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

PropQueries wrote: »

I believe I have always stated it's around July/August where I see big movements happening. We'll find out within three months I guess.

Big movemements in July and August is what you said props :cool:

Yurt! wrote: »

Mostly incorrect. I do remember, I had family members who thought they had become JR Ewing from Dallas overnight. Demand from buy to let landlords who were convinced by banks and media that they had figured out a free money forever scheme was massive. Real demand (natural demographic growth and immigraton) was relatively high, but 100k units a year was about half of what was being constructed in the UK at the time. It was lunacy - and supply and demand was only a marginal driver of the activity.

No. Its all correct.
It was a demand driven boom.
All was well until the demand left.
Then you were left with massive over supply.
Same will happen again.
But this time at least normal people wont be over stretched as much as last time.

SmokyMo wrote: »

How did you come to 10% figure?

Apologies, it was a bit arbitrary, based on inflation hitting 4% combined with housing costs increasing I feel that a salary increase of 10% is what would be needed just to notice more money in your pocket, otherwise you're just about keeping pace with or else losing to the cost of living increase.

Yurt! wrote: »

Sorry, but holding up a historic housing explosion as an example of supply/demand framework operating as it should is not just toying with ignorance, you're in the deep end of ignorance with a snorkel.

But its proof that supply and demand fundamentally drive prices up (and down).

The nature of the demand is the issue, but fundamentally its supply and demand.
In the boomtime it was joe soap borrowing 100% mortgages to build and flip houses with the assumption prices would rise indefinitely - a pyramid scheme of sorts.
When the mortgage bubble burst, the demand plummeted and so did the prices - because the supply was constant, the demand changed. Supply and demand 101.

This time around we have more of a supply issue - although the institutional investors are definitely adding to demand and inflating prices. We have seen this in the last month quite prominently.

Amadan Dubh wrote: »

Apologies, it was a bit arbitrary, based on inflation hitting 4% combined with housing costs increasing I feel that a salary increase of 10% is what would be needed just to notice more money in your pocket, otherwise you're just about keeping pace with or else losing to the cost of living increase.

I wasn't looking for specific figures just factors.. 10% is big increase. Even 4%. Try to convince your boss or any textbook economists that there is inflation. They ll foam at the mouth denying it.

Yurt! wrote: »

I'm trying not to be haughty here, but supply and demand theory is economics 101, and all things being equal, holds that transacting between buyer and seller will result in equilibrium. Bubbles and frankly thick transacting behavior due to exogenous variables to demand for goods violate the supply/demand theoretical framework. Which is why they are studied, and why have economists in governing institutions trying to save us from cowboys who just shout supply and demand when things go haywire.


If you want to hold that the beginning, middle and end cycles of the celtic tiger housing mess bore any relation to equilibrium and underlying demand for the public goods of housing in the behavior of transacting parties and the outcome for the country at large, go ahead. And at the risk of haughtyness again, anyone who's sat down in a first year economics tutorial who would try to make the case that supply and demand of housing was propelling the market and prices at the time would see their tutor with their head in their hands asking you to leave the room.

I think that professor should get fired for teaching first year students against basic laws of demands and supplies.

https://www.investopedia.com/ask/answers/040215/how-does-law-supply-and-demand-affect-housing-market.asp
"Real estate is a tangible asset made up of property and the land on which it sits, and while it is unmovable, real estate, like other assets, is also subject to supply and demand. This means that the prices of homes, like those of stocks and bonds, depend heavily on the law of supply and demand"

"The law of supply and demand is a basic economic principle that explains the relationship between supply and demand for a good or service, and how that interaction affects the price of that good or service."

"The housing market, too, relies heavily on supply and demand, which is why it is a much looked-at indicator in the industry. Each housing transaction, of course, involves a buyer and a seller. The buyer places an offer to buy a property, leaving the seller to accept or reject the offer."

"One of the main causes of the Great Recession that followed the financial crisis in the mid-2000s was that the housing market crashed. This was due to the law of supply and demand.

During the lead-up to the financial crisis, consumers were enjoying relatively low borrowing rates. Banks began to offer lower rates on mortgages and were also encouraged to relax their lending standards. People who weren't otherwise able to afford a home before, suddenly found themselves able to realize their dreams of homeownership. Many of these consumers, called sub-prime borrowers, were able to snag a home with very low down payments even though they had very low credit scores.

During this time, speculative buyers also began entering the market, driving up demand for housing and, at the same time, cutting into the available supply. All of this, in turn, drove prices up to lofty levels."

Yurt! wrote: »

The point is simple. Supply alone, under current conditions will not, and it has been proven in markets all around the world - ameliorate the problem. This is fact. Anyone saying that supply and keeps on chanting 'supply and demand' brings down house prices like a drunk football fan on the terrace as a matter of course deserves an F.

Okay o learned one, if its not supply that will fix this, then what will?
Since supply and demand has been debunked, what dictates the prices in the market?

Dav010 wrote: »

A multitude of interlinked factors, that is why it is such a difficult problem to solve, and will most definitely not be solved just by changing Government.

Changing government can be a start thought.

timmyntc wrote: »

Okay o learned one, if its not supply that will fix this, then what will?
Since supply and demand has been debunked, what dictates the prices in the market?

The level of elasticity in the market frames the supply and demand "question". If only increasing supply was the answer - no point increasing supply in places where no one wants to buy. The basic premise of supply and demand still exists but there's many factors feeding into the market which in turn determines the price. Even back in 2005-8 there was plenty of property supply but there was also a cheap supply of money, 100% mortgages and so on. We all know that eventually the market caught up with itself but during the years that followed practically nothing was built. The bottom line is until the main component factors that make up the cost of a house are tackled (IMO mainly the cost of land & the planning process / regulation environment but there are others) affordability will still be an issue for some years to come. Also, Government (IMO) cannot continue to outsource their responsibilities to the private sector to provide housing. How to tackle all this is the 64 thousand dollar question.

Amadan Dubh wrote: »

Further news on the Facebook decision, with quotes from two employment lawyers, Ibec spokesperson and a Facebook representative.

I don't need to quote them but I would be curious to know more beyond the quote from the Ibec rep below.

https://www.irishtimes.com/business/economy/facebook-s-remote-work-move-means-floodgates-have-opened-1.4589770?mode=amp

I will dial into the next AmCham call and see what others have to say. As posted earlier Hubspot are allowing remote from anywhere 3 months per year. Did Indeed.com also announce something similar?

Yurt! wrote: »

I'll leave you to your investopedia links. Honestly...

Well I don't know your first year economics professor. And since we talk about first years fundamentals in to economics, and how this applies to Irish Property Market, Wikipedia/Investopedia is absolutely fine to get basics. Even lecturers use it, no need to get into science published research.

Yurt! wrote: »

They most certainly do not

OK Yurt if its not a supply and demand issue , why are house prices going up??