How will US Tarrif war affect property prices?

lightspeed

Hi

I have been approved for a buy to let mortgage and I'm probably at a point that I have enough savings to get a 3 bed in my area of Balbriggan.

I generally have not been concerned about global indicators of economic slow down generally because I feel that Irelands lack of supply is significantly worse than elesewhere. We are not throwing up high rise and apartment building is down I think 40% on prior year. In addition I recall in the general election debates it being said that we need 80,000 construction workers to meet the supply needs of new homes.

So as this isn't going to happen, price seems only set to rise. However, I'f there was a long tarrif war, loss of billions to the Exchequer each year as 50% of pharmaceutical exports decline, how will property prices be affected?

Would they likely fall or would the supply constraint still keep prices up?

cap.in.hand.

A lot of foreign workers working in those industries could also up and leave relieving the accommodation crisis in the short term

Barry_Soweto

Probably won't have any negative effect. Knowing this government, they'll up subsidies and grants to prop up prices and run a deficit.

I personally, would like to see a drop of 10/15%. That would bring properties into my price range that I probably wouldn't despise.

lightspeed

https://www.boards.ie/discussion/comment/123319326#Comment_123319326

Possibly but not all have their manufacturing base in Dublin. I was in MSD in Tipperary years ago and it's huge but in the middle of nowhere. If jobs in pharma go there they won't be replaced.

o1s1n

Could see a lot of big salaried jobs in pharma and tech go and with that, a lot of competition from those people pushing house prices up could also drop off.

Might be a good time now to go for mortgage approval, get it approved in the current market and then see how things go 4-6 months down the line before committing to anything.

Definitely uncharted water so take all of that with a massive pinch of salt. Interesting time to be buying a house though. I definitely wouldn't be committing to anything until I saw how the tariffs impact the market. (if at all)

Francis McM

https://www.boards.ie/discussion/2058404847/how-will-us-tarrif-war-affect-property-prices

50% of pharmaceutical exports will decline, as we are lucky in that we have Europe and so many other countries to export to.

The factories here cannot be loaded on to a ship overnight and returned to the States.

I do not think Trump will have much effect on property prices here, but all the same, we are in the crosshairs of the US administration and in their eyes deserve no sympathy given our actions and anti-Israeli outbursts ( as they see it) from some of out politicians. Taoiseach Harris calling Trump "an awful ghoul" a few years ago did not go un-noticed either. Trump is leader of the free world now. We are like a child at school waiting to see what punishment comes from the headmaster at 9 p.m. this evening.

ted1

We’ll have lower interest rates.

thereiver

It depends on how many people are laid off if the move 50 per cent of manufacturing to America if you have a mortgage let's say prices go down by 2o percent so what you are living there for 30 years prices go up or down In the long term prices go up workers builders are not going to reduce thier hourly rates .The cost of materials wood bricks labour is going up

We have a desperate shortage of builders carpenters skilled workers

thereiver

Google has offices all round the world they need an office in Ireland to comply with gdpr rules on data retention in the eu

yagan

Well brexit was supposed to be a shock to our economy but the opposite seemed to occur.

If anything Tariffs can usher more US companies to set up here for accessing the EU market and markets that the EU have lower reciprocal rates with.

Factories follow markets, so no pharma is going to abandon global markets to suit a failed casino owner trying to sound smart.

DubCount

OP, you are the first person I heard of who is drawing down a B2L mortgage in quite a while.

I think the upcoming tariff wars will impact on growth and employment and that will take some heat out of the Irish housing market. More expensive areas will be most impacted. There is quite an overhang of supply deficit for 300-400k property in Dublin and its going to take some significant economic shock to change that. I reckon there's a possibility of some small declines in areas like Balbriggan, but I dont see a major crash coming.

