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

Sierra Oscar

https://www.boards.ie/discussion/comment/121183761#Comment_121183761

I think we can put to bed the notion that the war in Ukraine will lead to a collapse in property prices. All the arguing over CSO / Revenue stats and whatnot at the end of last year, wasn't the collapse meant to be well established at this stage? We're nearly two years on since the invasion began.

It just really highlights how dysfunctional our housing market is when we haven't seen any significant falls in property prices given the interest rate rises. We're likely more than half way through the current interest rate cycle. Economists are predicting that the ECB will start to lower interest rates from the second half of next year. I would well believe it too given key Eurozone economies such as Germany are undergoing a slowdown.

We aren't reaching our housing targets as it is and I suspect the targets themselves are too low given the persistently strong growth in population. It has been underestimated for the last few years.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121181436#Comment_121181436

30,000 units, not 30,000 Euros.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121184478#Comment_121184478

Any incentive for landlords is needed. It doesnt have to be a tax incentive, it could be a law that means non paying tenants are evicted in 6 months.

It all helps.

But SOME incentives are needed to keep landlords in the game, otherwise there will be no rental properties.

I agree with you about the country needing to build more homes, but in the meantime, we would want to keep the landlords in the market to bridge the gap whilst we ramp up building.

Once we have enough rental (and other) properties built, you can dial back on the landlord incentives, but for the time being they are needed.

90k new homes was in a different labour & commercial market.

Cost of building now, high interest rates, inflation, public infrastructure projects, continued commercial development and lack of available construction workforce are all headwinds that make anything like 90k units per year impossible.

SF will discover this, should they get into power. Thankfully, they probably wont.

fliball123

https://www.boards.ie/discussion/comment/121184589#Comment_121184589

I have no bother with landlords getting the law on their side for tenants who have not paid that IMO should actually be a given no matter how good, bad or ugly the supply side is. I do take issue with giving them tax payers money on top of the record breaking levels of rent they are getting after all they choose to invest in a 2nd property why should the tax payer pay them more?

Yeah I get that it is more expensive to build but on the flip side we have more money going into housing supports than ever before we are spending 4 Billion on our current supports for housing and will have a 50billion corpo tax return that is over and above what we should be getting as a country in taxes. The current model does not work and has had the perverse effect of pushing up prices. It can be seen First time buyers got 30k incentives and what happened all of a sudden prices of new builds went up by 30k and that knocked on prices in all areas of market. So just some of the issues you see. If the governments had their own building company they would not need a loan so Interest rates would be irrelevant. Commercial is in contraction with full employment people that are in jobs that can be done remotely are looking at working from home as a must or they change job so we are going to need less commercial space and looking at other trends that are making commercial space a thing that is needed less and less with the likes of online shopping ramping up and the high costs of simple things like eating out putting the kybosh on what would of been the norm for most people eating out once a week/month but in about 20 years time I can see the country pub/restaurants/fashion outlet closing completely as the cost of living in all areas is pricing them out and there is not much value for money anymore and the big cities will be a mecca for dining, drinking and shopping which will mean a need for even less commercial space. As for the lack of workers according to the CIF we have enough labour to build but its planning that is the real issue now as I said before if only there were people who had the power to change this ye know like the government? Then if the issue is labour we as a country over the next 5/6 years will have the finances to poach talent from other countries to build in real bulk but there is no critical thinking we are in a squeeze and there needs to be a 5 - 10 year plan of ramping up building using a public company where there is no need for a profit to be made and even using options like modular builds where it can be built quicker and cheaper and this would ramp up supply alienating the price pressures to both rent and buy. Will it happen - no not on your phucking nelly as the construction lobby is far to strong for something like this to ever happen as it will see their profit margins disappear.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121184676#Comment_121184676

The problem is the current govt doesnt want to be seen to help landlords in any way. I am sure SF will be the same.

Yet landlords hold the assets we need to use, so its a peverse govt logic to drive them out of the market. But SF wont do a thing differently there. They seem to hate landlords more than the current lot does.

