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Do you think property will crash again?

LambDev

I was reading the thread on prices in Ashbourne increasing by 55k, and the comments were interesting. eg ("Similar happened in 07", "Here we go again").

During the last boom and subsequent crash, I was only a child/young teenager. I'm 22 now, but I didn't really experience the last one.

It's not going to happen soon, but does anyone predict a crash long term, and what market conditions will cause it?

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Ray Palmer

kaymin wrote: »

Yes I'm hoping for a crash and I say that as a home owner. I don't see much upside to another generation being priced out or slaves to mortgages for the rest of their lives so they can fill the pockets of a few land owners and developers.

The crash has resulted in the current situation and another will make it worse again later on. As a result of the last crash a huge amount of people were aged out of getting mortgages. That meant the rental market needed to increase in size above population normal growth rates. The resulting lack of investment in property due to increasing charges on landlords made everything worse.
If that happens again would be devastating thing that would have massive long term affects.

oceanman

thierry14 wrote: »

Thats a fair point

Couples earning a modest 100k combined that isn't bad

modest!.....what planet are you living on??

theboringfox

kaymin wrote: »

The comments he has made in that article seem completely logical to me. If the EU expects the UK to cut off NI by having a separate economic region there that effectively stays in the EU then the EU can't really be serious about achieving a soft Brexit. What May seeks seems very reasonable to me also:

'The Prime Minister has instead called for either a customs partnership, under which the UK "mirrors" EU requirements on goods from around the world, or a streamlined customs arrangement, using technology and "trusted trader" schemes to do away with the need for customs checks.'

Agreed

Yes I'm hoping for a crash and I say that as a home owner. I don't see much upside to another generation being priced out or slaves to mortgages for the rest of their lives so they can fill the pockets of a few land owners and developers.

I would never hope for any form of economic crash in Ireland and property falling would not happen in isolation. The last major crash did not help a large number of people get access to cheap property. It was horrible.

I don't want to see houses being unaffordable but I don't think we are unique in Ireland in where house prices are versus income. We have good controls in place now from Central Bank.

Bob24

Andrew Beef wrote: »

how on earth are the “nurse and the guard” ever going to afford to live anywhere other than Dublin 15 or beyond

[...]

That’s what happens in big cities; we can’t all live in Manhattan.

But again no matter which companies are established here we are not a big city and we have no Manhattan.

Also Dublin 15 (this post) and Mullingar (your previous post I was replying to) are not exactly the same thing.

If you're saying it makes sense that a nurse can't afford to live in Dublin 4 and will have to go somewhere else in the city I will of course agree, but if you are still saying Mullingar is as good as they should get then it is very different. All this seems very vague :-/

Lumen

Andrew Beef wrote: »

We become like every other major city in the world where those people live elsewhere and commute. The idea that a waitress/nurse/security guard can live 20 mins from the city centre is a dead duck. They will need to live in Mullingar.

Waiters, nurses and security guards in London don't do 100 mile round trips to work. Commuting is expensive.

Andrew Beef

Bob24 wrote: »

Andrew Beef wrote: »

We become like every other major city in the world where those people live elsewhere and commute. The idea that a waitress/nurse/security guard can live 20 mins from the city centre is a dead duck. They will need to live in Mullingar.

Define what you mean by city centre of of major city. Dublin is not exactly London, Tokyo, New York, or Paris. And D1/D2 is not exactly Westminster, Shinjuku, Manhattan, or Le Marais.

Think of the organisations that we have here that pay their staff serious money: Facebook, Twitter, LinkedIn, Google, AerCap, Microsoft, Arthur Cox, McCannFitzGerald, A&L Goodbody, KPMG, Matheson, PWC, Deloitte, Davy, EY, Avolon, the big pharma companies, etc. There are a finite number of properties in “Dublin, Dublin”; how on earth are the “nurse and the guard” ever going to afford to live anywhere other than Dublin 15 or beyond when they’re facing firepower like that?

It happened in London; Abramovich lands in Kensington and forces the hedge fund guy into Chelsea; the hedge fund guy then forces the bank guy into Fulham; the bank guy then forces the solicitor into Putney; the solicitor then forces the small businessman into Wimbledon; the small businessman then forces the tradesman into Epsom; the tradesman then forces the nurse into Guilford.

