Irish Property Market chat II - *read mod note post #1 before posting*
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Who will serve you your coffee if we all become doctors and investment bankers though? I have a third level education and earn above the median national salary, I am coming at this from a position of experience of the current market and not some opinion based on how hard I worked nearly 30 years ago.
You should take a look at the place where you bought that apartment now and see could you do it again in the same job - use glassdoor.com to get an idea of the salaries in the area.
It seems to me that you are simply delusional and more than happy to stick with your ill informed opinion that an entire generation simply picked the wrong careers and made poor choices even when presented with evidence that this is simply not the case. Maybe that exercise will show you what that age group are currently up against.
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Where did I say the Irish government had control of ECB rates?
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Could I buy it today for what I would be paid? I don’t know, different market conditions and as it has been 26 years and I don’t live in London I'm not knowledgeable about either the job or housing sector. What I can tell you is that a similar apartment in the same development is advertised for quadruple what I paid for mine, but it is in better condition than when I bought.
I don’t think people picked the wrong careers, there is more to it than just owning a house. But there has always been higher paying jobs in society, in Ireland at the moment there is just a lot more of them. I don’t blame people for choosing a career path, I just don’t agree with them blaming others because they don’t have what the others have.
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Nah dont think I will. Everyone including him should always be reminded of the damage he did to this country's economy.
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A lifetime of bitterness awaits you if you continue to fixate on Bertie.
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Well 35-44 year old adults in the UK were far more likely to own a house as compared with today apparently.
That is a macro change in society.
Since housing is a fixed cost I think it is a truer reflection of monetary inflation than other prices which can be arbitraged or otherwise artifically deflated, and from that I would conclude that real wages are lower now than in 1997.
The UK market is arguably less distorted than Ireland with its multiple construction lockdowns and near-zero rentals.
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milton Friedman assumed that central banks had control of the money supply but that’s not the case money supply is increased everytime credit is issued and destroyed when repaid.
The lowering of interest rates was to encourage credit growth but this wasn’t as successful as expected because banks were unable to find opportunities to lend within their risk appetite. And instead we saw an explosion of credit being issued by funds because it was not as regulated as banking. Most of this credit found its way into assets pushing up prices because these funds attract investors who are looking for investment opportunities.
the main driver of QE was to lower rates to increase investment and create jobs and pull Europe out of recession…the fact that there was a unforeseen impact on asset prices is well documented. An ECB paper on this topic was released about 3/4 years ago.
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So no you couldn't, unless your job at the time has also went up 300 odd% right? Now add in cost of living, rent crisis etc etc to that mix, they all feed into the problem.
Great your starting to see it, I think.
"I don’t think people picked the wrong careers"
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"Why is there an incessant need to blame others, be they your peers, or the Government for your choice of career "
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maybe I misunderstood your post but it sounded like you were blaming government for 15 years of low interest rates.
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Thinking that people chose the wrong careers, and them blaming others for the careers that they chose is not the same thing by any standard. Can I make that any clearer for you?
The fact that you grasp the concept that not everyone, including myself could afford to buy what we want when we want it is encouraging. If I couldn’t afford to buy my 1996 apartment today, do you know what I would do? Exactly what I did in 1996, I would buy where I could afford to, I would have preferred not to have to travel so far each day, but no one was going to help us buy closer to where we worked, we neither expected them to, nor blamed anyone else for that.
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You also need to take into account that interest rates in the Uk fell 600% (6% to 0%) during the period.
Just looking at your 300% increase in salary it’s an average of 12% pa and if you take into account the reduction in rates during the period which would have resulted in an increase in disposable income the gap narrow.
I for one can remember 1996 and the majority of people had practically no disposable income compared to what they have today. I’m not saying it wasn’t easier to buy back then especially as most properties were in negative equity in the Uk at the time but you need to factor in all the facts when doing a comparison. It’s like comparing buying a property in 2012 to today in Ireland.
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Very true, interest rates were 15% just before that, owners were handing in keys to banks. The apartment I bought was a repossession, but I can’t remember what the mortgage rate was when we bought, I think it was around 8%.
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Grand, so you dont think we all picked the wrong career.
I would agree firmly with you on living within your means, 100%. However our housing crisis is not Dublin-centric or even limited to cities, its nationwide with the exception of a handful of counties. Not to mention the material rises have yet to really have an impact on new builds for sale so id imagine the crisis will deepen in that sense.
Aside from the unfairness of having to live far away from ones home forever how logistically can it work long term? How can Dublin be sustained by middle income workers living in rosscommon for example?
