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

I think people need to set aside what they may want to happen as opposed to anything that is happening.

People will find certain articles and that that reassure themselves or give hope to what they want.

For example, some wanting prices to fall, put up headlines of layoffs. They're of the belief that layoffs=reduced demand=reduced prices (but they themselves feel it won't impact their financial position and they'll be able to make use of the reduced prices)

Likewise, there will be others who don't want prices to rise, and will put out a certain narrative, such as auctioneers and press releases etc.

Imo, there's nothing to indicate dramatic falls, and it doesn't affect me either way whether there is or not. The supply simply isn't there at the moment. Those wishing a recession may just see themselves ending up burning the candle at both ends. Financially worse off, and in no better position to buy a house.

We're 3 years and more reading about dramatic price falls based on 1)people's desire, 2)people coming to conclusions adding things together from previous price falls and presuming it'll be the same this time and 3)people having a predetermined opinion and providing numbers to fit that opinion.

https://www.boards.ie/discussion/2058041687/property-market-2020/p1

Here's some 3 years ago predicting 10% drops annually. Before covid. Then covid happened and the drops were to happen then surely. None account for the difficulty in predicting human behaviour or lack of supply.

Number 5 is Limericks biggest employer by some margin. Is there anything to be concerned about here?

Your forgetting that the % of people working in construction that are not sitting on sites far out weigh those who are, only a small % are up at the top sitting on sites so what do these workers do who have no sites to sit on?? Sit there and wait go from earning 40/50/60/70k a year to the dole??? I dont think so Dave there will be pressure put on these people from all angles from employees looking to work to the government who will be ramping up those vacant site taxes this has already been flagged. Not to mention if the modular homes take off in any meaningful way over the next 12 to 18 months their dinner will be eaten by this sector as the building of new supply will be less of a priority for the government trying to house people and a hell of lot less expensive for the tax payer. Dave it is gouging prices of raw materials have been dropping for the guts of the last 6 months (its akin to the energy companies the price have come for gas and oil but your bill has not, yet prices go up very quickly and are always stickier coming down than going up) and it has not been reflected in their prices so there is no other word for it.

Lets get one thing clear their is a huge difference between the last bust when we had a shocking over supply of houses including the ghost estates so anyone building would of just been chucking more supply onto the pile of supply that was already there and there would of been very little profit and at that time people had not got the financial leverage to buy either. There is a market for new builds at the moment but people cannot afford the prices so business is business and if you project your prices at a price point that the vast majority of your buyers cant afford its not exactly a solid business strategy.

You would think so wouldnt you. But on the flip side there are not enough houses already to buy. Not enough houses available to rent. Not enough builders to build enough houses (in a recession they wont be building them anyway). So anything bug enough to cause house prices to go down is going to be big enough to have a massive effect on employment rates. And with no jobs who is going to be buying the houses? Oh yeah, the remaining people with jobs with higher taxes.

What a mess.

After the last recession nobody is going to hang money out in the hotzone if the economic outlook is bad.

Banks wont lend for building. Builders wont want to build because they might lose everything like last time. They will wait it out til its safer to invest.

The only entity capable of building will be the state. And to do that they must tax the already highly taxed workers who are lucky enough to hold on to a job even more. Thaqt wont go down well at all, so expect more talk and can kicking but minimal building.

Lets be clear they stopped building as their was an oversupply I mean ghost estates how many had to be demolished, prices had dropped from 50 to 80% of their pre bust values and there was no money in it. Currently we need more supply but people cannot afford the price point this is evident in the amount of government supports for FTBs and there are now real threats to their long term viability from modular homes and the vacant site levy (which will be ramped up if the big boys set their face against building) to losing their pool of employees to other countries. If those that have the land and are ready to build think that jimmy the brickie and joe the plasterer will hang around on the dole for a year or 2 waiting for the big bad boss to give the order "to build" they have another thing coming. These lads have a really nice life style I had work done by a construction company back in 2020 and the lad doing the build (not the boss now) had the best of gear, brand new Jeep and during the 6 months of the construction he brought the kids to Lapland to see Santa, as well as a 3 week stay in Barbados and of course the 2 weeks in Lanzarote. These lads now have a taste of the high life and it will be hard to readjust to a day trip to Dollymount beach with sandy sambos due to only being paid the dole.

