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

JimmyVik

https://www.boards.ie/discussion/comment/117928495#Comment_117928495

I think I posted when they first came out with the co-living rubbish that that was exactly where they were headed. For use as hostels and homeless shelters.

Villa05

Meanwhile

https://www.independent.ie/irish-news/education/student-accommodation-crisis-dcu-president-hits-out-at-governments-uneconomic-housing-for-all-plan-40880643.html

https://www.independent.ie/irish-news/education/student-accommodation-crisis-dcu-president-hits-out-at-governments-uneconomic-housing-for-all-plan-40880643.html

yagan

https://www.boards.ie/discussion/comment/117928495#Comment_117928495

In the investment game success can be judged by how quickly a manager can extract themselves from a crowded market. Many developers set up separate companies for individual sites so risk can be spread.

Unlike the Bertie years where even mentioning the business cycle could get you branded as a doom monger the more experienced money always have an eye on the exit. Kennedy Wilson have been following booms and busts for decades, the Marlet group was set up specifically to flip nama sites etc...

jill_valentine

https://www.boards.ie/discussion/comment/117923001#Comment_117923001

Our entire economy right this minute depends on other people's money. Again and again decisions have been made to protect landlords and property profiteers' access to other people's money. First Time Buyers are people. Renters are people, and given Varadkar's recent comments framing them as paypigs, that other people's money line's an especially bad joke just at the moment.

Housing For All is a perfect encapsulation of it anyway though - schemes everyone and their mam can predict will only send up the cause of housing, and serve simply to gift wrap more public money to private entities for little gain.

In the meantime, the housing market has mutated into such a monster it's affecting family planning decisions, causing kids to defer or drop out of college, leaving jobs unfilled in one place and not to be got elsewhere. Major life decisions and quality of life issues defined by government policy which prioritises the inalienable right of property owners to only ever see the value of their investment go up over the rights of people to keep any more than 50% of their own wages after renting shelter.

I'm not particularly enamoured of SF, but I can't take anybody seriously who presents them as a boogeyman because they might do something as bad as FFG are doing this years.

Jmc25

https://www.boards.ie/discussion/comment/117928959#Comment_117928959

Absolutely agree. There's no solution that will please everyone. To "fix" the housing market for those who don't own property, prices have to fall.

The government talk about "affordability" and by that they mean helping people to afford the current high prices. In my opinion that's just window dressing for the fact that they're reluctant to change the policy of successive governments over a period of decades, which has consistently taken the side of individuals and companies with skin in the property game.

SF are advocating something different and many people believe that "something different" can't be worse than the current situation, where as you say, life events are put on hold as a result of the monstrosity that is the housing market at the moment.

There's no policy that will please everyone. The government parties have chosen their side over a long period of time. SF are *claiming*(from the comfort of opposition) they'll choose the other side. That's all it comes down to in my opinion. Most commentators presenting SF as the boogeyman have a vested interest in the status quo remaining.

Amadan Dubh

https://www.boards.ie/discussion/comment/117928495#Comment_117928495

Analysis on Ireland's education sector in recent years points to it requiring significant overseas, fee-paying students over the coming decade in order to keep its funding model sustainable (i.e. low fees for EU citizens). Obviously these students need accommodation and would only exacerbate the already high demand for student accommodation, but these students would likely have deeper pockets which is a reasonable assumption based on the high fees they are paying to attend college in Ireland. I don't think there is anything much more significant than that in terms of considering whether or not it would be a worthwhile pursuit.

However, we are seeing these purpose built student accommodation developments not being utilised as their pricing is clearly totally unsustainable for the target market. So perhaps the misjudgment of the investors was on the targeted pricing (at least €900 per month for a bed), but I wouldn't put too much weight on the investors' ability to access perfect data sources. I am not paid to make investment decisions on property for investors, but I can tell you that starting prices of eight or nine hundred euro per month for student accommodation is cuckoo land, even a lot of full time workers wouldn't be able to pay that.

