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

A degree back then was the equivalent of a phd today. The point the poster was making was that it has always hard to buy…..Back then it was difficult to secure a mortgage unless you had a job paid by the government. Getting a mortgage today would be considerably easier.

Your post has descended into the worst kind of folk gibberish.

Having single-pane windows and having to light the fire is not hardship. I know because my childhood was in just such a house. I also never went anywhere foreign until much later in life.

Foreign holidays were unheard of because they were expensive. Clothes were expensive prior to the late 1990s. They are not expensive now. They aren't expensive now because in the global economy we have, there is a huge deflation of certain consumer items and services (airplane flights, phone calls, clothes etc.) which are unfixed costs. While also there is inflation of fixed costs (like housing).

The former deflated costs have been arbitraged via off-shoring of manufacturing (e.g. moving textile factories from Derry to Bangledesh, in the case of clothes), out-sourcing, in-sourcing, and immigration of cheap labour.

Deflation of consumer costs has nothing to do with real wealth. If 1kg of caviar costs €500 then I start a corporation which creates 5000 new caviar farms and then I sell caviar on the market for €5 per 1kg, and you walk into a shop and buy it, have you now become rich? You can afford a 'luxury', right? You're eating caviar. No it doesn't mean you're now rich. It means the price has been deliberately pushed down. Deflation.

Now repeat for several unfixed costs, while hiking the prices of fixed costs simultaneously.

Look at a phone bill from 1986 and compare it to a phone plan for today. (You'll have to change currency from punt to Euro.) Compare it even in real terms before adjusting for 38 years of inflation.

Now use logic. If bananas, airline tickets, jeans and tshirts haven't maintained their real value since 1982 - and here we're using housing as the measuring stick for real monetary inflation, since that's what we're talking about anyway - then will subtracting bananas, airline tickets, jeans and tshirts from your budget today add up to extra savings which will pay for a house? No.

As for your mam getting a good job in the bank...that is much harder since the bank strike of 1992. Starting salary can be well below median for new employees (with college degrees). The thing of a 'good job at the bank' is very old-fashioned. It's evaporated really.

Similarly the poster above @SharkMX talking about people he knows who got good jobs without a college degree...use your noggin mate, how many good non-college jobs do you think there are in this country? Construction niches, mechanics, drivers and a few other jobs have won a mini-lottery with the wage booms they've seen in recent years, but it doesn't have a more general application. Many non-college jobs are an entry to a hard life with poor pay and no way out.

House price-to-income ratio give a good overview of the real situation imo. I'm not one for privileging statistics over anecdotes as such, but people don't even understand their own anecdotes because there are too many aggravating factors operating simultaneously.

Because ultimately having somewhere to live is so fundamental that it can be used as a real measure of monetary inflation. (Obviously food prices matter too.)

All sorts of (cost-deflated) luxuries disguise a more general fall in the standard of living imo. Cheap baubles become just become a kind of compensation package.

Holidays were expensive in the 1980s so people didn't take them.

Holidays are cheap now so people take multiples a year.

Same with everything else. Clothes, cars, experiences you name it.

“You buy furniture. You tell yourself, this is the last sofa I will ever need in my life. Buy the sofa, then for a couple years you're satisfied that no matter what goes wrong, at least you've got your sofa issue handled. Then the right set of dishes. Then the perfect bed. The drapes. The rug. Then you're trapped in your lovely nest, and the things you used to own, now they own you.”

Except now people can't afford the nest

Has the number of people who have access to finance and can afford to pay 370k gone up? Also, it’s possible your parents bought on a single salary, most buyers now I suspect, have two.

The property market is completely different to 1992.

1992 had 14% mortgage rates though, so house prices were cheaper in real terms as the cost of finance was much higher.

What was the total cost of a mortgage in 92 to buy a £42k house? Including total loan interest? Then how does that compare to today's case?

One of the biggest mistakes in the UK and Ireland's housing markets was the sale of LA stock at discount prices.

And now they're making it even easier for tenants to buy? Beggars belief.

Policies like this actually make social housing make even less money for the state - as the types of tenants who would pay their rent are those most likely to buy their house from the state instead. So those left over are a higher % of people in rent arrears.

feel like im going insane reading that story. how does o'brien think this solves anything?!?

Are you double counting the inflation there? 🙂

The 108k already counts the inflation - no? ...........you appear to have just plucked an alternate inflation rate out of the air.

Are you mixing up inflation and interest? You are talking about one and then the other. I mean you can talk about the inflation component of a nominal interest rate if you want, and strip that out to get a real interest rate, but I don't think that is what you are talking about

yes, definitely.

The 30k units we are building is more than Ireland would need with no net migration. In 2022 Ireland's natural population increase was 20k and given how low are fertility rate has fallen to, 1.63 (well bellow the replacement rate of 2.1) the natural increase will turn negative within 20 years.

So this bullshit claim we need to be building anything like 50k units is ridiculous. It must be for FG immigration policy. If they do belive we need to build 50k units but are "only" building 30k units then they have to curtail their immigration policy.

Plenty of jobs here, near full employment. Immigrants needed.

I converted 42k 1992 pounds to 2023 euros using an inflation calculator to see the cash purchase price today. Then assumed a 7%interest over 25 years with no down payment.

As i said, it's very rough.

The market of the 80s and 90s isn't comparable to today. Houses back then cost a lot less relative to the average salary, and single income households were not yet functionally extinct. Case in point, my parents sold their Dublin 3 house for 75k pounds in 1997, and that same house is today worth about 600k. That's well above the rate of inflation, and I would add that they bought that house in 1988 when they were in their mid 20s when my mother only worked part-time. That simply isn't happening today.

If you are on an average salary in Dublin, you will struggle to find anything beyond a small apartment, and even that could be a stretch. Two people on an average salary could probably get something, but the semi-detached house in a nice area is now the purview of high earners, and I even know people like that who are constantly getting outbid.

In short, it's a s**t-show, and it is going to fundamentally affect the future of the country in a very negative way and few seem to care as long as they are comfortable in their own bubble.