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

Timing belt

https://www.boards.ie/discussion/comment/118225917#Comment_118225917

I think property prices rises will continue for a few years rather than months because there will be no change in rates till at least 2023 (as per speeches from ECB) and it will take time for meaningful supply to come online.

houseyhouse

Any predictions for what’s going to happen with construction costs in the short to medium term?

Timing belt

https://www.boards.ie/discussion/comment/118226281#Comment_118226281

Here is the extract from the central bank report on construction costs that was published yesterday.

Marius34

https://www.boards.ie/discussion/comment/118225917#Comment_118225917

"If there was no demand for the new build apartments (incl. student accommodation and short-term accommodation like hotels) to rent in the last 3 years, there will never be demand for them without the rents dropping significantly"

There were demands prior Covid, and there will likely be demands in the future. There was reduced demands in City Center due to Covid.

Marius34

https://www.boards.ie/discussion/comment/118219879#Comment_118219879

The private debt although it's serious worry around the World, and it feels like adds to overheating, it's probably not the highest if we compare with GDP terms.

Amadan Dubh

https://www.boards.ie/discussion/comment/118226522#Comment_118226522

I strongly disagree that there was and is demand for 1 bedroom apartments over €2k per month and 2 beds at €2.5k per month etc. Even high paid workers are not queuing up to come to Dublin and pay those rents. But that isn't even significantly more than the average rents in Dublin for 1 and 2 bed places! Personally speaking, we have a net household income of €7k p/m and I would probably have us in a higher earner bracket for renters but nothing would get us to pay €2.5k p/m on a 2 bed apartment unless our salaries went up at least another 10% (although to be fair this isn't unlikely next year). But presumably the likes of myself are the target market for these very expensive, empty new builds. My peers would be in a similar sentiment to us.

With student accommodation, there is plenty of newly built accommodation for €800+ per month for a room which is just unaffordable for students no matter what way you cut it. And it can't all be geared to international students.

cnocbui

Economic corrections do not improve things for property buyers, except for investors and cash buyers.

JimmyVik

https://www.boards.ie/discussion/comment/118226651#Comment_118226651

What happens is that people who want and can afford to live in those 2.5k apartments will and the ones who cant or dont will move further out from the city where the same apartment is available at a price they are willing to pay.

For example 1 bed apartment in city center for €2k pm or 1 bed apartment in Swords for €1.5k pm or 1 bed Balbriggan for €1250 would be the type of choices. People will just have to go for what suits their budget.

Markets falling as snow look on news.If its will continue next week Recession will start in January 2022 at full.Thats it the fall of property prices will start soon.Who was seating on bag of cash and waiting for the crash finally will afford property on best price ever.Its started today.

Amadan Dubh

It's not covid spooking markets, that would be too convenient a scapegoat and barely any information about a new variant was released the last day or so to have triggered this dramatic a movement. The trigger happy sellers are typical of bubble activity when people are on edge. Nonetheless, it's the time for taking profits for sure.

Timing belt

https://www.boards.ie/discussion/comment/118228856#Comment_118228856

Of course it’s not covid spooking the market… It must be because people don’t want to go on holidays that all the airlines/cruises and travel related companies are the biggest losers today with share prices falling 1O+%….absolutely nothing to do with covid and new travel restrictions!!!

Amadan Dubh

https://www.boards.ie/discussion/comment/118229278#Comment_118229278

Yes, all those trips people were planning to make to and from the US and Europe to southern Africa have caused airline stocks to plummet! QE and low interest rates is the problem looking for a solution and the coordinated panic is a justification to keep the music playing a bit longer. It's almost too perfect - another South African variant no less. Like Brexit being blamed before for the Irish property market slowdown, we have a new red herring. It is just unbelievable that a few flight cancellations to southern African countries would cause significant drops in oil and stocks!

https://www.boards.ie/discussion/comment/118229278#Comment_118229278

You forgot short term properties at bookings.They will be empty when them owners will have continue pay mortgages :)

If sell off on markets will continue all next week that will be the end because shares prices are historically high !

There is millions people took loans of cheap money to buy shares and now they will have find money to pay loans back! And banks will have find ways to cover the loses .

Its only started today but all week before that investors been quite nervous already.So keep watching but things which happened today look terrible already.

Timing belt

https://www.boards.ie/discussion/comment/118229387#Comment_118229387

The sell off is 2-3% and is not even in correction territory. The Dow has seen 7 off these sell off's in the last year.

it is highly probable that that this has already spread to multiple countries and will result in further restrictions and more lockdowns worldwide and that is why there has been a sell off in travel related stocks. It’s has potential to be much bigger than just flights to southern African.

