Property Market 2019

Bluefoam wrote: »

lol... I don't know what to do with this... These are exactly (some of) the conditions that created that last recession. It doesn't work. It hasn't worked, thats why they stopped it. It litterally caused death and destruction.

Pushing credit onto people is what caused the last recession. Prudent lending went out the door. You can't blame people for taking "free money" (equally, people need to accept they over-extended and take their justified evictions). The current crisis has emerged due to the lack of apartment and home building the last 10 years so it is the solution to get appropriate housing built in the areas that need it.

Assetbacked wrote: »

I'm not saying it is they themselves but a system which pervades allowing them to benefit disproportionately. This article explains it quite well http://www.davidmcwilliams.ie/contented-classes-could-be-biggest-threat-to-irish-economy/

You don't benefit from DMW's eloquence with words
I'm not sure you fully understand the article
Yes I understand what he's saying.... But...
.... That is not what you said above

Assetbacked wrote: »

Pushing credit onto people is what caused the last recession. Prudent lending went out the door. You can't blame people for taking "free money" (equally, people need to accept they over-extended and take their justified evictions). The current crisis has emerged due to the lack of apartment and home building the last 10 years so it is the solution to get appropriate housing built in the areas that need it.

Am I reading this right... you want to create a recession-like economy, you want to be tough on lending, you want to limit credit, you want houses built on a massive scale (+apartments), you don't want a free market that can increase or decrease depending on inflationary inputs or demand. You want individuals and landlords/investors to compete in the same market. You don't want old people to retan the property they worked hard for. You think it outragious that property should increase in value. Note the word *value.

You want it all...

Assetbacked wrote: »

I'm not saying it is they themselves but a system which pervades allowing them to benefit disproportionately. This article explains it quite well http://www.davidmcwilliams.ie/contented-classes-could-be-biggest-threat-to-irish-economy/

Thats not what that article is about.

Also look at the messenger and where they live.

Assetbacked wrote: »

Pushing credit onto people is what caused the last recession. Prudent lending went out the door. You can't blame people for taking "free money" (equally, people need to accept they over-extended and take their justified evictions). The current crisis has emerged due to the lack of apartment and home building the last 10 years so it is the solution to get appropriate housing built in the areas that need it.

Look beyond peoples individual borrowing.
Who gave them the money and why?
Perhaps those institutions borrowed big and needed to more that debt onward.

Assetbacked wrote: »

The ironic thing is that, if I was caught in the rental crisis until my 40s, I won't actually have to worry about the above as I won't have any security into retirement meaning the State will have to pick up the tab.

That suggests such people have goals that are not sustainable.
Perhaps they should think the master plan.

The Student

alwald wrote: »

Why take a debt when there is a massive budget for housing overall? Shouldn't this miserable government use those funds to build more?

Other than that I agree with the fact that this government isn't going to do anything and that next elections are key.

The decisions taken are not just financial ones. Firstly the tax take for the govt from private (non institutional) landlords is in the main over 50%.

For this the Govt don't have the risk of non payment, don't have the maintenance costs. The Govt also are not blamed on any eviction should it happen.

Firstly while in the long term from a financial perspective it would make sense for the State to build rather than rent with this comes its own problems. We would need significant capital investment to build the number of properties needed. We can't access the capital to do this because of the conditions of the bailout. If the properties were built where would the be built, we have ample land outside of Dublin, Cork and Galway for example but people want their "forever home" in these areas. I don't have an issue with supporting those who genuinely need support, I do however have an issue with people picking and choosing where they will agree to live despite the fact they are receiving heavily subsidized housing.

Secondly, there are the cost savings to the State for support staff to maintain council properties.

Thirdly because of our culture people are never really held to account for their actions in all sectors of society. Be it for committing criminal offences or even failing to pay mortgages, rents, fines etc.

All in all what the State "pays" for housing is not actually a bad deal when you consider the above.

Bluefoam wrote: »

1.You don't benefit from DMW's eloquence with words
2.I'm not sure you fully understand the article
3.Yes I understand what he's saying.... But...
4..... That is not what you said above

The post I was replying to said this;

beauf wrote: »

You are complaining that people buying property and having it appreciate are blocking those who want to buy.

