2021 Irish Property Market chat - *mod warnings post 1*

Villa05

fliball123 wrote:

People have been shouting bubble since 2017 and the price of houses have not shown the same trajectory of being in bubble territory.

Again 50% of rents and 100% of new build sales subsidised by the state. This would not happen in a market that is affordable. Plus these actions are deemed insufficient and further incentives for demand are being dreamed up by government

The bubble from 96 to 06 was also interrupted in 02/03 by the 9/11 attacks and dot com crash,
Similarly this one has been interrupted by Brexit and covid

fliball123

Villa05 wrote: »

Again 50% of rents and 100% of new build sales subsidised by the state. This would not happen in a market that is affordable. Plus these actions are deemed insufficient and further incentives for demand are being dreamed up by government

The bubble from 96 to 06 was also interrupted in 02/03 by the 9/11 attacks and dot com crash,
Similarly this one has been interrupted by Brexit and covid

Hang on the Irish property bubble balanced out a bit for a couple of months after 9/11 and after this it then went up and up and up for 7 years (give or take 6months) as in a balloon hense the terminology. It hit the skids in 07/08 and fell for for 5 years (give or take 6 months) Since 2017 our prices have gone up a bit, gone down a bit, gone back up a bit , gone back down a bit and are rising again. There has been not much price increase (if any) since 2017. This pattern is not a bubble so regardless of what you perceive to be an affordability issue the properties that would identify a bubble has not existed in the market for the last 4 years. Or to put it simply affordability issues does not equal a bubble. Throw in that the cheap and easy credit available to blow up every bubble in history has not been there to inflate prices. You only have to look now there is a bit of a frenzy with regards to buying due to the low number of properties for sale but credit is not been thrown at couples like confetti. It is actually quite hard to get a mortgage from a bank now.

I have put up the math that those on the median wage can afford more than half the current property stock available on my home. The government are trying to help out those who are starting out. Ask yourself are you on more money now (this only works if your not in your mid 20s obviously) than you were when you were in your mid 20s..I know I am I bet a lot of people looking at this thread are and anyone I know is also on more now than their mid 20s. I am in my mid 40s and I am on about 3 times as much as I was when I was 24 buying my first house.

If your contention is that there is currently an affordability issue with the current market then why has the same rules not been applied to buying 2nd hand property and 2nd time buyers? Could it be that First time buyers are being given a leg up by government to actually get on the property ladder?

Hubertj

schmittel wrote: »

As mentioned to Hubertj, more to do with houses in Longford falling nto disrepair where there is no demand for them. But this has to be balanced with houses elsewhere being brought back into use.

You do need to consider the large number of listed /protected buildings in parts of Dublin. Renovation costs are significantly higher to comply with conservation regs (if actually adhered to)

Hubertj

schmittel wrote: »

I'm sure somebody somewhere must have attempted it, but never see anything referenced. The only thing I found which is still being cited today, was a count from 2012. Using that today is pretty silly.

The impact is obviously pretty easy to measure in changes in the housing stock. As latest Geodirectory report showed more houses were brought back in to use than became derelict. If you discount this fact housing need forecasts are wildly over estimated.

It is also important to recognise that the market is pretty good at controlling obsolescence. Properties in Longford are far more likely to become obsolete than those in Dublin, for obvious reasons.

I think kits better to continue using the outdated 2012 figure and argue about it. What would be the fun in using an accurate number?

Cyrus

Villa05 wrote: »

100% of new build sales subsidised by the state.

no they aren't.

Stark

I think he's referring to the Help to buy scheme.

Cyrus

Stark wrote: »

I think he's referring to the Help to buy scheme.

he may well be, that doesnt make the statement correct.

HansKroenke

Villa05 wrote: »

Regular source of dispute here:

David McWilliams talks through why he believes that we need 50,000 units built per year in the last 12 minutes of this podcast: How Ireland really works

Net immigration of 30k+ per year requires drastic increase in housing output as we also have lots of people already in the country looking for housing. To become more sustainable and reduce the risk of housing costs increasing further (in fact they might even decrease significantly) the more ambitious target should be set so then when it inevitably falls short we are still making a good dent in the problem.

To dispute the claims on the numbers required to meet our housing needs should only revolve around whether 55k is too high or 30k is too little. Anything else and the person either has a vested interest or is in denial that there is a problem.

hometruths

Hubertj wrote: »

I think kits better to continue using the outdated 2012 figure and argue about it. What would be the fun in using an accurate number?

You also need to remember that McWilliams lives in a 7 figure house.

Just saying, for context, like.

hometruths

HansKroenke wrote: »

Net immigration of 30k+ per year requires drastic increase in housing output as we also have lots of people already in the country looking for housing. To become more sustainable and reduce the risk of housing costs increasing further (in fact they might even decrease significantly) the more ambitious target should be set so then when it inevitably falls short we are still making a good dent in the problem.

