2021 Irish Property Market chat - mod warnings post 1

Cyrus · 04-02-2021 02:32PM

schmittel wrote: »

Exactly the same thing by other posters is routinely overlooked. By your logic, nobody here is on the level.

You are changing your tune now.

fliball123 · 04-02-2021 02:37PM

combat14 wrote: »

so how many houses do we need to build over the next decade to fill this massive 2.2 million people demand for houses .......

2.2m / 2 per couple = 1.1m houses / 10 years = 110,000 houses urgently needed to be built every year or we are facing a cathastrope ....

but why is no one saying this then..?

average house build requirement mentionned appears to be 20-30k houses per year

so do we need all these new houses for 2.2 million people in 25-54 year age category or not........?!

I would be looking more at the range of the 15 to 24 year olds 616k in 5 - 10 years time a lot of these will be wanting a house and people have been saying 45k houses are needed a year for the next 5 years. There will be a % of the 2.2 million who are between 25 and 54 who will already have a house already and a % who dont. It kind of puts a stop to the idea that these houses were needed for the additional people coming in to the country via migration.

https://www.irishtimes.com/business/construction/47-000-homes-need-to-be-built-each-year-to-solve-housing-crisis-report-says-1.4329432?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Fconstruction%2F47-000-homes-need-to-be-built-each-year-to-solve-housing-crisis-report-says-1.4329432#:~:text=As%20many%20as%2047%2C000%20houses,which%20was%2021%2C000%20last%20year.

awec · 04-02-2021 02:41PM

Completions up in Q4 but down overall.

Not a surprising outcome.

hometruths · 04-02-2021 02:43PM

Cyrus wrote: »

You are changing your tune now.

Sorry, I don't get you? What tune am I changing?

Cyrus · 04-02-2021 02:47PM

schmittel wrote: »

Sorry, I don't get you? What tune am I changing?

I'm sick of hearing about people making stuff up and spinning data - it's utter nonsense. You are wrong about this.

Exactly the same thing by other posters is routinely overlooked. By your logic, nobody here is on the level.

First you say it doesnt happen then you say others are doing it and its overlooked, which is it.

PropQueries · 04-02-2021 02:53PM

fliball123 wrote: »

I would be looking more at the range of the 15 to 24 year olds 616k in 5 - 10 years time a lot of these will be wanting a house and people have been saying 45k houses are needed a year for the next 5 years. There will be a % of the 2.2 million who are between 25 and 54 who will already have a house already and a % who dont. It kind of puts a stop to the idea that these houses were needed for the additional people coming in to the country via migration.

https://www.irishtimes.com/business/construction/47-000-homes-need-to-be-built-each-year-to-solve-housing-crisis-report-says-1.4329432?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Fconstruction%2F47-000-homes-need-to-be-built-each-year-to-solve-housing-crisis-report-says-1.4329432#:~:text=As%20many%20as%2047%2C000%20houses,which%20was%2021%2C000%20last%20year.

That article is on the 13th August 2020.

On the 19th August 2020, the exact same opinion writer changed tune and stated: "Claim that 47,000 new homes needed a year isn’t credible"

Link to his follow up article one week later here: https://www.irishtimes.com/business/economy/claim-that-47-000-new-homes-needed-a-year-isn-t-credible-1.4333525

hometruths · 04-02-2021 02:55PM

Cyrus wrote: »

First you say it doesnt happen then you say others are doing it and its overlooked, which is it.

I hve been consistent on this. I don't believe Props spins data any more than say Marius or Timing Belt or Bass Reeves. Sometimes I think he's guilty of confirmation bias and sees more in a headline than is actually there. We all do it, I do it, as do the other posters.

In replying to your post, I was saying that if you are going to accuse Props of spinning data, and call him out on it, then you should hold other posters to the same standard. If you don't you're not on the level.

Eg Bass Reeves saying property prices rose by 6% last year. Or Timing Belt saying that the data behind the claim saying 7/10 people in Ireland live in under occupied houses is explained by old people in rural areas.

I think there is a huge amount of hypocrisy but I don't believe anybody intentionally spins data.

DataDude · 04-02-2021 02:57PM

Bass Reeves wrote: »

Data yes you are correct. However the fundamental s were different and the assumptions made by estate agents was against a lot of other opinions out there at the time.

SSIA's were done mainly by savers. Myself and my wife had one each and only that many as our kids were not eighteen. I knew a lad that opened 4-5 putting the minimum amount in 2-3 of the ones he opened. We maxed out ours as we only had two. The estate agents assumptions was based on a biased assumption. Our toiseach virtually told people who foresaw the collapse to go away and commit suscide. There was a lot of time economists that predicted the collapse.

