Softening house market?

IWW2900

https://www.boards.ie/discussion/comment/120014805#Comment_120014805

LOL, if we see hyper inflation in developed Countries we have bigger problems then the price of my house. Are you one of those guys who stores gold under your pillow?.

We are just seeing typical cycle, rates will rise until inflation is gone and asset prices will be way down. People dont understand the level of tightening coming.

monkeybutter

https://www.boards.ie/discussion/comment/120014964#Comment_120014964

when you sold your investment property did you trade in for a hotel?

https://www.boards.ie/discussion/comment/120014907#Comment_120014907

As long as houses prices don't continue to rise while the wage increases are negotiated. Problem with inflation is that everything gets more expensive so its not like people have more money just spend on housing when they get the pay rise. The cost of credit goes up to curb inflation making the cost of the mortgage more expensive. The only thing that really makes houses cheaper is when their price drops.

Timing belt

https://www.boards.ie/discussion/comment/120015061#Comment_120015061

And property has historically been a natural hedge against inflation for investors

byrne249

https://www.boards.ie/discussion/comment/120014964#Comment_120014964

'People don't understand the level of tightening coming'. Mere fear mongering and hubris. Neither do you or anyone. Inflation could be solved by 3%.

It must have been painful for you to see the ECB already dialling back on increases last week to 0.5%. How long before they scale back to 0.25%? My guess is March/May.

I'd love to see price drops as much as anyone but I don't see anything significant happening next year either way. By the way, Do you have a source that states the interest rates and the property market are highly correlated?

IWW2900

https://www.boards.ie/discussion/comment/120015416#Comment_120015416

Im fear mongering?!, you are the one talking about hyperinflation.

Its healthy to see price drops after silly rises over last number of years, caused by low interest rates.....but Im fear mongering....ok.

fliball123

https://www.boards.ie/discussion/comment/120015416#Comment_120015416

The facts are its going to take at least a decade for vast majority of peoples wages to catch up to the inflation rates increases seen over the last 2 years. So prices will have to come down or there will be houses not sold. Its not just houses it every aspect of life that has sky rocketed and I truly believe we will see a different existence in this country come the new year. A lot of people are going to lose their jobs in the next 12/24 months and I can see a lot of emigration outwards happening again in Ireland over the next 12/24 months its then that IMO prices will drop. If the war in the Ukraine ends and China finally open up the current supply chain issues will be gone. We could have another 2% increase in interest rates over the next 12 months as well. A lot of people will have to wake up to a new reality. I don't know about anyone else but I have been out in Dublin 3 times this month and all at the weekend and the usual wall to wall claustrophobic overcrowding in the pub I had gotten used to over the decade preceding the pandemic simply was not there. Are we turning a corner with regards to peoples spending habits? Its anecdotal but if people are no longer willing to shell out the ridiculously high prices for goods and services that they got cheaper 2/3/4 years ago and their wages will come no where near the new costs. What happens?

byrne249

https://www.boards.ie/discussion/comment/120015438#Comment_120015438

My comment about hyperinflation was tongue in cheek to emphasise how ridiculous some of your statements have been.

Tonesjones

https://www.boards.ie/discussion/comment/120015416#Comment_120015416

David mcwilliams says higher interest rates leads to lower property prices like night follows day

Timing belt

https://www.boards.ie/discussion/comment/120015509#Comment_120015509

He also said the best action that the Irish government could do during ‘08 crash was to guarantee all deposits. They took his advice and the country went bankrupt.

IWW2900

https://www.boards.ie/discussion/comment/120015470#Comment_120015470

Of course, make a stupid, get called out. "It was tongue in cheek"😂

DataDude

https://www.boards.ie/discussion/comment/120015509#Comment_120015509

David McWilliams promised me lower house prices in 2020. Buyers strike or something. He still owes me a few hundred grand!

