Irish Property Market chat II - read mod note post #1 before posting

MacronvFrugals · 20-05-2021 06:23PM

It seems renters are rapidly becoming discontent....

https://twitter.com/GerardBrady100/status/1395078923340365828?s=20

derekgine3 · 20-05-2021 06:39PM

From general chit chat IRL, it seems people have this strange notion that prices will only keep going up forever and they need to purchase now before it's too late (sounds familiar).

Can we have some sort of rationale agreement that this isn't the case and prices will very likely dip in the short term and maybe even crash within 5-10 years.

fliball123 · 20-05-2021 06:45PM

derekgine3 wrote: »

From general chit chat IRL, it seems people have this strange notion that prices will only keep going up forever and they need to purchase now before it's too late (sounds familiar).

Can we have some sort of rationale agreement that this isn't the case and prices will very likely dip in the short term and maybe even crash within 5-10 years.

You have proof of this of course? So no doubt with your your power to see into the future your already a very wealthy person as anyone who could predict what your trying to spin would be very very wealthy in 5-10 years time. Any chance of the lotto numbers for Saturday

derekgine3 · 20-05-2021 07:00PM

fliball123 wrote: »

You have proof of this of course? So no doubt with your your power to see into the future your already a very wealthy person as anyone who could predict what your trying to spin would be very very wealthy in 5-10 years time. Any chance of the lotto numbers for Saturday

I never said i had proof, what a lame response and cliche question to chalk it off.

To expect property prices to continually rise for what would be 15-20 years if no dips occurred in the midst of a global pandemic of which we are yet to see the real economic effects of covid (thanks to government support payments) is completely asinine.

Prices will drop within the next 5 years, it would be a few % or a huge crash. A correction will be due once the true economic impact of covid is felt when the government sedation is removed from the equation.

Marius34 · 20-05-2021 07:02PM

derekgine3 wrote: »

From general chit chat IRL, it seems people have this strange notion that prices will only keep going up forever and they need to purchase now before it's too late (sounds familiar).

Can we have some sort of rationale agreement that this isn't the case and prices will very likely dip in the short term and maybe even crash within 5-10 years.

You looking for rational agreement, with irrational comment.

am_zarathustra · 20-05-2021 07:08PM

Literally neoliberal capitalism means prices will rise, with occasional blips. It's not a coincidence rich people by properties and land.

growleaves · 20-05-2021 07:09PM

derekgine3 wrote: »

From general chit chat IRL, it seems people have this strange notion that prices will only keep going up forever and they need to purchase now before it's too late (sounds familiar).

Can we have some sort of rationale agreement that this isn't the case and prices will very likely dip in the short term and maybe even crash within 5-10 years.

I wonder has this monetary system that is in place since 2009, based on asset inflation, altered normal boom/bust dynamics though.

There has also been a 13 year bull market in stocks. Bull runs in the stock market typically last around seven years (figure quoted from memory).

I suspect prices can go higher for longer than anyone is expecting. Especially since physical assets are seen as a hedge against currency collapse.

derekgine3 · 20-05-2021 07:12PM

Marius34 wrote: »

You looking for rational agreement, with irrational comment.

So it's irrational to predict prices will not keeping rising for the next 10 years?

Of course prices will fall within the next decade, we have record unemployment and haven't even seen Government supports remove yet and don't forget the tax payer will be footing the covid bill.

Marius34 · 20-05-2021 07:29PM

derekgine3 wrote: »

So it's irrational to predict prices will not keeping rising for the next 10 years?

Of course prices will fall within the next decade, we have record unemployment and haven't even seen Government supports remove yet and don't forget the tax payer will be footing the covid bill.

There is no such notion here for the start:
"chit chat IRL, it seems people have this strange notion that prices will only keep going up forever"
but than you come up telling what will happen instead.

fliball123 · 20-05-2021 07:33PM

derekgine3 wrote: »

I never said i had proof, what a lame response and cliche question to chalk it off.

To expect property prices to continually rise for what would be 15-20 years if no dips occurred in the midst of a global pandemic of which we are yet to see the real economic effects of covid (thanks to government support payments) is completely asinine.

Prices will drop within the next 5 years, it would be a few % or a huge crash. A correction will be due once the true economic impact of covid is felt when the government sedation is removed from the equation.

