Softening house market?

As a personal anecdote - I own a property in London (used to be my home, before I relocated back to Ireland), and my tenants have just announced they're moving out. A week ago, I'd have been more on the fence about selling the flat or renting it out, but after the last few days, I'll very likely sell up, given how bad things are turning in the UK, especially. I'm sure other landlords will be thinking along similar lines, so the UK may now see a surge in landlords offloading properties, the way that we have here.

bloomberg piece on office real estate in america. interesting if this happens here once eu starts hiking. i wonder would how much more labour it would free up to for housing projects?

There is a reason for this, and it is that there are plenty of financially illiterate people who place too much weight on arguments that are similar to those in the rest of your post. It is what happened in the mid-2000's when every eejit was piling in blindly ignoring the warnings that things were unsustainable. Unfortunately, some of those who were wreckless were rewarded by the State and society by being bailed out directly and indirectly. Only for that the impact on the market would have been a lot worse.

You can possibly take on a bit more risk if you have a genuine path for career advancement such that you are fairly sure that your salary will increase sufficiently over time. That is not strictly the case for everyone though. And that is the reason why there are stricter rules now preventing people from taking on too much mortgage debt. There are still people who are in arrears since the last crash. 14 years on and they still haven't been able to get back to where they thought they would be. There have also been a noticeable increase on various auction sites of receiver sales of all types of property. Many of that would have been in the hands of receivers as a result of the last crash and they are only finally being offloaded now.

Will we see State intervention again if rates continue to rise - unfortunately it is likely that we will. The fiscally prudent who didn't take on debt that they couldn't service will find themselves paying higher taxes to subsidize those who were reckless. If rates take a few more jumps there is no doubt that you will have people calling for State intervention or tax credits or subsidies or changes to rules etc.

You can see my example a few posts up. If you can afford to pay a level 420 Euro per month, then you can service a mortgage of 100k if you get it at 3% fixed for 30 years. Whereas if your rate is 4% you can only afford to service a loan of about 88.5k. Maybe you won't understand the risks and you fire ahead anyway and try to fudge things to take on the 100k@4%. And maybe it would work out for you, or maybe your property would be up for auction by a receiver in 14 years.

You are imagining things

I would say the majority of Irish people are not financially prudent, judging by the lack of pension plans and savings.

https://www.independent.ie/business/irish/new-research-reveals-significant-gaps-in-irish-pension-planning-42002940.html

Unless you fix the rental market, it actually is logical for someone to borrow as much as they possibly can if it results in buying a home. Maybe that shouldn't make sense, but right now it does. And that's before you consider that its nigh-on impossible to lose your home in this country.

Why did prices FY2019 retract in Ireland?

Covid messed up the market for various reasons. Not just here but around the world. Now that interest rates are rising, we are seeing price drops in many markets around the world.

This will all come out in the wash, but I firmly believe that renting is so abysmal that increasing interest rates will not dissuade buyers and cause a large drop in house prices.

I think the Central Bank Limits were basically doing their job and prices were beginning to hit those limits in 2019.

Then the Pandemic and specifically lockdown happened. People weren't going on holidays, they weren't going out to restaurants, they weren't commuting and paying for lunch every day. Bottom line is that you had a huge boost in savings all over the country. For the house-buying demographic this meant bigger deposits, which in turn meant bigger mortgages. You also had a lot of people who were stuck in apartments with small children who suddenly realised the value of having a garden. The upshot of all this was a shot of adrenaline straight into the housing market.

Now you have a different dynamic taking hold. People's lives are, in many cases, back to the way they were in 2019 - with all the implied additional spending. Yes many people have had wage increases but in a lot of cases these have not matched inflation. This reduces people's abilities to save and in some cases people are actively eating into their savings. So in CB rules terms, your wage multiple may have gone up but you still need to get that deposit together. At the same time we have increases in interest rates with many more being telegraphed by the ECB in the near future.

The next couple of years should be very interesting.

Paschal's line re REITS is we need REITS to finance our building. Why is this the case, how did we ever get this far before we ever had REITS to finance building? He says it like we should be grateful that they're building all these properties. Even though after building they're then extracting high-rents out of the economy.

REITs don’t have family members who suddenly want to ‘move in’ to the house, or it’s going to be ‘sold’ or ‘renovated’.

Why like the REITS are you stuck in the rental model? What's the problem with building houses for the citizens of the nation to buy?