Irish Property Market 2020 Part 2

fliball123

MacronvFrugals wrote: »

They will pay of course but that electricity isnt free when the EU start breathing down our neck with fines -

https://www.irishtimes.com/business/technology/why-ireland-s-data-centre-boom-is-complicating-climate-efforts-1.4131768

In fairness the fines are small bananas in the whole scheme of things, getting these companies here mean that local companies can be created and flourish due to the trickle down effect, also if they are paying the elecy bill it means the ESB are getting cash and their workers continue to be paid and so on and so forth. But I get your point it would be better if we had a more green alternative to electricity in the main

PropQueries

fliball123 wrote: »

In fairness the fines are small bananas in the whole scheme of things, getting these companies here mean that local companies can be created and flourish due to the trickle down effect, also if they are paying the elecy bill it means the ESB are getting cash and their workers continue to be paid and so on and so forth. But I get your point it would be better if we had a more green alternative to electricity in the main

It's not just the fines, we'll pay for it through ever increasing levies on on electricity bills on top of that: https://www.rte.ie/news/business/2020/0608/1146192-levy-increase-could-see-electricity-bills-rising/

PropQueries

PropQueries wrote: »

It's not just the fines, we'll pay for it through ever increasing levies on on electricity bills on top of that: https://www.rte.ie/news/business/2020/0608/1146192-levy-increase-could-see-electricity-bills-rising/

Which to bring it back to property, will mean less funds that future mortgage hopefuls have to spend on their monthly repayments.

fliball123

PropQueries wrote: »

True as well. But it depends on if their citizens (who are highly educated by the way, as they basically went nuts (not really reported here) over the money given to Greece a few years ago as they were saying how come the Greeks get these massive pensions and we don't), continue to agree to lend us money to pay our pensioners 4 to 5 times what their pensioners get. I think (and I could be wrong) this time will be different as they've matured and they are no longer the new kids in the block.

I think they should of moved to Greece , as the Greek economy fell off a cliff , cuts to ps pay in the region of 20%+ large numbers of layoffs in the PS, billions cut to social welfare and 20% cut to pensions in some cases as well. Imagine we had done that here the unions would of gone berserk. Ireland at least got back to a positive spend vs income last year, Greece is no where near that. Also we can hardly give out as we did the same with our public sector, pensions and welfare as in the cuts imposed came no where near the amount we needed to save.

Like you say it is different this time as in everyone is feeling it as the Virus doesn't care if your rich or poor it will go after you and every country in the EU have been in some kind of lockdown meaning their countries economy cannot function correctly so they need money as well. Also the last recession showed how damaging austerity can be and I think they are taking a longer term view of paying back debts.

PropQueries

fliball123 wrote: »

I think they should of moved to Greece , as the Greek economy fell off a cliff , cuts to ps pay in the region of 20%+ large numbers of layoffs in the PS, billions cut to social welfare and 20% cut to pensions in some cases as well. Imagine we had done that here the unions would of gone berserk. Ireland at least got back to a positive spend vs income last year, Greece is no where near that. Also we can hardly give out as we did the same with our public sector, pensions and welfare as in the cuts imposed came no where near the amount we needed to save.

Like you say it is different this time as in everyone is feeling it as the Virus doesn't care if your rich or poor it will go after you and every country in the EU have been in some kind of lockdown meaning their countries economy cannot function correctly so they need money as well. Also the last recession showed how damaging austerity can be and I think they are taking a longer term view of paying back debts.

I think the difference is that last time we entered the downturn with €30 or €50 billion in debt. This time we already have the third highest debt in the world on a per capita basis, so there's not much leeway regarding increasing debt. The international tax regime is changing so in 5 years times e.g. Google may be better off in Poland, with their lower cost educated workforce, than Ireland. As Google etc. matures, they look more at cutting costs e.g. employee costs. As for the we're all in this together, rich or poor, I believe many minimum wage workers in hotels etc. would beg to disagree as their pandemic payments are cut etc.

cubatahavana

PropQueries wrote: »

That's true, but the United States has one big advantage that Ireland doesn't have. They can literally print a $20 Trillion dollar bill in the morning and pay off their debt. We're completely reliant on what the ECB decides (the money we borrow in Euro is basically a foreign currency) and I could be wrong, but as I've said, if I was a citizen of an eastern European country, I'd be asking my government why is Ireland getting all this free money, when will it paid back and why aren't we getting it. I reckon the ECB money printing will stop in the next 18 month and then we will be told to cut back considerably as there's no more free money coming our way.

