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

Amadan Dubh

Dav010 wrote: »

In fairness, a by-election in the part of the country most acutely affected by the housing crisis could not be a more apt barometric test. Do you think Leitrim or Cavan/Monaghan would give a better indication of the mindset of the public in relation to housing?

I wouldn't necessarily say it is most acutely affected as it is not typically within the affordability spectrum and does not have the most disconnected voting demographic. In fact, it potentially benefits under the status quo.

MacronvFrugals

Ace2007 wrote: »

But only if the banks have rejected them for a mortgage, if the banks all offer them 178.5k, can they rock on over to the RI and get 255k?

Yes, they just say the house they want is 255k show 2 screenshots from bank calculators rejecting that and off you go!

Ace2007

Dav010 wrote: »

Why would a buyer be confined in an open market?

Because the market is flawed, if you think of any any other major investment decision, you wouldn't get away with the current system. I can't just phone up a stockbroker and say that i want to buy 500k worth of shares in xyz, without going through some sort of AML/KYC process, to see if i have the funds etc. When you bid for a share, you get the best price and it's all regulated - unlike housing.

So while folk say it's a market let any others, the main difference is that there is no checks of those bidding or any requirements to have €x in advance of being given access to certain property.

Marius34

MacronvFrugals wrote: »

The point is its all demand side, a single person on 51k could borrow 178.5k off the bank they can now borrow 255k off RI

I would not be sure someone on e 51K would get 255K. At least definitely not someone on joint income, and definitely individuals on 65K would not get 5X their income.

Cyrus

Amadan Dubh wrote: »

I wouldn't necessarily say it is most acutely affected as it is not typically within the affordability spectrum and does not have the most disconnected voting demographic. In fact, it potentially benefits under the status quo.

Few places are less affordable

tigger123

Dav010 wrote: »

In fairness, a by-election in the part of the country most acutely affected by the housing crisis could not be a more apt barometric test. Do you think Leitrim or Cavan/Monaghan would give a better indication of the mindset of the public in relation to housing?

By what metric is DBS the most acutely affected by the housing crisis?

I lived in that constituency for years, and still travel in and out of it every day. I also have friends and family living there, so I know it very well. It's doing fine.

As an aside, I always thought it was an FG political masterstroke to stick a TD from DBS (Eoghan Murphy) in as Housing Minister. Come re-election time, his performance in that role would not (and was not!) in anyway affected by his performance in housing (as DBS is quite comfortable on that front).

Amadan Dubh

Amadan Dubh wrote: »

I wouldn't necessarily say it is most acutely affected as it is not typically within the affordability spectrum and does not have the most disconnected voting demographic. In fact, it potentially benefits under the status quo.

It is a constituency in the most affected part of the country, are rents/property prices not high in DS, is there no one trying to rent/buy there?

fliball123

Villa05 wrote: »

Does anyone know if that 12% ownership rate for 25 to 39 year olds is an outright or with mortgage ownership

If I recall correctly the census only asks if you own or rent your property

You need to look at all stats in this regards, Its not just home ownership, people get married later, have kids later. People in this generation like to live a little before being saddled with debt , kids and commitments. Its the new norm and one of the outcomes of this is home ownership its not just that they cant afford it its also that they have not started saving early to start the process. All indicators would suggest this. If you need the proof.

Find out what the average age is for having kids/getting married/New phone buying/holidays abroad (obviously all of these will be impacted with 2020/2021 due to corona) the following has gone up to. I am sure there are some who cant afford to buy a house but those who can want to keep the lifestyle of a new phone every 6 months, a new car every year and 4 breaks away a year going.

fliball123

coolshannagh28 wrote: »

We are close to the top of our rollercoaster property cycle and those who will suffer the brunt of it are ordinary young people sucked into this ; we deserve better government as smoothing out this cycle is one of their primary responsibilities .

