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

Welcome aboard the affordable rental model for workers lobby group train Dave

I’d love to see companies outbidding the state. Better to provide housing for the working than the non-working.

The middle class as we know it today it historically an anomaly. For most of human history across nearly all cultures, there was a ruling/martial class, some sort of clerical class and then everyone else. As globalism continues to erode the wealth of what we call the middle class, those at the top will gather up more and more. I've said it before, if something dramatic doesn't alter the direct of things in a fundamental way, living in modern tenements will be normalised here within a few decades. Maybe there's a reason why so many Science-Fiction stories envisaged future cities as dystopian, over-crowded nightmares...

It's sad. So much effort was made in the latter half of the 20th century to provide decent housing for the Irish people, and it's all be sold up a river for the sake of short-term profit.

It's a bit abstract. I would class someone as "middle class" if they are able to own their own home, support a family and have a reasonably comfortable life. Obviously, there are going to be variations within that group, and there's no clear line that can be said to divide upper and middle classes neatly.

In the European middle ages, most property was owned by a very small number of people. Those who worked the land almost never owned their land. Rather, they held it and worked it for the sake of their lord. This is an aspect of feudalism, though the system itself is fiendishly more complicated.

"would they now be above your typical middle class"

There's no "my" about it. I'm talking about something that is a recognised part of the social hierarchy. We can talk about things such the hypothetical that you mention and the article that you quote, but broadly speaking the rate of home ownership is declining here:

It actually went up in 2022, but the overall pattern is moving down. What's also worth mentioning is that many people classed as home-owners hold huge mortgages, so can they really be said to own their house? Well I'll leave that open.

I don't know if this was ever posted before but I thought you guys would find it interesting, seeing as it goes against most of the arguments on here.

The article - https://positivemoney.org/2019/09/bank-of-england-confirms-positive-money-analysis-of-house-prices/

The more detailed research - https://bankunderground.co.uk/2019/09/06/houses-are-assets-not-goods-taking-the-theory-to-the-uk-data/#more-5400

Interesting article but flawed analysis

It's correct that low rates are causing the rise in prices, incorrect to state this is not due to supply and demand. Cheap credit is a demand multiplier of sorts - that is house prices could be described simplisticly as:

Price = (demand/supply) * credit

More demand less supply and prices go up, equally more credit and regardless of supply-demand balance prices also go up.

But what were interest rates in the 1930s? Or 1997?

In the 30s UK rates were between 4 and 6%. 97 was around 6% also. The lifetime cost of a mortgage (and therefore the house) depends on interest rate also, not just the headline price. Unless you think a 300k house in Dublin is a steal even when interest rates are 10%?

Very very Simplified lifetime cost of mortgage would be:

Cost = principal * rate * duration

3 main factors then impacting actual price to acquire a house, with principal (advertised selling price) being just 1 of those. For BoE analysis to not look at lifetime cost of loans and instead only ratio of principal:income, is incredibly amateurish for what should be their bread and butter.

My ex used to work for Ryanair in Spain and lived in Ryanair provided accommodation. They move you to a different house every few months so you cant ever get any rights. Then after a year they ask you to get your own accomodation or you can move to yet another Ryanair house and pay even more rent. Not sure what rights you would get in Spain, but Ryanair are definitely ahead of it.

The study attempts to claim that shortage of houses plays no part in affordability crisis or price inflation - which is nonsense. There are multiple factors at play, interest rates are just one. Supply/demand is still true here - the article claims otherwise.

In UK sealed bids are less than 25% of sales.

Majority of sales are open bidding similar to ourselves.

In Scotland a closing date is set if more than one person has noted an interest in a property, in the last couple of years I’m certain more than 25% of Scottish homes have had more than 1 person interested in purchasing them. Once the closing date is set all interested parties place their offer in a sealed bid. Seller then gets to choose the offer, more often than not it would be the highest offer but I’ve had an offer accepted which wasn’t the highest, different times and I got on well with the seller (you often show your own home to buyers in Scotland, EA often just does the marketing). Sealed bids may occur less in England. House buying and legal systems are very different, perhaps that’s the 25% you mention.

https://www.warnersllp.com/news/property-jargon-buster-–-how-do-closing-dates-work-in-scotland/

The Scottish system can lead to people paying way over the odds for property because you only get one good go at it before you lose out.

In addition, sealed bid process is also open to manipulation by agents. This is a big issue in the UK also, with agents lying about other bids and then suggesting the sale moves to sealed bids to close, implying that bidders should bid more for their last to close, when in actual fact there may be only one top bidder already.

There's plenty of people benefitting from this scheme.

800 a month per room means you would get near 80k for a 4 bed house if you started renting in 2022. No wonder people can't find rentals.

Agreed, and as well as the extremely low rates of property tax, the evidence would suggest values are chronically underreported.

The people paying on the true value of their house are primarily those who have bought recently…mostly younger people. So long term homeowners are largely paying tiny percentages on an under-declared value.

Populism at its very worst.