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How to Really Solve the Irish Housing Disaster/Crisis
1.Build up Immediately on a massive scale (Minimum 20 story’s)/ Halt Urban Sprawl/Stop Wasting Prime City Locations/Change DCC & An Bord Planaela Policy/Move Dublin Port/Free up 200 Hectares for 50 Story Apt Buildings
2.Ban Landlord TD’s (currently 25%+, clear conflict of interest), Healy Rae has 16 properties worth over 5m, Dail has 70 millionaires, you cant run in the next election if you own property, you must sell, Troy is probably making 25 grand a month
3.Issue 25,000 construction worker visas (war time effort)/ Bring Down Construction Labour Cost/Do what Dubai Did/EU & Asia/Extra Apprenticeships Domestically will take too long/ emergency/We need foreign workers
4.Apply Shared Equity Scheme to Existing Properties (no new builds in Dublin under €350,000) /Makes the scheme dead on delivery/Demand Side Scheme will only push up prices/Shoebox apartments shouldn't cost half a million/you also need to borrow full amount/essentially a double mortgage/
5.Borrow 20 billion now and massively ramp up timeline from 10 years to 5 years (ESRI report/Pension Timebomb for Renters/HAP/Hotel Spend/Request EU Assistance/Should have been done when interest rates were at 0%
6.End Nimbyism and Streamline Planning Laws with An BordPlaneala with Emergency 5 year legislation/Compulsory Purchases/High Density Apartment Construction/Aesthetics are a Luxury/Generation Rent just want Housing and to stop paying crippling rent
7.Strengthen Remote Work Legislation to Decentralise Dublin, Reduce Emissions and offer incentives to convert office to residential/Massive opportunity here to increase accommodation fast/ghost offices at the moment
8.Landlords Leaving the Market should be viewed as a good thing, move away from housing as a commodity, let local authorities ,buy that asset/one persons rent shouldn’t be another persons income
9.Inner City Flats residents should be offered new builds further out for free so we can demolish prime city centre locations worth hundred’s of millions and build high rise apartments, primarily 1 & 2 beds for the new generation who simply cant afford to have kids, they just want shelter. These are generally high crime eyesores and terrible first impression for high spending tourists.
10.Government should start building social housing on a mass scale on public land, using its purchasing power for discounted construction materials.
11.Bank Cuckoo & Vulture Funds Immediately: They are distorting the market not helping it
12.Impose a 100% Tax on Multiple Vacant Properties and Compulsory Buy Orders. Demolish eyesores and build high density apartments.
13.1 & 2 Beds Affordable Apts : Majority of People in their 20/30’s who are single and don’t believe in being forced to couple up in the biggest financial decision of their lives just to avoid being crippling rents.
14. Stop Wasting Money on Green’s Retrofit Scheme: Only Rich People can afford this and it is foolish diverting construction labour time away from new builds
15. Offer Tax Credit to Renters in the interim, generation rent are just surviving,not living, spending 60% of net income on rent/we are paying for our parents generations mistakes/they have pulled up the drawbridge on us happily seeing their house price increase and someone else paying their mortgage. It is an absolute scandal.
16. Impose an immediate Rent Freeze/ Amend the Constitution if necessary
17. Conservation Laws: Analogy, Painting a building that’s on fire, we are in a crisis, young people paying crippling rent couldnt care less, a destroyed generation, so all laws that impede or slow down building should be immediately bypassed.
18. End Bluffer/Teacher TD’s being placed into Minister Roles/Place people with relevant degrees or 20 plus years in relevant field into the role for e.g. Professor Ronan Lyons and Professor Rory Aherne should be asked to step up for their country in an emergency and assist the Housing Minister/ Generation Rent Does Not Trust Darragh O Brien, an early investor in vulture funds and no relevant experience
19. Scrap Help To Buy Scheme: Pointless Demand Side Scheme/Only applies to New Builds/None in Dublin under 350k
20. Never Again Allow Council Houses to Bought by Tenants for Cents on the Euro/Unbelievable Waste of Taxpayer Money
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you need to put some thought into the impacts of your plan as it’s not as simple as you suggest
e.g.
1 if you build up then you also need to be improve infrastructure, transport, schools etc. is this included in your plan and who pays for it.
2 it shouldn’t make a difference if a TD is a landlord as long as they follow the rules like everyone else so that it is clear if a conflict of interest exists. If a change was to be made I would suggest that anyone that doesn’t declare correctly looses there seat along with their state pension.
