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

RichardAnd · 14-10-2024 01:38PM

https://www.boards.ie/discussion/comment/122717735#Comment_122717735

Add to this the fact that 100k plus NET immigration seems to be establishing itself as the norm, and there is little to no hope of a reversal in house prices here.

scrabtom · 14-10-2024 01:39PM

https://www.boards.ie/discussion/comment/122711761#Comment_122711761

We're probably 3 or 4 years away from 50k homes a year at least.

DataDude · 14-10-2024 05:18PM

https://www.boards.ie/discussion/comment/122717560#Comment_122717560

Maybe I’ll eat my words, but I’d be inclined to trust the banks this time around. It’s just such a completely different lending environment to 2007.

Having gone through two mortgage drawdowns in 3 years I was shocked at just how stringent they are with their checking of information, their reluctance to factor in variable pay and how conservative they are with their lending amounts.

They regularly choose not to lend the full amount permitted (which is reasonably conservative by global standards) due to their own internal affordability restrictions.

Fitz* · 14-10-2024 05:33PM

Just viewed a 4 bed in Galway city. The estate agent said that their current stock of houses for sale in the city is the lowest it's ever been. Really hits home what the market is like, pardon the pun. The market in Galway city has been incredibly dry since April/May time.

GalwayBmw · 14-10-2024 05:40PM

https://www.boards.ie/discussion/comment/122719047#Comment_122719047

I generally agree with one caveat - I'd use the word cumbersome instead of stringent. As it happens in many other areas tightening the rules in one area inevitably leads to their relaxation in another one. Until banks start repossessing, there will always be an opportunity to sell your risk to a larger group of less smart/more responsible taxpayers. This is a corner stone.

Ozvaldo · 14-10-2024 05:41PM

Government buying up properties for the new Irish leaving Paddy with fcuk all is adding to it aswell.

chalky_ie · 14-10-2024 05:50PM

https://www.boards.ie/discussion/comment/122717126#Comment_122717126

Cheap foreign labour and AI are going to impact high earners before low earners, and make them a bigger risk than lower earners in terms of mortgage viability, you'll have to explain that one to me.

GalwayBmw · 14-10-2024 06:09PM

https://www.boards.ie/discussion/comment/122719163#Comment_122719163

I don't, but I will 😀 Cheap (or more correctly cheaper) foreign labor is used in relative terms here. IT job market for instance is practically dead in Ireland I'd love to use "at present", but I think it's not needed. Agencies sourcing IT personnel started to work in other low margin market segments such as accounting etc. People from SEA/India took over a lot of IT jobs across all sectors (75K-200K p/a from what I can observe at my level), resulting in a lot of people who considered their work situation safe are sitting on the bench now with more to join them. To get a job now you have to first compete with a remote team and then if ye're lucky with local experts. AI of course has a long way to go until it starts affecting job market, but the first step in that direction is done, there'll be highs and lows but it will take its toll. I think the same will happen to finance, the likes of Revolut and blockchain in more remote future will kill canonical banking along with the jobs created by it. Have a look at BOI shares. It's a great market for people having truly unique/rare skills, I hope you're one of them 😎.

Timing belt · 14-10-2024 06:53PM

https://www.boards.ie/discussion/comment/122719234#Comment_122719234

is Revolut not a bank?

chalky_ie · 14-10-2024 07:38PM

https://www.boards.ie/discussion/comment/122719234#Comment_122719234

This is just word salad of classic Boards/Irish Reddit fear-mongering talking points, you haven't said anything actually informative at all. People taking 300k mortgages will lose their jobs to outsourcing and AI a lot sooner than those taking bigger ones.

hometruths · 15-10-2024 08:32AM

Social Democrats have launched their affordable housing plan.

300k in Dublin, 100% ownership, built by AHBs, price achieved through mixture of cost savings and direct subsidy.

Similiar to SF's plan they intend the subsidy to benefit each subsequent purchaser, which is good. But details of how they're actually going to achieve that are a bit thin.

I prefer SFs plan. I get that not everybody is a fan of the leasehold idea but at least it is very clear how it ensures the affordability for subsequent purchasers in the future.

https://www.socialdemocrats.ie/social-democrats-launch-affordable-homes-plan/

RichardAnd · 15-10-2024 09:42AM

https://www.boards.ie/discussion/comment/122720612#Comment_122720612

And how will they be doing this with 100k NET immigration each year, increasing inflation and possible supply chain issues if (and probably when) further conflict is triggered overseas?

timmyntc · 15-10-2024 09:45AM

https://www.boards.ie/discussion/comment/122720612#Comment_122720612

Affordable zoning seems like it would be much tougher legally to get over the line than leasehold.

Also zoning can be changed - what's to stop a subsequent govt deciding to change zoning of these affordable houses to let homeowners profit off the difference and sell at market rates?

RichardAnd · 15-10-2024 09:52AM

https://www.boards.ie/discussion/comment/122719132#Comment_122719132

Paddy is too busy celebrating and out of control ruling class' selling Ireland to the wolves to fatten up their investments. Imagine if the men who fought for this country could see it today :(

getoutadodge · 15-10-2024 10:27AM

Dublin (in relative terms) down the scale with the usual suspects (Oz, Zurich, London, Paris etc etc) heading to the moon.

Could it be that home ownership (along with the supposedly middle class status it confers) was in fact a temporary (1950-2000) historical aberration?

https://www.newgeography.com/files/2024-Demographia-International-Housing-Affordability.pdf

BlueSkyDreams · 15-10-2024 10:35AM

https://www.boards.ie/discussion/comment/122719105#Comment_122719105

Are they building much in Galway?

We see the house completion numbers each year and we were around 34k last year. I dont think it is as clear where the homes are being built. Would be good to see a county overview.