The problem with you thesis is people have been saying what your saying for the last 5/6 years. At some stage you might be right but that could be 10/20 years from now or 6 months from now. The one thing that is certain about property prices is no one knows how the market will play out. Case in point 2020/2021 the worst pandemic to hit the globe and prices have shot up. Very few if any seen that coming.

enricoh · 20-05-2021 07:40PM

fliball123 wrote: »

The problem with you thesis is people have been saying what your saying for the last 5/6 years. At some stage you might be right but that could be 10/20 years from now or 6 months from now. The one thing that is certain about property prices is no one knows how the market will play out. Case in point 2020/2021 the worst pandemic to hit the globe and prices have shot up. Very few if any seen that coming.

True re 2021 prices, but if we didn't have government money buying + renting such huge numbers of houses surely prices would have fallen. They literally are the market these days!

Post economy corona they won't have the money to spend as much anymore imo especially with corporation tax getting a hit.

Marius34 · 20-05-2021 08:04PM

enricoh wrote: »

True re 2021 prices, but if we didn't have government money buying + renting such huge numbers of houses surely prices would have fallen. They literally are the market these days!

Post economy corona they won't have the money to spend as much anymore imo especially with corporation tax getting a hit.

I don't think they will decrease spending on housing by any significant numbers.

fliball123 · 20-05-2021 08:05PM

enricoh wrote: »

True re 2021 prices, but if we didn't have government money buying + renting such huge numbers of houses surely prices would have fallen. They literally are the market these days!

Post economy corona they won't have the money to spend as much anymore imo especially with corporation tax getting a hit.

I flagged back in late 2019 that governments participation in buying and their rental schemes along with the paradigm change of Ireland property no longer being local and being an international market where the guaranteed rental scheme would put most stocks/shares to shame with regard to a guaranteed ROI and all throughout 2020 I was ridiculed saying prices would not be dropping and would stay fairly consistent. All indicator point to an upward trajectory with regards to prices how long that remains the case is anyone's guess but once demand > supply the prices are not going to drop. The big unknown is Sinn Fein they will be in power in the a few years I reckon a lot will depend on how full of sh1t they are when it comes to fixing the housing problem.

PropQueries · 20-05-2021 08:09PM

Some interesting comments from the housing minister today on AirBnB etc.:

“Under the new plans a property would not be allowed to advertise on the platform without the requisite planning permission.”

“He said that an Airbnb property which is occupied for three months during the summer season can make “significantly more money than a property rented out for 12 months. However, by letting properties on a seasonal basis, large amounts of homes across the country are lying vacant for the vast majority of the year.”

“During a time when we’re facing a critical lack of supply of housing, we can’t afford to have perfectly good homes lying empty for over 50 per cent of the year. “While tourists might want to book a holiday home for a two-week break during the summer, local families are left struggling to find a home at a price they can afford.”

Link to article in Irish Times today: https://www.irishtimes.com/news/politics/minister-says-time-is-right-to-act-on-airbnb-1.4570720

Bass Reeves · 20-05-2021 08:31PM

derekgine3 wrote: »

From general chit chat IRL, it seems people have this strange notion that prices will only keep going up forever and they need to purchase now before it's too late (sounds familiar).

Can we have some sort of rationale agreement that this isn't the case and prices will very likely dip in the short term and maybe even crash within 5-10 years.

The problem with this assumption is for how long do you rent. At present rental costs are higher than mortgage costs. They can exceed mortgage costs by 7-10k/year. If houses crash in 2026 will they revert to 2012-2014-2018 or 2021 prices. If they do will you be able to access finance to benefit from that crash. Property prices seldom crash in isolation. Usually there are other financial problems as well. Who benefitted from the 2008-2014 crash. By the way it was as much a credit crisis as a property crash.

It was not just property. The price of cars dived faster and earlier. In early to mid 2009 car dealerships were awash with second hand cars that they refused to discount. A three year old Avensis was costing 15-16k by August the same car could be bought at auction for sub 10k

Maybe some here are right and there is a massive load of houses to come on the market over the next 6-12 month's. If there is where will the floor be. But maybe it will be 18-24 months or 30-40 months time. Will it be a 10%,20%,30% or 40%+drop.

