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

Even if you ignore the economic hardship, austerity etc etc of the period of 2009-2015, and focus solely on the fact property was incredibly cheap to both buy and to rent. Through that narrow lens, it may seem like some sort of paradise to look back on with envy…but it was utterly unsustainable.

It was THE event which caused the housing deficit which many of the same posters longing for 2009 again give out most about today. It may have been brief relief for the renters of that era, and permanently good for the cash rich of that era (who could buy), but the 100s of thousands of units that weren’t built during that period, and all the tradespeople that left, and all the potential tradespeople who didn’t do an apprenticeship is precisely the cause of the pain of today.

Wishing for some sort of Armageddon in the property market whilst simultaneously complaining there are not enough properties being built is hypocritical in my opinion.

How do you stop those that earn more outbidding those who earn less?

If the answer is build enough houses that there is cheaper houses for everyone, private developers will stop building long, long before that point is ever reached.

Genuine question on the 2nd piece because I think you've made an interesting point, how do you think the problem should be solved?

I still can't get my head around the paradox that rising prices to stimulate supply will somehow generate adequate levels to eventually reduce demand ergo prices. Should help with rents, but I can't see how people will be able to meet asking prices that can't already presently.

I'm not wishing for a crash. As it is, I'd lose out. My point is merely that for many people, a 2008 crash would be a welcome thing.

One thing I do believe is that nothing short of a crash is going to change the situation here regarding housing. There was talk earlier in the thread that something in the order of 1.5 million units will be needed in the next 25 years to keep up with the demand. In my own town in Wexford, there are already major congestion problems due to population rises, and there are another 1000 houses planned for the area.

For how long can chasing the infinite growth fairy be sustained? Is it even worth it? The only things that I see in the future are rising costs, declining quality of life, environmental damage and social decay.

Anyways, that just my two cents.

If you're consistently getting out bid on unremarkable houses or apartments by investors, the state or otherwise whilst simultaneously paying thousands on rent each month and watching your expenditures rise, how do you think you'd feel? As I've said before, if I were in that situation and I was ten years younger, I'd take my chances in a crash.

If you were young enough to not understand what had to happen for that crash to occur, and the impact it had on life in this country, it may be possible, just about, to understand why they may think life would be better as you didn’t experience the crash. If you lived through that period, and now think it was a good time, then you don’t have the benefit of lack of experience as an excuse. Surely you understand that even if you were young again, there is no reason to think you would be unaffected by such a crash, and that you would be able to buy a house when banks would not lend to you.

5 years in government saw a massive massive increase in housing units built. The most in any 5 year period since 2007 by a country mile. Despite a 2 year pandemic and a global supply chain disaster. Record numbers of First Time Buyers getting houses, increasing every year.

And in that 5 year period since 2019, house prices stayed the same in real terms.

If they’re trying to make it worse, they’re not doing a very good job.

I posted the official stats a few pages back. Real prices in Dublin down a good bit since 2019. Countrywide up slightly.

I will say there has been some worrying signs in late 23/ early 24 of prices taking off again which is a real shame.

22 & 23 were great years where wages outpaced house prices. If we had a couple more years like that then the affordability issues could have gone away in a controlled manner which would have been ideal. Let’s hope the recent moves upwards don’t continue.

I think you consistently overestimate the impact of government interventions in the purchase market. I posted some stats on them a while ago, the new ones like shared equity represented a tiny fraction of the market spend. HTB has been around a long time now and its impact should be lessening each year as the price ceiling and subsidy amount are not being indexed.

Price growth has kicked off again across most countries. Even Australia which was suffering badly is now soaring again. Generally speaking we tend to follow global trends. It’s not some little crazy Ireland bubble like it was in the mid 2000s. If anything our increases this time have been very tame vs others due to our relatively restrictive lending.

Our overall house price to income ratios also remain one of the lowest in the developed world. You desperately seem to want it to be 2005 again but I’m afraid it just isn’t.

Look at the increased income tax take over the last couple of years to see how well people are doing financially.

I agree that sorting out the rental sector should be the absolute priority.

You don't have any source for the amount of first time buyer grants drawn down last year by any chance

https://www.revenue.ie/en/corporate/documents/statistics/tax-expenditures/help-to-buy-annual-report-2023.pdf

7,200 total. C.75% for non self build. So let’s say 5,500 rounding up.

60k property transactions last year for non self builds. So HTB is a MAXIMUM (not everyone will be eligible for this maximum due to not paying €30k in tax) of 10% of the purchase price in less than 10% of the houses bought last year. So you’re talking significantly less than 1% of the money being spent in the market last year coming from HTB.

EDIT. Used some more numbers in the reports. Of the money spent in the property market in Ireland last year. HTB represented roughly 0.5% of it. As I’ve said previously. It’s a drop in the ocean. Shared equity is even less.

in with the estate agent today and she said they could already see signs of strain with people paying e.g. 340k for houses the estate agent only felt were worth 280k could be quite a few burnt over the next while if this continues

I don’t see any rationale why HTB would be having a YoY inflationary impact as it has not be altered since 2022? (I agree there may be some overall inflation in certain smaller cohorts in absolute terms).

If anything on a YoY basis the HTB should be deflationary as its relative power in less than it was in prior years due to the non indexing cap and value.

Only possible inflationary angle would be people earning more, so on average obtaining more of the maximum grant than previous years.

Last time I checked FHS was barely off the ground. Not sure the long term scale planned and if it could become inflationary. From what I remember the caps are very restrictive to the point it won’t be much use in Dublin and surrounds (similar to FTB)

I’m not seeing the same numbers as you. I wouldn’t compare new builds to second hand as they just behave differently. There was a period in 2020 when second hand houses were going way up and new builds were flat. Then recently second hands were falling but new builds increasing. I think there is a lag based on the way new builds are sold with long delays to closing so YoY comparisons are distorted.

So just looking at FTB vs SSB new builds. 2018-2023. FTB up 21%, SSB 21%. 2022-2023 only. FTB 7%. SSB 9%.

There’ll be some volatility in the above so I’m not saying it factually proves HTB is absolutely not inflationary. It probably is. But it’s a rounding error if it is. It gets weaponised by certain political parties and unfortunately some young disenfranchised people catch onto it and genuinely believe with all their heart that if it’s removed that prices will fall dramatically (hint: they won’t)

The total spend on HTB over the last 7years since it was created is €0.9bn. The total value of property transactions in 2024 alone was c. €20bn. It’s a fart in the wind. A complete and utter red herring.

any thoughts on HTB and FTB schemes - are they worth signing up for or is it a terrible idea to have the government involved in owning a portion of your new higher priced house when you may have been happier to buy an older cheaper house in the first place