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

Well you have certainly convinced me that the rental market is on a sustainable trajectory!

The government paying the majority of rents in the country is normal and our corporation tax is reaching for the stars forever more. I shall say no more, eh, fam!

Well I have been consistent a year ago I said we would find ourselves in trouble at some stage in the next 2 years 12 months are down and already.

Property prices are dropping - even do the government are spending 10s of billions to prop this sector up and a huge lack of supply

America's spend doubling. war still going on in Ukraine (people may of thought this would of ended by now), you have trouble in Irreal, China have stopped proping up their property market and is in the midst of a huge crisis. While non of this directly impacts Ireland with our reliance on corpo tax and FDI and goods and services from other countries we find ourselves being strangled with high energy and other chigh costs. Not to mention the knock on effect to amount of corpo tax taken in (this is dropping and will continue to do so) put it this way next years budget will not be a give away budget as there will be feck all to give away.

So yeah there have been doom mongers and for those scoffing at me at least I went on the ledge and gave a timeframe (24 months from 2022) and there is nothing in the last 12 months that would suggest that I will be wrong in my timing (give or take 3/4 months). So sticker this post 12 months lets see where we are if Ireland are going gang busters I will hold my hand up and say I got it wrong.

Property prices have dropped slightly (2% average in Dublin in 12 months to August 2023) is more indicative of 9 consecutive interest rate rises from the ECB causing a very modest restriction in lending instead of being the canary in Ireland's coalmine. The Chinese property market will have 0% impact on Ireland and most of the world is well aware lots of Chinese construction is a scam.

The war in Israel is not going to have a major impact either, Covid and the Ukraine war have had a much worse impact on the world economy. Israel or Gaza aren't going to impact the exchequer or house prices in Ireland. US spending is unlikely to have any impact of FDI either.

I'm not sure what relevance your post really has to the Irish housing market. You're adding a bunch of things together and your conclusion is bad news for Ireland. As the saying goes, if you throw enough mud at the wall, some of it will stick.

Firstly prices have dropped at a time of a housing crisis and p1ss poor supply and with a population that is at its highest for decades all of those pressures should be pushing prices up and yeah I am aware that its due to interest rates and these will not be coming down any time soon.

So China has 0 impact on Ireland? Really you need to get out and look around. Just one small example there are more and more Chinese investors buying properties in Ireland now than ever before and there will be a knock on effect globally not just for Ireland China being in trouble will cause a lot of issues for the globe in countries like the U.S and unfortunately we are way to open to what happens globally now than at any other point in our past history with FDI and our corpo taxes being exposed for example.

Once again you say Isreal will have no impact - really well this could escalate very quickly with the US on the side of Israel and other countries like Iran etc coming to the aid of the Palestinians. Not to mention this has already caused a knock on effect for oil globally as in its gone up - do we not use oil in Ireland? If we do then it will have an impact on this country.

The US at some stage will have to call a holt on their spending it puts our couple of hundred billion right in the happeny place.

I have bunched things together as this is what is happening globally and our property market is no longer just for Irish people. People throughout the globe look at our property prices, our very high rents , our very favorable taxation systems for an entity buying property to rent to the Irish public and even Stevie feckin Wonder can see the return on investment would be a nice earner for them. you only have to look at the ramping up of REITS and other foreign companies buying into our property market over the last decade to see this. So when something happens globally no matter how trivial Ireland is very very open to these events.

Well you have to temper this with other issues at play mainly Supply , demand, government interference and our population explosion. People all need to live somewhere and until more housing is built the level of price drops that should be happening will be kept at a minimum.

Well I can pick them out I am making a prediction that we will be in a much bigger recession than now in 12 months time and it will progressively get worse as our corpo tax dwindles and our unemployment ramps up. I cant see any reversal of Ireland's fortunes while interest rates remain at the rate they are at. But its a prediction based on both domestic and global conditions we have done really well over the last few years to be coming in with a budget surplus, but everyone knows that we would be in trouble if we had not been getting our record breaking corpo taxes over those years

good article to gain a bit of perspective - most of Europe is suffering the same issues as us (though not nearly as bad as us), wrt construction not keeping up with demand.