That’s what happens in big cities; we can’t all live in Manhattan.

kaymin

Andrew Beef wrote: »

Exactly; how is €350-400k for a decent BER’d new build in Dublin not reasonable?

Isn't that price range 8+ times the average industrial wage? And there's not many new builds in Dublin that are priced as low as that.

Andrew Beef

Exactly; how is €350-400k for a decent BER’d new build in Dublin not reasonable?

Bob24

Andrew Beef wrote: »

We become like every other major city in the world where those people live elsewhere and commute. The idea that a waitress/nurse/security guard can live 20 mins from the city centre is a dead duck. They will need to live in Mullingar.

Define what you mean by city centre of a major city in the world. Dublin is not exactly London, Tokyo, New York, or Paris. And D1/D2 is not exactly Westminster, Shinjuku, Manhattan, or Le Marais.

thierry14

Andrew Beef wrote: »

We become like every other major city in the world where those people live elsewhere and commute. The idea that a waitress/nurse/security guard can live 20 mins from the city centre is a dead duck. They will need to live in Mullingar.

Thats a fair point

I don't see a crash coming nor do I see a boom

Not much building going on, credit isnt easy to get, cheap labour and materials to build don't exist, unemployment is low at same time wage inflation is low

I think prices even in Dublin are very reasonable

New builds in D13 + D15 for 350 - 400k

Bit more nearer city like Terenure and Dun Laoghaire

Couples earning a modest 100k combined that isn't bad

Andrew Beef

kaymin wrote: »

Andrew Beef wrote: »

The only people who are being priced out of the market are lazy Snowflakes who think that the world owes them a living. People who work hard and don’t pursue frivolous careers are fine.

If everyone followed that logic then who will be left to do the traditionally low paying jobs like waitressing, cleaning, security, warehouse work, lorry drivers - all essential jobs, none that I'd consider frivolous or easy, yet don't pay enough to buy a property.

We become like every other major city in the world where those people live elsewhere and commute. The idea that a waitress/nurse/security guard can live 20 mins from the city centre is a dead duck. They will need to live in Mullingar.

Bob24

Andrew Beef wrote: »

The only people who are being priced out of the market are lazy Snowflakes who think that the world owes them a living. People who work hard and don’t pursue frivolous careers are fine.

Very good troll.

kaymin

Andrew Beef wrote: »

The only people who are being priced out of the market are lazy Snowflakes who think that the world owes them a living. People who work hard and don’t pursue frivolous careers are fine.

If everyone followed that logic then who will be left to do the traditionally low paying jobs like waitressing, cleaning, security, warehouse work, lorry drivers - all essential jobs, none that I'd consider frivolous or easy, yet don't pay enough to buy a property.

Skedaddle

The issue is what’s our alternative?

A single bilateral trade deal with Brexit Britian and leave the EU?! That's really not an option at all.

Tying two bricks together doesn't make them float.

The UK is proving to be completely untrustworthy at the moment, as they're willing to just agree to something then ignore that agreement. I'm sure we would be in an extremely vulnerable position if we ended up totally dependent on the whims of the British Government. We wouldn't be an equal trade partner. We'd be back to being buffeted around by a large and not always friendly neighbour.

We would also be directly exposed to Trump who thinks that Ireland's trade surplus needs to be tarrifed back to balanced. Within the EU he has to have a trade war with the world's largest economic entity. Outside the EU he would simply destroy us and not give a damn.

We're also a founder member of the Euro. Relaunching IEP would have enormous risks to the Irish economy and we've no idea how it might trade. It could launch with an immediate run on Irish assets for example.

All of our foreign direct investment and much of our domestic economy is dependent on access to the single market. So you'd immediately start to lose most of that.

Ireland could be looking at a contraction back to the 1970s

We've a choice between an unstable neighbour or sticking it out with the EU.

My view of it is that we don't have any option but to ride out Brexit in the EU and just try to make the most of it.

Ireland interests don't necessarily align with the UK and we just need to be a bit ruthless about putting Irish interests first.

