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

combat14

won't affect many here as the massive pay rises we are all receiving after tax and the latest 16% increase in grocery bills will still leave us with loads of money to plough into over priced houses but the rate rises that are on the way will give pause to think for some would be house buyers here:

Homeowners could pay €6k more a year as ECB set to issue further interest rate hikes

Those who fixed their rate at 2.5%, on the average mortgage in the past five years of €253,950, could soon be facing fixed rates of up to 5.95%, costing an extra €5,870 per annum.

We’re at 3% now. We were at 0% this time last year. That already means about €150 per month for every €100,000 you owe.

https://www.irishexaminer.com/news/arid-41090545.html

Bass Reeves

https://www.boards.ie/discussion/comment/120344075#Comment_120344075

Paper never refuses ink and newspapers like to scare monger. I was on bonkers.ie just now and checked fixed rates. For a person moving with a less than 80% LTV( which if you have you house bought 3 years plus it should be) there are 3-4 rates available at between 2.9-3.5% still. Fixed rates wil not follow the ECB completely, at present 6% rates look like an outlier

theboringfox

I suspect bonkers is picking up rates that are no longer on offer or are technically there but only to people with offer letter out. Noone who goes sale agreed on house from today is seeing 3.5% rate. The market view is 50bps this month then 2 to 3 more 25bps moves this year. So 1.25% to be passed on. I would think by second half of year most people will be doing well to get a 5% rate. Two areas that could keep it lower are 1. Banks keep deposit rates low so dont need to pass on rate rises and 2. ECB soften on rate rises (seeing what happened Silicon Valley Bank from US rate rises may make them more cautious.

badboyblast

People are waiting for a crash, it ain`t going to happen in the next 10 years, we are building way less than required, peoples wages are going up and up and houses will follow that , people are seeking increases in their wages in the private sector year on year. we had cheap everything for a long time in Ireland and all that is changing now and people are in the dark thinking we are going tohave a crash like 2008.

combat14

https://www.boards.ie/discussion/comment/120344351#Comment_120344351

nobody is talking about a crash!

some commentators are simply pointing out that many would be buyers are now facing significantly increased repayments on would be mortgages this may in some cases have an affect on the amount they are ultimately able to borrow or pay for houses.. the seller can make their own decision on price based on the reality on the ground

many current mortgage holders and businesses are also in for a massive shock when they come off their current low interest rates

even mentionning the fact that the ECB are rising interest rates is now slapped down as talk of a crash its almost like bertie ahern in 2008 dismissing any or all negative reality news

Zenify

Reading the papers this morning has a common theme. It's no longer soft vs hard landing. The question is now hard vs harder.

Villa05

https://www.boards.ie/discussion/comment/120344028#Comment_120344028

Remember the Irish times during the Celtic tiger. There property section had a column where they would list 3 options of what the average Irish house price would buy you in Europe and beyond. They should do something similar on renting now

Villa05

https://www.boards.ie/discussion/comment/120344351#Comment_120344351

House prices are dictated by investment funds and the state buying, even in areas that those entities don't operate in, as that's where those that can't compete against them get pushed out to

We are firmly in a bubble which will burst. Government assistance for housing for incomes up to 100k tells you everything you need to know.

It looks like a maximum pain moment right now, with pandemic savings, multiple grants, last opportunity to get a decent fixed rate. Throw in the state instructing councils to buy 1500 homes. It's got a feel of 100% mortgages combined with maturing SSIA savings about it.

We were never able to buy a house until the state and the banks were bankrupt. I borrowed from a bank where my net asset value was greater than there's. Therein lies a big part of the problem

mike_cork

Would you have any links?- I'd be interested to see what's being said !

tanko

https://www.boards.ie/discussion/comment/120344028#Comment_120344028

Nail on the head, the whole thing is a pyramid scheme but sure what happens in other countries has nothing to do with us just like Fannie May, Freddie Mac, Lehman brothers and Northern Rock had nothing to do with us. The Irish government is bidding against itself to buy property, in reality there’s no other bidder driving up prices, it’s unsustainable.

Beigepaint

https://www.boards.ie/discussion/comment/120344450#Comment_120344450

Can you link to any specific articles?

Deub

https://www.boards.ie/discussion/comment/120344028#Comment_120344028

I am really getting tired of this. Instead of taking actions to fix the root cause, all the government is doing is throwing cash left, right and centre.

Cost of living increases? Housing crisis?

Let me give extra bonus here. There is already a bonus? Let me double it. Here is some credit for your electricity. Lets increase the threshold to be eligible for benefits.

I am not expert on the house crisi so I am likely to be wrong on this but I feel the government has all its eggs in the same basket by mainly helping big developers with all the different schemes and the reit/investment companies with the nice tax rate for rents.

The rental sector is now at the mercy of investment companies. It is not a free market anymore.

https://www.boards.ie/discussion/comment/120344450#Comment_120344450

Just had a look at a few newspaper websites to see the articles you are talking about, any chance you could link them please. Thanks.

herbalplants

https://m.independent.ie/business/irish/central-bank-predicts-soft-landing-for-housing-26296858.html

Article from 2007 🤣🍀

RichardAnd

https://www.boards.ie/discussion/comment/120344932#Comment_120344932

The state does not want to fix the housing crisis. Indeed, there is a very defensible argument that it deliberately created the crisis thought its own policy. Whether that is true or not, nothing that the state has done, be it immigration policy, pumping the economy with money or shutting the place down for two years has done anything other than make it worse.

