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

Marius34

schmittel wrote: »

Once again it seems the goalposts have shifted. That link talks about the correlation between house prices and inflation. Nobody is disputing that.

It doesn't come close to explaining this:



If that's the best link you can find to explain this apparently historically proven phenomenon, then we'd best leave the discussion there.

I don't have the proof, and I'm not going to waste time to look for it, as there is no point to provide it, my main point was towards inflation impact anyway. You rely on data you like, and reject you don't like anyway. There were already official reports stating of lack of housing construction, or low vacancy in Dublin, all those reports you reject anyway, you need better proof and recalculations when statements doesn't suit you.
I see there is no need of any proof if someone says that if/when there is increase in interest rates it will cause prices to fall.
I think it's fair to say, that we don't know how interest rates will impact the property price.

Marius34

combat14 wrote: »

so how high will house prices go here before they pop again leaving a big fat mess - any thoughts

nobody knows, nor anybody can tell if there will be a crash over 20% in the next decade or more.

hometruths

Marius34 wrote: »

That's what we may want to believe how it works, to keep optimism. But history tells it otherwise. Inflation has higher correlation to price increase, than interest rates, in its nominal value.

So we’ve gone from you telling another poster he is just posting what he wants to believe, and pompously saying “history tells it otherwise” to:

Marius34 wrote: »

I don't have the proof, and I'm not going to waste time to look for it, as there is no point to provide it

Maybe don’t invent “facts” if you don’t want to be asked for proof of them.

Marius34

schmittel wrote: »

So we’ve gone from you telling another poster he is just posting what he wants to believe, and pompously saying “history tells it otherwise” to:



Maybe don’t invent “facts” if you don’t want to be asked for proof of them.

ok, it's not a fact, as I don't have prove if there is any correlation of interest rate impact on property price.

cruizer101

New rules on rents now increases to be linked to inflation rather than the current 4%

https://www.rte.ie/news/ireland/2021/0701/1232340-government-rent-measures/

Villa05

combat14 wrote:

so how high will house prices go here before they pop again leaving a big fat mess - any thoughts

No idea, but the level of inflation we are currently seeing with the impact of shared ownership later in the year to add to that will speed up the process

High rents/prices plus wfh appear to be pulling people away from high demand areas. This pushes up prices in other areas. Affordability issues are easier to resolve when they are confined to specific areas. The window for resolving the issue is closing.

The fuse for the bomb has been lit. How long it is can be very hard to determine but double digit price inflation should shorten that fuse

fliball123

It seems Ireland are not the only one experiencing double digit price (15.2% YOY) increases and lack of supply issues the U.S are the same. Also these are actual prices I think the last daft report was for asking and Irish prices were a fair bit under 15.2%

https://www.noradarealestate.com/blog/housing-market-predictions/

Villa05

fliball123 wrote:

It seems Ireland are not the only one experiencing double digit price (15.2% YOY) increases and lack of supply issues the U.S are the same. Also these are actual prices I think the last daft report was for asking and Irish prices were a fair bit under 15.2%

The consensus appears to be that sales prices are considerably above asking.

With regard to the US I'd imagine there wouldn't be a long delay between actual sale and that sale appearing on the register like there is here

fliball123

Villa05 wrote: »

The consensus appears to be that sales prices are considerably above asking.

With regard to the US I'd imagine there wouldn't be a long delay between actual sale and that sale appearing on the register like there is here

Yeah I agree, but it puts to bed that its just the Irish market that is heating up

Timing belt

"More than half (56 per cent) of respondents to Threshold’s Tenant Sentiment Survey 2021 said they rent because they are unable to buy their own home. A further 12 per cent said they rent because they cannot access social housing.

The majority of those renting by choice were aged between 18 and 24 years old, with 43 per cent of renters in this cohort saying they do so by choice.

However, the majority of 25 to 34-year-olds (55 per cent), 35 to 44-year-olds (68 per cent) and 45 to 54-year-olds (50 per cent) said that they rent because they are unable to buy their own home.

No respondents over the age of 54 stated that they rent by choice."

source: https://www.breakingnews.ie/ireland/just-one-quarter-renting-by-choice-in-ireland-survey-finds-1150098.html


Based on the above there is a lot of Pent up demand for affordable housing.

Amadan Dubh

Timing belt wrote: »

"More than half (56 per cent) of respondents to Threshold’s Tenant Sentiment Survey 2021 said they rent because they are unable to buy their own home. A further 12 per cent said they rent because they cannot access social housing.

The majority of those renting by choice were aged between 18 and 24 years old, with 43 per cent of renters in this cohort saying they do so by choice.

