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

thats per person, per year, you can see how it can easily be bypassed

i dont think there's any other rules in place as pretty impossible to regulate, all they can really do is regulate exchanges of currency

From the article

By my maths (suspect), that's less than 2500 units less than 10% of the output. Expect that to drop significantly with much higher rates. High cost to the state for very low output.

Makes no difference to me if my house is at 2018 or 2023 price.

The 2023 price actually drives up my costs in terms of tax, insurance, general inflation as with oil the higher the price the higher the price of everything else

Fortunately housing and inflation are our governments number 1 priority :-)

Whats the correlation between maintenance costs on the same house when its market value changes?

Insurance is rebuild cost, not market value.

If you are saving for a house then only house price inflation is really important. That is far lower than general inflation. Also with wage increases now above house price inflation the average house price is now a lower multiple of the average wage so should be more affordable. Of course if you are paying rent while saving then that can make it more complex.

It’ll be easier for you to trade up if values drop?

So you think the value of the more expensive will drop, but your existing house will not? And if values decrease, there is likely to be more competition for the better houses.

You are kinda making my point, you want other houses to fall so that you can buy a better house, and also that your generation can buy a house, but you don’t seem to factor in that the price of your house may fall more, and more people, particularly cash buyers will take advantage of lower prices.

99% of all developments are financed by funds because banks stopped lending directly to developers and instead lend to a fund who along with investors in the fund finance the development.

Levy even more taxes on the small amount of resident net tax payers….

EU citizen will always be treated like irish citizens, so any taxes would have to be residency based. There aren’t many foreign based BTL buyers in ireland anyway. Most landlords are residents.

Not to mention that any event big enough to make property prices collapse would need to wipe out half the jobs in the country and nobody will be trading up without a job.

I honestly dont think all of the people praying for a crash understand what else will be happening besides house prices falling if there is a crash big enough to collapse property prices in any significant way.

Everything is relative, if johnnychimpo is talking about trading up to an expensive/luxury house which is a discretionary purchase, then in a recession, that type of house is likely to drop more in value, but if he/she is talking about a more expensive house which would be popular with other buyers who just want more room, or in a better area, then it’s hard to see how the factors which affect the price of that house would be any different to the factors affecting a similar price drop on his existing house. And, as others have said, the shock to our financial system which would be needed to reduce prices by a significant amount would likely be associated with job losses and wage reductions.

Which brings me back to the point of mine that johnnychimpo responded to, it’s all good and well to say we want prices to fall so that younger people/average income earners can buy a home, but we just don’t want it to have any affect on our own houses/income. So it isn’t just FFG who have a vested interest in house prices remaining stable/high, all property/home owners do as well.

If prices fall 20% across the board, anyone looking to trade up saves more in absolute terms on the more expensive property they acquire than they lose on the cheaper one they sell.

You should only cheer high prices if you're going to be a net seller of property for the remainder of your lifespan.

They don't fall linearly across the board though

On the prices rising/falling argument for those trading up.

1 as stated more expensive houses fall faster than entry level housing in a correction. More buyers for your home less for the bigger home

2 those trading up don't have the gun to the head of current market rents, so waiting is an option and saving is easier

3 trader uppers don't buy last year and decide to trade up this year, they will have significant equity built up between 5 and 10 years through appreciation and paying down mortgage

4 the more trading up that occurs, the more stock that is available for new entrants. A more fluid market is a more healthy market

Posts by @Dav010 and @Bass Reeves may have an element of truth in them if we had a repeat of 08, where the banks and the state were effectively bankrupt, so those propping up the bubble were eliminated.

In truth the vast majority of homeowners would be much better off were the market stable and affordable as they derive most/all of their income from work. A stable housing market allows them to move easily between jobs and locations and protects them from government sponsored boom bust policies

CSO property price index released now for March. National annual increase of 3.9% (was at 5% for February), in Dublin the increase was 1.7% (was 3.2% in February). March figures probably still represent a lot of deals made before the new year though, so the competing effects of the new 4x limit and higher interest rates might not have had much of an impact on these figures.

Plenty of states in the US with effective property taxes substantially in excess of 1%.

Interest rates surely have to have an effect on affordability. How much of an effect though I dont know.

A couple I know who returned from Australia have been waiting for property prices to come down for about 6 years now while they rent here. They are still waiting. And the more prioces go up the more they feel they have to wait. But in truth I think between the rent they are paying now and the interest rates I think that the properties they would have wanted are now beyond them. As much as they save, prices are running away on them. Add interest rates to that and I think they are out of the current market and not by choice this time.

And the worst part of it is that they are both 40 years old now, so their potential mortgage payments will be getting higher the longer they wait because of that too.

So there are definitely a lot of people getting dumped out of the bidding for property simply because they cannot afford that property anymore. It doesnt seem to be having an effect on prices yet because there is still a steady stream of buyers, but I feel if interest rates go up much more there are going to have to be price adjustments. Or more likely more REITs will be in to buy up houses and apartments. The councils too.

There is just demand from all directions now, even with people dropping out.