But there was other fudmentals. We were building 40k houses a year, banks were funding development to be complete before a housev as build. There was 100 k houses completed and in various stages of completion as the crash happened. Even with all that it was 2010-2012 where the majority of the price fall happened. Builders sat on supply that long and banks financed them.

We had a huge public finances issues as we we had increased public spending and services substantially. This was funded mainly by stamp duty and property transactions as well as vat and income taxes from the property sector. You could equate pandemic borrowings to this but this borrowings should reduce as we vaccinate population.

Banks just didn't lend to the Irish sectors. They were financing property speculation accross Europe. You were nobody unless you had 2-3 houses. Tommy the taxi drive his house in Dublin, had bought one in Wexford and was buying one in Fuengeirola.

Not disagreeing the fundamentals aren't different.

Just more observing that both sides on here tend to come in, dismiss the others as wrong and "here are the real facts" with remarkable levels of certainty. The reality is (I think!), that if you own house or make a living selling houses you're probably a bull, if you want to buy a house you're probably a bear. Each will find and interpret the data that suits their perspective (consciously or unconsciously). I'm not sure there really are unbiased observers, and I certainly doubt many are on this forum. It would probably be a more useful place if everyone had to declare vested interests!

I doubt I'll be on here long enough to confirm my thesis, but I suspect the bulls will continue to bulls throughout the cycle, right up until the point of the next collapse. Things will recover, the bulls will again find stats to back up their point and explain with remarkable clarity how they can now see why they were wrong the last time but this time is different. Exactly the same on the bears!

Those who are claiming credit for being "right" at the moment are right by fluke of timing and will be wrong when the time comes. They won't successfully interpret the data and dramatically change their predictions ahead of the next change in direction.

I understand all this is unavoidable, and what else can you expect from an internet forum, but I guess it just struck me when someone genuinely came here looking for advice earlier.

It's also unfortunate (with any debate) when only one side gets any air time in the media. Sadly anyone who's going to be bothered writing a 2 page article for the Irish Times or Daft on house prices is almost certainly going to have a personal interest in higher prices.

Just as aside: On your point many economists calling the downturn last time (I can't comment on how true that is and in particular how "mainstream" it was back then), I think there have been a fair few over the last year including those in the banks saying the same this time? I do remember central estimates of 20% drops over next 1-3 years etc.

Also on point of SSIA's - not sure what point you're making there. Are you not saying this was a temporary windfall for many people, which supported a very mini revival/extending of the bubble in early 07? Isn't this almost a complete parallel to unexpected additional (but unsustainable) savings from the lockdowns which is being credited to a sharp uptick in Q4 2020 following a very weak year?

Bass Reeves · 04-02-2021 03:08PM

Data
The point I was making on SSIA's was that most people doing them were savers. Savers do not rush out and spend straight away. Opinion at the time that it would all go into property was an incorrect assumption to make.

Pandemic savings are accross the board. They are savings by both spenders and savers, therefore a higher percentage will get spend where is anyone's guess.

Hubertj · 04-02-2021 03:13PM

So are prices going to fall or rise or stay the same?

DataDude · 04-02-2021 03:15PM

Hubertj wrote: »

So are prices going to fall or rise or stay the same?

Stay the exact same - 100% sure. I have all the data but can't bring myself to type it out.

fliball123 · 04-02-2021 03:15PM

PropQueries wrote: »

That article is on the 13th August 2020.

On the 19th August 2020, the exact same opinion writer changed tune and stated: "Claim that 47,000 new homes needed a year isn’t credible"

Link to his follow up article one week later here: https://www.irishtimes.com/business/economy/claim-that-47-000-new-homes-needed-a-year-isn-t-credible-1.4333525

Maybe, maybe not we dont know. What we do know is the figures of people here aged between 25 and 54 is 2.2million we dont know how many have a house. We know the figure of 616k of 15 to 24 years olds I dont think it would be too far of a stretch to say that the majority of these will need a house in the future. So that is where the current estimates should be coming from, you have you 3 people per house rule that you like to use that would suggest in the next 10 years at at least 200k (616 / 3 and rounded down) houses need to be built. So 20K a year would be what I would estimate is needed

Now thats assuming no one in the 25 to 54 need a new house (which I highly doubt)
We are at zero when it comes to nett migration over the 10 years (which I highly doubt)

DataDude · 04-02-2021 03:19PM

fliball123 wrote: »

Maybe, maybe not we dont know. What we do know is the figures of people here aged between 25 and 54 is 2.2million we dont know how many have a house. We know the figure of 616k of 15 to 24 years olds I dont think it would be too far of a stretch to say that the majority of these will need a house in the future. So that is where the current estimates should be coming from, you have you 3 people per house rule that you like to use that would suggest in the next 10 years at at least 200k (616 / 3 and rounded down) houses need to be built. So 20K a year would be what I would estimate is needed

Now thats assuming no one in the 25 to 54 need a new house (which I highly doubt)
We are at zero when it comes to nett migration over the 10 years (which I highly doubt)

I may be misinterpreting, but are you not also assuming that nobody who owns a house dies?

