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

Villa05

https://www.boards.ie/discussion/comment/118938338#Comment_118938338

I would agree, however they are smart and appear on paper to have a better housing strategy (not very hard in fairness). The government(s) of the last decade have left the door open for them so they should be held fully responsible

This is not uniquely Irish situation. 60% of the French voters that bothered to come out voted far left or far right. Stormy waters ahead

Murph85

https://www.boards.ie/discussion/comment/118938338#Comment_118938338

That's the problem. There is no answer. Spoiling your vote to highlight the farce here, is the best bet. Your options range from the left, to the far left. Ffg only differing from left wing ideology on the housing racket front.. oh and the corporation tax, where companies worth hundreds of billions should pay a pittance in effective corporation tax. But a poor person in dublin should lose 50% of income over a pittance of 36,000.

We have no military expenditure and a tiny elderly population, but ageing population. Pity we couldnt just leave the troika in charge. The next bailout, let them set the changes, make the decisions. Rather than defering to the weasels here opting to increase taxes to pay for all of the inefficiency and waste. Irelands tax policy is effectively, let the middle to upper middle class pay way more than their fair share. There are no water charges, LPT is a token gesture. Huge amounts out of the tax net. Somebody has to pay a high cost for this farce...

Villa05

https://www.boards.ie/discussion/comment/118934564#Comment_118934564

There are tons of FTB buying every month. Surveyors and solicitors are super busy. Landlords are net sellers, ie lots of people become home owners currently.

I'm sure there is lots of ftb's out there. There are significant savings out there that need to be hoovered up.

If their is one thing the great unwashed learnt from the last bust its that the cautious and prudent got burnt. The wrost thing that could have happened you was to be without a house whatever the cost.

I'm not so sure that particular trait will remain for the next bust, given our national debt and our rather expensive social housing program and health care issues.

Wanderer78

https://www.boards.ie/discussion/comment/118938533#Comment_118938533

once again, the last bust was largely related to our over reliance on credit i.e. private debt, it had little or nothing to do with public debt, we still have not dealt with this on a global level, for example, its primarily these debts thats preventing rates from being increased at a rate thats required or desired, doing so would simply lead to our accumulated private debts to become unserviceable, and potentially.....

combat14

as inflation surges shoppers advised of 17% price rises on furniture in the uk .. when is enough .. enough..

The Gaurdian:

Shoppers are being warned that the cost of a new sofa and other furniture is to race higher as the Russia-Ukraine war pushes up the cost of key materials such as timber.

“We have never seen anything like this in terms of across-the-board price increases for materials,” said Sean Holt, the managing director of the British Furniture Manufacturers, the industry’s trade body. “It is putting a lot of pressure on manufacturing in the UK and that will have to be shared with retailers and consumers.”

Higher furniture prices are already feeding into higher living costs in the UK. Inflation is running at 7%, the highest level in three decades, with furniture prices up 17%. The invasion of Ukraine is heaping more pressure on British furniture makers who had been sourcing timber from Russia

J_1980

https://www.boards.ie/discussion/comment/118938138#Comment_118938138

Can you stop talking that nonsense?

its annoying and repetitive.

answera simple question: why isn’t Argentina rich then?

Wanderer78

https://www.boards.ie/discussion/comment/118938811#Comment_118938811

....and once again, boards is a public forum, all members are entitled to express their opinions, as is the case with yourself, you may also need to self reflect, as your opinions also seem to be very repetitive!

....and once again, countries such as Argentina are as such for various different reasons, one being the fact the majority of their debts are in foreign denominated currencies such as the dollar.......

Villa05

Can't beat innovation

https://www.irishmirror.ie/lifestyle/homes-and-property/solution-irelands-housing-crisis-metal-26715995

Wanderer78

https://www.boards.ie/discussion/comment/118939725#Comment_118939725

spotted this alright, some do look great, but its just disturbing on the other hand!

https://www.boards.ie/discussion/comment/118939725#Comment_118939725

Saw a house in grand designs made from shipping containers, fab.

I know people that built a 'house' from 5 prefabs, from a building site in England. Bought and shipped to their site in Cavan for less than 20K. It was about 10 years ago. They made a lovely house out of them.

Timing belt

https://www.boards.ie/discussion/comment/118938579#Comment_118938579

Let’s not forget about the government debt that is also preventing higher rates….The issue is not just private debt!!!

https://www.boards.ie/discussion/comment/118940034#Comment_118940034

agreed. Mortgage holders among us should be thankful government debt is so high across the world. It really limits where interest rates can go. Seventies interest dates were destructive to the individual borrower….interest rates at that level in today’s world, even half of that level, would be an existential threat to our whole global financial system

Villa05

https://www.boards.ie/discussion/comment/118940089#Comment_118940089

I believe the mortgage rates in the US have doubled in the last couple of months. It would be very foolish to think that won't happen here as Europe's inflation threat is greater than the US

Turkey could be the canary in the coalmine

Timing belt

https://www.boards.ie/discussion/comment/118940279#Comment_118940279

Turkey is a special case….gov who won’t listen to every economist in the world…..total disaster by incompetent government that don’t understand the basics of running a country.

Mad_maxx

https://www.boards.ie/discussion/comment/118933996#Comment_118933996

Not saying they won't go higher but how are they " grotesquely cheap " ?

Bass Reeves

https://www.boards.ie/discussion/comment/118940279#Comment_118940279

Bla, Bla, Bka.......chicken licken running around again shouting the sky is falling in.

Most US mortgages are generally fixed rates varying from 5-30 year rates.the 15 year rate is slightly above 4% in 2019 they were at about 3.5%. they dropped to 3.25% in 2020.

As most mortgages payments are based on these 10+year rates new higher rates only effect those finishing a fixed rate term( however they have access to a variable which is about 4% at present). It will take interest rates remaining high for 5 years plus before they effect a substantial amount of borrowers.

So chuck, chuck,chuck

Villa05

https://www.boards.ie/discussion/comment/118940350#Comment_118940350

That sounds eerily familiar

Seriously EU is in serious trouble, energy food, basic materials. Reliance on Russia/Ukraine will bite hard. Interest rates will have to go up to cool demand

Bass Reeves

https://www.boards.ie/discussion/comment/118940363#Comment_118940363

Looking at it this way an investor must now out in 30% equity. Say you bought a two bed apartment for 400k. If you put in 120 equity and borrowers 280k your repayments on a 28 year fixed for five years would be less than 1300/ month. Such apartments are makeing 2k+/month in rental income.

Murph85

https://www.boards.ie/discussion/comment/118939732#Comment_118939732

Way less disturbing than living in kips and paying a fortune to do so...

Murph85

J_1980

https://www.boards.ie/discussion/comment/118940363#Comment_118940363

Most apartments are priced below replacement costs. Dublin apartments B/C rated are similar priced to most tertiary German cities.

you can even look at poland, a european low income country:

80 sqm in dublin 400k:

https://www.myhome.ie/residential/brochure/3-millrace-road-phoenix-park-racecourse-castleknock-dublin-15-d15-fp66/4584055

95sqm in Warsaw same price:

https://realting.com/property-for-sale/poland/swiat-nieruchomosci-sp-z-o-o-swiat-nieruchomosci-llc/1205230

J_1980

https://www.boards.ie/discussion/comment/118939450#Comment_118939450

Great maybe Argentina should issue debt in their own currency then. How’s that working for them…

Timing belt

The EU have already stepped in and raised rates by over 1% by stopping QE….The ECB rate has more or less been meaningless since turning negative….the only mortgages they impact are trackers sold a long long time ago.

Villa05

https://www.boards.ie/discussion/comment/118940536#Comment_118940536

I wonder do Poland have a newspaper called the polish Times with a section

This is what €400k gets you in country x

The bubble is global folks. Looking at insanity in country x is not justification for insanity in our own country

Mad_maxx

https://www.boards.ie/discussion/comment/118940536#Comment_118940536

Polish one far superior, probably central Warsaw too ,castleknock is a suburb

Villa05

https://www.boards.ie/discussion/comment/118940575#Comment_118940575

Far too low, when inflation is at 7% and rising

Jonnyc135

https://www.boards.ie/discussion/comment/118940645#Comment_118940645

The dog on the roads knows its too low but Philip Lane (our very own south dubliner) who's runs the show in the ECB (Lagarde is actually a lawyer), seems to think this inflation is a figment of our imagination and will just evaporate away. Time will tell but the bond market certainties think the fed and the ECB are way behind the curve and see a policy u turn to upping rates causing a recession (no soft landing) then lowering rates and probably starting QE again and the casino starts again.

Amadan Dubh

https://www.boards.ie/discussion/comment/118940477#Comment_118940477

It's not necessarily about rates going up but QE needs to stop a year ago! In a supply shock environment it is just fuel for the fire. With QE and asset prices being definitively correlated, it is obvious what happens with some QT.