There are residential construction sites all over Dublin, but is Dublin getting most of the new stock?

BlueSkyDreams · 15-10-2024 10:40AM

https://www.boards.ie/discussion/comment/122720820#Comment_122720820

I assume it would also segregate housing developments. If the land was zoned for affordable homes only, the private market would have to build elsewhere, so mixed tenure would be difficult to achieve.

Who would fund the AHBs to build 300k homes in Dublin? The taxpayer would probably be spending 400k to construct a 300k home.

RichardAnd · 15-10-2024 10:42AM

https://www.boards.ie/discussion/comment/122720989#Comment_122720989

Excellent question. Historically speaking, a middle class is something of an anomaly. Most of history saw the majority of property owned by a small ruling class, with most people working on but not owning land, at least not as we would understand it today. It could just be a temporary phase that is rapidly eroding.

DataDude · 15-10-2024 11:17AM

https://www.boards.ie/discussion/comment/122720989#Comment_122720989

Ireland second only to Singapore both in terms of affordability and home ownership. Affordability relatively unchanged here since 2019 despite significantly worsening elsewhere.

Dublin affordability wedged between the titans of Leeds, Richmond, Hull & Humber & Jacksonville. Vancouver 3x higher prices relatively, California 2x, London 2x.

Imagine the outrage if a media outlet ran with that story. Not doomsday enough though…

Fitz* · 15-10-2024 11:18AM

https://www.boards.ie/discussion/comment/122721026#Comment_122721026

Not a whole lot in the city. Oranmore seems to be getting nearly all of the developments now (~20 min drive).

There was 1 or 2 new developments on the far West side outside the city, but with majority of employment on the East side and the massive traffic problems crossing the river, it's a stretch to pay that premium to add extra commute to your every day life. Those new developments are on the outskirts of current civilization up a bohereen with no foothpaths or PT routes already set up. One of these developments was originally assigned to be 100% social housing but out of nowhere announced that they would be going for public purchase. They sold out after 1 day of being on sale. From memory these were mostly 4 beds, which rules out a few FTBs.

On the new developments in the west side since 2020, there has been a few developments, 2 or 3 depending on what you would class as a mass-development. 100% of all of these developments were assigned to social housing. Not one unit was available for public purchase. This rules out all FTBs, and all up-sizers too!

hometruths · 15-10-2024 12:07PM

https://www.boards.ie/discussion/comment/122721176#Comment_122721176

Dublin affordability wedged between the titans of Leeds, Richmond, Hull & Humber & Jacksonville. Vancouver 3x higher prices relatively, California 2x, London 2x.

Hull? Perhaps that's more to do with the fact Hull is "seriously unaffordable" because of demographics, it being on the poorer end of the scale?

Properties in Hull had an overall average price of £157,387 over the last year.
The majority of sales in Hull during the last year were terraced properties, selling for an average price of £124,721. Semi-detached properties sold for an average of £178,360, with detached properties fetching £297,410.
Overall, sold prices in Hull over the last year were 6% down on the previous year and 2% down on the 2021 peak of £161,317.

Dublin and Hull have very different housing affordability issues. Comparing the two is a stretch.

https://www.rightmove.co.uk/house-prices/hull.html

DataDude · 15-10-2024 12:26PM

https://www.boards.ie/discussion/comment/122721377#Comment_122721377

Yes absolutely, the metrics are based on median price to income ratios. You would expect the two factors to scale together in a vacuum

The point is howeve, that capital cities have higher incomes, but also are generally less affordable (I.e. house price increases are relatively more than income differences) because their is huge amount of forced demand. That is seen in the affordability list.

A huge huge percentage of the Irish population have to live in or near Dublin for economics reasons. It’s incredible its price to income ratios are in around those like Hull, where almost nobody is forced to live.

Dublin is one of the ‘most affordable’ capital cities in the world.

Villa05 · 15-10-2024 12:53PM

https://www.boards.ie/discussion/comment/122721449#Comment_122721449

Would it be appropriate to use this as an example of the government created dysfunction in the housing market

If Dublin is the most affordable to purchase and I suspect amongst the highest rents. How come landlords are not filling the void

Why are we giving tax breaks to institutional landlords and taxing indegenious landlords in excess of 50%

In relation to the 70% home ownership assessment

2016 census was 68%

2022 census was 66%

Id doubt we were flooded with home buying migrants in the interim. Highly questionable stats

DataDude · 15-10-2024 01:29PM

https://www.boards.ie/discussion/comment/122721540#Comment_122721540

It’s a very interesting question as to why rental yields are so high in Ireland (I think rents are moderately high but broadly in line with other capitals, it’s just house prices being lower which makes the yield higher).

I’d propose a few possible reasons but don’t know for sure:

Pretty tight lending rules make it hard for people to buy a home which supresses house prices (increases rental yield) relative to other countries. Most renters would be far better off with a mortgage…but can’t get one for ‘affordability’ reasons.
Individual BTL mortgages are crazy expensive…but then I don’t think average Joe landlords are that prevalent globally.
We have a systemic lack of apartments in major cities which is where rentals are mostly focused.
We have fairly involved government policy in rentals with RPZs and the main opposition party manifesto talking about outright bans on rent increases for several years…institutional investors will always require a premium to cover this government intervention risk.

On your tax point. I’d be surprised if many countries taxed rental yields for individuals more favourably than earned income as this would be very hard to justify.

The ‘tax breaks’ for REITS are poorly understood. They don’t pay tax within the fund because those who own the funds are subject to tax upon sale.

If the REIT itself paid income tax…and the individual who owned the REIT had to pay tax again when they sold the REIT, they would immediately cease to exist which would be disastrous for are already low supply of apartments.