We do have plenty of money to spare and I would love to see it invested in the councils building programme, I just dont see it happening under any govt.

Too much cost & labour management for councils and the govt essentially does not want to take responsibility for delivering & managing property.

Councils dont want the cost of hiring building teams, nor the hassle of dealing with non paying tenants.

One third of DCC tenants are in rent arrears! Its a crazy stat but its not uncommon.

There is also no workforce available to staff the new council home build programmes. Anyone in construction that wants a job, has a job.

We are at full employment.

But, there are plenty of folks not working that could work if they were incentivised to do so...

Sadly, our govt has made it too easy not to work and Ireland has a very high rate of non working households. 1.5 times the rate of the UK and more than double the rate of many european countries, despite us being in full employment and there being 10s of thousands of vacant jobs.

SF, nor the current govt, are going to pressure people to work if they choose not to.

SF will just encourage people not to work by giving them even more benefits.

Commercial construction is still strong in Dublin at least, although things will slow down in the office market next year.

There will be more carbon tax/green taxes on online shopping soon enough. Which will help keep town centres etc somewhat viable as people shop locally to a greater degree.

The Planning system certainly needs overhauling and I agree that we need to build more homes. Thats the real cause of the issues we are seeing.

I also agree that more could be done and that we could increase output above 30k homes over the next 5 years. I just dont agree that we can build significantly more than 30k within 5 years.

Not under any government.

fliball123

https://www.boards.ie/discussion/comment/121184947#Comment_121184947

The issue is the current system is not working do and letting councils dictate due to not wanting "the hassle" is the tail wagging the dog. We seen how quickly these boyos can get their ass in gear when covid was upon us yet housing which is at a critically low ebb is not seen as important.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121185031#Comment_121185031

Yes, the current system cant keep pace with demand. But I just dont see the appetitie from any govt to radically change approach and the costs involved are huge, not to mention there are no staff to fill the new roles we would need to ramp up state construction.

Bass Reeves

https://www.boards.ie/discussion/comment/121185031#Comment_121185031

It is not necessarily the ''hassle''. It's simply the inability of the public service to manage staff

Look at the present furore in An Gardai about the change in roster. Compare that to private industry where many companies over the last twelve months have insisted on people returning to the office. The police commissioner cannot I sist on these ordinary rank and file Gardai returning to a pre COVID roster that will balance the working needs if the force.

You can look at the HSE over the last 10 years we have put more and more money into it and yet we still have longer and longer waiting lists and emergency access figures. Middle managers in the public service do not manage. O ly in the more qualified sectors ( doctors, nurses, higher echelon of An Gardai, etc) is there a decent work ethic. A substantial portion of the rest are there to ride the system, part of that cohort are good workers, but there is a cohort that want to do nothing. Look at the sick leave record of the public sector compared to the private sector and people here want to hand over the construction industry to it.

Look at RTE, the HSE, the scandal in UL, there is no magic cure if the state taking over construction

CorkRed93

https://twitter.com/IrishMirror/status/1708753692181369327

very stupid country.

byrne249

https://www.boards.ie/discussion/comment/121184566#Comment_121184566

It was going to be impossible for interest rate increases, as small as they have been in reality, when they increased lending limits for FTBs. For example, I took out a 3% mortgage in 2019. I took out a new 4.2% mortgage this year. This indicates our market has been kept tight all things considered.

Some chap helpfully linked a study purported to support the notion that interest rates led to falls in prices. What he neglected to mention is the study stated 'insofar as those interest rates limited borrowing ability'. Not to mention the study was done by the head of financial stability of the CB leading up to the financial crash but I digress.

I don't believe interest rates have affected borrowing ability in any major capacity. The move to 4x borrowing for FTBs skewed things upward. All that matters is overall borrowing, Which has increased passed an record average of 300k recently. Don't expect any major falls and don't be fooled by scare mongerers. The real fear to me is inflation driving things ever upward.