OK have you a crystal ball. There will be zero drops until building new houses is ramped up in a meaningful matter, the government are still talking and not walking when it comes to this problem. It will take years to build what we need and the longer they remain in zombie mode the longer prices will continue to rise. There is absolutely zero evidence out there that prices are going down any time soon

Amadan Dubh

To be fair, I think you're right. I was thinking that there is probably a larger proportion of home-owners in the constituency so more likely to vote FG. However, this is definitely not the case; it is a constituency of renters - no wonder it is not as cut and dry for FG as it should be.

https://data.oireachtas.ie/ie/oireachtas/libraryResearch/2020/2020-02-09_dublin-bay-south-constituency-profile_en.pdf

Amadan Dubh

Amadan Dubh wrote: »

I wouldn't necessarily say it is most acutely affected as it is not typically within the affordability spectrum and does not have the most disconnected voting demographic. In fact, it potentially benefits under the status quo.

Happened to be in kimmage yesterday, Fianna Fail were canvassing, every single person bar one, mentioned the housing crisis. Usually because of their family members.

Mad_maxx

Dav010 wrote: »

Let’s see if public dissatisfaction is as strong as some think, if housing is the pressure point for the governing parties, FG/FF candidates should perform poorly and SF/PBP should be strong. If housing isn’t the dominant consideration, or is just one of many considerations, the much maligned axis of evil will coast home, much to the chagrin of the Lefties.

certain issues are top of the agenda for media and this can create the impression that they are hugely important to the general public

homelessness

direct provision

neither of those in truth are important to the general voting public and while housing is a far closer to home issue for most compared to the above , I suspect for the majority it is less important than the media would have us believe ?

Villa05

That appears to be the general commentary on the topic, but when you scratch the surface, the fault lines are fairly stark

Firstly, in 2011 much of the required cuts were done all that was left were water charges. That didn't end well

The flagship government project was the children's hospital

The seeds for the recovery were sown by central banks by whatever it takes speech backed up by action. This period of low interest rates was the opportune time to get your house in order

Housing at affordable rates is key to competitiveness in an exporting nation. We started that period in a position of oversupply. The first warnings of a potential issue came in 2013/14 which closely coincided with extra unforseen extra revenue from corporation taxes.

Supply was suppressed through all developers being in Nama and extortionate 14% interest rates on development loans from state owned banks. Even today rates of 7% are quoted for funding for projects that have state guaranteed long term leases for construction projects. Alot of white collar leakage in the cost of building homes.
Couple this with ineffective expensive regulation of construction work when a fully functioning independent system at a fraction of the cost could have been copied from Northern Ireland. Again more white collar leakage

So in terms of housing and property massive opportunities lost to help the competitiveness of our economy

Again the domestic economy is held hostage by rents insurance and legal costs a situation underlined by 1 fg TD assisting another in a legal capacity seeking compensation for a fall of a swing. The scenario shows the level of entitlement and contempt they have for the people they represent.

These costs also crucify working parents with massive childcare costs further damaging competiveness

As for guiding the economy back to where it was. Be very careful what you wish for. House prices might be heading that way but the last time we had significant surplus each year plus the pension reserve fund. We are a long way from that luxury today

Ace2007

Ace2007 wrote: »

But only if the banks have rejected them for a mortgage, if the banks all offer them 178.5k, can they rock on over to the RI and get 255k?

MacronvFrugals wrote: »

Yes, they just say the house they want is 255k show 2 screenshots from bank calculators rejecting that and off you go!

But that's not really how it works though, you need to get a letter from the bank etc, and if the bank says it will give you the amount required as per the central bank, then they aren't rejecting you.

Is the whole idea not for people with pool credit history or whatever that can't get 3.5x from the bank in the first place.

MacronvFrugals

Ace2007 wrote: »

But that's not really how it works though, you need to get a letter from the bank etc, and if the bank says it will give you the amount required as per the central bank, then they aren't rejecting you.

Is the whole idea not for people with pool credit history or whatever that can't get 3.5x from the bank in the first place.

This RIHL provides mortgages at reduced interest rates to first-time buyers who have been refused a mortgage or were offered “insufficient” finance, by at least two lenders.

https://www.moneyguideireland.com/new-mortgages-available-local-authorities.html

Villa05

Villa05 wrote: »

Again the domestic economy is held hostage by rents insurance and legal costs a situation underlined by 1 fg TD advising another in a legal capacity that a fall of a swing was someone else's fault. The scenario shows the level of entitlement and contempt they have for the people they represent.

Source please.

Eclectic Econometrics

MacronvFrugals wrote: »

Anecdotally any of my friends from over that way housing is not too big an issue as their parents make up the difference with gifts, two SF TDs here in what the IT described as the "content suburbs" would be unbelievable but I think Ivana has a very good chance from what my mates do be saying.

