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

SwimClub

It's a very murky market these days, the various rate quotes might not available in practice, because a bank can just decline or delay the application so long etc. and rate rises are happening so quickly.

Villa05

Also interesting they are starting to pay on deposits - thought they'd try and bank the spread on deposit money for a bit longer

There's a German new entrant paying 2% on savings (Trade Rebublic) . I'd expect revolut to ramp up also now that they are giving Irish IBAN numbers. They are now serious competition for the Irish banks

timmyntc

https://www.boards.ie/discussion/comment/120147919#Comment_120147919

Banks dont "lend out" deposits anymore

theboringfox

https://www.boards.ie/discussion/comment/120150094#Comment_120150094

What are they funding lending from so?

Dante

https://www.boards.ie/discussion/comment/120147610#Comment_120147610

My AIP rate was 2.05% back in September, my loan off rate earlier this week was 2.7% 😕

I managed to avoid the latest PTSB rate increase of 0.5% announced last week by 1 day which was very lucky, I probably would have pulled out if I had to eat that increase too.

Bass Reeves

https://www.boards.ie/discussion/comment/120150094#Comment_120150094

They cannot lend out all there deposits. The reserves they need are higher than previously. However they can lend out a percentage which is about 70-80%. The rest is on deposit with the ECB. The ECB marginal rate was -0.5% early last year so it was costing them to leave money on deposit not that excess is earning over 2%.

fliball123

https://www.boards.ie/discussion/comment/120147961#Comment_120147961

Well they must be talking out of their a$$ how can someone date check the 1st of March for 10% more on a specific commodity. I mean with level of insight they could make fortune on trading this commodity they must be Nostradamus reincarnated. So your theory is on the 1st of march 10% more please for blocks?. Even do demand is down due to construction coming to a near halt is there any chance of a name check of who your getting this information from?. You either have a vested interest or your spinning. The government levy on blocks is going to be pushed out till September.

https://www.independent.ie/irish-news/politics/introduction-of-concrete-block-levy-to-be-delayed-for-a-number-of-months-42073281.html

Watch prices even with the high demand we have in the country and lack of properties when the interest rates go higher and higher watch demand run for the hills due to affordability. What will they do then well by your logic rise prices by another 10% see how much blood we can get. The majority of people living in the country cannot afford to buy or rent or extend. At some point this has to kick in with the construction industry or they will hit the wall.

Bass Reeves

https://www.boards.ie/discussion/comment/120150291#Comment_120150291

In the last recession even though construction completely stopped the price of cement, concrete and concrete products only fell by 20%. Production is really sensitive to energy prices as energy is the big cost in production and delivery. The plants just literally shut down. Now if we have the government adding a levy at some stage and carbon tax as well, I cannot see where a significant drop in cement and concrete products will come from

fliball123

https://www.boards.ie/discussion/comment/120150340#Comment_120150340

That was because there was still activity and demand going on throughout that period on a personal note I knew of 2 family members and at least 5 other friends/work collogues who between 2009 and 2012 got extensions. As I pointed out in my previous point then there is gong to be stand off as people cannot afford the offerings that are put on the table in front of them from construction companies so either prices drop or construction companies hit the wall and its not just concrete or bricks these lads are making a nice tidy sum in their pockets as well. I mean I had a lad quote me 1200 for pouring a bit of concrete for a shed there the other day I laughed and as closing the door said no thanks. I truly believe that this year is the turning point where people will be a lot more careful with their wallet with regards to gouging.

LJ12345

https://www.boards.ie/discussion/comment/120147373#Comment_120147373

I’m aware of investors with multiple units in one location drip feeding them to the market, if they take a lower price on 1 it devalues them all. This might be what you’re seeing.

Bass Reeves

https://www.boards.ie/discussion/comment/120150352#Comment_120150352

They went from building 50+k houses a year to a few extensions and you think it did not effect demands back then.

Local plant formerly an Independent but now roadstone owned left all independent trucks go and parked up a load more.

fliball123

https://www.boards.ie/discussion/comment/120150495#Comment_120150495

It wasnt a few extensions remember anyone who had bought a house leading up to the crash in 08 could not move with neg equity and a lot of people extended anyway the over riding point is demand dropped due to affordability as people lost jobs and hours. The same thing is happening in 2023 people may not of lost jobs (although we may be entering into that territory by the end of the year) but the money they make simply means they cannot afford the prices of what construction companies are asking so 20% drop in pricing may be what happens again. The majority of companies cannot afford pay rises on top of other costs.

awec

Why are we even talking about extensions? Extensions don't drive the cost of materials, they are small fry.

It's like saying demand for petrol in lawnmowers is what drives fuel prices.

SwimClub

Nasdaq up 2% today, almost 10% for the month while tech companies have all been announcing redundancies.

Strange times!

fliball123

https://www.boards.ie/discussion/comment/120150560#Comment_120150560

Extension work is the option that people turn too when they are locked out of selling and/or buying a property. Now think about that someone trying to trade up over the last 5 years - there is feck all on the market to trade up too so that's when the extension is looked at and this has been the case for the last 5 years add in we built maybe 100k new builds in that period as well.. Be interesting to get a breakdown of the %s of extension work with regards to the overall construction output but I would be shocked if it wasn't a high % over the last 5 years.

L1011

https://www.boards.ie/discussion/comment/120150569#Comment_120150569

Share prices often bounce on redundancies. A rather less bonkers than these days Michael Moore had a book extensively about this over 25 years ago

fliball123

Just as a snapshot also the figures for extensions and this figure does not include those that do not require planning permission

Q3 2022

1930 planning permission granted for new dwellings

3736 planning permission granted for extensions, alterations and conversions.

Q2 2022

2161 planning permission granted for new dewllings

2949 planning permission granted for extensions, alterations and conversions.

Q1 2022

2432 planning permission granted for new dwellings

3246 planning permission granted for extensions, alterations and conversions.

https://www.cso.ie/en/releasesandpublications/ep/p-pp/planningpermissionsquarter22022/

Villa05

https://www.boards.ie/discussion/comment/120150569#Comment_120150569

As I heard one commentator saying there has been no panic during the selling that brought markets down 30 odd percent. The panic is in the rallies up.

Alot of silly money still out there, plenty of FOMO. The markets will bottom when you see panic selling

timmyntc

Shares typically bounce back on news of redundancies, because investors think that by cutting staff costs, profitability increases.

And in fairness its often right. In this case especially, most of the firing is due to previous over-hiring.

Jonnyc135

https://www.boards.ie/discussion/comment/120150291#Comment_120150291

You can think what you like but I'm only telling you what my sources say its guaranteed - we will se come march but I am 100% sure all concrete, blocks and stone are going up 10% come march.

When March comes you can thank me

fliball123

https://www.boards.ie/discussion/comment/120150814#Comment_120150814

So no name so? Well I will call bullsh1t on this one last year when prices were lower construction was contracting for 7 out of the last 8 months and upping prices now this year will bring it to a complete standstill. Can you ask your source for Saturdays lotto numbers please?

Jonnyc135

https://www.boards.ie/discussion/comment/120150846#Comment_120150846

Cant and wont name them, but I was told its coming from 1st March.

fliball123

https://www.boards.ie/discussion/comment/120150882#Comment_120150882

Why cant you name them can you find out how they know that on the 1st of March all concrete, blocks and cement will be going up by 10% ?? As no one will take you serious if you cant give the name your source and the mechanism of how he can see in to the future of commodities market?