I am personally beyond the point of believe that this is anything other than outright malice on behalf of politicians, senior civil servants and whoever else is profiting from this. Of course, no ponzi scheme lasts forever, and everything something will happen, and it is the average Joe Soap will will be burdened with the consequences. Those who made the decisions will get their pensions, their NGO sinecures or a nice job in the EU.

Really, when those responsible for these disasters do not face severe consequences for their actions, why should we be surprised that we are where we are?

Zenify

https://www.boards.ie/discussion/comment/120344875#Comment_120344875

https://www.boards.ie/discussion/comment/120345020#Comment_120345020

https://www.ft.com/content/f789eed9-cb22-46f6-a9ad-dd450e999179

FT:

Hard landing or harder one? The Fed may need to choose

The writer is a former central banker and a professor of finance at the University of Chicago’s Booth School of Business

I only read 2 papers. The FT and the Economist. Everything else has an agenda with their articles IMO. So if I'm ever taking about something it will usually be in one of them. The article in the Economist seems to only be in the paper version of this weekends edition but it it titled "too fast to land".

https://www.boards.ie/discussion/comment/120345424#Comment_120345424

Think this is the Economist article you are talking about.

https://archive.ph/vFRIN

Ozark707

https://www.boards.ie/discussion/comment/120344265#Comment_120344265

It is unlikely the rises will be limited to 1%. 2% far more likely unless the SHTF. So it could be a 6% rate come the end of the year.

theboringfox

If rates hit 6% there is no way there is not at least a modest pull back in house prices. Not seeing crash or issue with existing mortgages but for majority buying with mortgage you can't just brush off or absorb 6% rates which is over double the rate on offer 6 months ago.

Ozark707

https://www.boards.ie/discussion/comment/120346205#Comment_120346205

Rates going substantially north turned the markets markedly negative in the likes of Oz, NZ, US, Sweden and Canada. A lot think we are different here so it will be interesting to see how it plays out.

Bass Reeves

https://www.boards.ie/discussion/comment/120345896#Comment_120345896

For 3-5 year fixed rates to hit 6% the market would need to expect that the ECB rate will be at 4.5-5% for that time duration, that is not a realistic senario.

If fixed deposit rates for 3-5 years hit 3% money will flood into these deposit rates

Beigepaint

https://www.boards.ie/discussion/comment/120345424#Comment_120345424

Great article, thanks for posting.

I hope you are not being naive when you imply that the FT and Economist don't have an agenda. Everyone has an agenda, especially those who claim to have none.

Zenify

https://www.boards.ie/discussion/comment/120346459#Comment_120346459

Maybe they do. Ignorance is bliss though. I feel like it is true unbiased information and that means I enjoy reading it.

theboringfox

https://www.boards.ie/discussion/comment/120346348#Comment_120346348

Why? ECB rate could easily be 3.75% to 4%...you don't see mortgage rates sitting about 2% above that?

I agree though banks might keep deposit rates lower and therefore keep mortgage rates more like 5%. That's what I am hoping for.

5% is still double what was on offer 6 months ago. I do not see a crash but I do think might see flat market or low rise. But again who knows as supply is not good.

Ozark707

https://www.boards.ie/discussion/comment/120346348#Comment_120346348

I admire your optimism. Not sure if there is anything to back it up though. Many have been calling for a pivot in the US for a long time now but so far it is not coming and short of a catastrophe it won't be. People better get used to it and stop listening to stories of an impending pivot. The CB's have decided to tackle inflation through the hiking of rates.

Bass Reeves

https://www.boards.ie/discussion/comment/120346574#Comment_120346574

I do not but I do not see rates average 4% for the net 3+ years. ECB rates could be 4%+ which would put variable a percent above that but fixed rates could be lower than the ECB rate

Villa05

https://www.boards.ie/discussion/comment/120346983#Comment_120346983

Tracker plus 1 percent was considered a mortgage holder robbing the bank. It would be odd for that to be a standard product into the future.

With cost of funding higher, expect a bit of competition for those savings in Irish banks, the most recent bond issue by the state will be paying 3.3%

Ozark707

https://www.boards.ie/discussion/comment/120347157#Comment_120347157

Yes hopefully the banks have learned their (painful) lesson and don't extend loans which make no financial sense for them.

enricoh

German inflation rose 1% last month to 9.3% , can't see much slackening off on interest rate rises for the foreseeable from the ecb.

https://www.rte.ie/news/business/2023/0310/1361362-german-inflation-rate/

amacca

https://www.boards.ie/discussion/comment/120316187#Comment_120316187

What could possibly be the problem with being able to remove non-paying tenants in a timely fashion?

Why would pointing out that its ludicrous that people get to remain in situ for huge lengths of time after not paying rent be considered whinging?

Your solution = choose better tenants rings a bit hollow tbh.....why should prople have to accept that state of affairs?

why not amend the system and design regulations so that those that don't pay can be removed in a timely fashion and discouraged from causing damage .... what would be wrong with that?