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

timmyntc

https://www.boards.ie/discussion/comment/120375583#Comment_120375583

Land values in Ireland, rural and urban are very high compared to European averages.

Ag land alone is crazy expensive here compared to the continent.

badboyblast

https://www.boards.ie/discussion/comment/120375583#Comment_120375583

Limerick prices are substantially lower when comparing to Dublin and Cork, alot of big pharma coming to Limerick now and they all tend to follow, good for Limerick but I think we had cheap credit and cheap houses for the bones of 12 odd years , I cannot it going back to what prices people got after the crash, alot of people are doom merchants but I just cannot see it for the cities outside of Dublin.

badboyblast

https://www.boards.ie/discussion/comment/120374837#Comment_120374837

alot of places are using work from home as a dangling carrot but they do offer contracts in writing to the same effect, anyone that gets a hybrid contract knows exactly their mix of days they will be required to be on site ( Anyone savy would ensure this is in a contract)

combat14

Holders of $17bn of Credit Suisse bonds wiped out under UBS takeover

Value of risky additional tier one debt written down to zero in move expected to jolt markets

One banker said the decision could lead to a “nightmare” in European debt markets, particularly given bondholders were having heavier losses forced on them than shareholders in Credit Suisse.

https://www.ft.com/content/d1ae9a54-c4a7-4742-8b2d-afff549f4f95

Looks like the swiss have gone and burned the bondholders something vigorously avoided here during our recent banking / property saga

Timing belt

https://www.boards.ie/discussion/comment/120378001#Comment_120378001

These TLAC bonds were sold with the specific reason to recapitalise the bank in the event of a failure so no surprise. This was new regulation after ‘08 and if it had existed back then governments wouldn’t have had to bail out banks.

https://www.washingtonpost.com/business/2023/03/19/why-credit-suisse-coco-bonds-are-causing-anxiety-quicktake/945ef2fe-c69c-11ed-9cc5-a58a4f6d84cd_story.html

mike_cork

https://www.imf.org/en/Blogs/Articles/2023/03/14/house-prices-continue-to-fall-as-borrowing-costs-rise

Some interesting info put up by the IMF

"Interest rates play a critical role in driving house prices, along with income and population growth on the demand side and various supply factors like construction costs and regulations. A rule of thumb based on cross-country evidence is that every 1 percentage point increase in real interest rates slows the pace of house price growth by about two percentage points."

GoldFour4

https://www.boards.ie/discussion/comment/120378001#Comment_120378001

These are not standard bonds. They are issued specifically on the basis that they can be converted/cancelled in an event like this.

theboringfox

https://www.boards.ie/discussion/comment/120378645#Comment_120378645

It is still not meant to be the case they rank behind equity though. It was always known could be wiped out but the rules rewritten here saying shareholders not fully wiped out but this tier of bond is. That is what is concerning markets and central banks.

Villa05

https://www.boards.ie/discussion/comment/120378645#Comment_120378645

275 billion market for these type of bonds in Europe alone.

Id imagine there value has collapsed. Who's holding the bomb

RichardAnd

https://www.boards.ie/discussion/comment/120378001#Comment_120378001

I believe that all of the bonds that were picked up by the Irish taxpayer were all held by helpless pensioners. Of course, by "Irish Taxpayer" I do of course mean people who were too young to have played any part in creating the property crash and those yet to have been blessed with the boon of existing.

Bass Reeves

https://www.boards.ie/discussion/comment/120379133#Comment_120379133

Some will some will not. Credit Suisse had an investment/ trading arm/ bank side. This seems to be where the issues arose.

However the interest rate on this tier of bond is supposed to be substantial. I have a friend that has a bond investment that is supposed to be returning nearly 2%........per month. I presume that it's this type of bond.

Issue is these type of bond holders taught they were ahead of shareholders in the pecking order. The Swiss central bank decided otherwise.

Timing belt

https://www.boards.ie/discussion/comment/120379133#Comment_120379133

Insurance companies and pension funds Mainly

Bass Reeves

https://www.boards.ie/discussion/comment/120379288#Comment_120379288

Insurance companies maybe, pension funds should not be. Mostly private investigators through hedge funds I think.

Timing belt

https://www.boards.ie/discussion/comment/120379297#Comment_120379297

Do you have a source to say it is mainly private investors?

as when banks issued these notes the target audience would have been insurance and pension funds.

combat14

looks like a second wave of tech sector job losses on the cards alot of uncertainty out there now from US and European bank collapses to burned bond holders, continuing inflation increases and sustained interest rate rises a bit of stability would be nice

Amazon announces second wave of layoffs with 9,000 more workers to go

The tech giant, which employs 5,000 people here, has not yet specified what the cuts mean for Ireland.

https://m.independent.ie/business/technology/amazon-announces-second-wave-of-layoffs-with-9000-more-workers-to-go-42395540.html

Jonnyc135

https://www.boards.ie/discussion/comment/120380159#Comment_120380159

Not good, I'll have to make that Honeysuckle money last.

alwald

In the context of the Irish housing market, will layoffs, inflation, high interest rates and a potential "recession" impact both price and supply positively or not?

Zenify

https://www.boards.ie/discussion/comment/120380815#Comment_120380815

Don't forget a banking crises, war and mass strikes around lots of the world.