We've interests that align very closely with a lot of the small Northern European countries, especially the Netherlands, Belgium and Luxembourg. Even Germany and France aren't going to want to see a catastrophic Brexit. We need to fight our corner and use all the EU diplomacy we can muster and we do actually have far better connection in Europe than the UK has.

The EU isn't out to punish. It's just not prepared to be ridden by the UK after Brexit which is pretty much what the Tories seem to want to do. They're very much ready to try and undermine the EU while using it.

Even from an Irish perspective, it's not in Ireland's interest that the UK gets a cakeist deal that gives them FDI advantages over Ireland. If they retained total market access and no regulatory requirements, tons of investment would just move from Ireland (and not just FDI bit Irish businesses too) in exactly the same way as they'd move from France or Belgium or NL.

We need to be careful but I think we also need to avoid being suckered into believing Tories and UKIP pretending to like us. It's a completely manipulative wolf in sheep's clothing, or in this case donning the green jersey and feigning concern.

Brexit is undoubtedly the biggest risk to our economy, but we don't really have much option but to brace for impact and deal with it, come what may.

[Deleted User]

Andrew Beef wrote: »

The only people who are being priced out of the market are lazy Snowflakes who think that the world owes them a living. People who work hard and don’t pursue frivolous careers are fine.

Great point. Well made. Would read again.

cursai

bluewolf wrote: »

We should ban the word snowflake

We should ban the term frivolous careers. It's illogical.

[Deleted User]

We should ban the word snowflake

Andrew Beef

The only people who are being priced out of the market are lazy Snowflakes who think that the world owes them a living. People who work hard and don’t pursue frivolous careers are fine.

kaymin

theboringfox wrote: »

That article is just quoting one of the strongest voices in UK government pushing for full Brexit. That guy wants no customs or single market participation. He wants UK to get a full free trade deal with EU and basically keep all the positives of EU membership and remove all the negative. He absolutely couldn't care less about Ireland and if our politicians are being attacked by him then they are most likely doing well. Yes a Hard Brexit is very bad for Ireland but that's largely all that's on offer from this guy as EU will not agree to free trade deal.

The comments he has made in that article seem completely logical to me. If the EU expects the UK to cut off NI by having a separate economic region there that effectively stays in the EU then the EU can't really be serious about achieving a soft Brexit. What May seeks seems very reasonable to me also:

'The Prime Minister has instead called for either a customs partnership, under which the UK "mirrors" EU requirements on goods from around the world, or a streamlined customs arrangement, using technology and "trusted trader" schemes to do away with the need for customs checks.'

theboringfox wrote: »

If a hard brexit happens and it badly hits our economy it could yes reduce prices. But it'll also badly affect peoples ability to buy.

Agreed

theboringfox wrote: »

Sometimes reading on here you would think people are hoping for a crash

Yes I'm hoping for a crash and I say that as a home owner. I don't see much upside to another generation being priced out or slaves to mortgages for the rest of their lives so they can fill the pockets of a few land owners and developers.

Q&A

kaymin wrote: »

According to Copenhagen Economics Ireland will suffer more than the UK from a hard Brexit.

http://www.thejournal.ie/brexit-scenario-3849849-Feb2018/
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In the context of 'property price crashes' it's a nice chart. It also shows how you can get wrapped up in numbers and lose sight of what's forecast to happen.

The thing that this study, and others, present is how future GROWTH RATES will be effected not actual LEVELS. Even in the worst case scenario most studies forecast positive growth (all lines go up). It's just not as strong compared to a soft- or no brexit situations. They're not talking Armageddon they're talking tapping the breaks. If they're right the majority of us we won't notice an appreciable change. That's not to say there won't be pockets harder hit areas but overall the Irish economy will keep ticking along.

Now let me use the same framework to discuss Irish property:

For Irish property the analogy could be a 30% decline in growth.... That's like saying rather than growing at 10% per year house prices will increase by 7%. So house prices will be lower than what they might otherwise have been but still above today's level.

This is how brexit had been presented so there's something for everyone:

for the optimist (nominal) prices will go up

For the pessimist (Real) prices will go down (Compared to no brexit prices).