Maybe a deal can be done to convert these to short-term lets in order to house all the Brazilian and Chinese labourers that'll be shipped over to deliver Housing For All targets!

cnocbui

https://www.boards.ie/discussion/comment/117928805#Comment_117928805

Reminds my that some local resident biddy recently managed to win a planning appeal against a Dublin university that was intending to construct more student accommodation, because it would be visible from her home - presumably across the street - and would alter the visual amaenity of the university in a way not in keeping with her sensibilities and property value.

PommieBast

https://www.boards.ie/discussion/comment/117928959#Comment_117928959

Things are so bad that I now see SF et al deliberately crashing the property market as an essential part of this mess ever getting fixed. There will never be affordable housing until the government is willing to see all those who overpaid for Tiger-era property get wiped out.

fliball123

https://www.boards.ie/discussion/comment/117929481#Comment_117929481

Will you get real. Sinn Fein are going to go the way of every other talking shop who has ever talked a good game pre-election. The money is not there to do what they want, you only have to look up north and have a gander at their record whilst in government of how they have phucked up in housing/rents/homelessness areas. Over 20k people homeless north of the boarder and 8k here in the south. Property prices have risen by 10% up there as well not to mention rents rising. So much for Sinn Fein knowing their a$$ from their elbow when it comes to the property market, they are just as bad as the rest.

House price

https://www.irishnews.com/business/2021/07/09/news/competition-for-reduced-housing-stock-continuing-to-drive-up-rent-and-house-prices-2380592/

rents

https://www.irishtimes.com/business/economy/house-prices-in-northern-ireland-rise-by-almost-10-1.4649292

homelessness

https://www.thejournal.ie/homeless-northern-ireland-varadkar-4992863-Feb2020/

Only 8000 homeless in the the Republic

https://www.irishtimes.com/news/ireland/irish-news/number-of-homeless-people-in-ireland-rises-above-8-000-1.4635202

Wanderer78

https://www.boards.ie/discussion/comment/117929481#Comment_117929481

theyd be pretty dump to do this, and how can they truly crash it anyway? if our state takes a leading role in property markets, we could get to a more stable situation, but if we continue to default to the 'alternatives', we ll more than likely remain in a mess. its all to play for now, but i think we can do what needs to be done, but radical changes are required to do so, i just cant see ffg doing it, its deeply against their fundamental ideologies to, but elements of the 'housing for all' plan do indeed seem to be testing these beliefs, interesting times!

Timing belt

https://www.boards.ie/discussion/comment/117927884#Comment_117927884

Not all European economy's are going "Gang Busters" and it is the ECB that control interest rates not the Irish Government.

Timing belt

https://www.boards.ie/discussion/comment/117929481#Comment_117929481

What would crashing the property market achieve without addressing the underlying issues. All it would achieve is for existing houses projects to be shelved and noting to be built for a few years till the shortage in supply drives prices back up to where they are today.

Suggesting that crashing the housing market would resolve the issue is the same as saying that the central banking lending rules should be removed... yes it would enable people to borrow more and get on the housing ladder in the very short term but longer term it would just push up the price of houses and we end up back where we are today but with more debt and more risk.

PommieBast

https://www.boards.ie/discussion/comment/117929662#Comment_117929662

Beats me how they could do it, but as a plan it does not seem any worse than what the current lot are doing. It was also a bit tongue-in-cheek because fear of such a happening is the only thing keeping FF/FG in office.

Wanderer78

https://www.boards.ie/discussion/comment/117929960#Comment_117929960

as others have said, crashing the market would be beyond dump, and actually extremely dangerous for us all, 08 was a major wake up call for us on this one, having stable property markets is absolutely critical for our economy and society. governments have limited control in such markets anyway, but they need to wrestle it back, or we will more than likely remain as is, which isnt good for anyone, including current property owners, you can clearly see many landlords are now in serious trouble as well

Villa05

https://www.boards.ie/discussion/comment/117929825#Comment_117929825

Exactly that's why they need to engage their brain cells to help alleviate overheating and exploding the economy.