Hubertj · 04-02-2021 03:20PM

DataDude wrote: »

Stay the exact same - 100% sure. I have all the data but can't bring myself to type it out.

I’ll take your word for it!

Marius34 · 04-02-2021 03:21PM

fliball123 wrote: »

I would be looking more at the range of the 15 to 24 year olds 616k in 5 - 10 years time a lot of these will be wanting a house and people have been saying 45k houses are needed a year for the next 5 years. There will be a % of the 2.2 million who are between 25 and 54 who will already have a house already and a % who dont. It kind of puts a stop to the idea that these houses were needed for the additional people coming in to the country via migration.

https://www.irishtimes.com/business/construction/47-000-homes-need-to-be-built-each-year-to-solve-housing-crisis-report-says-1.4329432?mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Fconstruction%2F47-000-homes-need-to-be-built-each-year-to-solve-housing-crisis-report-says-1.4329432#:~:text=As%20many%20as%2047%2C000%20houses,which%20was%2021%2C000%20last%20year.

45K looks to high to me, haven't seen such reports. Most reports points in the range from somewhere around 26K to 40K.

fliball123 · 04-02-2021 03:23PM

DataDude wrote: »

I may be misinterpreting, but are you not also assuming that nobody who owns a house dies?

There are more people up and coming year on year than dying even last year with covid we had more births than deaths this has been the case for 100 years. So yes I am going on the assuption that no one dies as well.

We have to have a starting point.

So 3 assumptions

No one owning a house dying - highly unlikely
Nett migration of zero - highly unlikey
24 to 54 years olds currently all have house - highly unlikely

20k a year is going on these 3 assumptions

fliball123 · 04-02-2021 03:25PM

Marius34 wrote: »

45K looks to high to me, haven't seen such reports. Most reports points in the range from somewhere around 26K to 40K.

Yeah I was just pointing out what others where putting as a projection. The honest answer is going on the current age demographics in the country we need about 20k a year but it assumes nett migration of zero over the next 10 years and that all 25 to 54 years already have a house ..both of which are unlikely but you can only go on data that you have.

JimmyVik · 04-02-2021 03:27PM

DataDude wrote: »

Stay the exact same - 100% sure. I have all the data but can't bring myself to type it out.

Im with you. Clear as day in my data. Too much to type out, and pe3ople wouldnt understand it anyway. Far too complex for them.
I always find it amusing the effort people got through top get links to support a position they have, even when they know that its just rubbish at the end of the day.

Marius34 · 04-02-2021 03:34PM

fliball123 wrote: »

Yeah I was just pointing out what others where putting as a projection. The honest answer is going on the current age demographics in the country we need about 20k a year but it assumes nett migration of zero over the next 10 years and that all 25 to 54 years already have a house ..both of which are unlikely but you can only go on data that you have.

Understood, actually most reports already include age component. Definitely Central Bank does, so if we take central bank projections, age impact is calculated for us.

DataDude · 04-02-2021 03:35PM

fliball123 wrote: »

There are more people up and coming year on year than dying even last year with covid we had more births than deaths this has been the case for 100 years. So yes I am going on the assuption that no one dies as well.

We have to have a starting point.

So 3 assumptions

No one owning a house dying - highly unlikely
Nett migration of zero - highly unlikey
24 to 54 years olds currently all have house - highly unlikely

20k a year is going on these 3 assumptions

I might be very confused here but I don't follow. Take out 24 to 54 for a second (big simplification but bare with me). Surely it is too simplistic to say 600k people between 18-24 will buy house in next 10 years = 200k houses needed = 20k per year?

Is the figure of interest not ((number of people per annum coming into house buying age) - (number of people dying))/3. So if we ignore 25-54 it would be more like

(60k per year becoming house buying age) - (35k deaths) = 25k per annum growth in "potential home owners"/3 = 8.3k?

I know the above is ridiculously simplistic but just using to help myself understand the point you're making.

fliball123 · 04-02-2021 03:50PM

DataDude wrote: »

I might be very confused here but I don't follow. Take out 24 to 54 for a second (big simplification but bare with me). Surely it is too simplistic to say 600k people between 18-24 will buy house in next 10 years = 200k houses needed = 20k per year?

