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

It can that is exactly what a sole trader is. The extent of involvement by The State is to ensure properties meet health and safety regulations.

Setting a price that the market can bare is not acting illegally it letting the market find its equilibrium of supply and demand.

Economics 101 if supernormal profits are earned new suppliers are attracted to the market thereby increasing supply which has the effect of reducing price. This is how a free market works.

Other more mature rental sectors in other countries have supply that is a closer match to demand. More importantly they have a more balanced relationship with both parties in the lease. Sadly this is not the case in the Irish rental market.

It's more than health and safety requirements it's to enforce continued improvements. Not just in housing but it seems a large proportion of the country would let things go to wreck and ruin to squeeze a small amount out and the government cannot allow that to happen. Fixing prices I disagree with but setting minimum standards I do agree with.

As for your point on attracting new players to reduce the market didn't that happen with REITS but prices still increased?

Min standards already exist. Attracting new entrants in large numbers ensures no one supplier or small number of suppliers will control the market. But what has happened is small landlords are being driven out of the market because of continued one sided legislation etc.

Everybody wanted professional landlords which is exactly what is happening in the form of the REITs. How is that working out?

I would argue they dont really exist having rented several places that fall far short of them. And even the existing standards are far too low already.

Unfortunately I think in this debate we both have different views of what we want the end result to be and as such won't agree on it. In my own view the one sidedness of the recent legislation you mention is there to protect people with the side effect that some take wild advantage of it, but that doesn't make it wrong. It's unfortunate that some have to leave the market but the alternative is even more terrible. In my job I see the social cost that the lack of housing has caused and it's shocking already.

His point sounds good to me, as a renter back then. I had a variety, some out and out gougers, others just happy to let the property cover costs or make a small profit. In the long run, neither sort was soft-hearted when time came to throw you out.

Luckily I managed to get out of that particular rat-race in the end. Dublin landlords are seriously the worst, so many of them still act as though it was 1913..

We have been at full employment for a while, so any small contraction in GDP due to multinationals exporting less is not the end of the world, nor is it going to materially impact house prices.

There is still far too much pent up demand and sfa supply

We are unique in that any mortgages that fall into arrears or non-payment as a result of rate hikes, these cant be repossessed.

So the only option left to the banks is to raise their rates further, so that the "performing" mortgage holders pay even more to cover losses made on those in arrears.

No other country would see this happen

Latest CSO visualisation shows a staggering 140 k migration. In such a market I could rent out my coal shed to some unfortunate. By way of example a nearby house of 65 m2 has just been rented out to six people. Bunk beds have gone into the downstairs room. The Ponzi scheme rolls on.

https://www.cso.ie/en/releasesandpublications/ep/p-pme/populationandmigrationestimatesapril2023/

It is interesting to see what is happening in the US now that mtge rate has crossed 8%. Housing demand back at mid 90's level and basically the market has ground to a halt. Builders are not faring as bad as they are juicing up the incentives (such as mtge subsidies). I am reading stories of realtors who survived 08 saying it is worse now.

So no incentive to build until rents increase or government step in and pay….Absolute joke

I'm currently renting. Would anyone think it would be wise to buy a property at the moment? Keeping in mind that there doesn't seem to be any change in the imbalance of offer/demand and with interest rates only going up and perhaps staying this way for a bit, is it wiser to wait if you can for lower rates or leave the rental market as soon as you can?

I have people say ´´get out of the rental market and buy yourself a property if you can´´. Others say ´´I'd wait this out´´.

I´m not even going to go into the whole ´´there's a crash coming´´because God knows they've been saying this for years..

I don't think we have to get anywhere near 8% before serious pain will be felt

But home owner will be 5-10 years into there mortgages, let just take that it's a buyer five years into there loan, there wages could be 10+% higher. Government is increasing tax allowances and bands so there take home will increase by 10%. If they were single when they bought it they may now be in a relationship. Even if they have a young family government is picking up more childcare and school costs.

There was a discussion about this a few years back. Are you renting as a single person or a family units and how much is the rent.

In general it's cheaper to pay a mortgage than renting at the moment for the equivalent property. You also have vastly more security. Rent prices are unlikely to decrease and interest rates probably won't increase dramatically or at all going forward. Given the exodus of landlords rent prices will keep going up/rental accommodation standards will go down. So purely from a cost of living buying is better.

It does depend on your situation though. The younger you are the longer you can afford to wait. The older you are the shorter the mortgage term available to you resulting in higher repayments. Irish rental regulations are not set up for long term renting which also needs to be factored in.

As someone pointed out in another thread there is also the cost of the rent you are paying between now and buying to consider.

All this is only relevant if you have the deposit and income to buy in the first place. Which is the biggest hurdle and a huge difference between the current housing market and the mid 00s.

As well I think interest rates will be slow to reduce. TBF banks in Ireland were slow to increase and the most expensive new mortgages are around 4-5% mortgages which is the ECB rate.or a bit above it

Even if the ECB rates drop Irish mortgage rates may not reduce below 2-3%.

Another if he is buying an apartment outside Dublin they are still below cost of construction in must locations