We need housing at affordable rate built for the state that the state can actually make revenue positive

They have the land, cheap capital and with economies of scale could surely negotiate a competitive build price

Wanderer78

https://www.boards.ie/discussion/comment/117930042#Comment_117930042

this is the only way out of this mess, with minimum damage, still wouldnt be easy though, and would be problematic in its own right

MacronvFrugals

I wonder are we losing much FDI because of the housing/rental market?

Housing must be top budget focus for Donohoe, says KPMG

housing crisis is deterring foreign investors from setting up business in the Republic and addressing the problem must be a focus for the Government in the budget, Big Four accountancy firm KPMG has said.

“The housing crisis is already a significant negative factor for foreign investors looking to establish substantial operations here,” KPMG said in a pre-budget submission.

“In an environment where the country must work harder than before to attract mobile individuals and businesses, our housing crisis may be the determinative factor which prevents future investors and workings from locating The here unless urgent action is taken to resolve this.”

https://www.irishtimes.com/business/economy/housing-must-be-top-budget-focus-for-donohoe-says-kpmg-1.4682129

Amadan Dubh

It's sad that it will take the big companies raising concerns, rather than the average Joe, for the government to actually get the finger out and realise that "affordability" means increased supply with decreased housing costs and not just increased supply at existing or higher costs to renters and home buyers. But that seems to be where the centre right parties find themselves; in the pocket of the lobbyists and less inclined to act in the interests of the middle classes.

jill_valentine

https://www.boards.ie/discussion/comment/117929236#Comment_117929236

These complexes have already been used for large scale Airbnbing, if not primarily Airbnbing, for years. Applications for change of use were already going in by 2019 - so clearly student demand was not filling them. And yet, more have been applied for since.

I think it would be extremely naive to think developers misjudged demand in advance when existing stuff was already clearly sitting idle.

I think it's far more likely it was thrown up under student planning regs, with unfeasibly high rents that nobody ever expected anyone to pay, knowing fine well eventually they could use that vacancy as an excuse for change of use. They were never student apartments, they were co-living units in the pipeline, their construction was a speculative investment that in a country as incompetent and greedy as Ireland was a near sure thing.

Any such applications should now be denied to force them to engage with the student sector they were ostensibly meant for. Bring down the rent until it meets the market or your asset is dead and nobody else will want it either.

JDigweed

https://www.boards.ie/discussion/comment/117927505#Comment_117927505

The latest phase of 3 bed semis were going for around 370k, for a midlands village it is absolute Insanity.

Timing belt

https://www.boards.ie/discussion/comment/117930184#Comment_117930184

How do you achieve an increased supply with decreased housing costs unless the government step in and start building houses directly themselves.

Yes they could do this but it would take time to achieve but I doubt that they would be able to reduce costs even applying economies of scale as in this country any project being delivered by the government is seen as gravy train. But then again thinking about it might lead to lower building costs elsewhere as there would be a instant black market of building materials. (tongue and cheek)

If we are to have a secure and sustainable housing market then supply needs to be increased (Or we reduce people coming to the country and encourage people to leave). Only once supply has increased and there is a glut of available rental property will rent's start to decrease.

Once rents start to decrease we will see investors exit the market (Assuming that rates increase during this time and investors can get a better return elsewhere). As investors exit more property will become available putting downward pressure on house prices.

The biggest issue I see is how you ensure that we don't have stop/start building and a constant supply of new builds year on year to meet the housing needs of the population.

We know that if prices fall to much it will put a stop to building as it will no longer be profitable to build and some incentive would be required to get properties built whether it was specific tax cuts on building materials or some form of a grant (that wouldn't apply upward price pressure).