To sum up you're all correct!

theboringfox

kaymin wrote: »

According to Copenhagen Economics Ireland will suffer more than the UK from a hard Brexit.

http://www.thejournal.ie/brexit-scenario-3849849-Feb2018/

I have zero faith in Varadkar and his hard-line approach to the UK's Brexit negotiations. The EU is just using us as a bargaining chip / negotiating tool - they'll discard us when it suits them as we have seen before. Yet Varadkar / Coveney blindly don't see the obvious.

Surprisingly good article in the indo on this:

https://m.independent.ie/irish-news/politics/leading-tory-brexiteer-attacks-leo-varadkars-border-stance-as-irresponsible-votechasing-immaturity-36665280.html

That article is just quoting one of the strongest voices in UK government pushing for full Brexit. That guy wants no customs or single market participation. He wants UK to get a full free trade deal with EU and basically keep all the positives of EU membership and remove all the negative. He absolutely couldn't care less about Ireland and if our politicians are being attacked by him then they are most likely doing well. Yes a Hard Brexit is very bad for Ireland but that's largely all that's on offer from this guy as EU will not agree to free trade deal.

If a hard brexit happens and it badly hits our economy it could yes reduce prices. But it'll also badly affect peoples ability to buy.

Sometimes reading on here you would think people are hoping for a crash

[Deleted User]

We need a building boom first. That'll be over the next few years. Maybe a crash after that.

lcwill

I just don't see how a crash anything like the last one can happen again - that was the worst property crash ever experienced in a developed market economy.

To have a crash worse than that would require something close to a total economic/political/social meltdown with a Mad Max/The Road style outcome where you are worrying more about canned food and ammunition than what % of mortgage interest you can deduct.

There will be "crashes" for sure, but maybe 10/20/30% price drops, and not 50%+ like last time.

kaymin

Skedaddle wrote: »

It is going to have huge swings and roundabouts for the Irish economy but the main take home point is it's going to potentially be a very bumpy ride for Ireland and probably a worse one for the UK.

According to Copenhagen Economics Ireland will suffer more than the UK from a hard Brexit.

http://www.thejournal.ie/brexit-scenario-3849849-Feb2018/

I have zero faith in Varadkar and his hard-line approach to the UK's Brexit negotiations. The EU is just using us as a bargaining chip / negotiating tool - they'll discard us when it suits them as we have seen before. Yet Varadkar / Coveney blindly don't see the obvious.

Surprisingly good article in the indo on this:

https://m.independent.ie/irish-news/politics/leading-tory-brexiteer-attacks-leo-varadkars-border-stance-as-irresponsible-votechasing-immaturity-36665280.html

Wanderer78

Skedaddle wrote: »

The only slight hope we might have is the ECB and the European Commission will have a bit of perspective and start issuing severe warnings and maybe we might not ignore them this time. It's a big maybe, but here's to hoping.

i think you maybe putting too much hope into institutions such as the ecb and the european commission etc. i think theres large scale group think going on within these institutions and also within our political institutions regarding many of the matters you present, but i will agree with you, we have convinced ourselves, that rising house prices is good for us, when in fact, it is not. this is very evident for younger generations, as many are ending up in employment situations which are not as secure as older generations, and with poor pay increases compared to the rising costs of living, including the cost of housing.

i do personally believe global central bank policies such as qe are in fact failing, these type of policies only truly work if we continue to take on private debt, but i suspect we ve more or less maxed out on that for the time being, possibly indefinitely, for the reasons i mentioned above. id agree with australian economist steve keen when he uses the phrase, 'the walking dead of debt', to describe countries such as ours, i.e. we cannot truly grow unless we address our private debt issues, but our political institutions, including the institutions you mentioned, have become obsessed with public debt, and imposing idiotic policies such as austerity, in trying to deal with the wrong problem, further compounding the underlying issues.

Skedaddle

Andrew Beef wrote: »

I love this narrative that we somehow lose our brightest and best during an economic downturn.

The reality is a million miles from that; our brightest and best remain; they are employed in aircraft leasing, technology, the legal/accountancy/tax/medical professions, etc.

Our best and brightest who are not yet in employment or who have lower salary and career expectations during a recession most definitely do leave and others who might come here and join the talent pool opt to go elsewhere instead.