However, the majority of 25 to 34-year-olds (55 per cent), 35 to 44-year-olds (68 per cent) and 45 to 54-year-olds (50 per cent) said that they rent because they are unable to buy their own home.

No respondents over the age of 54 stated that they rent by choice."

source: https://www.breakingnews.ie/ireland/just-one-quarter-renting-by-choice-in-ireland-survey-finds-1150098.html


Based on the above there is a lot of Pent up demand for affordable housing.

It's why the investors cannot be taken seriously when they say that the only reason places are getting funding is because the funds are there to buy them in bulk. It's gaslighting, nonsense. The demand is there, maybe not for €500k 2 bed apartments but for affordable, non bubble priced properties!

hometruths

Timing belt wrote: »

"More than half (56 per cent) of respondents to Threshold’s Tenant Sentiment Survey 2021 said they rent because they are unable to buy their own home. A further 12 per cent said they rent because they cannot access social housing.

The majority of those renting by choice were aged between 18 and 24 years old, with 43 per cent of renters in this cohort saying they do so by choice.

However, the majority of 25 to 34-year-olds (55 per cent), 35 to 44-year-olds (68 per cent) and 45 to 54-year-olds (50 per cent) said that they rent because they are unable to buy their own home.

No respondents over the age of 54 stated that they rent by choice."

source: https://www.breakingnews.ie/ireland/just-one-quarter-renting-by-choice-in-ireland-survey-finds-1150098.html


Based on the above there is a lot of Pent up demand for affordable housing.

And not much demand for houses at current prices.

awec

schmittel wrote: »

And not much demand for houses at current prices.

I am not sure how you deduce that from this article.

The article would imply there are people renting because they cannot currently afford to buy, or they are unable to find suitable property to buy. This does not mean there is not much demand at current prices.

If anything, it implies the exact opposite. Demand is strong enough to prevent prices dropping, which continues to price these people out of the market.

Marius34

Timing belt wrote: »

"More than half (56 per cent) of respondents to Threshold’s Tenant Sentiment Survey 2021 said they rent because they are unable to buy their own home. A further 12 per cent said they rent because they cannot access social housing.

The majority of those renting by choice were aged between 18 and 24 years old, with 43 per cent of renters in this cohort saying they do so by choice.

However, the majority of 25 to 34-year-olds (55 per cent), 35 to 44-year-olds (68 per cent) and 45 to 54-year-olds (50 per cent) said that they rent because they are unable to buy their own home.

No respondents over the age of 54 stated that they rent by choice."

source: https://www.breakingnews.ie/ireland/just-one-quarter-renting-by-choice-in-ireland-survey-finds-1150098.html


Based on the above there is a lot of Pent up demand for affordable housing.

From percentage wise it appears the biggest demands are between renters of 35-44. The real problem with this age group, that if they don't manage to buy home before 45 or so, their chance of getting mortgage and acquiring property are closing.

MacronvFrugals

Competitiveness is taking a hit with the high housing costs, 2 articles just today highlighting the same, this would be fine if we didn't have the existential threat of the OECD's upcoming tax changes


Canadian firms' Irish expansion 'hampered' by high costs

ICBA said the housing crisis is “a key area of concern”, with 85% of its members of the view that the Government is not doing enough to support their staff in the current housing market. Most Canadian firms want further Government interventions to boost housing supply and affordability here.

ICBA members include Air Canada, Shopify, PressReader, TD Bank, Bank of Montreal and the Canadian-owned Irish Life.

Cost of living makes Dublin less attractive for remote workers

However, it scored low for the cost of living, coming in at 68 out of 75 cities, and 64 out of 75 cities for the price of home office room rent, meaning home office space is less affordable than most other cities.

https://www.irishexaminer.com/news/arid-40326038.html

https://www.irishexaminer.com/business/economy/arid-40326065.html

hometruths

awec wrote: »

I am not sure how you deduce that from this article.

The article would imply there are people renting because they cannot currently afford to buy, or they are unable to find suitable property to buy. This does not mean there is not much demand at current prices.

If anything, it implies the exact opposite. Demand is strong enough to prevent prices dropping, which continues to price these people out of the market.

Fair enough, it would have been more accurate to say whilst there is a lot of pent up demand for affordable housing, there is not much pent up demand at current prices.

Timing belt

schmittel wrote: »

Fair enough, it would have been more accurate to say whilst there is a lot of pent up demand for affordable housing, there is not much pent up demand at current prices.

If there wasn’t pent up demand at current prices we would not be seeing people outbidding each other and prices rising

Bass Reeves

Marius34 wrote: »

From percentage wise it appears the biggest demands are between renters of 35-44. The real problem with this age group, that if they don't manage to buy home before 45 or so, their chance of getting mortgage and acquiring property are closing.