Glaceon

https://www.boards.ie/discussion/comment/123319625#Comment_123319625

No guarantee of that. In fact, if the tariffs result in higher inflation, interest rates would rise.

fliball123

I don't think there will be any effect unless we see a huge swing in migration numbers and start seeing huge nett minus figirue. If people lose jobs our left leaning government will ensure everyone has a roof over their head so the net result on properties becoming available to others does not move and will only shift if we build more - which seems to be beyond the current governments abilities or if we start seeing -20/30k net migration figures. Even at this it will take the guts of a decade before our demand and supply align. Sure Trump will be gone in 4 years time and the next guy sitting will have to clean up his mess.

Padre_Pio

Gonna say the tariffs will have limited effect.

Our major exports are products most people can't do without, and can't be moved easily. They're sold for high margins, and some companies might absorb some cost of the tariffs themselves.

gral6

HHuge depression is on the way caused by Trump's tariffs. It is time to sale property if it is not too late yet.

yagan

Another factor that can't be replicated on the whim of a failed casino owners and convicted sex offender is the cluster effect of pharma and biomed in Ireland.

Of the top twenty global companies 75% have production and r&d facilities here. A whole engineering industry has evolved around servicing this sector which helps attract more new entrants and even nurture Irish companies who then go global.

This cluster has being evolving since the Whitaker reforms.

BlueSkyDreams

https://www.boards.ie/discussion/comment/123320285#Comment_123320285

The migration out of the country will be high skilled, highly paid labour. Both Irish and Non-Irish. The high paid folks leaving the country will bring house prices down.

Once prices come down, the govt will still have to house those that cant afford their own accommodation, but the market rate for rent and sale prices will drop, so the govt will pay less to accommodate people on social housing.

All of the above depends on how many high paid jobs leave our shores; Nobody knows that number yet.

I would not be buying a house in the short term, until the dust begins to settle on the Tariff related job cuts here.

We can cope with losing Corporation Tax; CT doesnt hugely affect household wealth or people's spending power and spending power is what sets the market rate for housing.

If we lose high paid jobs in big numbers, people's ability to buy a house reduces and therefore house prices will drop.

fliball123

https://www.boards.ie/discussion/comment/123320370#Comment_123320370

Cant see it happening the vast majority of companies that are based in Ireland are here to access the EU market I cant see them running any time soon and any companies in the US that will be hit with the EU reciprocal tariffs will see US companies create a HQ in the EU and with Ireland being the only English speaking member in the EU I reckon that this will balance out what we will be losing. Don't get me wrong our Corpo tax may take a nose dive (this will take time may even be so long that Trump is gone) but investment and jobs will remain here. The issue I see with your view is where in the world do these skilled workers go as every country that the US target will see a retaliation from them and it is the start of a trade war and the US will feel the pain too. The biggest problem Trump has is that globalization has made it easier for companies to divert and realign with other trading partners. So in your view where will all of these skilled workers go?

BlueSkyDreams

https://www.boards.ie/discussion/comment/123320437#Comment_123320437

I hope you are right, but I think a large number of the jobs could reshore to the US over time.

Yes, we will retain jobs here to service the EU and other markets, but if the US production is reshored, those jobs will go back to the US also.

The skilled worlers will follow the jobs wherever they go. Most likely back to the US.

herbalplants

https://www.boards.ie/discussion/comment/123320437#Comment_123320437

These skilled wo will go to India, Philippines, Kuala Lumpur, Cyprus, etc, countries that offer a better life style at least some of them.

fliball123

https://www.boards.ie/discussion/comment/123320985#Comment_123320985

They dont offer any where near the same level of pay.

shawnstar

These Tariffs will knock Ireland and EU into a recession, dont kid yourselves. someone said interest rates will fall…no they will rise..fact…property value will nose dive and if anyone buys a house now they will regret it in the not so distant future. this will happen fast..its already happening..they are on TV saying the figures are worse than the Great Depression. banks will be bailed out yet again but the home owners that bought high and bid over..way over what these properties where worth will see their rates go way up. this is a recipe that is used time and time again. this time it will be very bad so do not buy property now

Padre_Pio

https://www.boards.ie/discussion/comment/123327194#Comment_123327194

I'll believe it when I see it.

The majority of our exports are essentials. Drugs and medical equipment. People can't afford to do without, at least not for long, and there's likely nowhere in the US making this stuff.