Before people jump on me for suggesting that we need to provide an incentive to build they should look back at the full history of housing in Ireland from 1920 and not just concentrate on current policies or the Celtic tiger era. I am talking about a situation where you ensure that regardless of house prices that houses are built year on year to provide the projected housing needs of the population.

Jmc25

https://www.boards.ie/discussion/comment/117929617#Comment_117929617

SF may well be all talk and I suspect they are. But comparisons between being in a devolved power sharing arrangement with the DUP in the North and being in actual government here are meaningless.

But I do highly suspect they'll dial back the retoric within minutes days of getting into power. The great SF property crash is highly unlikely to happen.

mcsean2163

https://www.myhome.ie/residential/brochure/12-sidmonton-road-bray-wicklow/4531622

Texas chainsaw massacre house replica in Bray. A steal for €1.35 million

SmokyMo

https://www.boards.ie/discussion/comment/117929236#Comment_117929236

I read few articles on how Irish universities propped up by Chinese money to a point when they tried to enforce a policy to curb what they call 'academic freedom'. In some cases instill their own curriculum. Quite frightening. CCP power and reach touches all corners of your life.

To your second point, I am inclined to think that student accommodation was priced that way by design with the plan to toggle it to short term lets. Which is what we witnessing now. Also if you corner the market with the help of current environment regime ie no other supply to choose. , they will have to pay it. Either only the rich will do or government will cave in due to protest and subsides.

Villa05

https://www.boards.ie/discussion/comment/117928468#Comment_117928468

I understand your point, but recessions are a correction of unsustainable practices.

People need to view unsustainable practices as negatively as recessions. The world's financial might was thrown at the issue of house prices falling by double digit percentile.

When rents and prices plus stocks rise to unsustainable levels. It appears we can't take away the gravy even very slowly and let economies stand on their own 2 feet.

This ends one way, what countries do to plan for it determines the level of pain. Ireland has chosen to maximise it

Mad_maxx

Can't speak for the rest of the local authorities but I learned from Limerick City Council yesterday that they are no longer entering into long term leases.

I was considering buying another house myself as I already have one leased for ten years since 2018.

Timing belt

https://www.boards.ie/discussion/comment/117931848#Comment_117931848

Recessions are not a correction of unsustainable practices..... Recessions are brought about by fear and the first thing people do is stop spending and start saving.

QE is there to keep people in jobs and prop up the Economy.... It is no different to a interest rate cut. The world economy would not be able to stand on its own 2 feet at present and hence why the FED/ECB/BOE have not tapered their QE yet. The Irish economy may look like is healthy but when you strip away all the government support such as the EWSS etc....75% of businesses (Excluding the multinationals) would have heavy losses.

Villa05

https://www.boards.ie/discussion/comment/117931911#Comment_117931911

The theory on QE is that flooding the economy with cash it would filter down and everyone would benefit. It has been clear for many years that this has not been happening.

QE had the opposite effect in that the money stays at the top and drives up the prices of assets held by the wealthy. People in the middle and lower tiers very often rent these assets and get hammered so QE has resulted in further increasing the wealth divide and has failed.

Far from propping up the economy QE has blown up an unsustainable bubble and has turned economies into giant pyramid schemes.

QE and how it was spent is the greatest risk to economies not there saviour

growleaves

https://www.boards.ie/discussion/comment/117932028#Comment_117932028

Wealth consolidation is the real purpose of QE. Low and real negative rates allow the already-wealthy to borrow cheaply to effectively buy up the world.

BlackRock/Vanguard buying up housing. Bill Gates buying up farmland all over the US. Central banks and private interests buying up the world's physical gold supply etc, etc

By the time it is replaced by a different monetary system the people at the top of the pyramid will own near everything.

fliball123

https://www.boards.ie/discussion/comment/117930563#Comment_117930563

Sorry but the shinners will not get in by themselves they will have to share power down south as well. So it is an apt comparison. As it will be the same paradigm