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

Just watched the news and saw they are talking about reducing CGT on second properties…:what does that achieve? It doesn’t increase the housing stock it just ends up moving pain points from one group to another….Would they stop creating problems and just build.

Similarly, in other European capitals, plenty to rent.

That is to stop small landlords selling up and to attract some new ones to invest presumably. But it won't, because they are talking about it only applying when selling to existing tenant or LA or housing bodies etc. No-one can rely on any of those being options when they sell up, so it isn't going to make anyone invest/stay invested.

It's just politics, talking about giving something to various groups, when they are doing nothing in reality.

It does look very odd, I wonder how accurate the claim is. I was under the impression that it takes years, and only gets to court after extensive efforts are made by the lender to engage with the mortgage holder about the debt.

Upside is a quick recovery with a probability of 15%

bad case is what they expect with a probability rating of 45%

downside 1 will be lower than expected growth that is predicted in base case with a probability of 25%

and downside 2 will be energy shock gets worse and inflation goes higher with a probability of 15%

what is interesting is when you look at their assessment of Irish v UK house prices…AIB results published today show in the worse case scenario property prices to fall 8% in Ireland compared to a fall of 14% in the UK

If they just blindly reduce CGT it would surely incentivise people to cash out now.

If they wanted to keep people in they'd raise it (perhaps with a stated intention to reduce it at some point in the future)

looks like crippling inflation is feeding into planned state infrastructure projects now too:

"School patron bodies have said they are "bitterly disappointed" by a Department of Education decision to put on hold the construction of 58 new school buildings across the country."

A total of €860m has been allocated for school building projects for this year. In 2022 €792m was initially allocated but that was later augmented by an additional circa €300m, bringing the total for 2022 to €1.12m.

https://www.rte.ie/news/2023/0309/1361112-school-constructions/

I think you're missing the point a bit? A central case can be 'negative', even a positive case can be 'negative' if the overall outlook is bad. The central case is just what they consider to be the most likely

We have had ten years of growth off an artificial low. The low caused a situation where we had very few houses build for 6-7 years. The first 3 years of that growth was in Dublin only and the next two years only larger urban centres benefited

In the last five years our population has grown by 10% and that is ignoring the Ukrainian refugees. Dublin suffers from a massive shortage of construction labour. 50% of that workforce travels in and out of Dublin every day and needs a premium over what they would earn local to them.

Travel costs have further exasperated that along with carbon taxes adding to construction costs. There is no magic bullet. Unless the price of construction of new houses drops substantially ( which no one can see) it would take circumstances that would cause significant structural issues in this country's to drop prices by more than 10-15%

There are some posters that think shafting certain sections of society will cause a situation where prices will drop significantly. They would quite willing shaft the rental market, the Ukrainian refugees, refugee's in general, older people who have bought and paid for there houses years ago etc to achieve a short term price collapse with no consideration of medium or long term problem that would arise.

I accept what you say, and I don't really disagree. However, let's imagine that the growth continues unabated. What will happen then? If there is a crash, a lot of people will lose out, but if things carry on as they are, so too will many others. You mention older people who have bought and paid for their houses, but what about younger generations who cannot even acquire a house?

Regarding what you say about the growth being on top of an artificial low, could one not equally say that the Celtic Tiger was an artificial high? It was made possible largely though an abundance of credit. Indeed, the growth that has come in the 2010s was largely through the "printing" of fiat money, and that went nuclear during the lockdowns.

As I see it, the current chasing of constant growth is not going to go on forever.

Well then they will be hitting the wall. At some point they are going to have to cut their profit margins a lot thinner. Construction output is down over 20% over the last 2 years and this will continue as people who were going to be getting work done this year or next will be locked out of lending with the higher and higher interest rates. So the question will be who last longer a person who may or may not need work done or a builder who needs to work to pay the bills

The government profiteering (substantially) off housing needs to come to an END.

Good to see the news of the potential removal of CGT in certain scenarios.

Penny might be finally dropping with these idiots.

Here are a couple of simple solutions that the government could implement tomorrow:

1. massively increase property tax
2. a multiplier on same for vacant/underused/low density property.
3. Zero tax on building 6+ story apartment buildings inside the canals.
4. A new “antisocial objection” fee of €5000 to be allowed to object to an infrastructure project.