IWW2900

https://www.boards.ie/discussion/comment/120015509#Comment_120015509

People dont understand that it takes time. Even if they stop raising rates now, property prices will fall....but there is a lag. Its not like they are going to stop raising and then start lowering. These higher rates are going to be around for years.

First stocks, then recession, then jobs, property prices generally last.

DataDude

https://www.boards.ie/discussion/comment/120015466#Comment_120015466

Wage inflation is the big unknown. Tech is clearly under pressure but suspect their pay rises have been far outstripping even current inflation up until the recent slowdown.

Large parts of the economy, particularly the house buying cohort, are fairly strong at the moment and for the first time in my working life I will start to see 5-7% across the board inflationary increases. Lower paid members of staff potentially seeing even higher.

Not saying it will match current CPI, but significantly higher than normal wage inflation is going to be a thing next year for the majority of workers. Look at the public sector!

rob316

https://www.boards.ie/discussion/comment/120015618#Comment_120015618

Who would of thought a global pandemic where economies shut down for months would of sent house prices spiralling up. I literally pulled out of sale at the start because I said to myself Im overpaying.

Tonesjones

https://www.boards.ie/discussion/comment/120015618#Comment_120015618

But there wasn't a buyers strike. That's not his fault . And those who bought in the pandemic frenzy may end up wishing they didn't.

See the United States, see Canada, see Australia, see New Zealand see United Kingdom.

Although the government and central bank won't allow house prices to fall.

Donald Trump

People talking about high interest rates appear to be only considering it in relation to homeowners.

Investors with cash earning 0% were a large source of money being pumped into the market over the past few years. You can read back on plenty of threads over that time where people reason that "You might as well invest it rather than leave it sitting there". Some of those people may well decide to extract their money back out, and people who would have taken that option might instead opt for cash for the time being.

That's all property. Not just residential. But there will be correlations between the different types

DataDude

https://www.boards.ie/discussion/comment/120015650#Comment_120015650

I know. Crazy stuff. But I think the takeway is that predicting the property market is very complicated!

https://www.boards.ie/discussion/comment/120015746#Comment_120015746

I think anyone now who could go back and buy a property when McWilliams was screaming not to, surely would.

Prices up 25%+, more in the countries you quoted, mortgage rates soon to be 2%+ higher. Even if there’s an impending correction coming, it’s very difficult to imagine a scenario where someone who held off buying in 2020 will be better off for having done so.

kippy

https://www.boards.ie/discussion/comment/120002798#Comment_120002798

Look at what the state has done in the interim however.

We have decided that instead of having a department with responsibility for the actual delivery of housing and ramping up employees to do it we instead put money into the pockets of private developers who have proven time and time again that corners will be cut if possible, prices will change almost at will and who ultimately haven't and don't solve the problem..this coupled with the fact that HAP goes straight into the pockets of an ever increasing number of culture funds, foreign pension funds etc instead of being put towards building actual houses says a lot for the privatisation of accomodation provision if you ask me. Even the move away from local authority mortgage provision until relatively recently was a retrograde step. Couple all that with the state bidding against people to buy up housing and you genuinely have a basket case.

It would be far more efficient to directly hire the skill sets to deliver housing and CPO land (if for some reason the hectares of nama owned land didn't suit) to deliver social housing and in doing so reduce the social housing lists (this stopping the state bidding against citizens for housing) reduce the spend on HAP(again which should lead to reduced overall rents) and finally lead to a reduction in all of the NGOs that are tied up in housing.

I know that things weren't perfect with housing 'back in my day' and that the state aren't always good at delivering certain services but HAP and the backlog in social housing as well as the state's policies in dealing with them have led to major problems.

Tonesjones

https://www.boards.ie/discussion/comment/120015795#Comment_120015795

You are right. All of these red hot housing markets have the same thing in common. Supply supply supply. Or lack of.

byrne249

https://www.boards.ie/discussion/comment/120015610#Comment_120015610

Sure isn't the great predictor of the Great Recession Michael Burry himself warning about hyperinflation. You should be aware of all the risks. Still waiting on the source of the hyper correlation between interest rates and house prices. Or does it not exist?

mcsean2163

https://www.boards.ie/discussion/comment/120016458#Comment_120016458

Hi awaiting email confirmation.