On top of that US and other countries have been releasing large portions of their oil reserves which has resulted in declines in oil prices for the past 3 days.

Will be interesting to see how the Asian Markets react on Sunday night as more info on the variant and infected countries should surface before then.

Timing belt

https://www.boards.ie/discussion/comment/118229449#Comment_118229449

Are short term bookings not part of Travel?

The VIX is only at 28% and not up in the 60% like when Covid first hit... It has't even hit the levels of volatility that it saw when the other covid Variant's news hit.

https://www.boards.ie/discussion/comment/118229737#Comment_118229737

The next week stock markets activity will show us property prices in Ireland in 2022

Please do not forget that hedge /investment/cockoo funds buying and investing in property in Ireland as in shares

And when shares holders and investors starting losing money on stock markets they will start pump money out of those funds

What mean sell off of property in Ireland and property prices collapse !

Timing belt

https://www.boards.ie/discussion/comment/118230429#Comment_118230429

The stock market is up 15% from a year ago.... share prices falling 2-3% is not going to lead to Investors loosing money so badly that they will need to have a fire sale on Irish property.

Even if the stock market dropped 15% by the end of next week the lower yield on government bonds as investors seek safety in liquid assets will make the yield on property look more attractive.

https://www.boards.ie/discussion/comment/118230563#Comment_118230563

The structure of jobs and investment in Ireland is low taxation

Ireland has no oil and gas but has plenty green land which she trying to sell creating jobs and Johny Ronans,O Flynns and others.

You need look from that point.

As I said before we have a look to next week stock markets results and where shares holders will invest

To green grass in Ireland or Bitcoin

As I said before the property were cockoo funds invested in Ireland is ordinary shares .They put money in house when house price goes up they making money from it.

There is no supply and demand issues on market :) House in Ireland is a share on stock market and no more than that :)

Bass Reeves

https://www.boards.ie/discussion/comment/118230686#Comment_118230686

So it's like last March 12 months Chicken Licken is running around screaming the sky is going to fall in. It looking for s few turkeys to run around with it screaming it as well.

Yes funds suffer when stock markets fall. But funds seldom leverage into shares so o e of two things happen.

They sell off share and look for safer places for there money gold, government bonds or cash deposits. Most movement is caused by some investors ( individuals who hold pensions) switching from higher risk profile funds to lower risk funds.

Most pension fund investors in Irish property are chasing yield not capital appreciation. The investment is from lower risk funds not those chasing higher returns.

The REIT's that have invested in Irish funds will have taken a long-term investment. The return on investment is what they are looking at. So unless we get mass migration out of Ireland they are not going to panic about a Chicken Licken flapping about. As well a section of there investment is covered by longterm lease's to LA and blue chip corporate companies. You could see money making be in more than a risk of it moving out

Pension companies do not invest in property short term and do not leverage when they do.

Amadan Dubh

https://www.boards.ie/discussion/comment/118229680#Comment_118229680

It happened so quickly after the covid variant news, that it just couldn't be linked - there is zero information about how transmissible or deadly this variant is, by all accounts it needs to be assessed first. And no where has announced new restrictions from it, just a few cancelled flights from Africa. More likely the little sell off was to do with the US debt ceiling pantomime with the upcoming deadline to extend falling in the next week or even just a lot of people selling to get cash to spend on Black Friday!

The worst thing that could happen would be a panicked additional QE injection and a rolling back of talk to raise interest rates. There is a slight chance to make the fallout a bit better when the asset correction occurs.

Timing belt

https://www.boards.ie/discussion/comment/118232576#Comment_118232576

The markets move quickly and the drop has been felt most in the Travel Sector which has nothing to do with the US debt celling or Black Friday. To be honest I had to read your post twice just to make sure you were not being sarcastic.

Have you read any of the news in relation to the new variant it is meant to be more transmissible than the Delta variant and has already spread around the world with cases in the UK, Germany, Belgium, Netherlands. I agree that it is to early to know the full effect of it but the WHO and all the scientists are worried about it which is enough to get the travel market spooked and fears of more global lockdowns. If it does result in this then you are looking at a global slow down which will reduce the chances of any rate rises and increase the likelihood of more QE.

Yields on the 10 year Tbills dropped by 10bps yesterday and will drop further if there is more bad news in relation to variant. The economic data coming out of the states next week was expected to be strong but the market won't care about that if the no of cases of the new variant start showing up all around the world or does not respond to the vaccines.

You may not like QE but it has saved millions of jobs and a very sever global recession that would hurt everyone's pocket.

