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

A recession doesn’t necessarily mean cheaper houses there have been plenty of recessions over the years that didn’t result in a fall in property prices. It all depends on whether there are job losses and what sectors get impacted. If it is a case that a recession results in business cutting costs such as overtime but people keep their jobs or if the sector impacted by job losses is not a sector that generates a lot of demand for houses purchasing then it is unlikely to result in a fall in property prices.

There is a massive skills shortage in Ireland and a lot of businesses are still bringing in staff from outside Ireland to fill roles. It is not just tech companies in this situation and it is across the board including financial services and manufacturing. Let’s not forget that the ECB is deliberately raising rates to cool down the economy because it’s to hot.

Thats not to say that they won’t over cook it and slow it down to much. But even in the US the job market is still hot despite signs of recession. The business areas that I see being impacted the heaviest by the energy crisis is the hospitality sector as people cut back on spending and think a lot of restaurants, pubs and shops won’t survive the winter because costs have gone through the roof and if they increase prices they will have less business.

For house prices to drop you will need a recession that results in lower immigration and higher emigration. I know that in financial services there are little signs of this happening and only yesterday I heard how recruitment drives are now targeting Asia and the Middle East in an effort to fill roles and find staff because the shortage is that bad. We’re also not talking about one or two roles but multiples. This pressure has resulted in massive churn with people moving jobs for higher pay.

The other thing to remember is that house prices may fall in real terms (inflation adjusted) but not in nominal terms. This is an important point because with inflation running at 10% a drop in house prices by anything less than 10% means that prices won’t fall in nominal terms but housing is cheaper than it was a year ago.

All your points are valid when house prices are linked to wages, but that's not the situation currently. Money printing, investment funds and state activity have priced out most potential buyers. Take for example property prices have reached there previous highs, rents are way ahead. Look at the public service, has the gap between new entrants from the crash and pre existing employees been closed? Those new entrant are today's market less pay and lower mortgages multiples

Was listening to the latest inside business podcast covering recruitment and there saying business want to recruit within the current pool as housing is too big an issue. In effect housing has strangled the growth in the economy. Its overheated and extremely vulnerable to an economic shock of which they are multiple potential causes out there right now. In particular IT looks vulnerable. From what your seeing is it predominantly the housed or unhoused that are leaving for higher pay. From the podcast it's 5 years experience there looking for

Most of our employment is in small business, one would imagine many of them could fold from the inflationary pressures. Many also had significant debt issues after the last crash, could these resurface in rushed interest rate rising environment.

Well, your health and your job are your two most important assets in that order and if there are considerable layoffs there will be a massive reduction in demand, particularily if those layoffs mean people leaving Ireland for one reason or another. That's a simple enough outlook mind but it's probably what is coming.

It will make it harder to get a mortage, depending on your circumstances, but it should effect the supply of houses.

I think that "trickle down" may have worked in the past, but it's becoming increasingly clear that consolidation of wealth is happening all over the world. Funny money is great if you're the first person to get it.

Hard to beat a Bertie budget. Pay rises and tax breaks for all. No quarry or bank regulation either. Go away and commit suicide if you dont agree with his policies. Bertie for president. Great lad and true patriot.

Look at the school transport fiasco, nothing learned from the free gp care. Same mistakes repeated over and over again to grab a newspaper headline. Populism at its finest

There is some leadership vacum all around the world.

Now were going taxing the bejaysus out of renewable energy, no effort to push demand onto off peak hours at reduced rates to prevent these renewable sources being switched off when there is an abundance of wind

We installed smart meters across the country, installing smart politicians is beyond us

Of course the politically correct crew say we can't plug in the washing machine at night in case it goes on fire. I'm sure the same crowd have been plugging out there fridges every night since the greenfell tower fire was started by a fridge

Germany are shutting down their second largest steel plant.due to energy shortages. Can hou imagine fir one moment what that is going to do to the cost of steel n this country. It will decimate the construction industry. I dont know whats heading down the tracks but Germany is the industrial powe horse if Eutope, if they go under, we totally fecked.

https://www.reuters.com/business/energy/arcelormittal-shut-blast-furnace-german-plant-gas-prices-soar-2022-09-02/

This may be a strange thing to say, but the idea of NOT having a recession seems more worrying to me. Consider if, after winter, the markets recover and the looming recession/depression does not materialise. House prices willing continue to rise, mass immigration will keep on rolling and accommodation will become simply impossible to acquire, which is not good for anyone, save the slum lords and investment funds. Weighed against that, I'd rather take my chances in a recession.

The state has demonstrated that it has no interest in resolving the housing crisis. Indeed, I would opine that those making the decisions here are benefiting greatly from this mess, for how many politicians and civil servants are invested in property? Beyond that, if one is not trying to buy a home or find a place to live, an out of control housing market does really matter, so likely it is of no consequence to such people.

Realistically, however, whether there is an economic upset in the next few months or in a a few years, there will be one eventually. The longer things go on as they are, the worse the fall out will be.

I think the horse has bolted. We are going to have a recession no matter what we do now. There is no way the government can cover energy prices for all people and SMEs, Inflation flying up on everything and if someone has to borrow to get through interest rates are going through the roof (this includes our government). Also with our open economy we will be more impacted in what happens to Germany, UK and the US - All 3 are in serious trouble. I can see a flip in emigration, tax take and unemployment figures in the next 12/24 months so demand is going to be emigrating, dole queues rising and income tax declining.. People simply will stop spending on areas of the economy they once did ....

I haven't seen much to suggest a recession either. Some people have told me that they are worried, but the shops are packed every Saturday whenever I've been there. This is why I'm not sure that there will be a major recession in the near-future.

However, Fliball123 does have a very valid point when he (or she) says that Ireland is very exposed to international troubles. Germany is in a bad place with the gas supply, and the US and UK do have major issues to contend with. If the technology sector takes a dive, and there are early signs that it is cooling off, Ireland could lose a major source of employment and tax revenues.

None of us know for sure what will happen.

I've been told by foreign colleagues and friends that they absolutely loath Ireland. I even know a few people have left high paying jobs because it's just not worth it to remain when they must pay huge rent for bad accommodation.

However, if you're after the welfare and freebies, things may seem different...