But those unable to buy they did manage to buy then are they not doing exactly the same thing?

This post misread what I was saying - I was not complaining about people in the present day who are buying, but rather was complaining that property prices have inflated dramatically in recent decades, compounded by the rental crisis. The burden on those renting and hoping to buy is disproportionately against them. House prices need to dramatically climb down or else the burden on income-tax paying, renting workers should be alleviated by extracting some of the wealth in property back into the exchequer.

Assetbacked wrote: »

The post I was replying to said this;

This post misread what I was saying - I was not complaining about people in the present day who are buying, but rather was complaining that property prices have inflated dramatically in recent decades, compounded by the rental crisis. The burden on those renting and hoping to buy is disproportionately against them. House prices need to dramatically climb down or else the burden on income-tax paying, renting workers should be alleviated by extracting some of the wealth in property back into the exchequer.

I actually don't get what you are saying, probably because you are all over the place... but, the article above was about nimbyism and its effect on the market. What you are talking about is taking from people who bought and stuggled to own their property in order to give to those who don't...

So, when you eventually own your property and have security for your future, are you going to willingly give up your property to help those who don't own yet?

Bearing in mind we will be living in a completely different ecoomy at that time... Are you going to give up whats you have built and put your future/your retirement in the hands of the young people & trust them to do the best for you?

I certainly wouldn't.

Bluefoam wrote: »

I actually don't get what you are saying, probably because you are all over the place... but, the article above was about nimbyism and its effect on the market. What you are talking about is taking from people who bought and stuggled to own their property in order to give to those who don't...

So, when you eventually own your property and have security for your future, are you going to willingly give up your property to help those who don't own yet?

Bearing in mind we will be living in a completely different ecoomy at that time... Are you going to give up whats you have built and put your future/your retirement in the hands of the young people & trust them to do the best for you?

I certainly wouldn't.

I'm not saying to take from them what they bought and struggled for, I'm talking about preventing so much wealth getting pumped into hyper-inflated property prices by bringing in measures to greatly reduce the cost of buying homes in Ireland as we are very much a society where home ownership is something people have to aim for and not long-term renting.

Assetbacked wrote: »

I'm not saying to take from them what they bought and struggled for, I'm talking about preventing so much wealth getting pumped into hyper-inflated property prices by bringing in measures to greatly reduce the cost of buying homes in Ireland as we are very much a society where home ownership is something people have to aim for and not long-term renting.

So by forcebly reducing property prices by 40% you will either push people into massive negative equity, with debt greater than the value of their assets, or you will take wealth away from those who have worked hard to gain it. BTW massive international firms will realise this drain and march right back in to take a slice of the pie...

Alternatively, you could meet the world economy, allow house prices to trend in line with international levels & house many people by improving rental conditions.

No matter what you do, property prices will increase, due to world markets and inflation. It is written.

Assetbacked wrote: »

The post I was replying to said this;

This post misread what I was saying - I was not complaining about people in the present day who are buying, but rather was complaining that property prices have inflated dramatically in recent decades, compounded by the rental crisis. The burden on those renting and hoping to buy is disproportionately against them. House prices need to dramatically climb down or else the burden on income-tax paying, renting workers should be alleviated by extracting some of the wealth in property back into the exchequer.

The people in the present day are the same people as those who bought 20 yrs ago.

Bluefoam wrote: »

So by forcebly reducing property prices by 40% you will either push people into massive negative equity, with debt greater than the value of their assets, or you will take wealth away from those who have worked hard to gain it. BTW massive international firms will realise this drain and march right back in to take a slice of the pie...

Alternatively, you could meet the world economy, allow house prices to trend in line with international levels & house many people by improving rental conditions.

No matter what you do, property prices will increase, due to world markets and inflation. It is written.

But then how did property prices crash during the great recession after 2008? You are claiming that property prices will continue to rise even though we already know we are in another property bubble of sorts.

