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

Marius34 · 13-10-2021 7:41am

https://www.boards.ie/discussion/comment/118011574#Comment_118011574

"Belief in conspiracy theories is generally based not on evidence, but in the faith of the believer"

"Belief in conspiracy theories is associated with biases in reasoning, such as the conjunction fallacy"

https://en.wikipedia.org/wiki/Conspiracy_theory

enricoh · 13-10-2021 8:32am

https://www.boards.ie/discussion/comment/118011542#Comment_118011542

In the town in the west my missus is from up to 2-3 years ago you could rent a 3 bed semi or bungalow for around 5-600 a month easily.

Nowadays that's 1000-1200 all due to hap. and with all the anti landlord legislation the last few years there is literally nowhere to rent now.

A working couple a few years ago could save a few quid while working away, nowadays they are at nothing trying to compete with the government. It won't be long before oz Canada etc come into the conversation.

wassie · 13-10-2021 10:12am

I'd say it already has - and this story is in Westmeath!

https://www.independent.ie/business/budget/i-dont-see-a-life-for-myself-in-ireland-my-friends-are-in-australia-and-are-living-the-dream-40942247.html

While in Western Australia it was reported back in August

Overseas nurses, midwives and doctors who want to work in Western Australia will be offered free hotel quarantine and $5000 for flights as part of an international recruitment drive to combat resourcing issues in the state’s hospitals.

...the campaign was already in action with 209 junior doctors from the UK and Ireland expected to arrive in WA over the coming week.

We saw this push-pull effect of Police, Nurses & Tradespeople a decade ago....

timmyntc · 13-10-2021 10:30am

https://www.boards.ie/discussion/comment/118012241#Comment_118012241

Who defines it as a conspiracy theory and not just regular theory (or fact?)

Either we have had the most incompetent back-to-back governments who keep stumbling at every turn regarding rents, even when plenty of sideline commentators (and no doubt civil servants) have been in their ears with solutions, and yet this hilariously incompetent govt just keep making things worse, or its intentional.

Occams razor suggests the latter to be honest, the state wanted property prices (and rents) to increase to bring more money back into the exchequer.

JimmyVik · 13-10-2021 10:37am

https://www.boards.ie/discussion/comment/118011542#Comment_118011542

Its funny.

I knew not one landlord before rent controls came in who put the rent up every year. Most of the ones I knew would keep the rent the same for the duration of the tenancy, to keep a good tenant.

Now if a landlord does that they will end up hurting themselves. Also if they dont want to keep a bad tenant they cant do anything about that either.

Now, of the landlords left in the country I dont think any of them wont be raising the rent by the max at every opportunity.

The government have caused this. But dont shed a tear for them. They are getting over 50% of the huge rents they caused for themselves.

L1011 · 13-10-2021 10:38am

https://www.boards.ie/discussion/comment/118012769#Comment_118012769

At least one of the same two parties have been in Government for 102 continuous years, name changes nonwithstanding.

Marius34 · 13-10-2021 10:45am

https://www.boards.ie/discussion/comment/118012769#Comment_118012769

When there is no source to confirm that it's true on major events, it can be considered as conspiracy theories.

If I say that timmyntc, tells that current government is incompetent, it is not a conspiracy theory, because I can show the source of it. But if I say that because of this timmyntc is pro-opposition(Sinn Fein) supporter, it would be conspiracy theory, because this is based on my believe.

Note. There is no clear solution to the housing crisis, if someone thinks that has a solution, there will be plenty here to contradict it. Everyone sees housing problem from different perspective. Even those who oppose current government doesn't have solution that would agree on.

PommieBast · 13-10-2021 10:49am

https://www.boards.ie/discussion/comment/118012685#Comment_118012685

The canary is long dead. Back in the spring I was speaking to my then-manager about how many remote workers were refusing to come back to Ireland, let alone Dublin. The delayed census will make interesting reading..

JimmyVik · 13-10-2021 10:54am

https://www.boards.ie/discussion/comment/118012340#Comment_118012340

Funny you should say that.

My family rent a house in Donegal all year round as a holiday home. None of us live in the house. Its purely rented as a getaway. We've been renting it for 3 years now.

We pay €600 pm between us and one or other family uses it almost every weekend and for every day during the summer. We even went there for Christmas last year. 3 families.

The owner could easily get €1000 or more for it now. I thought he would give us our notice this year. But I was talking to him during the summer and he asked us to sign a 5 year lease if we wanted to keep it on. If we didnt he would have to sell it. We signed the lease as we were happy with the arrangement.

I asked him why was he thinking of selling. One word he said - "legislation". He will not be renting it under the control of the RTB or the council. He had rented another house to the council and said it was a disaster and now he cant even sell that house until the council lease is up.

But he is happy with the arrangement with us for another 5 years at least.