The other difference is there was an oversupply last time and now we have an undersupply.. The last recession seen prices plummet there was no money in building. Currently there is money to be made which is the biggest difference between the 2 eras.

The other difference is the vacant site tax at 3% kicking in at the end of the year now these sites if they have planning will be worth a fortune so I can see a lot of very unhappy construction company owners having to pay this. I can also see the government upping this % in the next budget if the builders are sitting on their hands up until then. So there will be a real gun to the builders heads to use it or lose it. As I said before people cannot afford the price point currently so if the builders think sure we will just pass that 3% on then the spiral will keep happening the property becomes more unaffordable so less demand and less work for the builders. So either way the builders cash is hanging out there they can build and get a slimmer profit margin or lose 3% or more at the turn of next year.

Your also forgetting that it is a business and this nonsense that they can sit on their hand ad infinitum or until the government give them more gravy is ridiculous. They have to make money or hit the wall. Their employees have to get a pay check or they leave.

So if I was a builder and had a site with planning ready to go I would be pulling out all of the stops to get my slice of the pie before demand is quelled via other mechanisms, I pointed to a few already as in Modular homes, more interest rate rises and the emigration valve. The fact is that if the current paradigm continues the majority of our population under the age of 30 will never be able to afford to buy or rent so they will be left with one option that our ancestors had to use.

So how far up will this go will all construction workers just hit the dole queue and do you think the employees will skip some stones waiting for what ever mechanism the boss is waiting on for him to start building. I dont think so the lads will be gone and this will inevitably cause even more delay for the site owners with regards to trying to get a profit from an asset which if they do nothing will cost them 3%+ on a yearly basis and how long will they allow 3% of their site value leave in a tax.??. Trying to compare the construction game to 2008 is not a real comparison and guessing what they will do based on that is a fallacy the game has changed and significantly so

Monopoly

I knew there were a few in that camp, but banks cso etc were expecting drops

Is your opinion change down to buyer affordability solely. I feel the rate rises would have a larger effect on investment funds. The banks failing have tightened credit also and the funds will be damaged by commercial property falls

They may have been expecting drops but you can be sure they didn't see the current issues impacting banking or the Tech sector at the moment which I reckon will make a lot of the higher ups within the banking sector a lot more cagey about who and how much they will lend in the current climate which will reduce demand. It will have an impact on both funds and individuals IMO

Youve been through a recession before right?

Stricter lending will kick in with US regional banks as they will be watching their liquidity and funding as deposits move out to money market funds. This will make headlines.

Don’t see much change for Irish banks as they are awash with sticky retail deposits. The biggest issue for Irish banks is finding people to lend to within their risk appetite

We have entered the twilight zone.

"Builders" are defined as people who own land but who will refuse to actually build anything.

"Landlords" are defined as people who own houses who don't want tenants.

Both prices insane for that ugly nut house.

We don't know for sure it will go through

An estate agent told me builders are being laughed at going for finance for, say, a new estate. Not a chance unless they have a signed contract from the council/ charities, in that case no bother getting cash.

2bed for 880k is max. There is no way to add a third. This is not particularly walking distance to anywhere.

as I said there is absolutely no slowdown in Dublin. This is just one example. Houses in maxwell square (2 for sale now) woth sherryfitz all bid up above previous record sales. Both 825k best bid and still going.

its 1700 sq feet, at 515 euro per sq feet (the original price) it doesnt seem outlandish.

MArch should see a huge increase on what was on the market in the winter. At least thats what happens any other year.

I have and what is your point do you think every recession is the same?