Living here, my anecdotal experience is that if any of my neighbors have kids their kids number one concern would be what to do after retirement and not housing. I only see old people, I am talking bought Penny-farthing's when they first came out old.

So I dug around and found this - https://data.oireachtas.ie/ie/oireachtas/libraryResearch/2020/2020-02-09_dublin-bay-south-constituency-profile_en.pdf

This massively contradicts what I see with my eyes. The two standout stats are the % of people living in rented accommodation and those that are pre-family compared to the rest of the state.

growleaves

I am sure there are some who cant afford to buy a house but those who can want to keep the lifestyle of a new phone every 6 months, a new car every year and 4 breaks away a year going.

Waffle.

The obsession with consumer prices as the 'cause' of inability to access housing is the silliest talking point on this thread and in the media. It should be taken an admission of deep confusion.

Consumer prices are down across the board, the costs are deflated through labour arbitrage and import arbitrage. 'Fixed' costs like housing have diverged and are going in the other direction, up.

Very poor economic analysis. Although I guess you do realise that consumer prices have deflated relative to fixed costs like housing since you're having to claim that a normal person - within two years - buys two cars, four phones and takes eight holidays.

Do they also drink 12 cups of coffee a day at an expensive coffee house that charges a €5 a cup? Don't forget they buy a new laptop every 3 months also.

growleaves

growleaves wrote: »

Waffle.

The obsession with consumer prices as the 'cause' of inability to access housing is the silliest talking point on this thread and in the media. It should be taken an admission of deep confusion.

Consumer prices are down across the board, the costs are deflated through labour arbitrage and import arbitrage. 'Fixed' costs like housing have diverged and are going in the other direction, up.

Very poor economic analysis. Although I guess you do realise that consumer prices have deflated relative to fixed costs like housing since you're having to claim that a normal person - within two years - buys two cars, four phones and takes eight holidays.

Do they also drink 12 cups of coffee a day at an expensive coffee house that charges a €5 a cup? Don't forget they buy a new laptop every 3 months also.

I doubt the point being made related solely to consumer prices, more to consumer consumption and the desire to have the latest issue.

Amadan Dubh

Eclectic Econometrics wrote: »

Living here, my anecdotal experience is that if any of my neighbors have kids their kids number one concern would be what to do after retirement and not housing. I only see old people, I am talking bought Penny-farthing's when they first came out old.

So I dug around and found this - https://data.oireachtas.ie/ie/oireachtas/libraryResearch/2020/2020-02-09_dublin-bay-south-constituency-profile_en.pdf

This massively contradicts what I see with my eyes. The two standout stats are the % of people living in rented accommodation and those that are pre-family compared to the rest of the state.

You dug around the previous page of this thread you mean!

growleaves

Dav010 wrote: »

I doubt the point being made related solely to consumer prices, more to consumer consumption and the desire to have the latest issue.

Yes but the argument depends on ignoring the deflation of consumer prices relative to the past and relative to asset inflation.

Otherwise how can consumer consumption eat up a person's income to that extent? You have to believe that a normal person would take eight holidays in two years. It wouldn't be possible to hold down a job doing that.

growleaves

growleaves wrote: »

Yes but the argument depends on ignoring the deflation of consumer prices relative to the past and relative to asset inflation.

Otherwise how can consumer consumption eat up a person's income to that extent? You have to believe that a normal person would take eight holidays in two years. It wouldn't be possible to hold down a job doing that.

You also have to accept that two expensive holidays may cost more than eight, and someone who changes yearly to the latest iPhone may cost more that a new, older model. So it is about consumption and frequency rather than the unit price falling.

Villa05

Dav010 wrote:

Source please.

National competitiveness council

growleaves

Dav010 wrote: »

You also have to accept that two expensive holidays may cost more than eight, and someone who changes yearly to the latest iPhone may cost more that a new, older model. So it is about consumption and frequency rather than the unit price falling.

It is possible for someone to throw all their money down a black hole, if they are foolish, incontinent and don't look for a good price. I'm sure there are people who do do this.

As a general phenomenon it has no explanatory power on a par with the supply curve and low interest rate fuelled asset inflation among other factors.

