitting.

All that to say that wage increases are a good thing and are playing catch up with what has happened with the soaring cost of living the last few years, they are not the cause of it.

The MNC gravy train is a huge concentration risk for our economy. By failing to provide adequate housing the last few years for the growth of these companies, we have looked the gift horse in the mouth and our corporate tax boon will not be a reliable source of income in the next few years.

So what's left as the tax haven gains reduce? We need to invest today for the economy of 10-20 years today with huge infrastructure projects and a focus on housing, SMEs, agriculture, green transition, tourism, rurual regeneration. We can still borrow unlimited amounts effectively and at no cost so should do it now before the economy struggles (as it will very soon) and it is harder to borrow. To do nothing will result in the last twenty years of "growth" not having much to show for it in terms of infrastructure, housing, economic diversification if we don't act while there's still a bit of time.

Of course, the unambitious civil service combined with short-termist politicians and a greedy home owning NIMBY class will never go along with anything too ambitious. So then what I say is "Good luck with SF and the headbangers" as that won't be fun.

its not the ability to pay the mortgage which is where the problem is as they are paying way more in rent already so a 10-15% pay rise impacts where the problem is for most people by increasing the amount they can borrow with LTI restrictions.

The money printers have lead to increases on asset values but it was only when government started spending did it get into the wider economy and start contributing to cpi inflation. Most of the inflation we have seen Is from supply chain and energy and pent up demand. This ignited the inflation fire at the same time of a very tight labour market which created the expectation of future inflation and wage increases.

as combat14 pointed out earlier the increase in house prices in real terms (inflation adjusted) is 4.4%….when rates rise and cool the economy we will see house price growth slow but until then And while we have inflation we will not see a drop in houses prices in nominal terms. We may see a drop in inflation adjusted terms but that means that the property will be as expensive or more than they are currently priced. It will be the end of 2023 or in 2024 before we see less demand for property

Are you seeing large volumes of properties being bought nationwide for rental purposes? RTB/EA data would appear to state the opposite of your musings. It is far more likely that purchases by OO’s and the lack of supply to choose from are the driving forces for price increases rather than investors buying to rent. Vulture funds may be buying new developments but it is a stretch to say their actions are the primary cause of property purchase price inflation nationwide.