DataDude

https://www.boards.ie/discussion/comment/121184566#Comment_121184566

One flaw in how property prices changes are reported is they are reported in nominal terms rather than adjusted for inflation which misses a fundamentally crucial part of the equation.

In nominal terms dublin house prices are down over 3% on their peak roughly a year ago. In that time general inflation has been c6.5% and wage inflation is at c.4.5% (both CSO facts before people start saying “but I didn’t get a wage increase”). So depending on what you used as your inflation measure (wages is a better indicator of affordability), Dublin house prices are down between 7%-10% in 12 months.

That is a substantial drop in prices - one of the most significant ever I’d wager outside the last crash (where I think 10-15% per annum drops were seen in ireland but not any other country.) This time it’s just being largely covered on a nominal basis by underlying inflation.

Villa05

https://www.boards.ie/discussion/comment/121184566#Comment_121184566

Would be strange to argue that the war would lead to drops in prices given the influx of parent(s) and children that was going to lead to

Bass Reeves

https://www.boards.ie/discussion/comment/121187164#Comment_121187164

Some posters have used every issues over the last 4-5 years to predict a house price collapse. Ukraine was, increase in interest rates, COVID, exit of LL's, vacant property tax, vacant site tax effects of Brexit and it would always start in 6 months time.

Villa05

https://www.boards.ie/discussion/comment/121187191#Comment_121187191

Prices rising during Covid and interest rate increases is much more concerning than having a correction for the same reasons

The economy will eventually pay the price

herbalplants

https://www.boards.ie/discussion/comment/121187191#Comment_121187191

Nah Bass, I think get your kids to buy multiple houses quick... I heard on the grapevine the house prices are going up.

StevenToast

https://www.boards.ie/discussion/comment/121187191#Comment_121187191

Agreed, similar to "the next 2 weeks is critical to flatten the curve" bullshìt we heard during covid.....

You keep throwing shìt....eventually it will stick.

JohnnyChimpo

https://www.boards.ie/discussion/comment/121188787#Comment_121188787

If by grapevine you mean "Daft quarterly report" or "CSO figures" then yeah I heard that too...

Might be a little early to wrap up 2023, but we can look back at the "Predicting 2023 Property Prices" thread (random post here)

https://www.boards.ie/discussion/comment/120030854#Comment_120030854

From the opening poll post we can see the wisdom of crowds (even among the kind of crowds you get on boards.ie). The largest prediction cohort (+ 0-5% price increase) was more than a quarter of all respondents, with nearly 60% of respondents predicting somewhere between -5% to +5% price changes YoY, which I would put in the "fair enough" bracket.

But then of course you have the cranks, AKA herbalplants and the like, confidently predicting 20%+ price drops in 2023. Worth keeping in mind for any posters who want to apply some kind of weighting factor to the quality of advice being dished out here...

Bass Reeves

https://www.boards.ie/discussion/comment/121188787#Comment_121188787

No need to worry about my kids.

Geuze

https://www.boards.ie/discussion/comment/121184566#Comment_121184566

There is no chance of any falls in house prices.

There is simply so much demand, thanks to rising population, latent demand from people living with parents, and billions of savings on deposit.

Combine massive demand with low supply, result = prices rises.

The higher interest rates have cooled down the price rises, okay, but no falls.

J_1980

https://www.businesspost.ie/politics/leo-varadkar-and-cabinet-sub-committee-discussed-cutting-ukrainian-refugee-benefits/

irelands Ukrainian population still rising rapidly thanks to the highest dole in the world. Expect similar numbers for non-Ukrainian “refugees”.

Simply cannot see house prices dropping materially. There’s a bit of a soft patch in Dublin now after crazy July-August-early september. Agents calling back, emailing and properties without offers etc despite many people at viewings. I’d expect things to go crazy again new year with salary increases, new AIP’s and desperation.

bluedex

https://www.boards.ie/discussion/comment/121185056#Comment_121185056

You make great points in your posts. I don't think you should waste your time replying to posters who won't see any sense or logic.

