2021 Irish Property Market chat - *mod warnings post 1*

An anecdotal thing, but surely a large proportion of the pup payment (perhaps largest) is simply being funnelled into property rent, no?

I know of several people, now out of work, receiving pandemic payment and it's in one hand from the government, and out the other hand to landlords. In Dublin anyway.

I fail to see a rationality for how property prices and rental prices are INcreasing during a global pandemic with more people out of work than ever before, and business essentially closed, struggling or altogether wiped out.

It reeks of artificial inflation, in my opinion. Perhaps mixed with some form of desperate speculation?

I'd like to hear other people's thoughts on this

Gradius wrote: »

An anecdotal thing, but surely a large proportion of the pup payment (perhaps largest) is simply being funnelled into property rent, no?

I know of several people, now out of work, receiving pandemic payment and it's in one hand from the government, and out the other hand to landlords. In Dublin anyway.

I fail to see a rationality for how property prices and rental prices are INcreasing during a global pandemic with more people out of work than ever before, and business essentially closed, struggling or altogether wiped out.

It reeks of artificial inflation, in my opinion. Perhaps mixed with some form of desperate speculation?

I'd like to hear other people's thoughts on this

one explanation is colossal reduction in socialising costs, coffees, meals and drinks out, weddings etc... Maybe getting rid of an expense like a car etc...

Graham wrote: »

I expect a large proportion of it is also being funnelled into supermarkets for food and utility companies for heat and light no?

In one hand and out the other to Tesco/Dunnes/ESB/Bord Gais.

Not much evidence of rent increases recently either.

The pup payment is 350 a week I think, so 1400 a month. As I say, I know quite a few people, some with hope of a job if things improve, others where the business is completely kaput. They are paying 800/900/1000 odd a month in rent. The majority of the payment is going to rent.

Of course Tesco and the like are indirectly getting some of it too. But the proportion is easily skewed, heavily, toward rent.

The fact of the matter is that property prices have risen, during a pandemic, and I'd like to hear argument as to how it is NOT simply the case that the government's money is not being used to artificially keep property prices where they are, and actually increasing.

It's like watching a football game between France and Germany, Germany is 20 nil up at half-time, yet bookies are offering the best odds on France to win.

It just doesn't add up. Not only does it not add up, it is completely counterintuitive.

Idbatterim wrote: »

one explanation is colossal reduction in socialising costs, coffees, meals and drinks out, weddings etc... Maybe getting rid of an expense like a car etc...

I know what you mean but, cynically speaking, why should one very specific business class, landlords, be a protected class essentially through government money?

Not only does the struggling cafe lose money, the average client of the cafe is also losing money because their biggest expenditure, rent, hasn't decreased.

It just doesn't add up at all, not if your goal is the protection of a functioning society.

Gradius wrote: »

I'm sure there are parts of the economy that have grown. But I fail to see how the overall outlook isn't disastrous. A walk down a street tells you a lot in terms of commerce. Constant, unrelenting news everyday of how this industry and that industry is going down the toilet, both here and elsewhere...

Yet property prices have steadily grown over the last year, good news or bad?

I understand what you're saying, to which I can only say that people are out of their minds betting (essentially what it is, against increasing odds) that things are great. Now is the time to saddle yourself with the largest debt you'll likely ever take? Really?

What I'm interested in is just how the markets react when these pandemic payments end, which will certainly happen this year. Who's going to prop up the prices then?

Obviously everyone has different opinions and will have different circumstances. If a couple that were saving to buy but were struggling to get a deposit together before covid manage to get a deposit and get on the property ladder they are probably better off even if houses prices fall as they are no longer paying rent.

If you asking do we think there is going to be a economic collapse once PUP payments end it would seem unlikely at present without some-other event occurring.

Ireland was one of the very few countries in the world to grow in GDP terms last year

Graham wrote: »

I'm not sure what you're referring to now.

Rents appear to be dropping while house prices look like they're fairly static.

Just a casual scan around the internet says that both property prices and rental prices have increased over the course of the pandemic. It's not difficult to find.

And even if they were static, how does that make sense either?

Timing belt wrote: »

Have you stopped to ask why every asset class has gained value during the year?

Why is the stock market at all time high's?

Why are bond prices at all times high's?

Why have property prices gone up in nearly every developed country in the past year?

https://www.bis.org/statistics/pp.htm?m=6%7C288%7C640

Oh believe me, I'm very much aware of all that.

Interesting, isn't it?

Gradius wrote: »

Oh believe me, I'm very much aware of all that.

Interesting, isn't it?

Yeah it is as QE is driving a lot of it as it is encouraging investors to take on more risk as they chase yield in different asset classes.

Why invest in bonds when rates are negative?
Why invest in the stock market when P/E ratios are so high?
What asset class is still giving a decent return.... Property.

nurik922 wrote: »

If I buy a new house, does it increase in value over time at the same rate as a similar second hand house? For example, if I choose between a new house for 300k and 4 year old property for 250k and buy the new one, after say 5 years living in that new house, in my view, any potential buyer when selecting between my house which is 5 years old and that second hand property which will be 9 years old then will choose 9 year old one (assuming the same growth rate in price). Am I missing some factors here?

That's deep thinking for this time of night

Assuming both properties were of equal standard and in equal area the second hand house would appreciate in value quicker.

nurik922 wrote: »

Indeed, I just copied pasted from another website where I asked the same question

So over time period that initial difference in price will become zero? That's my guess as well but just surprised with so many people going after new builds which led me to believe that I am missing something in my analysis.

In reality they won't be identical properties and the new builds will probably be better quality and people will also pay a premium for a new build.

HTB makes a big difference in the decision making as well.