Graham

Assetbacked wrote: »

we already know we are in another property bubble of sorts.

we do?

Sarn

Assetbacked wrote: »

But then how did property prices crash during the great recession after 2008? You are claiming that property prices will continue to rise even though we already know we are in another property bubble of sorts.

I wouldn’t agree that we are in another bubble. Prices are high, but I would only anticipate relatively small drops when you take into account the massive pent up demand and urgency to get out of paying extortionate rents, coupled with the (relatively) restricted access to credit.

People are currently buying houses based on 3.5 to 4 times their salary. This contrasts with people obtaining 6-10 times their salary (+income for renting out some of the rooms) as a mortgage and then using the built up “equity” in the first to buy another property. The turning off of the credit tap contributed to the drop. Housing became toxic, while rents were relatively cheap. The pressure on the housing market disappeared which further caused prices to fall.

Assetbacked wrote: »

But then how did property prices crash during the great recession after 2008? You are claiming that property prices will continue to rise even though we already know we are in another property bubble of sorts.

YES

they will drop occassionally, sometimes faltten, but ultimatley they will rise. Are we in a bubble? Or are we just in a trend involving peaks and troughs?

The shocking gains of the pas in Irish property were to do with a number of factors... our past as a colony, the desperation that caused to own property, De Valeras insular economic policy until the fifties. The opening up of our ecomony. Ultimately the dumping of cheap money by European institutions into our market to make a quick buck... So our house prices rose from a very small begining into a range beyond our means, there was never a drop because all of the mittigating factors came together to ensure demand... Unitl it all fell apart in 2007/9... Now we know that prices can drop, just as they do in every other country. But like every other country they wil also rise at a higher rate. Thats where you get a chart with peaks and troughs... Even if we do experience more property price drops, they will rise again, and prices will inevitably increase. They always have and always will. Irish property prices are relatively well positioned on the world scale...

Assetbacked wrote: »

But then how did property prices crash during the great recession after 2008? You are claiming that property prices will continue to rise even though we already know we are in another property bubble of sorts.

Most things and industries are cyclical.

But the general trend is upwards.

Unless of course, its something like an area dependant on one economic activity like mining which suddenly stops.

padz

Interesting discussion, imo the real risk is of potential buyers getting completely turned off the property market,

we all know the the ins and outs of what happened ten+ years ago and the situation today, if you're asking people to commit to 25 years+ mortgage they want to know there's that it's not just another plump and dump, imo we're at a point now where a lot of the fish have been caught in the net so to speak, some people are probably v happy other's prob are already in neg equity even If they only bought 2 yrs ago depending on the area, there's also the older owners who are still recovering from the past ten years, still paying their mortgages

The Banks do not care, if things head down hill they'll just go into consolidation mode as we Saw before arrears penalties, repo process & selling off, they're after people who can make the payments, pass the stress test, deposit etc weather Google decide to downsize they aren't factoring in that, there's also a risk of people leaving ireland due to being locked out of the market & high rents.

If people start leaving ireland,single professionals who can just up and leave, people who aren't tied to a mortgage or family, once that happens and people make that decision to go then we're back to where we we're ten years ago

There was a move to privatise lost of Govt services Globally and often social housing was one of the big ticket items to be privatised, commoditized.
So the same issue has occurred lots of places. So where ever you move to you are likely to have that same issue.
However the work/life balance is different if you can get a job or earn an income outside the high demand (housing) areas, you might be able to escape the rat race.

When I was starting out getting job in Ireland was almost impossible so lots of people left. I'm surprised more don't emigrate now.

Fol20

Assetbacked wrote: »

I'm not saying to take from them what they bought and struggled for, I'm talking about preventing so much wealth getting pumped into hyper-inflated property prices by bringing in measures to greatly reduce the cost of buying homes in Ireland as we are very much a society where home ownership is something people have to aim for and not long-term renting.

Or you change our society where home ownership is not the norm and you create a mature long term rental market. Not everyone can and should own a home.

Fol20 wrote: »

Or you change our society where home ownership is not the norm and you create a mature long term rental market. Not everyone can and should own a home.

