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

Demand is nationwide. There is still property for sake that is below the cost of construction in places.

Looking at bonkers mortgage comparison site green mortgages @90,%LTV are available at about 3.75% and BOI seem to be doing a standard loan for 3.95% four year fixed. Those rates take a lot of risk out for FTB.

A couple of us here early when rates started to rise pointed out that Irish rates might not increase substantial because of the high levels Irish savings. Rates are only 1.5-1.8% above pre interest rate increases

Rent allowance accommodated house shares, does HAP not do the same

Only If people request it. They should be offered it and if refused, to the back of the list you go.

People shouldnt be offered own home accom on the social unless they have kids of school age or a genuine need to live alone.

The numbers on the waiting list would soon diminish if they house shared like everyone else in society.

Heck, some folks might even get a job so that they can afford their own place!

McWilliams likes making that prediction. He does so fairly often, like back in 2019: https://m.facebook.com/story.php?story_fbid=pfbid02T5nv4jXZTmHeWiwyEbSHQm5m4P5WBXTTdFYaMpHY7rXanERcPf9r3RVieqpHPTQLl&id=6303603305

Eventually he'll be correct of course.

Don't see it getting cheaper in the next 12 months.

The Ukraine war ending and the 100k refugees head home may push the needle.

That said, some builders look to be in difficulty, not able to afford rates that subcontractors are charging, and I'm sure interest rate rises are having a large impact there too.

It's up to the ECB to deal with interest rates, so look at inflation in Germany and France to get an idea whether they will increase. Not looking good for rates dropping anytime soon, and I'd imagine Irish banks will be slow to reduce rates, seeing as they were slow to increase them.

Why extract one sector of the CRE market to back up the claim. The one sector that was changing massively anyway for a long time before 2019 as people changed their shopping habits and no longer used physical shops for purchases. Just look at Philip Green and how the high street changed his property portfolio…this was way before 2019. It was around 2016 that more retail shops started closing than opening.if it was only retail that McWilliams was talking about in 2019 then it was not a prediction as was happening for years before.

On the Other hand in 2019 he was saying that all the new hotels being built were never going to be filled and we had a massive oversupply. Have you tried to book a hotel room recently is there any sign what he was saying was correct.

in regards office space there was very much a divided opinion in 2018/19 and many like McWilliams highlighted the big tech head quarters as a sign the market had peaked….This assumption comes back to a phenomenon in the UK whereby every time a UK Bank opened its new shiny new HQ the bank was either taken over or got into difficulties. (many believe that this is because they paid more attention to the HQ than the actual business). There is little to no Empirical evidence to support this but make for good reading.

warehouse space was always going to be a growth area because of brexit and the fact that it looked unlikely that an agreement on trade would be reached

That leave residential property in the CRE market (I think the definition in the regs is 6+ residential properties = CRE) There is still no signs of slowdown here because as investors pull back AHB have stepped in. Take Apartment building in cork at the moment currently just shy of 1,000 hardly any BTR as investors and majority all being built for AHB as either social or affordable and I would expect to see a very similar situation in Dublin.

Saying McWilliams prediction in 2019 was right is not necessary the case when you jump into the facts..Also you can’t ignore the elephant in the room of his prediction in 2019 that house price will fall and don’t buy now as you will loose which he then doubled down on during Covid. Anyone listening to his advice then are financially worse off today.

I deliberatey chose 1 paragraph as it emphasised that retail performed better than office space despite being down 30% in the 3 years after the peak being called in Irish commercial property, that's 2 of the 4 main commercial real estate segments

With regard to hotels, they were always going to get a bounce coming out of covid. As a person that has almost always holidayed in irl, since covid we have gone abroad. We have been priced out and we are not alone. The medium/long term effects of this have yet to be felt. The wheel always turns!

Ukraine aside, We also have over 14000 in emergency accomodation, usually hotels at huge cost to the taxpayer. At the same time we have a boom in residential properties acting as airbnb's. You cannot legislate for the depths of stupidity where homes are for the odd tourist and hotels are used as housing for families

What proportion of CRE is warehousing?

We were continuously told here from 2016 to 2020 that we could not build more residential property because Labour was busy building offices, hotels etc. Had we a plan we could have a more balanced approach with less commercial and more residential and then we might have some hotel beds for tourists and homes for families

I do recall David calling for a buyers strike, but here is his opinion piece on the market January 2020

Do we have any recent figures on govt take up in hotels?

Especially the split between international protection & people on housing waiting lists.

AHB = social and affordable housing and is what what we are hearing day in day out is required by all parties. This is what traditionally was called council housing….Only difference is that by doing via a AHB any debt doesn’t get consolidated into the national debt….regardless of what political party is in power they will all use these vehicles for any social housing. Correct me if I’m wrong but this is what you have repeatedly said what is needed (I.e. social and affordable housing)

The only difference between SF and current government Policy is that SF want to use public land so that there budget figures look better in a short media clip. But Once you take into account the land value at market prices you end up in same financial cost to tax payer. Neither SF or current government can change the cost of building social housing directly to the same standard.

Just to be clear I’m not talking about a policy of renting or leasing instead of building because were specifically talking about CRE getting into difficulty and not building BTR. We have seen signs of something similar over the past year or two and the example I gave was the apartments being built in cork at present where the majority are AHB and very little private BTR because yields are to low despite eye watering rents to break ground on projects with planning approved.

It’s irrelevant as to the split because there is a legal requirement to house international protection.

what we do know is that in homeless numbers they are not included despite the need to house.

the average worker gets a look in today with the Help to Buy…. that’s the only help they get…does it push up prices of course it does when the supply isn’t adequately addressed. it’s SF policy to remove this but yet again it doesn’t address supply issue.

When it comes to supply they are of the belief that building more social housing will fix the problem and the private market will continue to deliver the same level of housing at present despite workers being redirected to build social housing and the loss of the HTB subsidy.

It’s not like as a country we don’t know what happens to house building when costs are more expensive than the sales price. Are peoples memories really that short?

So the way I see it is unless SF can explain the following then anyone that is working and paying tax beyond the min rate is going to be substantially worse off if they are looking to buy a house.

• - how they are going to control building cost to ensure that private housing doesn’t cost more than it would sell for so housing
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• - how they will find extra workers to build their social housing without impacting the private housing market.
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• - how they will cut the cost of building to offset getting rid of HTB
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• - how they are able to build housing so much cheaper to the same standard in their alternative budget besides fudging figures to exclude or not take into account all the relevant costs such as the public land they are building on.

Of course the could get rid off Vat on residential property (if legally allowed by EU) but then how will they balance the books for this loss of gov income. Will they increase tax elsewhere or make cut to government spending or will the savings in HAP or Hotels cover it. Basically share how the figures genuinely stack up without the smoke and mirrors.

Further offsetting the ECBs inflation fight: