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

I'd imagine they're near zero. But mortgage defaults means bad credit, which can make things for your future self more difficult.

Yep, that's the expectation for the Fed anyway. Would reckon the same will happen in EU, ie aggressive rate rises followed by cuts. But again, who knows. Signs of recession here with increase in household saving vs spending. Such sentiment plays a large role in the bringing on of recession.

https://www.irishtimes.com/business/economy/2022/09/09/irish-households-prepare-for-financial-squeeze-by-saving-more/

There's 100 buyers available to buy one of 200 houses. This is a seller's market is what you're implying.

Or else, there's 100 buyers available to buy 50 houses. They try and outbid each other in order to secure one of the 50 houses and selling prices are obviously based on what they can afford to pay. We add into this mix that the hundred buyers get a salary increase...

We add into this mix that the hundred buyers get a salary increase...

If you work for a private company or a MNC and didn't get a salary increase this year, you almost likely have missed the boat for any big salary increase.

This is the time of the year that most companies budget for the next fiscal year, and we are in a totally different place compared to this time last year - even with covid. Most companies will be very conservative with their budgeting for sure.

My answer to all three, none in isolation lead to price changes, as I said earlier, market change is multi factorial.

There are many economists predicting a crash, how could they not? But how many are certain of when it will be/how bad it will be/how long it will last? None I would suspect.

As that article makes clear, the same conditions do not exist today as did in 2008, so Ms Pettifor is hedging her bets and speaking in generalities. Why? Because every crash is different.

I don’t need you to tell me if I am right, no one, not even you has the answer. You have just read 3 economists give differing opinions in one article. It takes a particular type of arrogance to believe you are right on a subject with so many variables.

Again, you are not acknowledging that supply and demand are TWO of the factors. Is shifting Government/CB policy alone going to increase/decrease house prices? Only if you think that there aren’t people out there to buy houses, or that the number of houses available isn’t a consideration. These factors all play a part in the property market, which one is more important may vary at times. But no one, not you, not the three economists have a definitive answer, therefore they are just opinions rather than fact.

You are no more right than anyone else predicting boom or bust until it happens.

Wondering about changes that could bring down prices in the near future such as...

If HTB is not extended beyond 2022. Which will be announced with the budget in a couple of weeks.

Changes to the mortgage lending rules by the CBI e.g. Larger deposit requirement or the 3.5 multiple of salary is reduced.. Prudence due to cost of living. I believe the CBI carry out a review each year.

Banks lending less... My exemption was taken away a few months back due to stricter lending rules from my bank

The rising interest rates add a huge cost to a mortgage but I feel people overlook this as as they look at the monthly payments, which don't seem that significant when it is a €50-100 increase per month. But I think roughly for a couple borrowing 350k an extra 1% can add 50k to the cost of credit. Unlikely but this would be good if reflected in prices..

C’mon, an economist could write a book like that every year, eventually they would be right. The difference is that fewer saw it or expected in 2006, given what is going on at the moment, few economists are not predicting some kind of crisis. You have some predicting Armageddon, others predicting a correction in markets which may be mild and short lived, some will be door stops in future, others will be looked on as works of genius, for now, no one knows. What we all know though, is that the same conditions do not exist today because of what was learned in the last crash. So please, stop thinking that you are/she is the all seeing prophet. Property prices may well decrease as a result of local/global events, but when it does, there is no guarantee that everyone will be able to afford what they want, high income buyers will be able to buy for less, and if there is a recession, it’s the lower income earners who may well be most susceptible to job losses and downward pressure on wages. Will that make buying easier even if prices fall and interest rates rise? Of course not.

There is a limited number of exemptions every year. It's a percentage of total bank lending. It's a kind of ''use it or loose it''. When the bank have used there quota for the year ( it's based on there previous years lending if I remember correctly) then they withdraw the rest of the exemptions. Usually they are used up by mid late summer. Similar happens every year.

She says..."The idea that house prices are determined by supply and demand is an infantile view of how the market works". And then goes on to say that Ireland's high prices are due to REITS - in other words, demand. What difference do sellers care if it's a prospective homebuyer or an REIT, it's all the same demand inflating the prices.

What is the perceived benefit of having REITS competing with prospective homebuyers, it's meant to drive development and construction? Our domestic market isn't enough?