Timing belt · 20-05-2021 09:11PM

enricoh wrote: »

True re 2021 prices, but if we didn't have government money buying + renting such huge numbers of houses surely prices would have fallen. They literally are the market these days!

Post economy corona they won't have the money to spend as much anymore imo especially with corporation tax getting a hit.

The government won’t cut back on spending on housing the political fall out of homelessness is an optic they will avoid at all costs. Much more likely to see new taxes or increase in existing taxes.

The only thing that will cause house prices to drop is when supply is greater than demand.

Whether that is caused by all the uninhabited properties that hitting the market at once. ( Which seems highly unlikely).

Or whether it is a drop in rent to a situation where it is cheaper to rent than buy (yet again unlikely to happen)

Or we see people pack their bags and emigrate ( more likely to occur but where will the go if things are as bad as you suggest...remember Ireland is not the only country to borrow billions.

Or we see low immigration into the country that would reduce demand for housing (this is a possibility but I think a lot of Irish have returned during Covid that will offset this)

The only thing I see as a possibility of prices dropping significantly is if we build more or if the government started building large scale council houses. That is just my thoughts on the matter and I think for the next few years we will continue to see more funds enter the market to chase yield...this may lead to lower rents as they have capacity to lower yields and still get a better return than other asset classes but they wouldn’t do that until they have to when supply to rent increase... but remember that as the rent supply increases it leaves less property for buyers which will support the high prices.

Marius34 · 20-05-2021 09:28PM

Timing belt wrote: »

The government won’t cut back on spending on housing the political fall out of homelessness is an optic they will avoid at all costs. Much more likely to see new taxes or increase in existing taxes.

The only thing that will cause house prices to drop is when supply is greater than demand.

Whether that is caused by all the uninhabited properties that hitting the market at once. ( Which seems highly unlikely).

Or whether it is a drop in rent to a situation where it is cheaper to rent than buy (yet again unlikely to happen)

Or we see people pack their bags and emigrate ( more likely to occur but where will the go if things are as bad as you suggest...remember Ireland is not the only country to borrow billions.

Or we see low immigration into the country that would reduce demand for housing (this is a possibility but I think a lot of Irish have returned during Covid that will offset this)

The only thing I see as a possibility of prices dropping significantly is if we build more or if the government started building large scale council houses. That is just my thoughts on the matter and I think for the next few years we will continue to see more funds enter the market to chase yield...this may lead to lower rents as they have capacity to lower yields and still get a better return than other asset classes but they wouldn’t do that until they have to when supply to rent increase... but remember that as the rent supply increases it leaves less property for buyers which will support the high prices.

In short, I think there are 2 scenarios why property price could fall below 2020 levels.
1) Very significant increase in residential construction
2) Economic crisis, with very high unemployment (actual, not PUP)

I mentioned before, personally I don't think we will ever return to 2020 prices, because I don't think we are heading to any of those 2 scenarios in near term.

cnocbui · 20-05-2021 09:30PM

PropQueries wrote: »

Some interesting comments from the housing minister today on AirBnB etc.:

“Under the new plans a property would not be allowed to advertise on the platform without the requisite planning permission.”

“He said that an Airbnb property which is occupied for three months during the summer season can make “significantly more money than a property rented out for 12 months. However, by letting properties on a seasonal basis, large amounts of homes across the country are lying vacant for the vast majority of the year.”

“During a time when we’re facing a critical lack of supply of housing, we can’t afford to have perfectly good homes lying empty for over 50 per cent of the year. “While tourists might want to book a holiday home for a two-week break during the summer, local families are left struggling to find a home at a price they can afford.”

Link to article in Irish Times today: https://www.irishtimes.com/news/politics/minister-says-time-is-right-to-act-on-airbnb-1.4570720

Put enough into a brown envelope, and you can get an Irish minister to say and do almost anything, no matter how stupid.

wassie · 20-05-2021 09:32PM

derekgine3 wrote: »

So it's irrational to predict prices will not keeping rising for the next 10 years?

Of course prices will fall within the next decade, we have record unemployment and haven't even seen Government supports remove yet and don't forget the tax payer will be footing the covid bill.