To dispute the claims on the numbers required to meet our housing needs should only revolve around whether 55k is too high or 30k is too little. Anything else and the person either has a vested interest or is in denial that there is a problem.

I don’t have a vested interest, so I must be in denial so!

Cyrus

schmittel wrote: »

You also need to remember that McWilliams lives in a 7 figure house.

Just saying, for context, like.

as pee flynn once said you should try it sometime, might cheer you up

hometruths

Cyrus wrote: »

as pee flynn once said you should try it sometime, might cheer you up

Try what? I could do with cheering up.

Cyrus

schmittel wrote: »

Try what? I could do with cheering up.

living in a 7 figure house, youve mentioned it more than me at this stage,

and yes you could i think.

hometruths

Cyrus wrote: »

living in a 7 figure house, youve mentioned it more than me at this stage,

That box is already ticked. Let’s hope it stays that way.

Cyrus

schmittel wrote: »

That box is already ticked. Let’s hope it stays that way.

Basis your posts one would assume you dont believe it will, as long as you arent over leveraged what difference will it make?

L1011

Take the bickering to PM

hometruths

Cyrus wrote: »

Basis your posts one would assume you dont believe it will, as long as you arent over leveraged what difference will it make?

I'm more hopeful it will than I was this time last year, I haven't posted any doom price drop forecasts for a while. Seems to me to be business as usual at the minute.

Mortgage free, but it potentially could make a big difference, because I am unusual in that I think the value of my current home is irrelevant, it is the relative difference between this house and the next one I buy that it is important.

Given that my next home will be a lower value property, I was worried that my current house would lose significantly more in value than its replacement.

Cyrus

schmittel wrote: »

I'm more hopeful it will than I was this time last year, I haven't posted any doom price drop forecasts for a while. Seems to me to be business as usual at the minute.

Mortgage free, but it potentially could make a big difference, because I am unusual in that I think the value of my current home is irrelevant, it is the relative difference between this house and the next one I buy that it is important.

Given that my next home will be a lower value property, I was worried that my current house would lose significantly more in value than its replacement.

i agree with you, im not that fussed about the current value of my home either, but where we differ is i would probably buy a more expensive property if i move so a falling market is in my favour, whereas, as you correctly point out, it works against downsizers.

hometruths

Cyrus wrote: »

i agree with you, im not that fussed about the current value of my home either, but where we differ is i would probably buy a more expensive property if i move so a falling market is in my favour, whereas, as you correctly point out, it works against downsizers.

This is not well enough understood/considered I think.

It seems like most people who are happy with escalating prices are the ones who benefit least - i.e trader uppers.

They think that rising prices increasing their equity will help them trade up, but in truth if they wish to trade up they are much better served by falling prices.

combat14

Yurt! wrote: »

Well that's a one way to breezily waltz a country into chaos.

perhaps if some fiscal prudence is going to cause a little bit of chaos we are in the midst of a gigantic bube

The_Conductor

My current prediction:

Prices to stabilise at in or around current levels for a period of 18-24 months, once lockdown ends.

Salaries to barely budge (I see the public sector have voted to accept a 1% payrise this year and next)

Inflation to start to rise from Q3 2021 onwards- as the est. 22 billion in savings that the government feel people might splurge comes into play.

Taxation regime to take the cost of increased borrowing into account (our costs are already rising- we got lucky refinancing our long term debt when we did- however, we're not going to be so lucky in future)

Taxation and inflation- will make people feel poorer- esp. if there are no meaningful wage increases- which in turn may be a brake for the price tags of big ticket items- but they aren't going to help with everyday food/clothing/electricals/fuel/services/amenities etc- which will happily make hay while people have cash to burn.

I'd guess low grade inflation in the property market of 3-4% tapering back towards equilibrium in a 24 month period...........

Taxation- and how we decide to pay for Covid, alongside our public sector expenditure in medium term (esp. health) are the elephants in the corner. It beggars belief that we can continue borrowing as we currently are (even stripping covid EWSP and PUP out of the equation).

I suspect there are going to be a lot of people deeply unhappy esp. when the inevitable tax rises raise their heads. We aren't particularly highly taxed in Ireland- but the ultra wealthy and their opposites, those who earn less than than 25k per annum- do not pay their fair share- the heavy lifting is done by the middle income earners. I think the level at which our higher rate of tax vests in Ireland, is almost unique in the OECD- and is an active disincentive to work- its damn near impossible to pay someone to work- other than in low paid menial jobs- otherwise, a PAYE employee is simply working for the government (who get upwards of 52% of their marginal income).