Pussyhands

A nice little 20% crash to the housing market would do me nicely.

Amadan Dubh

https://www.boards.ie/discussion/comment/118232744#Comment_118232744

I was being sarcastic with the other potential causes, but not about whether the covid news caused the panic selling within a day. I have read some more news about it and it seems to be taken more seriously than I thought in the last 2 days when I first dismissed it, but I still don't think it should've caused such dramatic drops - even bitcoin fell which, despite its general instability, seemed to fall yesterday for the same reason as the markets.

I just think there is little room to grow for assets without constant State and central bank support. The whole thing is just not being allowed even a slight correction, but it defies sense to think assets can keep rocketing while wages barely go up and even go down as inflation eats into them. A correction feels inevitable and I don't necessarily link a correction to a crash. Artificial conditions keep these valuations high and can't last forever.

My own opinion about future of property market if fall of stock markets will continue next week

The hedge /investment/coockoo funds bought many property investing investors money in Ireland

If stocks will continue falling the investors will starting moving to cash creating funds to buy cheap shares on bottom

They will pumping cash out of companies which already invested to property in Ireland and those companies will start sell of of property in Ireland trying play back

Because those funds will start leave markets building sites will slow down because there is not enough buyers in Ireland to move building industry forward ( that why government let those funds come to Ireland )

Unemployed builders will fill shortage of labor in other industries and we will back to normal for a while

The cash buyers will continue move property market for a while and then government will organize cheap labor from Brazil and Philippines freely come to Ireland because there will be no Eastern Europe workers anymore what will keep renting market clicking over

You see guys somebody need pay rents and pay pensions and somebody need to move building industry forward also

Well there will be quiet as 2008-2011 for 2-3 years but there will be no end of the World

Timing belt

https://www.boards.ie/discussion/comment/118233717#Comment_118233717

If there is a fall in the stock market investors will move to government bonds as it is safer than cash. As the price of the bonds goes higher the yield goes lower which makes any investment in property more valuable as you can still get 3-4% yield from them.

Hedge funds are not material players in the property market... It is insurance and pension companies who are looking for a steady cash flow that allow them to pay out on policies/pensions. Normally these insurance and pension companies would hold government bonds but as the price of these bonds have shot up in value because of central banks buying them they can't generate enough cash to pay out on policies and pensions so they have looked elsewhere and property with it's strong yield has replaced what they would have invested in government bonds.

Until you see the yield on government debt climb higher you will not see a slow down on investments in properties and new builds.

Your doomsday scenario outlined above where you see stock market crash = fire sale in property would only happen if you had mass unemployment as a result of a stock market crash.

Personally I think markets will open 2-3% down Monday followed buy a rebound Tuesday as investors buy the dip as greed is still much stronger than fear. The strong economic data that is expected to coming out of the US next week will also give investors comfort to pile right back in. The only thing that would change this is if it is proven that the vacaines do not work on the new covid variant and as a result the world is looking at another year of lockdowns. I think you will see property increase in price until at least 2023/24

Villa05

https://www.boards.ie/discussion/comment/118233848#Comment_118233848

Do you think people are powerless in this ever increasing rent prices scenario.

If there is nothing in the system for an ever increasing proportion of our populations, surely a revolution is not far away, be it positive or negative for people

The great resignation is an interesting concept, so many jobs are now pointless as they do nothing to improve your lot, as rents will take more than you earn

https://www.boards.ie/discussion/comment/118233848#Comment_118233848

Lets see what gonna happen next week anyway ant talk about it on Friday evening next week.

Timing belt

https://www.boards.ie/discussion/comment/118234793#Comment_118234793

No people are not powerless but until their is more housing to rent than people looking to rent rent won’t fall without mass unemployment. demonstrate/protests do whatever it will still take time for supply to come online.

Villa05

https://www.boards.ie/discussion/comment/118235357#Comment_118235357

Would you think that the more unaffordable rents become the greater likelihood of a significant crash.

Where is the pressure release valve, I'm not seeing one so this continues until it explodes

Timing belt

https://www.boards.ie/discussion/comment/118235572#Comment_118235572

No more unaffordable rents won’t lead to a crash as people have to live somewhere and if they have no choice or alternative they have to live with it no matter how difficult it is.

The only release valve is

• a increase in supply whether that is funds exiting the market because they can a steady return on government bonds when rates rise substantially or an increase in new builds.
• a fall in demand brought about by unemployment, less people migrating to Ireland or mass emigration.

None of this would appear likely at the moment except an increase in new builds that will take a few years to come online