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

The shakedown laid out clearly for all to see here

Copy and paste any news article behind a paywall onto the site, if it isn’t archived by someone else already, it only takes a minute or two to get around the paywall.

https://archive.ph/tSz6M

Councils building nothing but social homes isnt going to solve our problems though.

Its homes for people on average salaries and above that are needed also (and should be prioritised), but the govt doesnt seem interested in that group.

Lets hope the private developers keep building so there is at least some new stock comimg online for people that work on median or average salaries.

There are close to 80,000 households on HAP currently, costing the state over €1bn a year. Its both a colossal waste of money and a huge factor in the private rental sector being so over capacity currently.

Getting those households off of HAP, and into social housing, both saves the government money and helps create capacity in the private housing market. It should have been done years ago, but wasn't for ideological reasons.

I agree with the principal of moving HAP tenants to social housing, but i dont think its ever going to happen.

It would look poor from the govts perspective to shoehorn HAP tenants into exclusivley social housing estates.

And what if the tenants refused to move?

You cant disband HAP because there arent enough social homes to move the tenants into anyway, even if they did agree to transfer.

Therefore, the transition would have to be done on a phased & optional basis.

i think the other problem is that creating 100% social housing just leads to Ballymun type estates.

Councils should build socially mixed develepments.

Some cost rental homes, some shared ownership homes, some 100% ownership homes, some fully council rented homes etc.

So we get a mixed and diverse group of residents from different economic stratas.

That way, we can part the waves between social and private housing, as you say, but without ghettoising social housing estates in the process.

There is a preconception that social housing has to be for poor people.

But we are all paying for social housing via our taxes and it should be available to everyone.

The council should enable mixed social developments, in the same way it forces private developers to.

I guess the problem is that the councils are obsessed with clearing a "social housing list."

And only the low income folks ever get on that list.

We are doing it all wrong. Everyone that wants to be should be on that list, regardless of income and wealth.

Private rents and house prices would fall as a result of creating mixed council developments...which I think is great, but is probably the same reason why the govt will never take my approach!

Yes they should be building affordable housing absolutely, but right now, in the short term they need to build social housing. Not all social housing ends up as ghettos!

A year or two building, taking social tenants out of private housing, then bang onto affordable and mixed housing estates, which is where I would like to see us end up.

Government get 50% back with tax on landlords. It’s far cheaper than financing and maintenance on social houses…..

Why not just create mixed use from the start? why prioritise people on low incomes for housing and create a ghetto?

I would say very few(if any) large exclusivley social housing estates would be considered salubrious.

Yes, social housing should be available for all and as HAP is for the private market, we could house some folks in their current place a little longer and prioritise new social housing for working people, especially key workers, whom cant afford private rents and may not qualify for HAP.

But as long as we can avoid the 100% social ghetto, i'm happy enough.

I just dont see the govt taking that approach though and I think they will continue down the path of housing the no and low paid, at the expense of the masses of moderatley paid folks.

I would also like to see social housing house shares, to reduce the list more quickly and maximise the social housing stock we have.

I disagree, psychologically an increase in mortgage payment from 1200 to say 2000 grand a month due to re fixing at these higher rates will cause serious knock on affects in our economy, money won't be spent elsewhere and the real economy that's already in a precarious situation will get far worse

Interesting to see the ECB warning of "disorderly" declines in property prices across Europe.

They seem to be highlighting Countries with high proportions on variable rates for most immediate drops, including Portugal, Spain, Estonia, Latvia. The longer rates stay high, the bigger and more widespread impact will be.

But they also highlight areas where institutional investors have big positions, mainly Dublin, Paris, parts of Germany, Madrid and Lisbon. Already seeing investors flee the space and taking profits. Definitely not seeing new investors. There is risk free earnings out there now.

the money not being spent elsewhere is the exact intention of the multiple ecb rate rises ...

wow so almost 60k houses are getting on average 9k per year in free housesing supports or almost 15k per year free support if on higher rate of tax

seems like an incredibly unsustainable model

Looking at the recent CSO stats on wages and house prices. Given that house prices are now falling, and wages rising rapidly. On a pure price to income ratio, housing is now approaching 2018 levels of ‘affordability’. Wages up 24%. House prices up 29% since Q1 2018. Average mortgage rate in 2018 was 3.2% so a bit easier to service the debt back then than now to be fair.

Seems likely that wages continue to go up strongly and house prices stagnate or fall further in the short term. Could push us back to 2016/17 levels of price to income ratios or so which would be a really great outcome.

Think the focus on house prices in nominal terms is misguided. Even though there has been no massive drop in nominal prices, real prices are plummeting at present. Hopefully it continues, could lead to much more affordable housing without all the pain of negative equity for many.

https://www.cso.ie/en/releasesandpublications/ep/p-elcq/earningsandlabourcostsq42022finalq12023preliminaryestimates/

All very anecdotal ‘my company’. Sure in mine it’s been the opposite 7.5%-9%+ increases for all non management staff. Less for execs etc.

We can only look at CSO stats as the measure of average income and they’re at up 24% since 2018. That is a fact. House prices are up 29%. That is also a fact. So on average we are getting back towards 2018 levels. Felt they were also a bit elevated so would be good to get back to around 2016, which purely arbitrarily ‘felt’ like a reasonable point for housing affordability. If we got back there I think that would be a great result. 2012/13 clearly never happening again.

Housing affordability is still terrible by historic standards but thankfully going in the right direction. I think it will continue.

Average income typically includes part time workers. Although it can also be ‘skewed’ by high earners. Per CSO average full time salary in 2020 was €49k. Roughly 4% per annum growth since then, so suspect average full time salary is now roughly €55k.

https://www.irishtimes.com/business/economy/average-full-time-salary-in-republic-nearly-49-000-1.4289348