In taking a long term horizon of 10 years, I would suggest that if Ireland experiences sustained positive population growth driven primarily by immigration, then yes its conceivable that house prices over the long term increase.

Timing belt · 20-05-2021 09:45PM

Marius34 wrote: »

In short, I think there are 2 scenarios why property price could fall below 2020 levels.
1) Very significant increase in residential construction
2) Economic crisis, with very high unemployment (actual, not PUP)

I mentioned before, personally I don't think we will ever return to 2020 prices, because I don't think we are heading to any of those 2 scenarios in near term.

I don’t think an economic crisis would cause a massive drop in prices unless we saw emigration.. even if someone ends up unemployed and unable to pay their mortgage they won’t be kicked out of the house so we wouldn’t see a fire sale that would crash the housing market. The only way I would see a fire sale is if enough people emigrated and sold their house.

Even with the construction of new builds we always look at no of units built but are these the right type in the right area...probably not as a lot of the units are flats for the rental market or houses in commuter towns whilst investors and the council sit on massive land banks and do nothing with them. Until we start using these assets there will continue to be a shortage. If the councils use this land for social/affordable housing then it would free up rentals and reduce the HAP bill.

Marius34 · 20-05-2021 09:52PM

Timing belt wrote: »

I don’t think an economic crisis would cause a massive drop in prices unless we saw emigration.. even if someone ends up unemployed and unable to pay their mortgage they won’t be kicked out of the house so we wouldn’t see a fire sale that would crash the housing market. The only way I would see a fire sale is if enough people emigrated and sold their house.

Even with the construction of new builds we always look at no of units built but are these the right type in the right area...probably not as a lot of the units are flats for the rental market or houses in commuter towns whilst investors and the council sit on massive land banks and do nothing with them. Until we start using these assets there will continue to be a shortage. If the councils use this land for social/affordable housing then it would free up rentals and reduce the HAP bill.

The reason why I say high unemployment would possibly result in price drop, is due to decrease in real demands, including higher emigration, and lower immigration.

PropQueries · 20-05-2021 10:50PM

Timing belt wrote: »

I don’t think an economic crisis would cause a massive drop in prices unless we saw emigration.. even if someone ends up unemployed and unable to pay their mortgage they won’t be kicked out of the house so we wouldn’t see a fire sale that would crash the housing market. The only way I would see a fire sale is if enough people emigrated and sold their house.

Even with the construction of new builds we always look at no of units built but are these the right type in the right area...probably not as a lot of the units are flats for the rental market or houses in commuter towns whilst investors and the council sit on massive land banks and do nothing with them. Until we start using these assets there will continue to be a shortage. If the councils use this land for social/affordable housing then it would free up rentals and reduce the HAP bill.

I think you’re forgetting that we’re not like most other EU countries in that we really don’t have a domestic market and are completely reliant on continued FDI and immigration to support our housing market.

Both are under significant threat at the moment. FDI from the obvious and our future immigration from initiatives like the Three Seas Initiative in Eastern Europe.

According to Bloomberg:

“The most important geopolitical project you’ve never heard of is called the Three Seas Initiative. It’s a joint endeavor by 12 eastern members of the European Union to update the physical and digital links between the Baltic, Adriatic and Black Seas.”

It’s near enough their equivalent of Biden’s infrastructure plan in the states and that’s where the future of Europe is heading IMO

We had 30 years of luck. We blew it IMO

Link to article on Bloomberg here and well worth a read: https://www.bloomberg.com/opinion/articles/2021-05-19/europe-can-fend-off-china-and-russia-via-three-seas-initiative

Timing belt · 20-05-2021 11:08PM

PropQueries wrote: »

I think you’re forgetting that we’re not like most other EU countries in that we really don’t have a domestic market and are completely reliant on continued FDI and immigration to support our housing market.

Both are under significant threat at the moment. FDI from the obvious and our future immigration from initiatives like the Three Seas Initiative in Eastern Europe.

According to Bloomberg:

“The most important geopolitical project you’ve never heard of is called the Three Seas Initiative. It’s a joint endeavor by 12 eastern members of the European Union to update the physical and digital links between the Baltic, Adriatic and Black Seas.”