Regarding Eastern Europeans countries, Poland gets the most subsidies from the EU by a huge margin

fliball123

PropQueries wrote: »

I think the difference is that last time we entered the downturn with €30 or €50 billion in debt. This time we already have the third highest debt in the world on a per capita basis, so there's not much leeway regarding increasing debt. The international tax regime is changing so in 5 years times e.g. Google may be better off in Poland, with their lower cost educated workforce, than Ireland. As Google etc. matures, they look more at cutting costs e.g. employee costs. As for the we're all in this together, rich or poor, I believe many minimum wage workers in hotels etc. would beg to disagree as their pandemic payments are cut etc.

Well you cant predict what any company will do and as for Ireland being the third highest in debt I do not think thats true I dont even think we are in the top 50 using GDP

https://worldpopulationreview.com/countries/countries-by-national-debt

your fogetting countries who have massive military spends that would dwarf our debt

per capita or adult we come in at 9th in Europe

https://www.statista.com/statistics/1073009/debt-per-adult-europe-by-country/

PropQueries

cubatahavana wrote: »

Regarding Eastern Europeans countries, Poland gets the most subsidies from the EU by a huge margin

True, but with a population of c. 40 million people, it doesn't have the same impact of e.g. €5 billion would have in Ireland and the people, especially older people, aren't seeing it in their pensions. They're no longer the new kids and they really are asking serious questions about the social payments in western countries. There's a reason Macron in France was looking to reduce them i.e. he has been told it's an issue.

PropQueries

fliball123 wrote: »

Well you cant predict what any company will do and as for Ireland being the third highest in debt I do not think thats true I dont even think we are in the top 50 using GDP

https://worldpopulationreview.com/countries/countries-by-national-debt

your fogetting countries who have massive military spends that would dwarf our debt

Third highest in the world according to the Irish Times: https://www.irishtimes.com/business/economy/ireland-s-200bn-debt-burden-how-did-we-get-here-1.3943085

fliball123

PropQueries wrote: »

Third highest in the world according to the Irish Times: https://www.irishtimes.com/business/economy/ireland-s-200bn-debt-burden-how-did-we-get-here-1.3943085

Well I have put up 2 links that would suggest otherwise

I dont even think we are in the top 50 using GDP

https://worldpopulationreview.com/countries/countries-by-national-debt




per capita or adult we come in at 9th in Europe

https://www.statista.com/statistics/1073009/debt-per-adult-europe-by-country/

PropQueries

fliball123 wrote: »

Well I have put up 2 links that would suggest otherwise

I dont even think we are in the top 50 using GDP

https://worldpopulationreview.com/countries/countries-by-national-debt




per capita or adult we come in at 9th in Europe

https://www.statista.com/statistics/1073009/debt-per-adult-europe-by-country/

Well maybe the Irish Times is wrong. But you must remember, GDP is no longer considered reflective of the Irish economy. I think it's now called GNP* and even that figure is contested. The reason is if a company is based in the United States and it only sells in the United States, they are taxed on all their profits there and it benefits the United States economy. Here, they aren't taxed as the profits are only held here until they are moved back to america where they are taxed. For example, Apple moved $250 billion back to the United States from Ireland to be taxed last year: https://www.irishtimes.com/business/technology/apple-received-250bn-dividend-from-irish-subsidiary-in-2019-1.4326911

fliball123

PropQueries wrote: »

Well maybe the Irish Times is wrong. But you must remember, GDP is no longer considered reflective of the Irish economy. I think it's now called GNP* and even that figure is contested. The reason is if a company is based in the United States and it only sells in the United States, they are taxed on all their profits there and it benefits the United States economy. Here, they aren't taxed as the profits are only held here until they are moved back to america where they are taxed. For example, Apple moved $250 billion back to the United States from Ireland to be taxed last year: https://www.irishtimes.com/business/technology/apple-received-250bn-dividend-from-irish-subsidiary-in-2019-1.4326911

Which is why supplied per Adult as well as I doubt there will be many kids paying tax and we are ninth in Europe so we are well down that list when the rest of the world come into play

PropQueries

fliball123 wrote: »

Which is why supplied per Adult as well as I doubt there will be many kids paying tax and we are ninth in Europe so we are well down that list when the rest of the world come into play

The concern with the per capita measurement is that if the international tax regime does change and the multinationals do leave and no other company comes to replace them, then it becomes a very real debt. Without our tax benefits, the most important reason for being here is mute. Most of Google and facebooks employees are already from Eastern Europe and would be delighted to move back home, even with a c. 30% paycut, so English isn't the reason they're located here. Google's new CEO is Indian, so their preference for an english speaking country is not as important as we believe anymore.

Cantstandsya

fliball123 wrote: »

it would be better if we had a more green alternative to electricity in the main

Ding ding ding, we have a winner!!