3 I wouldn’t use Dubai as an example as they effectively have slave labour and the no of deaths in construction is crazy. This is like asking to bring back slavery. I would also like to know why you think construction workers should take a pay cut they have families to provide for and all you would do is get less people going into construction/trades which will lead to problems down the road.
4 apply shared equity to existing houses doesn’t increase the number of houses being built and would only lead to upward pressure as a result.
5 the government wouldn’t be able to borrow 20 billion under EU budgeting laws. you would have a better chance of raising capital by housing agencies issuing bonds but to be able to make that work they would need to pay an attractive coupon so you won’t have cheap rent etc.
6 would be easier and quicker to build a new city on a green field site. Cost of high rise buildings is expensive and to do so in a historical city will be slow.
7 I tend to agree with this but you need to accept that they will need to be shoeboxes for it to be financially viable.
8 so you are saying that councils should buy more of the existing housing stock at the expense of FTB’s and private renters.
9 yet again something that has been done before with dire consequences.
10 if government build mass scale social housing it will mean less homes for FTB’s as construction resources get redeployed. This means reduced supply higher prices
11 funds provide nearly all the financing for new builds you need to be careful you don’t inadvertently reduce the number of new builds. They also provide supply for renters so how do propose this gets replaced and the rental situation doesn’t get worse.
12 a vacancy taxes is required but at 100% it would lead to less new builds
13 1 and 2 bed apartments are required but they will be shoeboxes and expensive
14 I would argue that the only people that can afford retrofit are people in social housing because government pays and not the well off.
15 thought you were against increasing demand on the buy side as this is what this would achieve
16 yet again a policy that would result in shorter supply
17 why not just declare war on the USA get them to bomb the city and then make them pay to rebuild it. These laws are there for a reason and if you built a new city you don’t need to worry about it.
18 you would need to increase pay dramatically for this to happen and there would be no guarantee that they would be any better. At the end of the day these guys are heavily involved in decision making just look at what is being paid to consultants that advice the government…they will all be qualified.
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I had always said we need at least a year after COVID restrictions end to see price correction start to occur and the fallout to begin (as stated previously COVID was not negative in any way to our economy, in fact it was a blessing for almost all of it). Restrictions only ended in January 2022 (it feels a lot longer for me that they ended, not sure if others feel that way) so through this year as things open up, we start to get a feel for how things play out and from next year onwards we see the true fallout from COVID. We are still within my timeframe of a year after the restrictions end.
My other timeframe was over a year ago to wait 2-4 years before buying if you were renting as the deposit will be larger, mortgage smaller and there will be greater supply (prices coming down may not happen in that timeframe); this is still playing out.
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The rental market should've imploded when COVID hit, because it was and is unsustainable but the government went beserk with cash to prop it all up where we now have 50%+ of all tenancies getting some form of rental support. This is not stable and necessarily requires a magic money tree to keep the whole charade going! I don't subscribe to this FF/FG/SF magic money tree school of thought so I still sit back and watch as the government try to squander more good cash into propping up the rental market - they are running out of magic tricks however from what I can see.
The stock market is another component of the asset bubble; the main US stock markets are the most grotesque bubble there has ever been, hence why it has been correcting and continues to correct. It is being propped up by the Fed and the corrupt politicians that, like our own, have skin in the game. Again, as a free market proponent, I would like to see more of a free market in operation and not this pathetic, deformed socialist market where profits are privatised and losses are socialised. Ireland is a micro-USA and we see what impact rate rises are having to the asset bubble there. This is a compulsory recession in order to unwind some of the QE/low for too long rates and is necessary, but that doesn't mean it won't be harsh.
Again, if the fundamentals were solid, the economy broadly diversified, individuals in generally a solid financial state, then there would be little to worry about for the coming winter and continuous rate rises, so I'm assuming that you are not worried for Ireland and its economy and housing market for the next few months.
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This is the collapse which we have passed the brink of no return? An increase in supply, but prices may not come down in your 2-4 year timeframe, during which, renters should continue to pay rent.
And Covid will cause some businesses to shut.
This is your insight/prediction? How disappointing.
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Some businesses to shut?! Some!? It is going to be a bloodbath; 24000 firms now unleashed into the free market from the Revenue's debt warehousing scheme in the last while, SMEs getting devastating energy bills has just begun, this is going to lead to them cutting down production which will mean cutting overheads, raising prices etc which will have a knock on effect, all feeding into the difficult to quantify but extremely important "sentiment".
Though as I understand you, the economy is booming so a few high energy bills for a few months won't do much to quench any growth.
