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

Election year, time to make those stats look better than they actually are add in a 5billion spending and tax cut budget. Inflation, How are you

Source Sunday Business Post

finance officials told McGrath that figures indicating that there were 53,000 commencements in the twelve months to April 2024 were “highly skewed and of diminished usefulness” for measuring the level of housebuilding in the state.The spike in April was “very likely” due to the high level of submissions of commencement notices ahead of an April 24 deadline for builders to avail of a development levy waiver and water connection charge rebate. The deadline was subsequently extended

How are prices continually increasing when significant costs are removed. Electorate taken for fools

Dejavu

If you are asking why the selling prices are increasing even though costs are lower, I suspect the answer lies both in demand, and the number of people who continue to be able to afford new houses. I haven’t seen any property remaining unsold, have you?

If you are asking why building costs remain high, it is because there is more to building than development levies and water connection charges.

Comparing costs in different jurisdictions is never a precise indicator, differing economies and construction sectors are of course going to through up price disparities.

And datadude’s viewpoint is a fair one to make, a new build so close to the centre of any capital city is going to be more expensive. Consideration should be given to the relative affordability for the location and proximity, rather than just affordability.

Close to the city center of any city in of itself doesn't mean property is in a nice area and deserving of a high price. Plenty of areas much closer than Coolock, within walking distance of inner city cores, are poverty riddled. Most of Dublin 1 being a prime local example.

In a fully rational housing market it obviously shouldn't be this way - all the property within walking distance, or a 10min commute, of a city center should be prime real estate. But thats not how things work in the real world. Killiney has, is deserving of, far higher property prices than East Wall for example.

You know when people are trying to justify people earning hundred grand a year only being able to afford a gaf in Coolock that we are near the top of the market.

It's 2024, the country is not the same as it was in 2007, there isn't a hope this is 'the top' and there is some impending collapse coming.

Nonsense. Until we see people on 150K a year struggling to buy a fixer-upper in rural Cavan, we won't even be scratching the top of the market! I think another few hundred billion in funny money and maybe another lockdown is what's needed to fatten up those pension funds.

Jokes aside, we have to be close to some sort of an asset bubble. Twenty years ago, money was generally discussed in the billions, but now the word "trillion" is being thrown about. For how much longer can this continue before something breaks?

Is supply actually rising though? I've seen no stats to suggest that, other than cyclical (and minor) summer rise.

I don't it's anywhere near demand, and that won't change short of something happening outside of Ireland to arrest the population rise here. I can't see what that would be.

Besides this, even if a crash is on the way, it may not arrive for years. Housing isn't like bitcoin or shares. For most of us, it's not an asset at all; it's a place to live. I bought in 2022 because waiting for me wasn't an option.

You can go back a lot further than that for predictions on this thread, some were saying “don’t buy, prices have to fall” years ago, anyone who did that has, in all probability, paid a small fortune in rent up to today.

Thats all true, but theres one other very fundamental fact of the current Irish property market.

The population of Ireland is increasing by 100k+ per year. While we're building approx 32k housing units per year. And the average numbers of humans in a housing unit in Ireland is 2.7, and falling.

On top of that yearly worsening of the problem we already have a deficit of circa 250k housing units, and need thousands of units per year to replace existing older stock.

We're not building enough homes (approx 40k required) just to house the yearly population growth, nevermind anything else.

We're never going to have a crash (or even mild drop, or even price stabilization) while the population growth is so much higher than the housing unit completions.

thats why i put a time limit on the stupidity

at least with covid we were staring into an unknown, potential financial disaster, made some sense

people just can't get their heads around the simple fact that prices aint going to fall in such a tight market

new housing is more expensive than the existing stock and thats the only source of new supply, even the prices of second hand houses is just covering the real costs when everyone is putting 100k plus into these houses.

Focusing on the size of the housing deficit is rather irrelevant given the more glaring population growth issue. It could be a deficit of 5k, or 500k, but either way we're not reducing it by a single house every year at present.

Our natural population growth is approx 30k per year just from births over deaths, thats not going to change any time soon. We're projected to take in 30k asylum seekers this year. That number is also unlikely to go down, given the global push factors (climate change, easier access to travel, rapid population growth in the source countries) or pull factors (our government's proven inability to control the borders, people like Roderic O'Gorman literally telling people to come here, none of the 6 major political parties currently having an anti-immigration platform).

Those two sources by themselves are a population growth of circa 60k a year, or enough to take up approx 25k new housing units a year. ie the vast majority of what we're building.

The remainder of the population growth (40k~) is down to legal migration, which is admittedly the most fluid yes. If we had a major economic crash that resulted in high employment it would likely collapse. But we've had a total of one of them in the past 30+ years, and the state is currently banking billions of euros a year into a stability fund because it can't spend whats coming in fast enough - a level of financial surplus unheard of in Irish history. So I personally would not be betting on an economic crash big enough to destroy the economy any time soon anyway, were I a renter debating if it was the "right time to buy" and hoping for a substantial downwards price correction.

Supply alone cannot increase or decrease prices. This is why I think it can be reckless to state, unqualified, that purely due to demand far outweighing supply, that prices won't drop. What good is massive immigration if those immigrants are not working in FANNG, Pharma or Finance jobs and they are earning only average salaries (which is probably the case in the last two years as MNCs have cut back on new hires)? Supply might be low in general but within components of the housing market, supply might actually be picking up as the demand within that component could be falling versus the supply increasing).

For one, people need access to the money in order to pay high house prices; it could be the most depressed housing market in living memory for supply of homes and yet prices could be falling because people can't afford to pay the prices. The government is spinning plates with all the different schemes that aim to horse first-time buyers into the market and today it was written in the news about asking prices rocketing again that the CBI has been the cause of this via its increase to the leverage permitted for FTBs.

My own search alert was for north Wicklow within a price range of €400-600k and it is getting a good level of hits recently for second hand homes which are most likely to be FTB homes. I think that supply versus demand might be shifting as the pool of FTBs with €40-60k in savings is potentially dwindling for homes outside of Dublin. However, for people looking to trade up in SoCoDu, with a budget of €700k-1m, demand is definitely outstripping supply!