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

Investment funds dominate the high demand areas pushing out workers to the regions, they in turn push out workers in those regions sparking a domino effect throughout the country

Note how the air bnb issue during covid briefly eased the rental issue as airbnbs returned to residential letting use. In a tight market small movements can have enormous affects.

The lobbyists will say that it will enable more people to buy their home. When it will essentially just keep prices high and not guarantee more supply

Such talk is a topping out signal. Search for similar musings in 06/07.

I was going to say watch out for sales of lunar real estate for evidence of the crash being close as in the noughties but apparently technology has moved on and it appears that virtual property sales are booming, kind of crypto property

Alot of silly money still out there

If inflation is due to energy prices then why not look for pay increases?

Surging energy prices are pushing construction costs & material costs higher and higher, even if we had no wage increases construction inflation would still be happening.

The end result of that is that no houses get built - because nobody can afford the mortgages. At least with a wage inflation scenario you'd still see some construction activity

Build more houses = more money leaving the country due to build to rent funded by foreign investment funds phenomenon

Higher energy costs = more money leaving the country

Higher wages = less competitive leading to less investment into the country

The focus needs to be on more efficient use of energy, allocation of housing, reduction in costs

We had figures in cost comparisons between our EU piers last seek. Where we are paying more is in sectors with state interference driving up costs. The solution is for the state to pivot and implement measures that reduce costs not increase them.

Houses are worth what people will pay. People are less likely to borrow large amounts if interest rates go up. People are less likely to borrow large amounts if cost of everyday goods and fuel etc go up.

The likely outcome is housebuilding simply stops - layoffs in construction & material supply industries, house buying slows down massively. The demand will drop.

People need energy for everything - businesses need it too. If their revenue/wages dont rise to match then the energy rises can leave many businesses unviable and many people in fuel poverty. Its either wage rises/price rises or government subsidies for energy. The latter is preferable for FDI as it leaves us still competitive but it could leave the country's finances in very bad shape over time too.

The problem really is that housing is out of reach for the average person in this country. So either 1- All employers have to give everyone a big bump up 2- Banks have to lend more than 3.5% your salary 3- Government have to come up with various ways to subsides new builds.

If you look at Cairn homes that builds a lot of new estates here in Ireland, they are expecting record profits of €100 million this year ! Last year they sold 1120 units and made a profit of €58.4 million from a revenue of €424 million. That is about 56K pure profit on each new builds they sold.

REIT will continue to hoover up stock as well, as renting is a gold mine in this country. Not to add that some areas about 40% of all rental units are subsidised by the government.

You maybe right but this is still no argument with regards to inflation and the increases in population

the price of 1 litre of milk here has gone from 75 cent to 1 euro and 5 cent in a matter of weeks .. this is a 40% increase in a number of months for just one essential household item .. but the price increases are across the board ..

this is the issue that is facing most struggling workers and families heading into this winter where many will struggle to heat their homes

hard to see the fairy land house prices and rents being sustained here if this rate of inflation continues ..

if businesses dont raise wages they wont get workers similar to hospitality - restaurants/hotels

how are people here going to afford the bonkers house prices if they dont get subantial pay rises .. other option if for house prices/rents to fall or people leave the country again like they always did before .. is that what we want on this board ?

if people can’t afford the prices then they cut back on discretionary spending and businesses that rely on discretionary spending start to close up shop.

Accommodation is a necessity and not discretionary spending so people will pay (while they can) and Look for better paid jobs. This is what is happening as we speak and people are getting better paid jobs because of the tight labour market. Unfortunately this is not across the board and people with limited skill sets are not finding better paid jobs and are getting squeezed by inflation and the prospect of own their own home becomes harder.

At the end of the day If businesses pay wage increases then they need to up their prices to keep the same level of profit. If they don’t up their prices and take a hit to profit then the asset value of the business drops and investors take the hit. Interest rate rises puts the squeeze on businesses because they won’t have the same volume of sales if they up prices and in turn are forced to take a hit to profit which in turn drives them to lower costs which means no wage increases at best and layoffs at worse.

House prices are no different a point comes where the volume of sales will diminish the higher prices go. That is unless people are get wage increases which means they are able to borrow more and in turn sustain the high prices.

Are public servants going to give up their jobs if they don’t get a pay rise? Of course not. Employees have always been free to move to better paying jobs, and will continue to do so, but that is not to say there won’t be others to replace them. The hostility sector seems to still be functioning and charging high prices even though they claim they can’t get staff. If people leave the country, they are doing what others did before them. Maybe house prices will fall, maybe there are enough people on good wages already or with savings to sustain prices when there are so few houses to buy, time will tell. But raising wages across the board by 10% guarantees that you will be paying more for products and services going forward.

Aren't you the person who is constantly saying it's all about supply and demand?

If demand collapses due to inflation/interest rate hikes (which deliberately destroy demand) and prices drop to the point that it costs more to build a house than people are prepared to pay then obviously houses won't be built and the whole mess starts again.

I am and I stand by that read my other posts. I have not been shy about this. What your arguing about the "if scenario" happens then how do we answer the issue of everyone that lives here needs a place to live... So can you see it costing less to build in the next 3-5 years with inflation heading to the stratosphere ??