Being totally honest, I do think prices will have come down by 3-4 years (2-3 years from now) in addition to supply being raised so I would be more confident now about prices than I was last year. This is because the rate rises are happening and happening with gusto, which are inversely correlated to house prices and rents.
Edit: I would also go further now since the money has dried up in Silicon Valley and we have a huge concentration risk from tech companies, that demand for rentals will dry up significantly unless rents start dropping materially. We are only at the start of hiring freezes and job cuts, with many of the cuts not even happening as of yet due to notice periods, but we have no alternative economic activity producing such high earners to be able and willing to take on 1100-1500 pm per room rates of rent. This is where Ireland will suffer disproportionately to our EU cousins who do not have a similar concentration risk with tech companies.
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ECB could raise interest rates into next year, says Philip Lane
Euro zone economy likely to flatline over winter months and a recession cannot be ruled out, says chief economist
throw in rising energy, food, heating and fuel bills and we have the perfect storm heading into 2023 .. but for many on this thread property only ever goes up
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Can you name a single poster who said “property only ever goes up”? Just one will do.
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When it all stabilises in a few years, we then have SF unleashed onto our politics, economy, property market etc and, at current trends, most of the electorate will be renters in 10-15 years which obviously means that high house prices are not what the electorate will vote for. In the same way salaries have not really increased hugely in 20 years, I don't think house prices in 10-15 years will be what they are today in Ireland, unless the whole property market was socialised by the State via another bailout like it introduced after 08 to prop up the market - the green agenda won't enable the State to throw cash at the market again to do this however.
Side point: with the Chinese property market crash, raw materials for homebuilding will get cheaper as this fallout gathers pace, given the amount of raw materials the Chinese housing market consumes. So building in this country will become more sustainable in a couple of years.
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Thanks for your response and debate, I appreciate all points of view.
However I do think that the reason this has become a disaster is because of apathy, incompetence and corruption.
We need a big bang war time effort for things to change.
1. Build Up: I am referring to ending urban sprawl and ensuring maximum efficiency. It has become an acceptable norm in this country to say I am commuting from Longford to Dublin for work each day. Schools ? , I cant afford kids, therefore I wont be having them. That is a fantasy luxury for generation rent as is a garden, we just want to stop paying crippling rent. We need 500,000 new 1 and 2 apartments in this country and we needed them 2 years ago.
2. Landlord TD's: I disagree completely and all you need to do is look at Robert Troy arguing to make it easier to remove tenants and increase HAP pay when he was renting out 9 properties. It is a clear conflict of interest and thankfully journalists are now investigating non declaring TD's rental income.
3. Dubai: I am using the it as an example of a desert in 1990 and a mere 20 years later it is a metropolis. I dont condone slave labour, I am referring to planning and ambition and why we have a 18th century mindset determined to keep a low rise city , why? .We are an international embarrassmentand need to foreign construction workers, well paid to rapidly speed up the time frame. 30,000 houses a year isnt enough, we need 500,000 immediately, therefore we need to bring them now, we proved we can take 50,000 Ukrainians in 6 months. Look at how much we spend on Hotel accommodation and HAP to subsidise landlords and 25 year leases to vulture funds with nothing to show at the end.
4. Shared Equity: Well then, its dead on delivery. 350k is not value and we all know it. Nothing in Dublin under that figure, 1 2-bed in Citywest for 375k, lets end the scheme and call an election.
5. Borrowing: Another benefit of being the EU, along with unachievable climate targets, have we even asked for half the figure,do they know the scale of the problem, we need a government who will demand change and not meekly accept young people living in their box room until they're 40
6. Councils/Local Authorities: No I am saying let them buy off landlords and rent back to low income renters and end this entitlement mentality that landlords have thinking someone else should pay their mortgage, i have spent over €150,000 in rent over the past 16 years. It is taking this vile greed from the market and helping people on housing lists and people on low incomes, spending 60% of their net income to pay rich peoples mortgages.
7. Demolising Inner City Flats: Dire consequences, you mean Ballymun ?, a simple cost benefit analysis would show these locations are worth tens of millions and perfect for high density modern, architecturally beautiful apartment buildings and that giving new builds to residents on the outskirts of Dublin would be a good deal to never make the same mistake again
8. Social Housing on a Mass Scale : Again Resources, solved by point 3, 25,000 foreign construction worker visas to reduce timeframe from 10 years to 5 years,we needed these houses years ago. I am ashamed with how little ambition we have in this country, the embarrassing gombeenery and backwards thinking.
9. Vulture Funds: Should be banned immediately, they are distorting the market and you know it. €1750 a month for a 1 bed is toxic supply and we can cover this shortfall through a mass building program with foreign workers.