Comment of the century

Marcusm

PropQueries wrote: »

Well maybe the Irish Times is wrong. But you must remember, GDP is no longer considered reflective of the Irish economy. I think it's now called GNP* and even that figure is contested. The reason is if a company is based in the United States and it only sells in the United States, they are taxed on all their profits there and it benefits the United States economy. Here, they aren't taxed as the profits are only held here until they are moved back to america where they are taxed. For example, Apple moved $250 billion back to the United States from Ireland to be taxed last year: https://www.irishtimes.com/business/technology/apple-received-250bn-dividend-from-irish-subsidiary-in-2019-1.4326911

First of all, you mean GNI* not GNP*. The absolute level of debt, i.e. EUR42k per person is relevant but it does not tell the real story which is by reference to the productive capacity of the economy and specifically the tax raising powers. A debt per capital of (for example) EUR1k in South Sudan would be harder to service than Ireland's debt.

Secondly, your analysis of the tax re the US is outdated. Since the TAx and Job Creation Act 2017, foreign profits arising prior to that date were taxed int he US at a concessionary rates of 8.5% or 15.5% depending on how the profits were held. Since then GILTI, at an effective tax rate of 10.5%, represents the tax on the foreign profits which are then not taxed on remittance.

Joe Biden proposes to increase the US corporate tax to 28% and the GILTI rate to 21% which would likely offset much of the negative effect of OECD Pillar I/II proposals on Ireland!

Browney7

PropQueries wrote: »

Well maybe the Irish Times is wrong. But you must remember, GDP is no longer considered reflective of the Irish economy. I think it's now called GNP* and even that figure is contested. The reason is if a company is based in the United States and it only sells in the United States, they are taxed on all their profits there and it benefits the United States economy. Here, they aren't taxed as the profits are only held here until they are moved back to america where they are taxed. For example, Apple moved $250 billion back to the United States from Ireland to be taxed last year: https://www.irishtimes.com/business/technology/apple-received-250bn-dividend-from-irish-subsidiary-in-2019-1.4326911

Correct, any comparison of Ireland to other countries when GDP is cited needs to be taken with a mountain of Salt.

For most countries, GDP is a fair reflection of their actual economic output but some economists look at Gross National Income. For example, for France, 2019 GDP per capita is 49145 and GNI per capita is 47290 so GDP is 4% higher than GNI (figures from the OECD)

For Ireland, our GDP is a whopping 88496 per capita, GNI is 66300 (GDP 33% higher). Remember Krugman's leprechaun economics jibe?

Further to this, due to aircraft leasing and a range of tax inversion deals (Pfizer and Allergen merger for example), GNI has been recognised as again not being reflective of Ireland's actual underlying real economy. So the CSO devised a measure called GNI* or modified GNI which based on 2018 figures was 30% below 2018 GNI.

Debt to GDP ratio is wholly inadequate to measure Ireland's level of indebtedness relative to other countries. Making an adjustment to the denominator to factor this in would result in a debt to GNI* ratio of more than 100% so our ability to absorb any future shocks after this one ends is very limited.

Future is very uncertain and our economy being a small open one with no natural resources or large indigenous industry (exception of agriculture) leaves us very exposed.

0gac3yjefb5sv7

Must say, following this thread for a year (2019 one also) and it would put anyone off buying a home anytime in their life.

Buy when it suits you and not as an investment. If you can live there 10 years and are happy too, then go for it. Not everyone can or wants to buy a "forever home" as a FTBer.

Hubertj

PropQueries wrote: »

The concern with the per capita measurement is that if the international tax regime does change and the multinationals do leave and no other company comes to replace them, then it becomes a very real debt. Without our tax benefits, the most important reason for being here is mute. Most of Google and facebooks employees are already from Eastern Europe and would be delighted to move back home, even with a c. 30% paycut, so English isn't the reason they're located here. Google's new CEO is Indian, so their preference for an english speaking country is not as important as we believe anymore.

This is incorrect. You’re misinformed or making stuff up.

PropQueries

Marcusm wrote: »

First of all, you mean GNI* not GNP*. The absolute level of debt, i.e. EUR42k per person is relevant but it does not tell the real story which is by reference to the productive capacity of the economy and specifically the tax raising powers. A debt per capital of (for example) EUR1k in South Sudan would be harder to service than Ireland's debt.

Secondly, your analysis of the tax re the US is outdated. Since the TAx and Job Creation Act 2017, foreign profits arising prior to that date were taxed int he US at a concessionary rates of 8.5% or 15.5% depending on how the profits were held. Since then GILTI, at an effective tax rate of 10.5%, represents the tax on the foreign profits which are then not taxed on remittance.