Beigepaint

I would imagine that tech layoffs could have an impact from foreign tech staff moving home or to another capital. And for the Irish tech staff they might get a lower paying job affecting the prices for a certain bracket of the market.

https://www.boards.ie/discussion/comment/120380815#Comment_120380815

It will most definitely be good for people with large savings and jobs which are recession proof, but for those hoping for a recession so that houses become more affordable, they must be assuming their jobs/income would be unaffected. Also, developers will not build if house prices are falling.

fliball123

https://www.boards.ie/discussion/comment/120380982#Comment_120380982

What will they do then Dave they are making a tidy profit and there has been massive gouging going on in the sector they can afford some hit to their profit margin or sure let them hit the wall and let them be content with the dole

Donald Trump

https://www.boards.ie/discussion/comment/120381000#Comment_120381000

All this guff you hear about developers refusing to develop until prices go up - and hence prices won't drop - never seems to take into account that if construction slows down massively, you're going to have a lot of previously reasonably well-paid workers not taking home wages........

Get Real

I think people need to set aside what they may want to happen as opposed to anything that is happening.

People will find certain articles and that that reassure themselves or give hope to what they want.

For example, some wanting prices to fall, put up headlines of layoffs. They're of the belief that layoffs=reduced demand=reduced prices (but they themselves feel it won't impact their financial position and they'll be able to make use of the reduced prices)

Likewise, there will be others who don't want prices to rise, and will put out a certain narrative, such as auctioneers and press releases etc.

Imo, there's nothing to indicate dramatic falls, and it doesn't affect me either way whether there is or not. The supply simply isn't there at the moment. Those wishing a recession may just see themselves ending up burning the candle at both ends. Financially worse off, and in no better position to buy a house.

We're 3 years and more reading about dramatic price falls based on 1)people's desire, 2)people coming to conclusions adding things together from previous price falls and presuming it'll be the same this time and 3)people having a predetermined opinion and providing numbers to fit that opinion.

https://www.boards.ie/discussion/2058041687/property-market-2020/p1

Here's some 3 years ago predicting 10% drops annually. Before covid. Then covid happened and the drops were to happen then surely. None account for the difficulty in predicting human behaviour or lack of supply.

Donald Trump

https://www.boards.ie/discussion/comment/120381089#Comment_120381089

An awful lot of self-projection in that.

https://www.boards.ie/discussion/comment/120381000#Comment_120381000

I suspect they will revert to type and wait for prices to rise again, even if that means sitting on sites and paying whatever taxes they have to for a few years. There are so many loopholes that many will avoid them anyway. Any developer commencing the process of developing a site has to take into account that it may be a couple of years before they will get any return on their investment unless they find an investor to forward finance or a county council to buy the lot. You can see how poor the uptake is for the apartment development grant because developers think it is too expensive to build and there is no longer that assurance that they will make a profit (there is also the issue that the grant is paid nearer the end than the start).

You might call it gouging, but it is all about making profit and moving on to the next development. If you are expecting developers to sell for anything less than the most they can get for their properties, then you are kidding yourself. Too many of them went bust during the last recession and no one had anything but bad words for them, you just posted the same yourself, so property development is all business, nothing less.

RichardAnd

https://www.boards.ie/discussion/comment/120381089#Comment_120381089

All humans have a confirmation bias. If one is seeking reassurance for any assumption, it’s not hard to find something that will provide that. Indeed, these days in just about every field it seems that we start with the desired result and then look for “evidence”. 

That said, I think that the housing market that we see today is anything but natural. The state has pumped billions into it, encouraged enormous levels of immigration and fiddled endlessly with the law in order to inflate the market. Normally, at this point, someone would say “we’re heading towards a disaster”, but I won’t do that because we already have a disaster.  

Villa05

Number 5 is Limericks biggest employer by some margin. Is there anything to be concerned about here?

https://twitter.com/KobeissiLetter/status/1637791417069101057?t=MEV0Xfsty1iJx4hwCYhlag&s=19

Villa05

https://www.boards.ie/discussion/comment/120381089#Comment_120381089

3 years ago almost everyone predicted at least a 10% drop during Covid. A 20% increase in that time should be a red flag.

Actions have consequences, we are starting to see the consequences now of all that money printing and free money not just over covid but for more than a decade. Inflation, bank failures, pensions failures, Blackrock defaulting on loans and even war. (war is about the control of resources)

fliball123

https://www.boards.ie/discussion/comment/120381250#Comment_120381250

Your forgetting that the % of people working in construction that are not sitting on sites far out weigh those who are, only a small % are up at the top sitting on sites so what do these workers do who have no sites to sit on?? Sit there and wait go from earning 40/50/60/70k a year to the dole??? I dont think so Dave there will be pressure put on these people from all angles from employees looking to work to the government who will be ramping up those vacant site taxes this has already been flagged. Not to mention if the modular homes take off in any meaningful way over the next 12 to 18 months their dinner will be eaten by this sector as the building of new supply will be less of a priority for the government trying to house people and a hell of lot less expensive for the tax payer. Dave it is gouging prices of raw materials have been dropping for the guts of the last 6 months (its akin to the energy companies the price have come for gas and oil but your bill has not, yet prices go up very quickly and are always stickier coming down than going up) and it has not been reflected in their prices so there is no other word for it.

Lets get one thing clear their is a huge difference between the last bust when we had a shocking over supply of houses including the ghost estates so anyone building would of just been chucking more supply onto the pile of supply that was already there and there would of been very little profit and at that time people had not got the financial leverage to buy either. There is a market for new builds at the moment but people cannot afford the prices so business is business and if you project your prices at a price point that the vast majority of your buyers cant afford its not exactly a solid business strategy.

fliball123

https://www.boards.ie/discussion/comment/120382172#Comment_120382172

3 years ago I was saying property prices would continue to rise even with covid due to supply and demand. I changed my opinion once interest rates started rising as affordability was always going to diminish demand and if the price drops recently seen continues my prediction will be spot on.