For example, posters who think lots of rental property owners selling up makes no difference to the rental market. There seems to be lots of that thinking out there and I can't get my head around how people can be that naive. It's incredible!

Sunny Disposition

The Government have really been disastrous on housing. A lot of that is due to fear of SF.

If they had introduced incentives for landlords several years ago there would have been a wall of money going into construction. Instead they put in place disincentives and would you believe it, thousands of people got out and the only investors are institutional ones. Crazy, crazy policies. Spineless. And people will vote for SF anyway because they didn't do the right thing and solve the problem.

Things are going to get worse before they get better too.

SharkMX

Im now living with my parents until I can buy an apartment. We are sale agreed now for a 3 bed house in Meath. There are tenants in the house though so it all depends what happens with them. Im not of the glass is half full persuasion on this one.

We were renting a room in an old school friends 4 bed house for the last 4 years. He is away in Canada for the last 4 years. There were 2 other couples and a single person in the house with us.

Last year my friend decided that he wanted to sell his house because he said he just couldnt hack it anymore with the other tenants and we all got our notice. I moved into my parents and my gf moved into her parents when we moved out. One of the other couples wouldnt move out so the house isnt even sold yet. They were trying to persuade myself and another couple to stay and not bother moving out and we could drag it out for years. They are the only ones who wont move out though. The rest of us understand where the owner is coming from as we know him.

The other couple are pregnant and looking to buy a starter home now too but like us, having no luck so far.

The single room guy we were sharing with is gone back to his parents house too til he finds somewhere else. He is getting married next year and they will probably emigrate. That was a 4 bed house with 7 people in it. Now its a 4 bed house with 2 people in it who wont move out.

The market right now is just horrible. I cant see it getting any better

bluedex

https://www.boards.ie/discussion/comment/121193046#Comment_121193046

Very true. I said it previously but most of the big problems in Ireland, and globally, are simply due to a large amount of people being really stupid. Or too lazy to engage their brain and think. It really boils down to that. I'm not just referring to property markets.

Villa05

https://www.boards.ie/discussion/comment/121197103#Comment_121197103

The next couple of months could be very telling in the everything bubble. Long bonds have lost more in the last 2 years than sharholders lost in the Gfc of 08/09

Its a bit more complicated than people engaging there brains, it's systemic. Issac Newton lost everything in a bubble.

David McWilliams explains it well on this Tuesdays podcast

BlueSkyDreams

https://www.boards.ie/discussion/comment/121197098#Comment_121197098

Any date in sight when your friend may be able to regain control of their own property?

And some people wonder why landlords want out of the market.

Bass Reeves

https://www.boards.ie/discussion/comment/121197268#Comment_121197268

And people saying a LL selling is a zero sum game accommodation wise

fliball123

https://www.boards.ie/discussion/comment/121197340#Comment_121197340

It is zero sum one property comes away from the rental market and one property is bought and put back onto the rental market or sold for someone to live in.

SharkMX

https://www.boards.ie/discussion/comment/121197268#Comment_121197268

No idea. All I do know is they were trying to encourage the rest of us in the house to stay too and at the time they were saying they checked it out with threshold and were told that if we overhold it would be a minimum of 3 years we could stay before finally being made move out. Hopefully since they are on their own they wont be as bold, but its been a good few months now already.

Last I heard, my friend in Canada who is trying to sell the house now cannot buy the house they were sale agreed on over there because they cant get the money from this one and they still have a mortgage on it. I must send him an email and see what the current story is.

BlueSkyDreams

https://www.boards.ie/discussion/comment/121197374#Comment_121197374

Not necessarily, but we have been through all that. :)

Even in this case, a home that housed 7 or 8 irish residents will ultimatley house 0 irish residents, when today's resident population is referenced. (assuming the irish owners decided to move back into the house in ireland)