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

The figure is 54% of renters is receiving some sort of rental assistance from the local council or government. 60% is what we were saying could happen by the end of the year or some time next year.

One area I'm looking in was up to this year selling a three bed house at an average of 400-430k depending on condition of the house on the property price register.

In the last couple of months the base price has increased to 440-450k and one property went for over 520k.

Bidding wars are insane right now, estate agents are of course driving it, but people need to take responsibility for what they're paying as well. It's hard to imagine that those properties will be worth that amount five years down the line as well as the fact that a large number of people I'm seeing at viewings are being blown out of the water and all vendors in the area are now expecting the same type of money for their properties.

It's getting to a point where it's almost impossible to buy anything, there would have to be a long cooling down period to temper vendor expectations from where it is now, you'd have to see properties sitting on the market for extended periods before price drops are entertained.

I'd imagine there will be a few people regretting what they've paid once they're in their properties paying massive mortgages.

I'm glad we acknowledge that for renting and purchasing, it was easier in the past, tough but very much achievable.

I can't argue too much against your renting regulation argument. It has encouraged vacancy and supply anomalies.

Reits are only an issue in Dublin and maybe Cork but the rental crisis is now nationwide.

I would question reits higher cost as standards were reduced to facilitate them in increasing supply. In addition most of their acquisitions were done in a distressed market, so I would argue the opposite. They also have the cherry on top of paying close to 0 tax and the icing of long term leasing to the state

We have created a monster that feeds on our young no matter what way you dress it up

Many of my foreign colleagues are living in dread of getting notice in their rentals. They have made plans to leave in such a scenario.

My neighbour just got his notice, a beacon in the community, a landlords dream, Mr fix it. I'd expect him and his family to leave, all educated here and the eldest in third level. We are scrambling to find something for them {if you know of anything, can you pm me, he's a couple of weeks into 3 month notice, mid west)

Now think of the cost both in direct and indirect costs of that 1 decision and multiply it throughout the country.

You'd really wonder how all this is gonna play out over the next 6-12 months. Especially given the following:

On the latter, I heard from a risk assessor in one of the banks that they are expecting a significant amount of mortgage defaults "soon". This was a number of months back. You'd have to reckon that those on trackers and variable rates will be the worst hit. Tracker holders will have gotten used to a lifestyle that likely won't be able to continue in an era of higher rates and even higher day to day costs.

But folk coming off fixed rates in the next 6-12 months will also be in for a shock when their new, potentially almost double, interest rate comes into effect. Not good.

Are evictions still very low?

For people who decide to stop paying their mortgage, will this affect their lives in any way?

Jim powers assessment is interesting appears to suggest that the covid bounce needs to be erased and prices and rents are crazy

Separately, the years have been kind to Constantin Gurdgiev

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.