Dav010

https://www.boards.ie/discussion/comment/120150882#Comment_120150882

Friend of a friend whose cousin’s aunt works in the accounts office kinda thing?

herbalplants

https://www.rte.ie/news/business/2023/0123/1350210-ireland-to-avoid-recession-in-2023-report-predicts/

So we are hunky dory in 2023, somehow special.

fliball123

https://www.boards.ie/discussion/comment/120151737#Comment_120151737

yeah I find this bizarre seeing stories like this when it actually conflicts with what going on, on the ground. I mean we are hearing of job losses in the tech sector that provide a very high % of our corpo tax and that is not even taking the job losses themselves into account, then our domestic companies on their knees due to costs and the minister holding the purse strings Mcgrath confirming that a recession cannot be ruled out and already the 2.3% growth forecasted in November (already down from 5.8% from the summer) has been forcasted to be only 1% in this report from McGrath.

https://www.irishexaminer.com/news/politics/arid-41007266.html

Then we have the below link. I don't know how anyone cant see the writing is on the wall. People cannot afford the price points in this country. A good indicator for anyone will be property prices as there is such a disparity for people who need housing and what is there available. If prices drop in this sector then its game over for the gouging in construction as people will not buy new houses at the price points even with First time buyers as this differential is usually already in the cost between a new home and a 2nd hand one.

https://www.irishexaminer.com/news/arid-41055707.html

quokula

https://www.boards.ie/discussion/comment/120151933#Comment_120151933

But that report is based on what is actually going on, on the ground. It talks about the redundancies that have got so much airtime but puts them in the context that they only impact 3% of the multinationals that operate here - affecting at most 8,500 jobs in the context of what are actually record levels of employment currently with 2.7 million jobs.

And it's not pretending everything is rosy, it's pretty clear that growth will be low, just that there won't be a recession as inflation falls back from the extreme highs we had been seeing. This is in line with what most data has been showing for Ireland and the Eurozone recently. It simply sticking with facts and observations rather than sensationalism and headlines.

There are challenges for sure but things are not looking as bad as many expected to be. And they're looking better now than they were a few months ago, which is why I guess you had to go back a few months to find that article you linked.

AlmightyCushion

https://www.boards.ie/discussion/comment/120151737#Comment_120151737

https://www.boards.ie/discussion/comment/120151933#Comment_120151933

Because ye didn't read the article. It clearly says in the article everything isn't hunky dory. It says there are serious concerns. @fliball123 that first article you link to even says similar thinks ti the article you say is bizarre. The article says it expect very weak growth at around 0.7%. In your article, McGrath says just over 1% so your article is more optimistic than the one posted by herbal plants.

From the article:

Dermot O'Leary told Morning Ireland that the economic mood music globally had improved significantly of late, mainly on the back of the dramatic fall in energy prices.

"I wouldn't say we're out of the woods," he said.

"Inflation is close to multi-decade highs. That's putting a real strain on households, in particular, but also businesses. Whether it's slightly negative or slightly positive, the bottom line is we're facing an international environment that's very weak relative to history."

Householders should prepare for further interest rate hikes of around 1% in the coming months, he warned.

The base ECB borrowing rate has been raised to 2.5% since the summer, following a number of years where it was at zero.

Amid a slew of job losses in the tech sector of late, Mr O'Leary said the unemployment rate was likely to rise here in the coming months.

"We are predicting a wider environment of very weak growth - just 0.7% down from over 5% last year. That will have impact on jobs market.

rob316

It'll be a return to pre pandemic economic activity, the boom we had is false growth evidenced by the MNC's cutting their excess. Record inflation will speed up that, house prices should fall back by about 10% in the next couple years but supply will remain constrained due to inflation in building costs. Its one thing buying a house for 400k with all the various new build schemes, its another thing trying to buy a second hand one for 400k that you have to raise 10% and borrow 90%.

tanko

https://www.boards.ie/discussion/comment/120150846#Comment_120150846

A neighbour of mine works in a builders/hardware store, he told me at the weekend that most of the stuff they buy and sell is going up in price shortly. Their suppliers are putting prices up so the store is doing the same.