A lot of that age group had an opportunity to buy during the property crash. Many choose not to as renting was cheaper and they taught prices would keep on going down. The recovery and it strength caught a lot of them, they expected a second crash straight away......they still think this will happen.

Until supply is sorted prices will hold or stay rising

Hubertj

MacronvFrugals wrote: »

Competitiveness is taking a hit with the high housing costs, 2 articles just today highlighting the same, this would be fine if we didn't have the existential threat of the OECD's upcoming tax changes


Canadian firms' Irish expansion 'hampered' by high costs






Cost of living makes Dublin less attractive for remote workers









https://www.irishexaminer.com/news/arid-40326038.html

https://www.irishexaminer.com/business/economy/arid-40326065.html

AmCham have been banging on about this for a couple of years… difficult to fix when you have dopes telling dopes to sort it out.

hometruths

Timing belt wrote: »

If there wasn’t pent up demand at current prices we would not be seeing people outbidding each other and prices rising

Ok, if there is pent up demand at current prices presumably that majority of that demand is the rental sector.

As per the threshold survey:

Only 48% of renters are in full time work.
Just over half, 54% of respondents were over the age of 34. Largest cohort at 36% were 35-44.
The majority - 58% - earn between €20,001 and €35,000. Only 6% earn above 45,000.

These stats point very clearly to the fact that it is a small minority of renters who can afford to buy a home at current prices.

If the vast majority of renters cannot afford to buy at current prices then there is not much pent up demand at current prices.

Sure the minority of renters who can afford to buy are currently bidding away against investors and the state, which is why we are seeing prices rise now.

But prices rising now are not an indication of large amounts of pent up demand.

Totally agree with your first comment that the Threshold survey shows a huge volume of pent demand for affordable housing.

C14N

schmittel wrote: »

Fair enough, it would have been more accurate to say whilst there is a lot of pent up demand for affordable housing, there is not much pent up demand at current prices.

This is kind of tautological. The actual price is the equilibrium price; it increases in response to the demand. There's really never going to be "pent up" demand at an actual current price, unless the government puts price ceilings or something in place. The demand at the "current price" will basically always be satisfied, because whoever wants to buy at that price can buy at that price. Demand for a 3-bed house in Dublin at €600k is mostly satisfied, because mostly anyone who demands it can have it.

There will also always be significant demand for pretty much anything at prices far below market rates (and any housing that could be called "affordable" with a straight face is currently going to be sold at far lower than the market rate). In this case, many people who would like to buy 3-bed house in Dublin at €300k are unsatisfied, because this theoretical affordable house is way below the market rate.

fliball123

Timing belt wrote: »

"More than half (56 per cent) of respondents to Threshold’s Tenant Sentiment Survey 2021 said they rent because they are unable to buy their own home. A further 12 per cent said they rent because they cannot access social housing.

The majority of those renting by choice were aged between 18 and 24 years old, with 43 per cent of renters in this cohort saying they do so by choice.

However, the majority of 25 to 34-year-olds (55 per cent), 35 to 44-year-olds (68 per cent) and 45 to 54-year-olds (50 per cent) said that they rent because they are unable to buy their own home.

No respondents over the age of 54 stated that they rent by choice."

source: https://www.breakingnews.ie/ireland/just-one-quarter-renting-by-choice-in-ireland-survey-finds-1150098.html


Based on the above there is a lot of Pent up demand for affordable housing.

schmittel wrote: »

And not much demand for houses at current prices.

schmittel wrote: »

Ok, if there is pent up demand at current prices presumably that majority of that demand is the rental sector.

As per the threshold survey:

Only 48% of renters are in full time work.
Just over half, 54% of respondents were over the age of 34. Largest cohort at 36% were 35-44.
The majority - 58% - earn between €20,001 and €35,000. Only 6% earn above 45,000.

These stats point very clearly to the fact that it is a small minority of renters who can afford to buy a home at current prices.

If the vast majority of renters cannot afford to buy at current prices then there is not much pent up demand at current prices.

Sure the minority of renters who can afford to buy are currently bidding away against investors and the state, which is why we are seeing prices rise now.

But prices rising now are not an indication of large amounts of pent up demand.

Totally agree with your first comment that the Threshold survey shows a huge volume of pent demand for affordable housing.