Is the figure of interest not ((number of people per annum coming into house buying age) - (number of people dying))/3. So if we ignore 25-54 it would be more like

(60k per year becoming house buying age) - (35k deaths) = 25k per annum growth in "potential home owners per annum"/3 = 8.3k?

I know the above is ridiculously simplistic but just using to help myself understand the point you're making.

See this is the thing you have to make assumptions as the data isnt there I mean if you take out the 24 to 54 year olds out that is 2.2 million a lot of which do not have a house. Also another assumption is the year at which a person is at house buying age that has so many caveats it would be very hard to calculate it. Not mention I take it the 35k deaths you have down are for 2020 would that be skewed by Covid related deaths?

I think I will leave it to the experts but even these make assumptions when getting their figures

Here are a few not one is saying under 20k can anyone find one that has under 20k??

https://www.propertyindustry.ie/Sectors/PII/PII.nsf/vPages/Publications~estimating-irelands-long-run-housing-demand---april-2019-05-04-2019/$file/Estimating+Ireland%E2%80%99s+long-run+housing+demand+-+April+2019+FINAL.pdf

https://www.rte.ie/news/2020/0826/1161322-home-building-market/

https://www.irishmirror.ie/news/irish-news/around-90-new-homes-day-21065718

Graham · 04-02-2021 03:53PM

Average age of a first time buyer is 34.

fliball123 · 04-02-2021 03:55PM

Graham wrote: »

Average age of a first time buyer is 34.

cool so a good % of that 2.2 Million would have to be added on thanks for that Graham

DataDude · 04-02-2021 03:55PM

fliball123 wrote: »

See this is the thing you have to make assumptions as the data isnt there I mean if you take out the 24 to 54 year olds out that is 2.2 million a lot of which do not have a house. Also another assumption is the year at which a person is at house buying age that has so many caveats it would be very hard to calculate it.

I think I will leave it to the experts but even these make assumptions when getting their figures

Here are a few not one is saying under 20k

propertyindustry.ie/Sectors/PII/PII.nsf/vPages/Publications~estimating-irelands-long-run-housing-demand---april-2019-05-04-2019/$file/Estimating+Ireland’s+long-run+housing+demand+-+April+2019+FINAL.pdf

https://www.propertyindustry.ie/Sectors/PII/PII.nsf/vPages/Publications~estimating-irelands-long-run-housing-demand---april-2019-05-04-2019/$file/Estimating+Ireland%E2%80%99s+long-run+housing+demand+-+April+2019+FINAL.pdf

https://www.rte.ie/news/2020/0826/1161322-home-building-market/

https://www.irishmirror.ie/news/irish-news/around-90-new-homes-day-21065718

I don't disagree with the estimates, but I do think it is heavily based on migration. Also on your point re 25-54 year olds buying, true some of the won't be homeowners and will buy but this implicitly means people in younger age also won't buy unless we assume a shift in home ownership rates (which on my understanding is moving slightly towards few homes needed as people are living at home for longer). The demographics bit is likely to be incredibly slow moving and easy to predict. The big unknown in any calculation is net migration.

Ignoring the slow moving demographic shifts for a minute
Population growth April 2018 - April 2019 - +65k (34k migration, 30k natural increase)
Population growth April 2019 - April 2020 - +56k (29k migration, 27k natural increase)

Based very loosely on the above I'd say our natural need for new homes is probably c. 10-15k per annum and need due to migration projected to be for another c.10-15k hence general predictions being around 20-30k per annum total.

DataDude · 04-02-2021 04:01PM

fliball123 wrote: »

cool so a good % of that 2.2 Million would have to be added on thanks for that Graham

Incorrect. It's not additive in that way.

fliball123 · 04-02-2021 04:04PM

DataDude wrote: »

I don't disagree with the estimates, but I do think it is heavily based on migration. Also on your point re 25-54 year olds buying, true some of the won't be homeowners and will buy but this implicitly means people in younger age also won't buy unless we assume a shift in home ownership rates (which on my understanding is moving slightly towards few homes needed as people are living at home for longer). The demographics bit is likely to be incredibly slow moving and easy to predict. The big unknown in any calculation is net migration.

Ignoring the slow moving demographic shifts for a minute
Population growth in 2019 - +65k (34k migration, 30k natural increase)
Population growth in 2020 - +56k (29k migration, 27k natural increase)

Based very loosely on the above I'd say our natural need for new homes is probably c. 10-15k per annum and need due to migration projected to be for another c.10-15k hence general predictions being around 20-30k per annum total.