So they (or their insurance) will have to pay for it. That said, pharma isn't included yet, and so far services are also excluded.

yagan

I've a US relation flying in next week because her US based company wants to start up an EU operation as a hedge against Trumpageddon.

shawnstar

https://www.boards.ie/discussion/comment/123327262#Comment_123327262

The Pharma are American companies, Trump has said he wants them back on USA soil..if they dont go they will pay another tariff of 25% minimum on top of the already 20%…theres only 2 outcomes here..if they stay here in ireland then they pay the flat 15% tax to do business here and then they have to pay the 25% tariff on top of that ..so 40% for doing business here OR they pack up and go home pay no tariffs and lower tax that Trump is promising them. The latter will happen because they only came to ireland because of Biden charging them huge tax..that tax is gone now with Trump.why would anyone choose to pay 40% tax when they don't have to? Trump wants to make America self dependent he wants his businesses back.If this happens and it will then all the property bought by these Americans and all the rentals rented to workers for the same reason will flood the market and bingo..recession..no more money from big Pharma ..no more jobs..we are now in a deficit..its not rocket science. anyone who thinks that this will blow over have their heads in the sand

shawnstar

https://www.boards.ie/discussion/comment/123327276#Comment_123327276

Not another liberal who thinks they are gonna get Trump 🙄

Fr Tod Umptious

https://www.boards.ie/discussion/comment/123327924#Comment_123327924

because they only came to ireland because of Biden charging them huge tax..t

Companies have been setting up in Ireland long long before Biden was president.

airy fairy

https://www.boards.ie/discussion/comment/123327924#Comment_123327924

The thing is though, it would take many years for pharma to set up back in the US. Besides building factories, the products they produce will take time to make all over again, months of testing, validating and trialling and then submitting each product for review by the FDA.

Fr Tod Umptious

https://www.boards.ie/discussion/comment/123327194#Comment_123327194

These Tariffs will knock Ireland and EU into a recession, dont kid yourselves. someone said interest rates will fall…no they will rise..fact…

Interest rates in the Euro zone are governed by inflation.

The ECBs mandate is to keep inflation at close to 2% .

If these tarrifs make goods in the EU more expensive then inflation will rise and so will interest rates.

If the tarrifs result in slower growth or indeed recession then inflation is less likely to be a problem and rates will decrease to try and promote growth.

It all depends on if the EU slap tarrifs on US goods and how much the extra cost of US goods affect the inflation rate.

Padre_Pio

https://www.boards.ie/discussion/comment/123327924#Comment_123327924

How much notice did we get that Trump was serious about tariffs? A week?

If it's so easy to implement tariffs then it's equally as easy to cancel them. Which is what will happen, either in Trumps term or very early in the next president's term.

It could take just as long to move a manufacturing line to the US, even if the factory itself was already built.

No company will spend millions of dollars and years of effort to bring manufacturing to such an unstable environment. They're just as likely to move it all to Russia, which has no tariffs.

SpoonyMcSpoon

https://www.boards.ie/discussion/comment/123321409#Comment_123321409

If these workers are renting then they can probably accept a hefty pay cut to end up with a decent standard of living elsewhere. Dublin is also not a great city unless you are big into pubs and the jobs are concentrated in Dublin so the nicer towns and cities in Ireland aren’t an option to live in. So many other European cities also have offices for these big tech companies and as the tax situation starts to harmonise Ireland loses some of its edge.

Government spending on the property market is acting to prop up house prices and rents so if there are spending cuts that need to be made by the State then we will see some of the property price and rent inflation schemes rolled back like H2B, HAP etc. Revenues may need to be raised so property tax increases could be politically unpopular of course but easy ways to raise some cash. That will affect rents and house prices.

The big concern from the tariffs seems to be in pharma whereas Big Tech was just in a natural restructuring without the Trump tariffs so the lack of new jobs and some job cuts will probably continue anyway. That’s less demand for rentals and the “asylum seeker” housing spend cannot hide the rental market cracks forever.