This particular guy is happier getting €600 from dependable people who dont have it as their PPR than getting around double that and being under the kosh of legislation and risk.

timmyntc · 13-10-2021 10:56am

https://www.boards.ie/discussion/comment/118012845#Comment_118012845

Your definition of conspiracy is severely lacking.

You've equated belief directly with conspiracy which is totally wrong. Conspiracy is a real thing, conspiracy theory is an unproven allegation of conspiracy, hence its a theory and not just a conspiracy (which implies fact in the absence of "theory" qualifier).

Furthermore, a theory is as yet unproven, neither proven true or false. "Conspiracy theories" can and do turn out to be true.

Anyways it is far more likely that government action deliberately inflated rental prices than a string of accidents, especially since FG manifesto circa 2011? said they wanted to increase property prices as part of the recovery. Encouraging REITs and others to invest in Irish property was a FG policy as a way to buoy prices, and in doing so that pushed rents up too as REITs became some of the largest landlords in the state, and investors were encouraged to buy irish property for its rental yields. Rental yields which are tied to property prices paid for the asset, because if the rent drops then they wont get their desired yield, and if yield falls so too does asset price.

Marius34 · 13-10-2021 11:11am

https://www.boards.ie/discussion/comment/118012898#Comment_118012898

You are right, corrected now, I should say conspiracy theories, not conspiracy. I use those to terms constantly interchangeably, although in most cases when I say conspiracy, I mean conspiracy theories.

Amadan Dubh · 13-10-2021 11:36am

https://www.boards.ie/discussion/comment/118012862#Comment_118012862

I have a feeling this is why the big tech MNCs have "delayed" the return to the office proclamations in Dublin, if they have not already offered full WFH forever. It is not that half the staff won't come back but instead that a meaningful number have decided that they won't come back to Dublin if they are told they need to come back. Losing 5-10% of people would be bad enough in the current, tight labour market. I have a few different friends who work in some of the larger tech companies (so of course this isn't really my own experience) and they all know of a few people who moved to their home EU country during the pandemic and won't be back ever.

I look on Daft this morning and search for general "Dublin (county)" rentals, seeing there are 1,029 in total available in the whole county (down from 1,700 in early/mid- August). The dearth in availability of rentals even with most workers still fully WFH would mean that any sort of a push to get staff back will push up rents even further and that small collection of rentals available will drop even further. The American Chamber of Commerce gave a reaction to the Budget yesterday;

"The American Chamber of Commerce Ireland, which represents US multinationals here, welcomed the decision to increase income tax bands and tax credits, noting that among its members, “93 per cent call out personal tax as a barrier to attracting/retaining talent, with 40 per cent seeing it as a barrier to further investment and expansion”.

As if housing wasn't already enough of an issue for companies, income tax is cited as a fairly big barrier to hiring and staff retention, but the government doesn't seem to have any appetite to materially reduce the income tax burden on workers. It's sad that the big companies are the ones who might finally tip the government into action as it should be enough for the average person (who actually votes) to be able to prompt action, but this is where we are heading; slower/no growth in multinational activity in Ireland rendering our "balanced budget" notions impossible without significant cuts to spending and tax increases.

iColdFusion · 13-10-2021 12:24pm

https://www.boards.ie/discussion/comment/118013051#Comment_118013051

The threshold into the 40% tax bracket is becoming even more of an issue with inflation the way it is, if you want to poach mid level staff from another company there's no point offering them a 5k payrise when the govt takes half of that, same goes for internal promotions and payrises. It gets even worse as you go up, someone on €100k pays €38k in direct tax, that's a massive amount of money to hand over every year!

Pussyhands · 13-10-2021 1:13pm

https://www.boards.ie/discussion/comment/118013051#Comment_118013051

The government should forget about reducing tax or increasing wages and focus on reducing the cost of living.

I don't need a wage increase or tax cut if rents/property falls by 20%

rob316 · 13-10-2021 1:23pm

https://www.boards.ie/discussion/comment/118013579#Comment_118013579

Exactly, I'd of rather seen the people who are been rode with rent get a credit or tax rebate that would put a months rent back in their pocket.

Affordable housing or accommodation should be the corner stone of our society/economy and that is the one thing the Government have had control of but did nothing about it before it became a crisis. A near decade of austerity measures and little public spending from FG has created this.

Timing belt · 13-10-2021 1:33pm

Unfortunately people never learn from their mistakes.... The crash in 2008 was brought about by banks lending to much and generating a bubble in the housing market. The solution to fixing this was to introduce new regulation that meant that banks needed to hold more capital for risking lending such a real estate financing or investing in financial assets to ensure that banks did not lend to much to inflate financial assets. The logic of this all makes sense and from looking at banks balance sheets this appears to have worked. But it also had an unintended consequence of reducing the capital that is required to build new housing that was required to meet population growth and as a consequence generated a housing shortage.

In order to address this housing shortage the solution was to get the capital to build new houses from Funds. The logic of this makes sense whereby you have investors with excess cash pooling it together in a fund to provide the required capital to build the required housing.

