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

Do you think that is an apt comparison? I mean you could afford a a Ford sh1tbox if it does the job of getting you from A to B so its not really a good compare and do you not think the state wont step in? As they already have the supports in place. People losing their job with a mortgage have the "family home" protected. You forget the Marxist paradise that is Ireland the tax payer gets to subsidize everyone's issues. The only way for house prices to drop is immigration figures reversing or a miraculous uptick in new builds as the pool of potential customers still need to live somewhere if they remain in the country.

There are still a huge number of people with the financial resources to buy the limited stock available. We all know it could take 10 years for a bank to repossess a house if the mortgage isn’t being paid. Also, if the economy contracts, developers will stop building.

Have any of your many predictions ever been accurate? Rents will drop 50% in 10 years now, not this year as you predicted. This 10 year prediction, might it occur as supply increases?

And it begins...sentiment moves markets above all else ..

https://www.thetimes.co.uk/article/meta-starts-to-shrink-its-dublin-base-gq9lp6g2p

he’s written a solid article.

I don’t get his ‘margin calls’ from investors there are practically no derivatives in play. The only one I could think of is an IRD and if a fund has that in place they have hedged for interest rate rises…can’t see any fund taking out an IRD to protect them from rates going lower.

if he is using the term margin calls to mean breaches in loan covenants then yes funds that are highly leaveraged may see their credit being revoked by banks. But you need to remember that the investors will be legally committed to lend to the fund. The main reason they borrowed from a bank rather than drawing down on the investors commitment is because it was cheaper and helped the fund manager meet his hurdle so he can be paid his big bonus.

If he is referring to fund investors looking for redemptions then they will pay dearly to exit their investment and not provide the capital they have committed. the penalties are to steep to exit by choice the only reason an investor would pay the penalties would be as part of a insolvency proceedings.

if these investors enter insolvency then you are talking about a financial crash because these investors are normally high net worth individuals or financial institutions such as pension fund, insurance etc. the financial institutions are regulated and required to hold reserves so it’s unlikely that they would enter insolvency. High net worth individuals will have a balanced portfolio so unless we see a crash in all equity classes it’s unlikely they will become insolvent.

Finally as we saw during covid in the early days of lockdowns…fund manager’s were able to execute clauses that prevented investors redemptions if it significantly impaired the underlying asset.

They must be delighted. That will give the slum-lord politicians and bureaucrats great returns on their modern tenements...

We can forget about a meaningful increase in supply. The only thing that will bring down rents and house prices will be a fall in demand.  

Very good read and makes a lot of sense for anyone to understand. We are looking at a very different property crash to 2008.

Protest at high rents. Also protest at new properties being made available for rent.

I believe the concern about targets is commencements, maybe this crowd could switch on the afterburners, again if there is slack, have projects ready

This will all be dropping over the next 6 - 18 months China are out as a building market and I cant see them recovering for a few years and as building stalls all over the world there will be a glut of raw materials that have been produced but no one wanting them at the prices they are currently at. So they can either warehouse which would cost storage and stop production which would also means job losses and other losses to the companies or they can reduce the cost of the raw materials in order to move those materials on. There will be a bit of pigheadedness with this as the gravy has been flowing into their coffers for the last number of years but we are living in straightened times. Producers of raw materials and builders will have to accept a thinner profit margin and compete or hit the wall .

You'll forgive my being a trifle hyperbolic, but many politicians are invested in property. This is known. I don't think that we need to drop names, and probably that would be against forum rules.

The state has, as I see it, done nothing to reduce rents or lower house prices. It has, conversely, done a lot to either directly or indirectly increase them. Indeed, I don't believe that anyone in government or the civil service has even said that they wish to reduce rents or house prices. All that we have seen is "supports", or to speak more honestly, giving people more money, which inflates prices.

What can we draw from this? Well, it seems very clear to me that the state WANTS high prices to remain. Be under no illusion, a sizable chunk of the population wants this too, so in that sense, the state is giving this demographic what it wants. Unfortunately, this is more of the maddingly short-sighted, boomernomics that is crippling the West.

I agree completely that Sinn Fein will not be able to deliver on most of what they promise, because what they are promising is having one's cake and eating it. Regardless of who is in power, the apparatus of the state itself doesn't change much. The system is set up to drive up accommodation prices, and voting in a gang of lefty lunatics and economic illiterates won't change very much.