There is discretionary hap payment for places with high rents- IE everywhere! Homeless hap even higher.

I posted a few months ago there was one rental in all of Balbriggan -e2750 for a 3 bed semi. The government will rent it n charge the tenants peanuts - which they will pay if they feel like it!

No one can tell me that's sustainable, the MNCs are peed off recruiting from abroad and then the staff turn down relocating here due to lack and cost of housing.

https://www.focusireland.ie/knowledge-hub/campaigns/are-you-struggling-and-on-hap/#:~:text=Where%20local%20rents%20are%20high,discretion%20was%20limited%20to%2020%25.

Where local rents are high and tenants are under financial pressure, the local authority can at its discretion increase the amount they pay – so reducing the contribution you need to make. From July 9th, local authorities can pay up to 35% over the official threshold. Previously this discretion was limited to 20%

As time passes, more and more will be rolling off the end of their shorter term fixed rates and be hit with the shock. That will eventually flow through to the general economy unless something else is taking up that slack

I wouldn't count on it. There will be people calling for it, but they will need to make sure they have tamed inflation.

To that point, there will be people on fixed rates with a year or two left locked in and who are taking for granted that rates will be back lower again before they lock in another round. So they are probably spending away regardless of recent rises. They might be lucky, or they might not. Only time will tell.

No the government was not spending a billion on HAP. It's the mistake that most make. When journalists, media and newspapers post and print articles on rent support they incorporate all three different rent supports in the headline figure as well as long term leasing by LA.

Two of the rent supports are mainly to service emergency rent support for domestic violence and for where a tenant finds themselves on reduced income due to unemployment or serious illness. The two of these cost about 250 million and the long term rentals by LA cost another 250 million approx

HAP itself cost 700milliin in 2022. Even if HAP ceased to exist the other supports wound remain in place and it's unlikely that any government will manage to completely do without HAP. Before LA and SW rental support if you were on the LA housing lists you fended for yourself and waited until a LA house was offered to you. Are some suggesting we return to that system.

When you do the costs HAP is a really cheap solution for the government. Rates have not increased in 5++ years. The tenant makes up the balance and pays part of the rent of the unit to the LA counter this with the inability of LA's to collect rent for there own units. I will concede on security for tenants but not on the general scheme itself.

Most LL's would prefer not to be dealing with HAP and would much prefer if LA were able to manage those requiring it.

It's unlikely that any LA will have surplus units even in the future. The nature of the beast is they would always require some rent support systems. Homeless, domestic violence and those that need emergency assistance will always be part of the system as well as there being some form of awaiting list for LA housing. It's at an all time high at present but it's unlikely HAP costs will every be much below 300 million and it's unlikely that other rental supports will every drop by another 100 million

Never let the perfect get in the way of the good. Demand for apartments is for two bed units, nobody will buy three bed apartment's neither investors or owner occupiers. Snodaigh knows that, but look social housing will be overshadowed by them so we must accommodate there whims

Nobody buys 3 bed apartments because in Ireland we still have this notion that apartments are not for families, you need a 3bed semi in a sprawling housing estate instead.

The only way that absurd notion will ever die is if we start building enough 3 and 4 bed apartments.

Now the cost of these units is a separate and valid issue - and something many including myself have been saying for years needs addressed (apartment construction costs), but the idea that because everyone prefers a semiD: all we should ever build are semiDs.. nonsense

The size of the gardens these days in new builds, its more like a cell for your children than a garden.

Apartments in europe have big communal playgrounds and green areas that are far superior to the poky half patio half turf tiny garden you get in housing estates these days.

Most peoples home gardens go unused the majority of the time anyways - kids prefer to play outside the confines of their home to socialise with other children, rather than cooped up in a 30sqm pen