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

DownByTheGarden · 21-03-2023 11:24AM

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

You would think so wouldnt you. But on the flip side there are not enough houses already to buy. Not enough houses available to rent. Not enough builders to build enough houses (in a recession they wont be building them anyway). So anything bug enough to cause house prices to go down is going to be big enough to have a massive effect on employment rates. And with no jobs who is going to be buying the houses? Oh yeah, the remaining people with jobs with higher taxes.

What a mess.

fliball123 · 21-03-2023 11:25AM

https://www.boards.ie/discussion/comment/120382447#Comment_120382447

Well lets see if the last price drop continues we may have seen the tipping point for property prices.

DownByTheGarden · 21-03-2023 11:44AM

https://www.boards.ie/discussion/comment/120382366#Comment_120382366

After the last recession nobody is going to hang money out in the hotzone if the economic outlook is bad.

Banks wont lend for building. Builders wont want to build because they might lose everything like last time. They will wait it out til its safer to invest.

The only entity capable of building will be the state. And to do that they must tax the already highly taxed workers who are lucky enough to hold on to a job even more. Thaqt wont go down well at all, so expect more talk and can kicking but minimal building.

DownByTheGarden · 21-03-2023 11:48AM

https://www.boards.ie/discussion/comment/120382452#Comment_120382452

I believe we are in for a massive economic shock alright. I dont believe its going to be the answer to peoples prayers that they think it is.

Recessions and high interest rates are bad for everyone, even if house prices fall. You need people to want to/can sell and you people who want to /can buy. Both will diminish with a recession.

fliball123 · 21-03-2023 11:56AM

https://www.boards.ie/discussion/comment/120382522#Comment_120382522

Lets be clear they stopped building as their was an oversupply I mean ghost estates how many had to be demolished, prices had dropped from 50 to 80% of their pre bust values and there was no money in it. Currently we need more supply but people cannot afford the price point this is evident in the amount of government supports for FTBs and there are now real threats to their long term viability from modular homes and the vacant site levy (which will be ramped up if the big boys set their face against building) to losing their pool of employees to other countries. If those that have the land and are ready to build think that jimmy the brickie and joe the plasterer will hang around on the dole for a year or 2 waiting for the big bad boss to give the order "to build" they have another thing coming. These lads have a really nice life style I had work done by a construction company back in 2020 and the lad doing the build (not the boss now) had the best of gear, brand new Jeep and during the 6 months of the construction he brought the kids to Lapland to see Santa, as well as a 3 week stay in Barbados and of course the 2 weeks in Lanzarote. These lads now have a taste of the high life and it will be hard to readjust to a day trip to Dollymount beach with sandy sambos due to only being paid the dole.

DownByTheGarden · 21-03-2023 12:57PM

https://www.boards.ie/discussion/comment/120382554#Comment_120382554

Lets be even more clear. They stopped building because there was no money to build and the value of their sites, half finished buildings and so on went through the floor. Even though property prices dropped, people were unwilling or unable to buy, making the whole thing spiral.

Now if you were a biulder would leave all your money hanging out in that kind of weather or would you take it in and wait til summer?

They are not going to keep building because people want them to. They are businessmen first and will protect their assets. None of them will gamble like they did last time. Future recessions will be everyone pulling in the oars and waiting out the storm. That includes, Builders, buyers and sellers.

fliball123 · 21-03-2023 01:14PM

https://www.boards.ie/discussion/comment/120382753#Comment_120382753

The other difference is there was an oversupply last time and now we have an undersupply.. The last recession seen prices plummet there was no money in building. Currently there is money to be made which is the biggest difference between the 2 eras.

The other difference is the vacant site tax at 3% kicking in at the end of the year now these sites if they have planning will be worth a fortune so I can see a lot of very unhappy construction company owners having to pay this. I can also see the government upping this % in the next budget if the builders are sitting on their hands up until then. So there will be a real gun to the builders heads to use it or lose it. As I said before people cannot afford the price point currently so if the builders think sure we will just pass that 3% on then the spiral will keep happening the property becomes more unaffordable so less demand and less work for the builders. So either way the builders cash is hanging out there they can build and get a slimmer profit margin or lose 3% or more at the turn of next year.

Your also forgetting that it is a business and this nonsense that they can sit on their hand ad infinitum or until the government give them more gravy is ridiculous. They have to make money or hit the wall. Their employees have to get a pay check or they leave.

So if I was a builder and had a site with planning ready to go I would be pulling out all of the stops to get my slice of the pie before demand is quelled via other mechanisms, I pointed to a few already as in Modular homes, more interest rate rises and the emigration valve. The fact is that if the current paradigm continues the majority of our population under the age of 30 will never be able to afford to buy or rent so they will be left with one option that our ancestors had to use.

