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

" hotel was dirty, infested with cockroaches"

"Pest Control attended the service on 30/08/22 and the building complies with all control protocols. No evidence of cockroaches was identified"

Well someone here is lying. I wonder who 🤥

Edit: Mystery solved https://m.independent.ie/irish-news/courts/tick-list-and-1600-cocaine-allegedly-found-in-dublin-home-41870919.html

It's crazy that it might cost over 150K to upgrade this house which seems to be in excellent condition without structural issues.

This is part of a huge, largely unspoken, problem in the property market, especially for young first-time buyers. Their traditional route to home ownership in an established community was to buy a doer-upper and spend the next couple of years engaged in a mix of DIY and building contractors. 10 years ago, 50K would get you a kitchen extension plus a new bathroom. 100K would have transformed the typical 3-bed semi. Now buyers have to reckon with 200-300K for a substantial extension. How's that for inflation, Mr. Putin!

Not entirely true. They cannot have a chimney but can can a flue going to a stove. As usual some builders used it as an excuse to further move to cheaper electrical installations.

I was watching the new series of Make a House a Home. A lady in here 30/40's bought a 2 or 3 bedroom cottage. She had it modernised for 15k. Over 5k of that went I think on the kitchen. The rest was paint, hard work and flat packs. She even had some landscaping done outside.

But a lot will say, Ireland is different because we have shortage of rental houses etc.

we will have to see the ECB have already warned us on this back in may - apparently the average eurozone house is between 15-60% over priced

Euro zone's overpriced housing market may sag if rates rise - ECB

It warned that home prices could fall by between 0.83% and 1.17% for every 10-basis-point increase in mortgage rates after adjusting for inflation.

https://www.rte.ie/news/business/2022/0525/1301058-ecbs-financial-stability-review/

Curious, can you link that part ? Can't seems to find it myself

This kind of carry on is disgraceful, bordering on the sociopathic:

i personally saw one recently where the gaff was bought for 380k early this year and relisted at 480k less than 3 months later, and subsequently sold. It was around the height if the bidding war madness so presume it went for over that even. It's not up on the PPR yet so looks not to have closed so far.

When I lived in Germany, if you sold a property at a profit before 5 years of ownership, there was crippling CGT and other taxes that would not only eat up all the "profit" but also, I believe, eat into your equity. This massively disinsentivised such types of speculation. I considered buying but hadn't decided to stay long term and was advised against it for those reasons.

The current system massively encourages this crazy carry on. How else can you make a cool 120k entirely tax free in a year on top of your other income. I mean besides winning the lotto.

Where else could you also lose a cool €120k if the market slumped like it did just over a decade ago? Don’t you wish you could have bought in Germany, paid off a couple of years of your mortgage rather than renting, and then sold, making yourself money to put towards a home here?

At just over 1200 sqft, it doesn’t come as a surprise that a family are looking for a bigger house, and will need the proceeds to buy in todays market. So, not sure why you think this is disgraceful, they are taking what the market offers, and the buyers are paying current market rate.

There are a few models for valuations one of which is rent but the driver of the main model they normally quote is not rent but more supply, demand, disposable income etc.

personally I would question the results but it really shows the risk across the rest of Europe and how the the CBI measures have kept somewhat of a lid on house prices.

Germany Netherlands wouldn’t be the first countries you would think of when it comes to housing risk…yet they have been advised of risk in their housing markets by the ESRB. Ireland on the other hand gets praise for CBI policies at reducing risk.

Whilst looking for that report I came across a paper on the impact of institutional investors on housing just published…I only read the conclusion but interesting that they talk about CBI proposing putting limits on how much investors can borrow etc.

https://www.esrb.europa.eu/pub/pdf/wp/esrb.wp~6a9f153304.137.pdf?39c93cb4c88c5a51846c25305f129b60

If you buy an affordable new build home and 12 months later sell it for 120k over what you paid, and pay no tax on that capital gain, there's something wrong with the system and its no wonder there are affordability issues.

I saw someone buy a secondhand home early this year and within 3 months of buying it had it up for sale 100k over what they paid.

There is a big difference between buying a home, growing as a family and trading up to a bigger house, and flipping houses and exploiting the system to avoid paying tax. I don't believe you can't see the issue with the latter.

Sorry, but if you're flipping a "family home" within 3 months at 100k+ profit, you're exploiting a technicality to avoid CGT. Fair dues and all, but let's call a spade a spade.

In Germany if you sell before 5 years you're only penalised if you sell at a profit adjusted for expenses/inflation etc. Seems like a fairer system and ensures a "family home" is treated like a family home and not an investment opportunity.

But I guess we are where we are. No problems here, nothing sinister coming down the pipeline for future generations. It's all grand, keep doing what we're doing.