That's very idealistic but not in line with current policy or attitudes of Irish people.

Fol20

Assetbacked wrote: »

That's very idealistic but not in line with current policy or attitudes of Irish people.

Your views are very idealistic wanting everyone to get an affordable home when in reality, this will never happen. Peoples expectations of life are very different now compared to our parents. People go on multiple holidays, new cars, gadgets etc while still wanting their forever home. We are a much more modern society now and with this will come with housing situations - similar to many other western countries.

You cant nullify the cost of land, building, margin builders need to achieve and credit availability and make it get cheaper. Standards of properties where it will decrease new builds to a level of affordability you want will never happen. Everyone needs to get a cut of the money from start to finish. If you remove any part of this supply chain, the rest will fall like dominos and no houses are built.

https://www.newstalk.com/news/heres-how-much-it-costs-to-build-a-house-597037

Take a look at a sample above back in 2017. All these prices have gone up substantially then but even then builders only had a margin of circa 10pc which is extremely low for a business to operate on.

The only realistic attitude which is gradually happening is long term rentals.

Browney7

Fol20 wrote: »

The only realistic attitude which is gradually happening is long term rentals.

At what rental price though? €1800 for a two bed fairly bog standard apartment when the equivalent mortgage would be far below this isn't sustainable for long term rental

padz

Saw this the other day, might be of some interest

Fol20

Browney7 wrote: »

At what rental price though? €1800 for a two bed fairly bog standard apartment when the equivalent mortgage would be far below this isn't sustainable for long term rental

How long has it been at 1800. People have very short memories as it was only about 3-5years ago when prices ballooned to what they are today. Something of this nature will take a lot longer to settle than a few years

Fol20 wrote: »

Your views are very idealistic wanting everyone to get an affordable home when in reality, this will never happen. Peoples expectations of life are very different now compared to our parents. People go on multiple holidays, new cars, gadgets etc while still wanting their forever home. We are a much more modern society now and with this will come with housing situations - similar to many other western countries.

You cant nullify the cost of land, building, margin builders need to achieve and credit availability and make it get cheaper. Standards of properties where it will decrease new builds to a level of affordability you want will never happen. Everyone needs to get a cut of the money from start to finish. If you remove any part of this supply chain, the rest will fall like dominos and no houses are built.

https://www.newstalk.com/news/heres-how-much-it-costs-to-build-a-house-597037

Take a look at a sample above back in 2017. All these prices have gone up substantially then but even then builders only had a margin of circa 10pc which is extremely low for a business to operate on.

The only realistic attitude which is gradually happening is long term rentals.

Fair, good point and well made.

padz

Separately I've been looking at San Francisco and their property bubble, literally one Street 1.5m home's next street across people are homeless,

the money that these tech companies bring in seams to screw up the economics of an area it's spoken about a lot By us property market, even when there's an ipo and a company floats on the stock market The locals are expecting a jump in house prices, also huge homeless in San Francisco, people crapping in the street...mind you I did see human feces in Dublin the other month.

as we know our gdp had a huge jump in 2015 I think because of Apple and already fb Google, air b n b, they domicile their money here and gives us a boost when in reality very little has happened, money floating around, could just as easily float somewhere else, something to think about

It's also because the jobs are all concentrated in a very small area in Dublin.

snotboogie

padz wrote: »

Separately I've been looking at San Francisco and their property bubble, literally one Street 1.5m home's next street across people are homeless,

the money that these tech companies bring in seams to screw up the economics of an area it's spoken about a lot By us property market, even when there's an ipo and a company floats on the stock market The locals are expecting a jump in house prices, also huge homeless in San Francisco, people crapping in the street...mind you I did see human feces in Dublin the other month.

as we know our gdp had a huge jump in 2015 I think because of Apple and already fb Google, air b n b, they domicile their money here and gives us a boost when in reality very little has happened, money floating around, could just as easily float somewhere else, something to think about

Austin, Singapore (if you are a local) and Berlin are pretty affordable and stable given their economic power and all three are bigger tech hubs than Dublin.