Just jumping in hoping you'll stop your needling. You could start here.

Assessing the role of income and interest rates in determining house prices

Kieran McQuinn, Gerard O'Reilly

Economic modelling 25 (3), 377-390, 2008

there's a thing called Google that might help you with further studies.

https://www.google.com/

Timing belt

https://www.boards.ie/discussion/comment/120016709#Comment_120016709

it’s interesting that the study you mention looks at income and interest rates because both are rising and have opposite impacts on property.

The link between inflation and house prices is also well documented in various studies for example https://web.stanford.edu/~piazzesi/inflationAP.pdf

The Real President Trump

https://www.boards.ie/discussion/comment/120015509#Comment_120015509

Yeah and he was also the dude who came up with the bank guarantee, he just churns out stories all the time and occasionally one of em seems like more than a coincidence

He's also been talking down the country since 1997, the real telltale is he never points to what is good or will become successful

StevenToast

https://www.boards.ie/discussion/comment/119915193#Comment_119915193

Just to update the thread....we have our house up a couple of weeks, generated alot of interest/viewings (at a bad time of year i thought)....received 2 bids under asking price from different individuals....a third separate bidder has now popped up and bid 5k over asking....we will accept this if the others drop out.....

fliball123

https://www.boards.ie/discussion/comment/120015637#Comment_120015637

Well put it like this any domestic company trying to survive the current energy and cost of living increases will hardly be able to afford a pay rise for their employees. I mean I know locally of one restaurant that closed this month (The month of xmas where businesses such as restaurants should be making a killing) it closed due to an 8k bill for electricity that it could not afford to pay. The public sector got theirs (sure with the unions on one side and gov on the other it was never going to be much of a fight from the gov to give in to demands due to their own wallet seeing a nice wad of cash coming into it) and with tech as you point out which was our bastion of high fliers (I am in tech and have got zero pay rise this year same with the majority of lads I went to college with who work in the same field and like myself they would of got wage increases annually up until 2022) with wage increases over last 2 decades is now on its knees. The bankers will get their rises with the lifting of the pay restrictions, but the majority of private sector will not be getting them as companies are on their knees with other high costs. I honestly think your going to see a real drop in spending from January onwards. People will be cutting from the small items to the big ones and will no longer be getting that 4 Euro Cappuccino or the 7 Euro Brekkie role and will be putting that 80k Extension well on the back burner or the buying that new car. There has been an increase in buy now pay later (which with higher interest rates will bring its own issues down the line) and with other indicators like the Aldi and Lidl garnering more and more market share would suggest that people are watching the pennies. It feels like the long breath before the plunge.

Padre_Pio

First Home Scheme limits will be increased throughout the country to put more money into people's pockets and keep houses prices high.

fliball123

https://www.boards.ie/discussion/comment/120016835#Comment_120016835

Congrats Steven, I hope for your sake they are a cash buyer if I was you I would make sure to put a time limit on this as if this goes a few months into the new year you may see prices starting to drop. Keep us posted on how the sale goes.

spuddy

https://www.boards.ie/discussion/comment/120015815#Comment_120015815

Back in the day there was an excess of labour - today we have a shortage. Also the state has a pretty poor track record delivering anything efficiently, just look at the costs of the Children's Hospital.

AdamD

https://www.boards.ie/discussion/comment/120015637#Comment_120015637

If you listened to this thread, or website in general you'd be led to believe that nobody has had a wage increase in a decade. Wage inflation will absolutely be a factor in house prices next year, whether they offset the impact of interest rates is anyone's guess of course. But when the stats come in I've no doubt they'll show that wages have risen quite significantly in the last 12 months