It’s near enough their equivalent of Biden’s infrastructure plan in the states and that’s where the future of Europe is heading IMO

We had 30 years of luck. We blew it IMO

Link to article on Bloomberg here and well worth a read: https://www.bloomberg.com/opinion/articles/2021-05-19/europe-can-fend-off-china-and-russia-via-three-seas-initiative

This is about building infrastructure in countries with poor infrastructure...just like Europe did in Ireland years ago....I don’t think this changes much as these countries will still have emigration because wages are low and that won’t change overnight. Only a portion of our immigration comes from these countries anyway.

Bass Reeves · 21-05-2021 12:51AM

Timing belt wrote: »

This is about building infrastructure in countries with poor infrastructure...just like Europe did in Ireland years ago....I don’t think this changes much as these countries will still have emigration because wages are low and that won’t change overnight. Only a portion of our immigration comes from these countries anyway.

That never stops Prop's' from adding 2+2 and getting 3, 5, 6 or any other answer he requires

PropQueries · 21-05-2021 07:40AM

According to The Journal:

"A vacant property tax for investment fund landlords who own a large number of apartments that are lying empty is under serious consideration, it is understood. Finance Minister Paschal Donohoe has been asked to consider whether a multiple of the Local Property Tax for apartments that are left vacant could be used to deter institutional landlords from leaving properties lying idle, senior sources confirmed."

There's plenty of low hanging fruit to pick at to help resolve the housing issue cheaply and quickly and this one would be an easy win IMO.

Link to article in The Journal here: https://www.thejournal.ie/vacant-property-tax-3-5441551-May2021/

yagan · 21-05-2021 08:11AM

Without clear optics beyond the once every five year census we don't have even a clue how many empties there are.

There was a ghost estate near me in 2006 two years before the bust was official, supply having long surpassed demand by years. As long as investment funds keep the cement mixers turning the empties will pile up again, until they twig that the existing units aren't meeting their projected yield.

A rental price register that also shows the unlet would give consumers and providers more stability in the long run.

handlemaster · 21-05-2021 08:13AM

PropQueries wrote: »

According to The Journal:

"A vacant property tax for investment fund landlords who own a large number of apartments that are lying empty is under serious consideration, it is understood. Finance Minister Paschal Donohoe has been asked to consider whether a multiple of the Local Property Tax for apartments that are left vacant could be used to deter institutional landlords from leaving properties lying idle, senior sources confirmed."

There's plenty of low hanging fruit to pick at to help resolve the housing issue cheaply and quickly and this one would be an easy win IMO.

Link to article in The Journal here: https://www.thejournal.ie/vacant-property-tax-3-5441551-May2021/

What you are proposing is more micro managing of a macro problem. Government have messed the property market up one mad law to to please the popular vote after another.

Wanderer78 · 21-05-2021 08:17AM

handlemaster wrote:

What you are proposing is more micro managing of a macro problem. Government have messed the property market up one mad law to to please the popular vote after another.

Our property mess is due to both state failure and the fire sectors, its also not just an Irish problem

PropQueries · 21-05-2021 08:23AM

handlemaster wrote: »

What you are proposing is more micro managing of a macro problem. Government have messed the property market up one mad law to to please the popular vote after another.

I'm not proposing it, the state is. But. it's already implemented in many countries around the world from Washington D.C. (5% vacant tax, 10% derelict tax) to Denmark where a property owner is fined for not informing the state that their property is vacant and why.

As another poster said previously, it's also good for discovery purposes i.e. actually knowing what property assets we have and what they're currently being used for.

Every corner shop does a regular stock take. It's about time the state did a similar and regular audit of our property market IMO.

wassie · 21-05-2021 08:31AM

Whilst not the same, Canadian Govt looks soon to introduce a 1% annual tax on non-resident, non-Canadian owned residential properties that are vacant or is considered underused.

The new tax would kick in on January 1, 2022, and is expected to rake in around $700 million in the first four years, according to the budget documents. The money earned from the tax will go towards affordable housing investments.

Although I agree with handlemasters sentiments, this sort of stuff is just tinkering around the edges for political gain in response to housing shortages in Vancouver and Toronto.

Irish Property Market chat II - *read mod note post #1 before posting*

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Irish Property Market chat II - read mod note post #1 before posting