We are going to have to have a proper debate on how we plan to run society and how we plan to fund it, once this covid mess is over. The risk is that people will turn to populists who promise them the earth, the sun, the moon and the stars- without having a manner of paying for the bribes they offer their electorate. Even the incumbents are guilty of this- FG got a lot of their votes last time round by promising to reform tax for middle income earners- well, they're certainly not going to get those votes again.

The bigger issue might be the fact that we don't have a forum to discuss all of these issues. Whatever we do- will involve sacrifice- probably in the form of higher taxes, cutbacks in other areas- and then the old chestnuts, such as pensions reform (you can bet that will be slipped in somewhere).

Its going to be an interesting time ahead of us- and I don't think anyone, anyone at all, is going to be particularly happy with the journey it involves.

Yurt2

fliball123 wrote: »

Go on show me these international defined metrics please. I did the math on here multiple times with a couple on the median wage they can still get houses in every county even in certain parts of Dublin its just when they want to go to parts that are in demand or houses that are on the higher end of the spec...Unfortunately you pay for quality and location as is the case in every first world country in the world.

https://www.cso.ie/en/releasesandpublications/ep/p-eaads/earningsanalysisusingadministrativedatasources2018/annualearnings/

Currently over 600 in Dublin alone coming in under 275k

Median wage in Ireland in 2018 was 36,095 (note this includes all part time workers as well)

We are conservative with our 3.5 times borrowings and 10% deposit under the ECB rules and when compared to other OCED countries

So the Math - 36k * 2 (as usually nowadays houses are bought by couples) = 72

Multiply by the very conservative 3.5 times you can borrow 72 * 3.5 = 252k

Add in your 10% deposit 252k + 25k = 277k

Now as I say 600 houses currently available for sale under this price in Dublin alone and 6200 well over half the current available stock up for sale on myhome available for under this price. How are we unaffordable again. Is it by some antiquated outdated method where mum must stay at home and look after the kids and not work ever calculation?

So in your analogy the typical Joe and Mary can afford a house at under 275k and there are well over half the current stock available in the country for under this price but I think the Average Joe and Mary want a mansion with a sea view with an A1 energy rating unfortunately these luxuries, add-ons and locations cost money.

Do you actually think these (wow 600 hundred in the capital city, knock me down with a feather!) houses in this segment go for on or under the asking price? Really? Joe and Mary median ain't getting their hands on these homes and will be stuck in the private rental market.

fliball123

Yurt! wrote: »

Do you actually think these (wow 600 hundred in the capital city, knock me down with a feather!) houses in this segment go for on or under the asking price? Really? Joe and Mary median ain't getting their hands on these homes and will be stuck in the private rental market.

Well there is nothing I can do about the current lack of supply and no one knows what the difference between asking and actual price will be unless you have a crystal ball but historically it has been more or less in or around the same over the last 4/5 years give or take. Also Dublin's mean wage would also be higher than that of the rest of the country. There is over half the current stock out there available for your typical Joe and Mary and I have shown you the math. So houses are currently affordable the problem is there just does not seem to be that many available.

We all have to start somewhere I was renting before I bought as well thats just how it is.

Yurt2

fliball123 wrote: »

Well there is nothing I can do about the current lack of supply and also Dublin's mean wage would also be higher than that of the rest of the country. There is over half the current stock out there available for your Joe and Mary and I have shown you the math. So houses are currently affordable the problem is there just does not seem to be that many available

You did a search on asking prices. There is not a snowballs that segment is going for on or under asking. Your argument falls apart pretty quickly on that score.

Hubertj

The_Conductor wrote: »

My current prediction:

Prices to stabilise at in or around current levels for a period of 18-24 months, once lockdown ends.

Salaries to barely budge (I see the public sector have voted to accept a 1% payrise this year and next)

Inflation to start to rise from Q3 2021 onwards- as the est. 22 billion in savings that the government feel people might splurge comes into play.

Taxation regime to take the cost of increased borrowing into account (our costs are already rising- we got lucky refinancing our long term debt when we did- however, we're not going to be so lucky in future)

Taxation and inflation- will make people feel poorer- esp. if there are no meaningful wage increases- which in turn may be a brake for the price tags of big ticket items- but they aren't going to help with everyday food/clothing/electricals/fuel/services/amenities etc- which will happily make hay while people have cash to burn.

I'd guess low grade inflation in the property market of 3-4% tapering back towards equilibrium in a 24 month period...........

Taxation- and how we decide to pay for Covid, alongside our public sector expenditure in medium term (esp. health) are the elephants in the corner. It beggars belief that we can continue borrowing as we currently are (even stripping covid EWSP and PUP out of the equation).