However this quickly developed into a situation where funds were used for speculative investments whereby they issued Debt to invest in financial assets (As opposed to providing capital for the creation of the assets) which increased the value of the financial assets because by issuing the debt they created money and you then have a situation where more money is chasing the same financial assets which in turn leads to asset inflation and more people investing in the fund which creates more money which leads to higher asset prices. This spiral continues with the funds sector growing year on year. This money creation by the funds is unregulated unlike the money creation in banking following the 08 crash.

So all that has happened is that the speculative lending has moved out of the banks due to regulation to hold more capital for risky lending and into the funds where the regulation does't exist.

When you incorporate QE into the mix you end up turbo charging the funds industry as you have more and more people looking for an alternative to keeping their savings in a bank account and getting a zero return. This results in a massive increase in Debt around the world accompanied by a massive increase in asset values the exact same as we saw during the 08 crash.

Will this result in a similar situation to 08 is the big question?

Back then we had banks that were to big to fail and needed to be bailed out... They are now more secure and risky lending is not being undertaken by them. So the question is will central banks bail out the funds in crisis or will it let them go to the wall.

CorkRed93 · 13-10-2021 1:37pm

https://twitter.com/C_Barraud/status/1448208154869870593

not just an Irish issue.

JimmyVik · 13-10-2021 2:40pm

https://www.boards.ie/discussion/comment/118013286#Comment_118013286

Hell I dont even do overtime anymore. Over 50% of it goes in tax. Waste of my time.

I even changed to a 4 day week. Only losing less than 50% of the money for that day anyway as the rest would have been tax.

wassie · 13-10-2021 3:11pm

https://www.boards.ie/discussion/comment/118013645#Comment_118013645

Significantly lower rents would also have the effect of redirecting a lot of peoples take home pay into actual productive parts of the wider economy enticing people to spend, especially retail and hospitality which is on its knees.

Villa05 · 13-10-2021 3:14pm

https://www.boards.ie/discussion/comment/118013707#Comment_118013707

If the funds and QE are creating a bubble in property/asset prices and Irish banks are almost exclusively lending into property, would the banks be overly exposed to property and thus be at risk of collapse when the bubble bursts.

Same problem, same result

Villa05 · 13-10-2021 3:15pm

https://www.boards.ie/discussion/comment/118014379#Comment_118014379

Consider maxing pension contributions to avoid tax

JimmyVik · 13-10-2021 3:18pm

https://www.boards.ie/discussion/comment/118014698#Comment_118014698

Been maxing them for the last 30 years. It was drummed into me when I started working job with a pension.

Amadan Dubh · 13-10-2021 3:20pm

https://www.boards.ie/discussion/comment/118013707#Comment_118013707

I think they already have been bailed out. On a small scale, HAP leases are almost like a pre-crash bailouts for some investors. But on a bigger scale the ECB bond-buying since 2015 has possibly found its way into the portfolios of investors. I noticed this first with one large fixed income asset manager of an Irish fund with billions of mortgage backed securities in its portfolio dating from the 00s in the U.S., these were essentially guaranteed MBS by the Fed's QE. I know there are transparency issues with the ECB's QE programme but would not be surprised if it is similarly buying "bonds" connected to property investors.

Timing belt · 13-10-2021 3:21pm

https://www.boards.ie/discussion/comment/118014689#Comment_118014689

No the banks don't have the same risk because they are required to hold enough capital to cover a stress in the lending they have undertaken.

Amadan Dubh · 13-10-2021 3:22pm

https://www.boards.ie/discussion/comment/118013735#Comment_118013735

But an issue it is nonetheless.

It shows that there is a common cause which is external to Ireland and therefore the risks which could cause a crash cannot be managed in Ireland.

PommieBast · 13-10-2021 3:34pm

https://www.boards.ie/discussion/comment/118014379#Comment_118014379

Having spent half of lockdown overseas I might have just about tolerated returning to Dublin dysfunctional housing situation, but then I worked out that I would get to keep an extra 7% of my salary if I stayed abroad permanently. Clearly I am not the only person doing the sums.

wassie · 13-10-2021 4:27pm

https://www.boards.ie/discussion/comment/118014729#Comment_118014729

And their lending has been more prudent. This time it will be the Pensions funds in strife as they have been duped into buying these overpriced assets.

Amadan Dubh · 13-10-2021 5:16pm

There's something in this that makes me uneasy, in the context of a "manufactured housing crisis" discussion.

https://www.irishtimes.com/business/commercial-property/john-mccartney-appointed-head-of-research-at-bnp-paribas-real-estate-1.4692657

John McCartney has joined BNP Paribas Real Estate Ireland as head of research, a role which will see him develop the group’s market research resource.

Mr McCartney most recently worked for the Irish Housing Agency, where, for the past year, he helped strategise on Dublin’s chronic under-supply of housing. Prior to that he was director of research at Savills Ireland and head of research at Lisney.