Thats also assuming there was not an existing demand. One of three links I provided (the first one) state that demand upped in the years from 2013 onwards. I cant stand over that but if you look at the first link I put up its one of their key findings so maybe there are a lot more people in that 25 to 54 demographic who have not got a house yet.

PropQueries · 04-02-2021 04:07PM

DataDude wrote: »

I might be very confused here but I don't follow. Take out 24 to 54 for a second (big simplification but bare with me). Surely it is too simplistic to say 600k people between 18-24 will buy house in next 10 years = 200k houses needed = 20k per year?

Is the figure of interest not ((number of people per annum coming into house buying age) - (number of people dying))/3. So if we ignore 25-54 it would be more like

(60k per year becoming house buying age) - (35k deaths) = 25k per annum growth in "potential home owners"/3 = 8.3k?

I know the above is ridiculously simplistic but just using to help myself understand the point you're making.

Why did you divide by 3 at the end?

But, keep at it. It looks like a person would need several doctorates in statistics to make sense of all the data. But, my rule of thumb is that if something doesn't make sense, it most likely isn't, no matter what the data is currently telling us.

For example, it took us 20 years to get to today's understanding by the former governor of the central bank, where he looked at the data and came to the conclusion that:

"Rankings that put Ireland as the most prosperous state in the European Union are wrong, former Central Bank governor Patrick Honohan says. Taking issue with headline economic data, he says the State’s position is more accurately somewhere between 8th and 12th among the EU-27."

Basically stating the obvious that every single non-statistics person in Ireland has been assuming for the past 20 years

Link to Irish Times article here: https://www.irishtimes.com/business/economy/irish-economy-ranks-only-mid-table-in-eu-honohan-1.4476081

Bass Reeves · 04-02-2021 04:07PM

DataDude wrote: »

I might be very confused here but I don't follow. Take out 24 to 54 for a second (big simplification but bare with me). Surely it is too simplistic to say 600k people between 18-24 will buy house in next 10 years = 200k houses needed = 20k per year?

Is the figure of interest not ((number of people per annum coming into house buying age) - (number of people dying))/3. So if we ignore 25-54 it would be more like

(60k per year becoming house buying age) - (35k deaths) = 25k per annum growth in "potential home owners"/3 = 8.3k?

I know the above is ridiculously simplistic but just using to help myself understand the point you're making.

There is about 60-65k people in any yearly age group between 15 and 35 age group. The death rate is about 28-29k people per year. Net migration is about 33k/ year.

Assuming that these trends continue and the only real variable is migration it means we need to provide housing for 65-70k people per year. Assuming a house to two people we need 35k units/ year. At 3 we need 23k units / year. Historicall people only bought houses when they formed relationships or were around the 40 age group. Nowadays people tend to want there own space earlier and form small household units.

Minimum I see is 30k units per year

DataDude · 04-02-2021 04:08PM

fliball123 wrote: »

Thats also assuming there was not an existing demand. One of two of the links provided state that demand upped in the years from 2013 onwards. I cant stand over that but if you look at the first link I put up its one of their key findings so maybe there are a lot more people in that 25 to 54 demographic who have not got a house yet.

I'm sure there is pent up demand. And everyone would like what you are implying to happen - i.e. for there to be a fundamental shift in our society which sees increasing numbers of 18-35 year old's getting out of their family home and buying a house sooner and thus leading to a greater demand for housing from that demographic, not due to growth in their absolute numbers but due to growth in the percentage of those people buying their own homes...Brave call

https://publicpolicy.ie/papers/housing-in-ireland-changing-trends-in-headship-rates-and-tenure-by-age-group/#:~:text=This%20decline%20in%20home%20ownership,less%20than%2061%25%20in%202016.

DataDude · 04-02-2021 04:11PM

Bass Reeves wrote: »

There is about 60-65k people in any yearly age group between 15 and 35 age group. The death rate is about 28-29k people per year. Net migration is about 33k/ year.

Assuming that these trends continue and the only real variable is migration it means we need to provide housing for 65-70k people per year. Assuming a house to two people we need 35k units/ year. At 3 we need 23k units / year. Historicall people only bought houses when they formed relationships or were around the 40 age group. Nowadays people tend to want there own space earlier and form small household units.

Minimum I see is 30k units per year

Completely agree with this by the way. Not denying that we need to build many many more houses (as others have suggested before). Just it's a fact that ~50% of best estimate expected growth is coming from migration (which again I agree will continue into the future). I was just disproving a suggestion that we need 20K+ for demographics alone and any migration goes on top of that.

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

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2021 Irish Property Market chat - mod warnings post 1