10. Shoebox Apartments: Why are they expensive, because of construction materials and labour. With a state construction company mass buying materials at a discount and hiring foreign workers we can address this.
11. Rent Freeze: Good, lets get those greedy people out of the market, we dont need the worlds smallest violin playing for poor people paying rich peoples houses off.
12. Landlord/Teacher/Bluffer TD's : I highly highly doubt people of that calibre are advising the government when its been an unmitigated disaster
and Prof O Hearne and Prof Lyons are ignored.
Remember there are 100,000 apartments with defects, or 80%, that in combination with MICA, will cost the state probably 10 billion once its all said and done.
Sickening,Incompetent,Corrupt,International Embarrassment of a country and noone will be held accountable.
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The stock market attracted every Tom dick and harry to invest and was no different to tech stock bubble of the 90’s…the main component that caused it was greed and what is causing the correction is fear.
the fundamentals for the rental market to collapse are not there we have a supply that is shrinking with demand rising. I don’t agree with HAP but the alternative is social housing and there are plenty on here that will give out about free houses for people. At the end of the day the government have always provided housing supports to people that need it. The alternative is sleeping in cars and under bridges like you would get in a totally free market. I for you one think that we are a more carrying society to not let that happen than live is an Society that only cares about themselves.
of course there are things to worry about with energy bills as a lot of pubs restaurants and shops will go out of business will this impact house prices of course it will but will it mean lower house prices no as there is wage inflation. It will probably mean housing is cheaper in real terms (inflation adjusted) compared to a year ago but not in nominal terms.
Rate rises are required as the economy is running to hot…that can be as dangerous as a recession so central banks have no option to keep hiking until the pressure in the jobs market falls away otherwise you just go into a wage/inflation spiral as people can just move jobs for higher pay.
As for Ireland’s economy the biggest concern I would have is if they did something stupid and guaranteed a price cap on energy thinking it would cost 1bn and end up costing 100bn because no-one knows how high prices will go or for how long. we still haven’t seen the impact of high oil prices on flights and wouldn’t be one bit surprised if a flight will cost twice as much as it does today by next summer…that would kill tourism.
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What a waster this guy and his cronies are. Honestly I know deep down they want inflation to stay around 5-6% for the next 5 years with interest rates only going to max 3% giving real terms negative interest rates of 2.5-3%. This is the only way they can sustainably reduce their debt burdens using this fiancial repression model whilst not blowing up the economy by raising interest rates too high.
I honestly believe this is why the ECB left it so long as they nearly wanted it to become fully entrenched. If they are able to keep everyone pacified with a looming energy crisis incomming then it might just work, but the probability of that happening is very low.
Philip Lane is a waster in my eyes but I do not envy the job he has to do especially if all goes south which is becoming ever likely.
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The housing crisis doesn’t just impact you it impacts families and schools and infrastructure are required there is no getting away from that.
There is a place for landlords in the market and to not be able to see that is just stupid. The issue isn’t the landlords it’s the lack of supply…if we’re taking out the little violin then give it to FTB’s that can afford to buy but can’t find property because the councils are out bidding them….or give it to the guys that are paying mortgage and working there asses of while somebody else gets it free next door to them because they know how to play the game and milk the system….the housing crisis isn’t just about renters.
Saying you paid a 150k in rent maybe we should give you the little violin…..I paid 450k over a similar period..ok it wasn’t in Ireland and it was normal to pay up to 50% of pay on rent….the issues are seen through out the western world and not just Ireland.
if renters had choices they would be able to push the prices of rent down. Wanting to reduce the supply is just crazy. Likewise advocating that council buy more of the existing property just drives up prices and they won’t be renting them significantly cheaper because they they need to recoup costs.
you should look at the credentials of the consultants that the government hire before they make any decisions…they are top consulting firms which hire the top grads. The only reason they hire them is they can blame them if things go wrong and say they were given bad advice. Your proposal adds nothing.
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My proposal is the true solution but it will never happen because this country is too backward and corrupt.
Landlords are the leeches of society, and i am the one working my ass off to pay their mortgage.
Like many other young people,our best option is to leave this country and find some quality of life elsewhere.
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true solution……Without landlords where would you live?
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in my own house/apartment and not in this dysfunctional disaster created by landlord tds,unfireable apathetic civil servants,and greedy bottom feeding vulture funds that have turned shelter into a commodity and destroyed a generation
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It’s interesting that you only joined boards today and your only posts are the few on this thread….you really got up to speed fast. You sure you don’t have another account on here?
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