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

Right if there is no undersupply why are there so few places for rent and spiralling rents so bad they needed rent controls

Why are the numbers of houses for sale so low at a historical level

He even says there was undersupply in past but no explanation as to when this was magically fixed without adding any stock to the market

There was historical oversupply and it's been reversed

Like why is is he picking out figures for housing building and comparing it to 10 years ago when the market was at the very bottom of the post Celtic tiger slump with no building, which is the whole problem in the first place

Vacany rates are great when they aren't in leitrim

And saying houses haven't gone up in real terms when inflation is sky high yet incomes are flat

Yes, and the biggest piece - up to 70% of house buyers are FTBs. Increase the number of FTBs and with all your other buyer types in decline and that percentage may be even greater and as you say, FTBs have little choice. Talk to an EA, there is no denying the latest surge.

I’m not close enough to market to speak to very live trends. You have some people on here saying demand is soft where they’re looking, others say it’s hot. The data seems to indicate prices have been falling for a while but may have picked up very recently - some have said this just the usual summer increase which will die down (hopefully).

I don’t think the piece on SSB not mattering is true. If we completely ignore supply and assume this is constant. Aggregate demand is just the total amount of money being pumped into housing across FTBs, REITs, SSBs, Govenemsnt etc.

When people move up the value chain they increase the amount of their money in the overall market, increasing aggregate demand. When people downsize, they pull money from the property market, reducing aggregate demand. We also have a major underutilisation problem in Ireland where people generally live in houses beyond their requirements (worst in Europe I believe)

Roughly based on recent data that I can see

35% Cash buyers

40% FTB mortgaged

25% SSBs Mortgaged

So absolutely acknowledge the 40% FTB mortgage people are seeing increased aggregate demand which in isolation would push up prices. They are also largely not sensitive to rate increases as long as banks will lend to them (which they are), as rent is so much more expensive regardless.

However the other 60% of demand is likely to have a material component of ‘non-essential’ demand which will be reduced by higher interest rates (kinda the point of higher rates I guess. Kill demand for everything).

I’m hoping the increased demand in the 40% is outweighed by the reduced demand in the 60% (less active REITS, less upsizing, more downsizing) which would allow a continuation of more FTBs getting loans approved for houses without an associated increase in price. That’s the best outcome we can all hope for.

You are incorrectly equating people's demand to move with new people coming into the market

The demand is not the same

One person moving make space but they take it up somewhere else, it cancels out

If no one new entered the market the demand would look very different

Normally rental is flexible and can absorb some demand but it has imploded

So what has taken the slack is massive increase in the age of people buying and the rest staying at home with parents, that is a crisis, it's kicking the can down the road

The demographics are all in place already for the demand

I think too many people do not understand the structure of our workforce.

Historically people had a Jon it entailed 40 hours over week and that was that. Traditionally people like students were often paid cash. Because of the change of nature of business payments all pay is now virtually all recorded.

Now if someone starts to work at 16/17 years of age they are on the system. They actually start on the less than the minimum wage. An U18 year old starts on 70%, @18 it's 80%, @19 it's 90% to where @20 you get the full rate.

Often these are on low part time hours and they drag down the average and median wages. Apprentices and interns also effect the statistic. We have over 250k college students in this country and the vast majority are working only 20-30 hours a week at the minimum wage or lower in some cases.

The nature of retirement has changed as well with many people now working part-time. The HSE is constantly recruiting retired nurses to work part time 15-20 hours/ week.

It's amazing the amount of people on the OAP I know that are working part-time, school bus drivers, machinery and truck drivers, clerical staff in companies. I know at least two retired women that do accounts for small businesses that take 1-2 days a week. Both work from home.

Add to that the amount of contract work out there ( not just the RTE example) but plumbers, electricians, blocklayers, painters who's earning are not accounted for in the median wage statistics as they are some traders.

If you go back over this thread you can see all the posts that immigration will never be as high as it what was pre Covid….that prediction was way off the mark.

We also had posters claiming that there was no housing crisis and it was just media hype because there was enough vacant property to house everyone.

yes we could end up with an oversupply if the population declined rapidly due to lower immigration and high emigration.

I don’t think anyone will argue this point but you need to look at the probability of this happening which is quite low without a Major Economic Event leading to mass job losses. yet we have full employment at present.

The amount of full-time adult ( not students) workers on the minimum wage is minimal. Generally retail and entertainment are paying 14-15/ hour minimum to fulltime staff. They are generally categorized as a shift lead or head waiter/ barman.

At a guess minimum household income now for a couple both working In very ordinary jobs is probably 55-65k/ week before tax.. Minimum earning in construction is now probably above 700/week before tax is taken out.

Median household income @45k is after tax as often that is what people report and I think I saw somewhere that they taught the figures were under reported as many do not fill it out correctly. It's a figure I be wary of taking into consideration as it includes single households, couple, pensioners etc. Sole traders are a terror for underreporting there income.

Agree with all of that. Post wasn’t meaning to blame older people - they, like my parents, are just making logical decisions in their own best interest (why wouldn’t they). Just speculating the changing economic winds (specifically higher rates) may alter the logic a bit!

Only place id differ is I’d probably use a small bit of stick as well as a healthy dose of carrot. 100% bridging loans are a great idea as this is a real barrier to moving. There was also talk of reduced stamp duty for downsizers (I think they should go much further on the incentives here) but not sure where that got too!

I think this is because the banks have yet to pass on the interest rate increases to new mortgage applicants but people fear they soon will so are queuing up to buy now instead of holding off.

BPFI figures on mortgage drawdowns last year had median income of FTBs at something like 90k. It was definitely under the 100k+ figures people on here would consider a normal household income.

And that figure has no distortion from part time workers or those who are totally priced out of market - these were mortgage drawdowns.

It was discussed at length on thread sometime last year - I had hoped it would put the average income question to bed. But now we're back again

Edit: my mistake, misinterpreted the above.