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

The government carefully choose their words when talking about prices and we all know they love to use the word “affordable”, which is vague but does not necessarily mean lower prices. Affordable mortgages could be based on a comparison to renting the same property; it could mean affordable relative to incomes etc.

The government have played a very dangerous game to throw our huge tax income of the recent years into propping up house prices in a sort of “hail Mary” effort to retain as many of their existing voter base as possible. In the papers today we see the crooked Big Tech companies playing the poor man and looking for more subsidies from the Irish government - even more good cash being thrown at places that don’t need it.

It seems to all be leading to the forthcoming election as there is no way all of this free money for the booming sectors of the economy is sustainable - we are after all supposed to be fighting (and struggling to fight) inflation. We are in the end game of the current model of throwing seemingly unlimited money at the property market - can the magic money printers and corporate tax revenue be used to push up house prices in isolation to an inflation fight when housing is the single largest expense for households? Absolutely not.

good article government plan is to increase wages (and keep house prices high)... the reality is wages are already very high compared to international salaries .. the real problem is house prices, rents, taxes, land prices, uncontrolled immigration and government inaction on funds buying up properties, green zoning and lack of supply

government tax of 33-41+% on savings and investments also is not helping as it funnels money into property investment instead

An estate agent I know was bemoaning that he isn't getting the stock to sell. He has no problems selling them just can't get enough of them.

I said did you not get any of the new estates on the go , there's 3 or 4 local enough. All social housing/charities etc no estate agent required.

Excluding one offs in the countryside is the majority of housing estate houses now not for sale?

A large portion of new properties are bought up in bulk and never see the open market.

There’s an economic reality that if you want lots of housing built, you need to ensure a stable and profitable environment for house builders to operate (see housing output when house prices declined). We want more house yet we vilify those who build houses for making a profit.

There’s a significant cohort of people who’d love to see Cairn, Durkans etc. posting record losses but still racing to increasing their production and competing to sell at the lowest possible price. It’s populist nonsense and needs to be called out as such.

I don’t think it is too much a stretch to say that though house prices were cheaper in the 2000s, the cost of building was also less expensive and regulations in relation to standards, lower.

In relation to developers, in many people’s view, developers contributed significantly to the financial meltdown you referenced, due to overdevelopment and over borrowing. Yet now it would seem they are being blamed for not building enough and being more prudent about borrowing.

The fact remains, if developers do not see profit in development, they will not build. There is no mystery in that, if house prices drop and costs remain at similar levels, it would be poor business judgement to proceed. Developers also have to try and forecast what values will be in two years, which realistically, is the timeframe from planning to completion, right now they will be considering what a change of government will bring, so it’s hardly surprising that they might want to wait and see what the election brings.

You can’t seriously argue that there isn’t an overwhelming negative sentiment towards developers and housing financiers in Ireland

I agree there's plenty of negative sentiment towards property developers - but that is not the claim that was made. It was that there is a significant cohort who simultaneously hold both the view that developers are evil and should make losses but also that they should keep making more houses at cheaper prices. I don't think many people hold both those views simultaneously

perhaps an increase in 35 to 40 year mortgages is the answer to all our property woes - stretching out the payments will allow builders and sellers to jack up prices considerably more thus increasing supply and allowing everyone escape the rental trap - except for no money to afford children property problem solved

'I had no choice but to get a 35-year mortgage'

https://www.bbc.com/news/articles/cn3dded32j2o

https://www.businesspost.ie/news/exclusive-government-contacts-hundreds-of-property-firms-in-bid-to-house-asylum-seekers/

Another scheme of the government to prop up house prices, under the guise of helping IPAs. What a country and seemingly an endless supply of free money to pay for all of this - and people somehow think it matters how SF fund their housing initiatives!

With the average age of FTB well over 30 now I think 35 year mortgages are pushing it for many

Nicola's five-year fixed rate mortgage costs £598 a month.

Different world in the UK

Honestly, I think this is a bananas estimate.

I am extremely dubious about these high side estimates and have been since I started to dig into Lyons et al work.

They involve assumptions around migration, housing obsolescence and household sizes which imo are very challenging to forecast. Housing obsolescence in particular is one where Lyons overshoots imo and doesn’t appreciate the impact of retrofitting and private investment.

In terms of household size. Can someone tell me why we have both one of the highest household sizes in Europe but also one of the most underlived homes stats in Europe? There is an contradiction to these two data sets. This would imply we have two massive extremes. Whilst I know we have too few apartments, I don’t accept that this would lead to such opposing indicators. Europe data suggests 2 out of 3 homes are “under lived” in Ireland which huge capacity to absorb the existing shortfall.

To be clear, I accept we have a massive undersupply of the right kinds of units. But I would content that this is in the order of closer to 100,000. And it is 1 and 2 bed apartments. This would unlock the underlived in homes.

This is basically the lost units post crash. If you take 20k as a minimum, that is basically the shortfall less any catch up in the last couple of years.

66,000 homes would be the equivalent to nearly 13 per 1,000 in the population. This would blow through other countries with the existing high side in Europe being around 7.5 per 1,000. Ireland is currently on 6.4 and one the highest in Europe, despite the popular narrative. I get that having a couple of years of this kind of supply would be amazing to clear a backlog, but it isn’t the reference point here.

EOB had a ridiculous comment on developers and profits in response to some concerns on their “policies” at the weekend. Goes to show how unserious it all is. He is just gaslighting people who devoured the narrative on developers being evil post crash. Developers should be viewed with healthy suspicion like any grouping but the narrative has been twisted to a ridiculous degree.

I wonder has Eoin gone to any building sites recently and asked why when the developer has substantially completed their work that it is taking months more for these homes to reach the market. It wouldn’t be anything to do with state owned utility companies, would it?

State building company though, that’ll solve everything.

You mentioned 2 developers/home builders in an earlier post. This is a big part of the problem, the small builder has been pushed out to one off housing/sub contracting.

We have effectively monopolised supply and its in there interests to have a supply demand imbalance thereby continually pushing up prices

We need to create an environment where those capable of delivering more supply can do so rather than stacking everything in favour of a small number of developers

In terms of household size. Can someone tell me why we have both one of the highest household sizes in Europe but also one of the most underlived homes stats in Europe

Would it have a thing to do with lack of smart effective taxation on property and particularly under used/empty property and 3 month a year air bnbs