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

Keynesian economics on steroids has caused this balloon in asset prices for western countries, all in the name of chasing that golden goose of GDP. The CB influence is staggering at the minute, there is no such thing as a free market now.

The majority if people will buy tge most expensive house they can afford or buy a house that needs work and poured money into that.

When an economy is going string this will always lead to house price inflation. Normally FTB's would nearly get completly squeezed out of such a market. Builders would be building for mover uppers or thise doing extensions.

However with the different HTB and tge house refurbishment grant the government has loaded the deck in favour of them. This has probably left a bitter taste in some who own smaller properties and see the government supports working against them

Heres another house for the posters in the thread questioning how dysfunctional the housing market is: an €860k C2 BER, ex-council house:

https://lisney.com/property/ard-nua-newtownpark-avenue-blackrock-co-dublin/

Not much change from a million euro for a small ex council house, a 45-60min commute from the city center, is absolutely bonkers.

You are delusional, 125m2 is not small, it has a big back garden, in a very nice area. I would say that's a decent price, it doesn't matter that it was a council house 50 years ago.

Its not that the house is bad in itself as a house/location, its perfectly reasonable and in a nice area. Its the price of it for what you get.

Dun Laoghaire's median household income is €68k. That house is over 12 times median household income. For that ratio in an anyway functioning housing market you'd have an exceptionally nice house, not an ex-council house of that size.

The median household income of Dun Laoghaire bears no relevance to the price of that house. Places evolve, my parent's estate is half full of single income, older families either retired or nearing retirement, and new families, dual income or single income making comparatively way more money than my father ever made.

The price of the homes when my parents bought was far cheaper(accounting for inflation) than what they cost now, because the town they exist in is not the same town it was 40 years ago. Dun Laoghaire's median income takes into account generations of people, who were able to buy homes there at various points in time.

Median income of 68k is about 20K above the national average. The house you are BS about is about 1400sqft which is over 40% larger than most new 3 bed semiD's. With a back garden doubke the size of modern ones and a front garden as big as a town house's back garden. The house is in very liveable condition.

Basically you are beginning to lose it

great area and great house ! City center is no longer gold standard to compare how far houses are from there ! Price is probably 100k-120k over what its worth but there are ppl have minted/saved money last three years to absorb that overvalue !

Given the fact that we keep voting them I to government it's hardly surprising nothing changes with FFG.

The Irish property market does offer not reliable returns either. If you adjust for inflation, prices actually fell last year.

You can indeed point to earlier losses in those markets. As someone who lost a huge amount of money in a previous property crash, I can assure you it’s not restricted to stocks and commodities. Having bought in 2006, I can further assure you that mistiming your moves in the property market is very possible and very, very costly.

Anyone buying this house or any other houses needs to be well prepared for such losses, hence the lending rules and absence of 100% mortgages.

Well it is higher than would be expected.

Not comparable to actual investments in a company that is inventing or creating something.

You also have to take into account that you have the use of the house for that time, and are putting wear and tear on it as well.

Well you could also have suggested they could have put all their money on whatever horse won the grand national last year.

Return is meaningless without reference to associated risk.

Contrary to the received wisdom, capital gains have been modest in the Irish residential property market even after the recovery. As you can see from this CSO chart, there have been just 36 months of strong price growth in the past 15 years i.e. where y-o-y price growth exceeded 10%.

Again contrary to received wisdom, Dublin prices grew slower than the rest of Ireland post-crash. Dublin prices increased by 192% in the past 10 years while national prices increased by 206%. That sounds a lot but it is just around 7% compounded annually and that is only for those who timed their entry perfectly. Anyone who bought in Dublin in 2018 is looking at a nominal return of 3% compounded annually which has been largely eroded by inflation. As you will know only too well, timing of market entry is important but timing of the exit is make-or-break. I don't believe the market is about to crash but the Central Bank will ensure that capital gains in real terms will be very low i.e residential property lending growth is strictly tied to growth in earnings which is barely keeping pace with inflation.

Contrary to all that Marxist nonsense from M. Piketty, it is often the case that r < g and Ireland provides an extreme example: our g far outstrips the r available to Irish investors. Since the GFC, there has been a global problem where no one can offer a steady and dependable return on capital so investors pile into whatever is the latest hot ticket - crypto, NFTs, AI, FANG, modern art, GameStop, biomed etc. - until the market sours and the divil takes the hindmost. Even the S&P 500, traditionally the broadest measure of the greatest market, has depended on a handful of stocks for all of its recent gains, including stocks like Tesla and Nvidia which have many of the hallmarks for bubble stocks. Central Banks created trillions of dollars/euros/yen which can't find a secure home.

I think this might be a true "crisis of capitalism" but the Marxists can't see it as such and no European political party, even the so called "far-right", dares to show concern for investors.

Return is meaningless without reference to associated risk.

which is exactly what you’re doing

You’re acting as though buying this house in 2017 came with a guaranteed 62% gain over the next 7 years. It absolutely did not and anyone saying it did is engaging in massive revisionism.

i don’t expect the SF shills to be even remotely embarrassed by revisionism by the way, not when it’s the party’s number one policy across the board.

Eh, I have no idea what you are on about - do you know yourself? Ranting about SF etc. Not one poster on here claimed that anything specific was foreseeable. They only pointed out that the number which experienced was not what it should be in a functioning market.

The pity party for those who were temporarily in negative equity, before being bailed out indirectly by state supports ended a few years back.