Joe Biden proposes to increase the US corporate tax to 28% and the GILTI rate to 21% which would likely offset much of the negative effect of OECD Pillar I/II proposals on Ireland!

Apologies on the abbreviation mistake. But, given that Apple etc. have been moving their profits back to the United States over the past 12 months shows how fragile our position is. Our per capita debt is still the third highest in the world and that is serious in itself as it gives us very little legroom regarding stimulus packages during 2021.

PropQueries

Hubertj wrote: »

This is incorrect. You’re misinformed or making stuff up.

How so?

MacronvFrugals

the IFSC holds 2.2 trillion in "little understood entities" like SPV's - We''re not called Europe's treasure island for nothing

No doubt thats what had the world world laughing at our 26% GDP figure in 2016, giant red blinking sign saying "We're a tax-haven"

https://www.irishtimes.com/business/financial-services/ireland-is-world-s-fourth-largest-shadow-banking-hub-1.3077914

Hubertj

PropQueries wrote: »

How so?

I addressed some of your comments about google a few days ago but you didn’t bother responding so won’t go there again.

Firstly the majority of Google’s Irish employees are not Eastern European. Secondly the fact that the ceo is Indian doesn’t mean a thing. To say it does is ridiculous.

PropQueries

MacronvFrugals wrote: »

the IFSC holds 2.2 trillion in "little understood entities" like SPV's - We''re not called Europe's treasure island for nothing

No doubt thats what had the world world laughing at our 26% GDP figure in 2016, giant red blinking sign saying "We're a tax-haven"

https://www.irishtimes.com/business/financial-services/ireland-is-world-s-fourth-largest-shadow-banking-hub-1.3077914

Very true. Plus the primarily back-office jobs in the IFSC are ripe for automation over the next 5 years or so. To bring it back to the property market, it all seems to point to significantly lower demand over the next few years i.e. less relatively high paid jobs equals less ability to pay high house prices. Less high paid jobs equals less tax revenues equals less government funds to continue to outbid people for both house purchases and home rentals IMO.

Claw Hammer

PropQueries wrote: »

Very true. Plus the primarily back-office jobs in the IFSC are ripe for automation over the next 5 years or so. To bring it back to the property market, it all seems to point to significantly lower demand over the next few years i.e. less relatively high paid jobs equals less ability to pay high house prices. Less high paid jobs equals less tax revenues equals less government funds to continue to outbid people for both house purchases and home rentals IMO.

You wish.

PropQueries

Hubertj wrote: »

I addressed some of your comments about google a few days ago but you didn’t bother responding so won’t go there again.

Firstly the majority of Google’s Irish employees are not Eastern European. Secondly the fact that ty eir ceo is Indian doesn’t mean a thing. To say it does is ridiculous.

I don't think i've ever mentioned Google before (I think, but open to correction), but yes, most of the Google jobs in Dublin are adword sales/ marketing positions and they need eastern european speakers to sell those adverts. It's why Google also employs the majority of their developers in other EU countries and not Ireland.

Hubertj

PropQueries wrote: »

I don't think i've ever mentioned Google before (I think, but open to correction), but yes, most of the Google jobs in Dublin are adword sales/ marketing positions and they need eastern european speakers to sell those adverts. It's why Google also employs the majority of their developers in other EU countries and not Ireland.

You’re just making stuff up now. Someone can’t be this badly misinformed.

fliball123

Just an update apparently Russia have approved a vaccine. All property up lads and property down lads I hope will agree no matter how it impacts property lets hope the Rushkies have a solution to the problem

https://www.irishtimes.com/news/world/europe/russia-approves-covid-19-vaccine-after-less-than-two-months-of-human-tests-1.4327421

PropQueries

Hubertj wrote: »

You’re just making stuff up now. Someone can’t be this badly misinformed.

Ah, just remembered, I did make a similar comment and someone replied about Google’s Centers of excellence. That’s true and they’re nearly all in other EU countries.

MacronvFrugals

fliball123 wrote: »

Just an update apparently Russia have approved a vaccine. All property up lads and property down lads I hope will agree no matter how it impacts property lets hope the Rushkies have a solution to the problem

https://www.irishtimes.com/news/world/europe/russia-approves-covid-19-vaccine-after-less-than-two-months-of-human-tests-1.4327421

They can thank the good work of the elite APT29

Hubertj

PropQueries wrote: »

Ah, just remembered, I did make a similar comment and someone replied about Google’s Centers of excellence. That’s true and they’re nearly all in other EU countries.

This is the wrong forum. But you are a liar. Must be sad to have to make stuff up on the internet to suit your agenda. Good luck