Mad_maxx

Villa05 wrote: »

That appears to be the general commentary on the topic, but when you scratch the surface, the fault lines are fairly stark

Firstly, in 2011 much of the required cuts were done all that was left were water charges. That didn't end well

The flagship government project was the children's hospital

The seeds for the recovery were sown by central banks by whatever it takes speech backed up by action. This period of low interest rates was the opportune time to get your house in order

Housing at affordable rates is key to competitiveness in an exporting nation. We started that period in a position of oversupply. The first warnings of a potential issue came in 2013/14 which closely coincided with extra unforseen extra revenue from corporation taxes.

Supply was suppressed through all developers being in Nama and extortionate 14% interest rates on development loans from state owned banks. Even today rates of 7% are quoted for funding for projects that have state guaranteed long term leases for construction projects. Alot of white collar leakage in the cost of building homes.
Couple this with ineffective expensive regulation of construction work when a fully functioning independent system at a fraction of the cost could have been copied from Northern Ireland. Again more white collar leakage

So in terms of housing and property massive opportunities lost to help the competitiveness of our economy

Again the domestic economy is held hostage by rents insurance and legal costs a situation underlined by 1 fg TD advising another in a legal capacity that a fall of a swing was someone else's fault. The scenario shows the level of entitlement and contempt they have for the people they represent.

These costs also crucify working parents with massive childcare costs further damaging competiveness

As for guiding the economy back to where it was. Be very careful what you wish for. House prices might be heading that way but the last time we had significant surplus each year plus the pension reserve fund. We are a long way from that luxury today

the international money markets had to be reassured that Ireland was rolling up its sleeves and getting stuck into our problems , the 2011 government provided enough assurance and our debt yields started dropping sharply from the time we exited the bailout , now granted the ECB buying up debt was a huge factor , however , had the likes of SF been the lead party , we would likely have been at Greek levels of yield on ten year debt

growleaves

growleaves wrote: »

It is possible for someone to throw all their money down a black hole, if they are foolish, incontinent and don't look for a good price. I'm sure there are people who do do this.

As a general phenomenon it has no explanatory power on a par with the supply curve and low interest rate fuelled asset inflation among other factors.

Are you arguing that people who have similar pay and spend more on consumer items have the same disposable net income to save/pay a mortgage as those who spend less?

Villa05

Villa05 wrote: »

National competitiveness council

Link please.

growleaves

Dav010 wrote: »

Are you arguing that people who have similar pay and spend more on consumer items have the same disposable net income to save/pay a mortgage as those who spend less?

No, I'm just saying there is no large pool of people who aspire to own a home but squander all their money on consumer goods in lieu of saving imo.

Since people can attain clothes, cheap flights, phonecalls, food etc. at low prices, consumer consumption is only explanatory for individual people who would struggle to control their appetites under any circumstances.

You can't get car insurance cheaply but you do see legions of cyclists about the place.

fliball123

growleaves wrote: »

No, I'm just saying there is no large pool of people who aspire to own a home but squander all their money on consumer goods in lieu of saving imo.

Since people can attain clothes, cheap flights, phonecalls, food etc. at low prices, consumer consumption is only explanatory for individual people who would struggle to control their appetites under any circumstances.

You can't get car insurance cheaply but you do see legions of cyclists about the place.

As I pointed out have a look at the numbers for the following

Amount of holidays a year over the last decade
Amount of new phone purchases
Amount of new car purchases
Average age of marraige
Average age of having kids

All will point to people in their 20s and early 30s wanting to live a bit more bfore debts, kids and responsibility.

growleaves

growleaves wrote: »

No, I'm just saying there is no large pool of people who aspire to own a home but squander all their money on consumer goods in lieu of saving imo.

Since people can attain clothes, cheap flights, phonecalls, food etc. at low prices, consumer consumption is only explanatory for individual people who would struggle to control their appetites under any circumstances.

You can't get car insurance cheaply but you do see legions of cyclists about the place.

Retail is based on enticing people to buy items they don’t need, even if they are cheaper now than a year ago. Personally I’ve never paid less for an iPhone than I previously, never paid less for the same model car, rarely pay less for takeaways/cafe fair than I did previously, in fact I’ve rarely noticed prices go down, but that’s just me.