This would make sense if isolated, you need to look at drawdown and mortgage approval figures. There is still a lot of demand out there at current prices stating anything else is false

https://www.irishtimes.com/business/economy/mortgage-market-buoyant-as-drawdowns-and-approvals-rise-1.4550316

hometruths

fliball123 wrote: »

This would make sense if isolated, you need to look at drawdown and mortgage approval figures. There is still a lot of demand out there at current prices stating anything else is false

https://www.irishtimes.com/business/economy/mortgage-market-buoyant-as-drawdowns-and-approvals-rise-1.4550316

Ok lets look in conjunction with mortgage figures.

Just over 9000 new mortgages drawn down in first quarter, 52% of them FTBs, approx 4,500, which are presumably the ones coming from the rental sector.

Lets say that is currently 18,000 per annum

Just shy of 300,000 tenancies in the private rental sector, and if Threshold survey is representative only a very small number of those can afford current prices.

18,000 out of 300,000 is 6%.

Interestingly only 6% of renters earn above 45,000.

fliball123

schmittel wrote: »

Ok lets look in conjunction with mortgage figures.

Just over 9000 new mortgages drawn down in first quarter, 52% of them FTBs, approx 4,500, which are presumably the ones coming from the rental sector.

Lets say that is currently 18,000 per annum

Just shy of 300,000 tenancies in the private rental sector, and if Threshold survey is representative only a very small number of those can afford current prices.

18,000 out of 300,000 is 6%.

Interestingly only 6% of renters earn above 45,000.

Yet year on year its an increase in draw downs and mortgage approvals. You can spin this anyway you like facts are facts more people are drawing down and getting mortgage approval then this time last year. No need to use other comparisons just use whats in front of you. This all with a 13% price increase in property. If people are looking to find the top of the market (sellers) I would keep an eye on this ratio of how much price increases start slowing and when mortgage approvals and draw down start dropping in numbers. The fact that it increased would suggest prices will continue going up for the forseeable

Villa05

schmittel wrote:

Totally agree with your first comment that the Threshold survey shows a huge volume of pent demand for affordable housing.

It seems odd that a state claiming affordable housing is its number 1 priority would be selling those apartments in Finglas at affordable prices to most likely investment funds whose objective would be to substantially increase the value of those same apartments.

Every way you turn, you just see madness

hometruths

fliball123 wrote: »

Yet year on year its an increase in draw downs and mortgage approvals. You can spin this anyway you like facts are facts more people are drawing down and getting mortgage approval then this time last year. No need to use other comparisons just use whats in front of you. This all with a 13% price increase in property. If people are looking to find the top of the market (sellers) I would keep an eye on this ratio of how much price increases start slowing and when mortgage approvals and draw down start dropping in numbers. The fact that it increased would suggest prices will continue going up for the forseeable

Fair enough you don't agree with my conclusions from the facts, but are you able to explain why instead of just accusing me of spinning the facts?

Or at the very least how exactly I am spinning this?

hometruths

Villa05 wrote: »

It seems odd that a state claiming affordable housing is its number 1 priority would be selling those apartments in Finglas at affordable prices to most likely investment funds whose objective would be to substantially increase the value of those same apartments.

Every way you turn, you just see madness

And the investment funds will most likely increase the value by leasing them back to the state for social housing.

Totally bonkers.

Villa05

fliball123 wrote:

Yeah I agree, but it puts to bed that its just the Irish market that is heating up

Agreed but you do understand that 15% inflation in an essential product/service is extremely damaging and far from what we would describe as a healthy market.

Children's and the unborn futures as well as the kitchen sink we're thrown to the market when they were falling at that rate
I wonder what the response will be when the problem is at the other end of the scale

MacronvFrugals

schmittel wrote: »

And the investment funds will most likely increase the value by leasing them back to the state for social housing.

Totally bonkers.

Are these the same units mentioned in this piece?


A Block of 58 Social Homes, Empty for Years

But blocks 2 and 2A, which contain 58 homes arranged in an L-shape on one side of a landscaped plaza, are silent – and empty.

Yet these 58 homes are supposed to be social housing. Over the last few years, council officials have regularly said they’ll soon be ready for families to move into, but the timeline has retreated again, and again, and again.

“Every couple of months we’re told it’s going to be ready, it’s going to be ready,” says Sinn Féin Councillor Anthony Connaghan. “And it’s not ready.”

https://www.dublininquirer.com/2019/03/13/a-block-of-58-social-homes-empty-for-years

Hubertj

MacronvFrugals wrote: »

Are these the same units mentioned in this piece?


A Block of 58 Social Homes, Empty for Years







https://www.dublininquirer.com/2019/03/13/a-block-of-58-social-homes-empty-for-years

Look the same…. It was definitely prospect hill. Mad stuff altogether. How difficult is it to get an apartment ready? Will anyone in the council be held accountable? No, salary increases instead.