Those who have good jobs and are setup already won't necessarily go anywhere, provided they're not impacted in terms of job losses or quality of life reductions.

Typically what happens here during a recession is an entire generation of graduates, postgraduates and skilled workers leave. That's been the pattern and there's plenty of strong evidence to support it.

It's a global market for jobs and even within Europe, if a country isn't offering something interesting in terms of lifestyle, they aren't going to retain and attract people.

Pawwed Rig

Andrew Beef wrote: »

The reality is a million miles from that; our brightest and best remain; they are employed in aircraft leasing, technology, the legal/accountancy/tax/medical professions, etc.

the unemployable also stay. Or the ones that landed the public sector job (regardless of whether good or bad). There is a certain amount of brain drain during a down turn.

There are feck all jobs in aircraft leasing btw. They tend to be companies with millions in turnover and employees on fairly average salaries. All of the money leaves the country. There are fees for the big 4 accountancy firms so I guess the emplyees there benefit too.
Re tech - there is a limited amount of R&D in the country so you do not need to be the cream of the crop to work in the Intels and googles of this world.

Andrew Beef

I love this narrative that we somehow lose our brightest and best during an economic downturn.

The reality is a million miles from that; our brightest and best remain; they are employed in aircraft leasing, technology, the legal/accountancy/tax/medical professions, etc.

Andrew Beef

corks finest wrote: »

Andrew Beef wrote: »

I’ve news for you; it wasn’t the cream who left.

New for you,cream did in the 80s

No they didn’t. I’ve more news for you; it’s never the cream who leaves.

Skedaddle

Andrew Beef wrote: »

The real fantasy is someone on the average income thinking that they’ve a divine right to live within walking distance of the city centre.

Most of them don't think that, but they can't even afford to live within reasonable commuting distance.

We aren't building the right kinds of accommodation in the right places and we don't have proper transport infrastructure to link it up.

Actually, most of the central area of Dublin bizarrely has large collections of semi-derelict buildings, which I simply do not understand, given the demand for housing and commercial space.

There are huge areas of central Dublin that I would describe as totally underused and bordering on falling apart. Take a look around the "non-trendy Stoneybatter" areas of Dublin 7, Dublin 1 and Dublin 3. You've little bits that are nice and then it's large areas of really surprisingly bad dereliction.

If you wanted to live within walking distance of the City Centre in Dublin anyway, you're really looking at a selection of largely tumble down 19th century buildings and some modern apartments but not all that many.

Dublin clearly wants to be a "world class city" but it lacks the transport infrastructure to make the centre dense with businesses and lacks the housing to accommodate people to work in them. So, unless it starts getting those two issues right, it simply won't happen. It also won't allow serious use of tall buildings.

The fantasy that I am seeing in Dublin is a notion that it has a skyline that's worth protecting. There's a level of BANANAs (Build Absolutely Nothing Anywhere Near Anything) in Ireland that really does not help. It's possibly driven by some really poorly thought out developments in the past, but it's bordering on a psychosis at this stage.

We live in living cities, we should protect the heritage and look of the place while remembering that they're not open air museums.

A few landmark towers in Dublin would not do any damage to the skyline and actually might make the place look a bit prosperous and modern for a change.

Without some radical rethink about how we use the built environment and what we're doing with Dublin (and other cities) Growth will be choked off and we're back into some kind of baseless property bubble that could easily go bang.

We also urgently need a lot more public transport in Dublin but also in Cork and elsewhere.

If you look at say the Dublin transit system, it's about suitable for a city the size of Cork if you compare it with what's possible somewhere like in France or Germany.

Dublin should have some kind of Luas-metro hybrid system running into EVERY major suburb. Two lines in 2018 is a complete joke!

Without proper transit systems, you can't open up serous housing developments and get people to and from work. So, effectively you're creating choke points in the city and driving the price of a narrow range of homes to insane levels while denying the city the possibility of ever growing into a serious urban centre.

We've poor and completely visionless planning in urban areas here and we are running our handful of cities as if they're small sprawling version of rural towns.

I hate to say it, but it's a complete joke of a place at times. We urgently need to get a bit realistic about what we're doing.

We talk big but we plan small.