DownByTheGarden · 21-03-2023 01:17PM

https://www.boards.ie/discussion/comment/120382814#Comment_120382814

I know builders. Lots of them. I know what I think will happen. And no, they wont be paying their employees when they pull up the drawbridge, because they wont have any at that point. Lets agree to disagree and leave it at that.

fliball123 · 21-03-2023 01:25PM

https://www.boards.ie/discussion/comment/120382824#Comment_120382824

So how far up will this go will all construction workers just hit the dole queue and do you think the employees will skip some stones waiting for what ever mechanism the boss is waiting on for him to start building. I dont think so the lads will be gone and this will inevitably cause even more delay for the site owners with regards to trying to get a profit from an asset which if they do nothing will cost them 3%+ on a yearly basis and how long will they allow 3% of their site value leave in a tax.??. Trying to compare the construction game to 2008 is not a real comparison and guessing what they will do based on that is a fallacy the game has changed and significantly so

alwald · 21-03-2023 01:31PM

https://www.boards.ie/discussion/comment/120382412#Comment_120382412

Interest rate will affect both buyers and builders. I can't see how new builds will get cheaper with high interest rate, this will have a knock on effect on the entire housing market IMO (new and old).

herbalplants · 21-03-2023 01:34PM

Monopoly

https://www.irishexaminer.com/business/economy/arid-41097937.html

fliball123 · 21-03-2023 01:42PM

https://www.boards.ie/discussion/comment/120382876#Comment_120382876

Well I cant see how they will be afforded if they go up even higher the current price point is unaffordable by the vast majority how much more do you think will be given to FTBs. I mean if you break this down to its core supply and demand supply has been shockingly low and demand overly high and yet the last data set of property prices seen a drop in prices and Dublin (the most unaffordable area in the country) has seen 4 consecutive price drops. As I have pointed out we have hit the tipping point the other thing is if someone decides not to buy they wont be seeing a 3%+ reduction in their asset on a yearly basis the big boss owning the site will.

Villa05 · 21-03-2023 01:42PM

https://www.boards.ie/discussion/comment/120382412#Comment_120382412

I knew there were a few in that camp, but banks cso etc were expecting drops

Is your opinion change down to buyer affordability solely. I feel the rate rises would have a larger effect on investment funds. The banks failing have tightened credit also and the funds will be damaged by commercial property falls

RichardAnd · 21-03-2023 01:43PM

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

By any definition, the lockdowns should have caused the market to slump. In fact, they did in a way as there was a major downturn in the markets at the start of 2020. However, as you rightly point out, the injection of war-time levels of funny-money directly into the asset market fixed that nicely....for a while.

My biggest fear is not really the consequences of the nuclear money-printing. Rather, it is what will be done to kick the can further down the road, and how the powers that be react when they realise that Rome is burning. Looking at the people in charge in the West, I see little more than people who are either malicious, incompetent or outright lunatics. Grab the popcorn, gentlemen, this will be quite the show.

fliball123 · 21-03-2023 01:49PM

https://www.boards.ie/discussion/comment/120382925#Comment_120382925

They may have been expecting drops but you can be sure they didn't see the current issues impacting banking or the Tech sector at the moment which I reckon will make a lot of the higher ups within the banking sector a lot more cagey about who and how much they will lend in the current climate which will reduce demand. It will have an impact on both funds and individuals IMO

needhelpguy · 21-03-2023 02:03PM

I can see a godawful scenario myself where if interest rates keep rising and banks start getting more strict about lending (both of which are now happening), that the government will become the only game in town for housing; through itself and it's related bodies like the councils and the approved housing bodies. That developers won't build anything unless they get forward purchase agreements from Leo & co.

Great for the social housing list. Absolutely terrible for everyone else.

DownByTheGarden · 21-03-2023 02:13PM

https://www.boards.ie/discussion/comment/120382854#Comment_120382854

Youve been through a recession before right?

21-03-2023 02:17PM

With the amount of infrastructure required for our population growth I doubt we'll be seeing lines of construction workers on the dole

Ozark707 · 21-03-2023 02:22PM

https://www.boards.ie/discussion/comment/120383000#Comment_120383000

Are banks getting more strict about lending? Is this anecdotal as I have not seen anything reported yet. I would expect them to tighten up it.

RichardAnd · 21-03-2023 02:31PM

https://www.boards.ie/discussion/comment/120383000#Comment_120383000

That would be a dream-come-true for a certain German madman of internet meme fame :D.

"You vill eat zee bugz and live in zee podz..."

Timing belt · 21-03-2023 02:36PM

https://www.boards.ie/discussion/comment/120383074#Comment_120383074

Stricter lending will kick in with US regional banks as they will be watching their liquidity and funding as deposits move out to money market funds. This will make headlines.

Don’t see much change for Irish banks as they are awash with sticky retail deposits. The biggest issue for Irish banks is finding people to lend to within their risk appetite

DownByTheGarden · 21-03-2023 02:39PM

https://www.boards.ie/discussion/comment/120383000#Comment_120383000

They are really heading to the point of taxing anyone left that is earning money out of the country.

Either that or they'll just go on the dole because it will be easier than working like a dog and getting to keep less and less

Mr Hindley · 21-03-2023 02:40PM

Just a hunch, but it feels like there's been a surge in new properties coming online this week, but total numbers on Daft still stable. I get a sense that there's both a rush of new vendors wanting to get their properties on the market, and a rush of existing vendors, and buyers, wanting to get deals over the line, which is why total numbers aren't going up. I wonder if the rolling bad news is adding to general fears of things going south in the near future.