Saw this article today which also touches on the topic I've been ranting about the last number of months, that the MNC gravy train is the epitome of normalcy bias in action and the boon of the last few years absolutely cannot be relied upon going forward. 60% of our corporate tax comes from the top ten companies and our public spending is so wasteful that, should the gravy train stall, we don't have much of a rainy day fund and belts will have to tighten once again.

This is my link to property, summarising what has happened and what may happen going forward;

• Since 2013 we started to see the economy recover and big companies started hiring and expanding their workforce.

• We received a big net immigration boost as a result with all of these workers needing somewhere to live.

• Housing supply was slow to react to this rapid and significant boost to our working population which pushed up rents.

• Because there was such a shortage of rentals, it meant that we had workers renting everything even family, suburban houses together and this meant that all properties were then increasing in value as they could be rented out for an excellent yield (rising tide lifting all boats); the value of properties increased due to their rental yield, even those that were never rented!

• The government, with its institutional driven property policies continued to ensure muted supply in the face of ever rising demand, thus pushing the market even higher.

• This included introducing ways to even encourage valuations to climb higher (eg Help-to-buy, RPZs, social housing leases and HAP putting a floor under the rental market).

• More and more workers arrived into Ireland and demand for rentals soared ever higher, matching with the rise in workers here.

• These same companies, should they stall their employee growth plans or even reduce headcount, for whatever reason (eg corporate tax reforms, expectation of lower future earnings because of higher borrowing costs, wfh policies, too expensive for housing in Ireland etc), would greatly impact demand for rentals and therefore materially and detrimentally impact out entire housing market (my own view is that the penny should already have dropped that we are in serious trouble here, economically, by not treating our lack and cost of housing as an emergency).

• Demand for rentals decreasing would impact the entire property market.

It looks like it will take, in the absence of any effort by our government to fix the problem, a big company to pull the plug on Ireland (citing a host of reasons) for the government and society to finally see that actually the economy and property market is mightily vulnerable and exposed, perhaps not as stable as we thought. Sad, but it will be too late when that happens and the heads will be scratched, blame will be given to anything but the squandering of cash (into things like propping up the property market) that we had since 2014.

https://www.irishtimes.com/business/economy/has-ireland-wasted-what-may-prove-to-be-a-temporary-corporate-tax-boom-1.4854938

Warnings about the highly concentrated, potentially volatile nature of the tax is a difficult sell in the context of such a windfall. Those who tried to puncture the rosy narrative around property prices back in the boom were also dismissed and painted as cranks.

Irish-based subsidiaries of US software giant Microsoft reportedly paid $3 billion (€2.77bn) in corporate tax here last year, approximately one sixth of the total. The switch to working from home during the pandemic accelerated demand for the company’s cloud-based computing services and its new Office 365 platform. The scale of its global operation is illustrated by the fact that two Irish-based Microsoft entities each paid a €30 billion dividend to their US parents last year.

These eye-watering numbers are mirrored in the accounts of Apple, Facebook and Google, which use Ireland as a pitch into Europe, the richest consumer market in the world.

We’re reaping a massive tax dividend as a result. But you would be foolish to presume we can bank on it indefinitely. Global foreign direct investment (FDI) morphs and shifts. It’s not a question of if we have a reversal but when. The Department of Finance said as much in the Stability Programme Update last week, referring to “an almost-certain fall in corporation tax revenues” somewhere up the line.

Several large multinationals operating in Ireland are understood to be fast-tracking revenue from future years in order to pay their corporation tax liabilities “on today’s terms” in advance of the shift to a minimum global rate of 15 per cent agreed as part of the recent OECD-brokered deal. The frontloading of future tax liabilities could make the falloff in receipts here even steeper.

Timing belt

https://www.boards.ie/discussion/comment/118940719#Comment_118940719

The USA and UK have only increased their 10yr notes by 30bps more than the ECB…the ecb are not that far behind.

if the only way to curb inflation is to reduce disposable income then the government shouldn’t have cut duty on diesel and petrol, shouldn’t reduce the vat rate etc….to hell with the people or businesses impacted….this is the same mantra as looking only for rates to be raised by increasing ECB rate despite the ECB driving market rates higher with other actions. It’s no different to people in the private sector hoping for a recession so house prices drop and not contemplating the impact on their jobs

Ozark707

https://www.boards.ie/discussion/comment/118941274#Comment_118941274

Is it just a lag but if the market rates have increased due to the ECB reducing bond purchases (?) how come mtge rates have not increased. I might have missed it but the only one I saw was the announcement from ICS a few weeks back. I would have expected all others to follow suit and possibly even add in some buffer.