I suspect there are going to be a lot of people deeply unhappy esp. when the inevitable tax rises raise their heads. We aren't particularly highly taxed in Ireland- but the ultra wealthy and their opposites, those who earn less than than 25k per annum- do not pay their fair share- the heavy lifting is done by the middle income earners. I think the level at which our higher rate of tax vests in Ireland, is almost unique in the OECD- and is an active disincentive to work- its damn near impossible to pay someone to work- other than in low paid menial jobs- otherwise, a PAYE employee is simply working for the government (who get upwards of 52% of their marginal income).

We are going to have to have a proper debate on how we plan to run society and how we plan to fund it, once this covid mess is over. The risk is that people will turn to populists who promise them the earth, the sun, the moon and the stars- without having a manner of paying for the bribes they offer their electorate. Even the incumbents are guilty of this- FG got a lot of their votes last time round by promising to reform tax for middle income earners- well, they're certainly not going to get those votes again.

The bigger issue might be the fact that we don't have a forum to discuss all of these issues. Whatever we do- will involve sacrifice- probably in the form of higher taxes, cutbacks in other areas- and then the old chestnuts, such as pensions reform (you can bet that will be slipped in somewhere).

Its going to be an interesting time ahead of us- and I don't think anyone, anyone at all, is going to be particularly happy with the journey it involves.

I haven’t got a clue what way prices will go. I still don’t understand why they haven’t fallen.

Fully agree with the conversation around taxation. Sadly this country won’t have a mature conversation around this due to the outrageous populism which has engulfed Irish politics. Not the forum to go into it here.

jill_valentine

Yurt! wrote: »

Do you actually think these (wow 600 hundred in the capital city, knock me down with a feather!) houses in this segment go for on or under the asking price? Really? Joe and Mary median ain't getting their hands on these homes and will be stuck in the private rental market.

Even at a glance it's even grimmer than that. Myhome is slow for stuff to come back down once sold, so a significant chunk of that is a) already gone, b) sites, and c) auctions, so Joe and Mary's mortgage is a no-go.

At most, it would look more like 500ish homes of any kind for sale *starting* under quarter of a million in the whole county.

cnocbui

Hubertj wrote: »

I haven’t got a clue what way prices will go. I still don’t understand why they haven’t fallen.

Fully agree with the conversation around taxation. Sadly this country won’t have a mature conversation around this due to the outrageous populism which has engulfed Irish politics. Not the forum to go into it here.

What is a mature conversation on taxation? It is my perception the Irish government gets away with blue murder on individul tax burden because of the near universal use of GDP as a reference, making individual tax burden in Ireland look light because of the exagerated GDP.

A grown up conversation in my eyes would be how Ireland is going to wean itself off low corporate tax as a competitive measure for attracting foreign employers and instead stimulate local home grown employment.

ebayissues

Its clear that taxes increases ae on the way. Before the government need to ensure that people have incentive to spend.



In terms of taxes, can someone provide an guestimate of %% taxes inceases in last crises - are we talking of 5%, 10% or 20% for hgh earners?


I looked it up ages go and thought it defo wasnt end of the world.

Hubertj

cnocbui wrote: »

What is a mature conversation on taxation? It is my perception the Irish government gets away with blue murder on individul tax burden because of the near universal use of GDP as a reference, making individual tax burden in Ireland look light because of the exagerated GDP.

A grown up conversation in my eyes would be how Ireland is going to wean itself off low corporate tax as a competitive measure for attracting foreign employers and instead stimulate local home grown employment.

All of those along with property taxes. Some seem to think we increase corporation tax and problem is solved. Need to discuss overall income tax, tax bands, broaden tax based including increased property taxes. By broadening tax base and changing tax bands that needs to be considered song with afforidsbiliry of housing both to buy or rent. Not an easy puzzle to solve when considering we will also have high levels of unemployment short to medium term (however you define medium).

Yurt2

Hubertj wrote: »

All of those along with property taxes. Some seem to think we increase corporation tax and problem is solved. Need to discuss overall income tax, tax bands, broaden tax based including increased property taxes. By broadening tax base and changing tax bands that needs to be considered song with afforidsbiliry of housing both to buy or rent. Not an easy puzzle to solve when considering we will also have high levels of unemployment short to medium term (however you define medium).

I'm not actually making the case for increasing the corporation tax rate in saying this, but the 12.5% is absolutely a sacred cow when it comes to discussing taxation. Sometimes when even a whisper of tinkering with it comes up, I worry that certain people from IBEC, the IDA, Ernest & Young and Deloitte are going to go full Tibetan monk and self-immolate on the steps of the Powerscourt Centre.

Rishi Sunak brought the UK's to 25% today without much of a whimper, so lets see how that works out.

There's a lot of people unable to have mature conversations around a lot of things in this country, and we're going to have to get used to the idea that due to factors outside of our control, the party days of 12.5% may well be coming to an end whether we like it or not.