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

Just got contracts on a new build. These are unconditional. Not sure why developers who make them unconditional if the house will be available for drawdown only after 6-7 months. Too much of a risk for buyers in this economy, with layoffs in a lot of companies. Anyone has been successful in getting this added in the past?

IT story on IR rises will be more than was forecast.

https://www.irishtimes.com/business/economy/2023/02/18/mortgage-holders-to-endure-higher-interest-rates-as-ecb-focuses-on-battle-against-inflation/

If you think mortgage rates will hit 6% soon, you should be looking to lock in the Avant 30 year fixed rate of 4.3% ASAP.

Even if you overpaid by 15% on a house you’d still be better off with the lower rate.

Thats my plan. But not sale agreed yet on any house so Id say summer before I would be drawing down. Im only working the 6% off what they are saying rates might rise to. Hopefully if Irish banks have lots of deposits they pay less on they may not need to get into 5-6% range. I really hope that is the case.

That argument might have worked this time last year, your probably better of to let the rate rises filter into downward prices now. They are going to come very fast and take 6 months to a year to fully affect price.

Rising rates with prices peaking due to the cumulative effect of years at 0% to - 0.5 is the absolute riskiest time to buy any building

If you believe 6% mortgage rates are the norm going forward (I don’t) and you still can get 4.3% 30 year now. You should buy now no matter what.

21% price drop + whatever the cost of your rent over mortgage is while you’re wait just to be back where you started while inflation is running rampant. It’s a no brainer.

Are you sure you weren't getting the '148' figure from the daily price drops figure? At present there are 348 drops in Dublin alone - a total of 3,787 for sale in Dublin. So 9% of active listings have had a decrease in price. (total & percentage are coming soon).

Site not trying to be interesting - just a tool to assist people gauge the state of the market :)

I find this guy very knowledgeable and he imparts what he knows in a relatively easy way to digest. It is US focused but he sometimes comments on the ECB. He doesn't see rates coming down anytime soon.

https://wolfstreet.com/2022/12/25/the-price-of-easy-money-now-coming-due/

There is a real lack of understanding by people on what is happening. We could have higher rates for a very long time.

I was talking to a work colleague who is rushing to buy now "before rates get higher". There was a clear lack of understanding of just how much extra higher rates could possibly cost over lifetime of mortgage. People rushing out now are going to take a double hit, pay a high price for the property and likely be stuck on high rates for foreseeable.

We will be reading about this mess in the future, expect next property circus to be all about people unable to pay their debt or refusing to pay as their property value crashes.

The Other Hand podcast covered it on most recent episode. They think rates will impact but they also stressed if its your forever home and can afford it there are often reasons to just go ahead. They just were keen to say make sure you stress test yourself and make sure can afford it etc. Their advice was kinda don't be in any rush. I think house prices will go down from back end of this year into next year but o big crash. Wont be cheaper for mortgage buyer as even if house cheaper mortgage payment still likely higher. Im planning on buying because I need a house now with space for kids.

I'd be VERY wary of placing too much faith in that podcast. This is Jim Power after all and those of us old enough can remember his forecasts before the last crash.

Here is a clip of him debate with Morgan Kelly (starts about 4m40s in). If you still want to place faith in him fair enough!

https://www.youtube.com/watch?v=Gd6ZwqLePC0

Many moons ago I wrote on this thread that at 4% interest rates there would be pain and at 6% there would be Armageddon. We're at the 4 and things seem to be holding up better than I would have predicted, although it is early.

I can't see a scenario in Ireland where the interest rate is 4-6% in order to fight high inflation and yet property prices are crashing. Also, for the sake of argument, let's say the it does come to pass that there is a 70s decade long inflation event, in this scenario has your friend's wages kept up with inflation and are they better or worse off in terms of what they are repaying for the house?

Sorry for the Sunday morning quiz mate, my last question to you is do you think it is possible that in 10-15 years time we could look back and think that people who bought property at the start of this inflationary event actually fluked the timing of their purchase perfectly, what would you make the odds of that?

The only way to sustain it temporarily is to suffocate supply further and maintain buying at the top 15 to 20% of householders. This postpones the inevitable or creates the so called soft landing untill the next election. Renters continue to be sacrificed particularly those covering the full cost. The taxpayer will be bled to maintain rents at current levels.

The governments answer during the week is telling. Doubling down on demand side policies. The solution they propose is to further assist FTB in buying a home. There solution to high rents is homeownership.

This both increases prices and rents further or restricts the falls in periods of corrections. This will exacerbate the housing crisis. In effect it's vote buying, the most expensive kind from the parties that brought you the most expensive bank bailout, hospital, social housing, metro etc in the world.

As stated earlier it only postpones the inevitable and makes the crash when it comes worse for everyone

Canada and Oz have ramped up the net immigration flows post Covid lockdowns as well.

Here is the latest on the Canadian property market:

https://wolfstreet.com/2023/02/16/the-most-splendid-housing-bubbles-in-canada-february-update-on-the-housing-bust/