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

PropQueries wrote: »

If rents can double, they can also make similar movements in the opposite direction.

For rents to come down sizeably would require the government to withdraw the amounts (and number of) payments they make through the likes of HAP. I just cannot see any serious attempt being made in this direction, if anything the number of people getting access to these programs is likely to increase going forward. Through Covid we have seen the numbers classified as homeless go down. As you numbers of social housing units coming on stream were affected by the lockdowns it is likely the reduction was due to HAP.

Ozark707 wrote: »

For rents to come down sizeably would require the government to withdraw the amounts (and number of) payments they make through the likes of HAP. I just cannot see any serious attempt being made in this direction, if anything the number of people getting access to these programs is likely to increase going forward. Through Covid we have seen the numbers classified as homeless go down. As you numbers of social housing units coming on stream were affected by the lockdowns it is likely the reduction was due to HAP.

There's no denying that the government in the words of Micheál Martin, is "The big player in the housing market at the moment is the State."

However, with the two main government revenue streams (corporation and income taxes) potentially under threat from both the global tax reforms and now the WFH in any country, they may have to re-look at their support for the housing market. Especially as the TD Michael McNamara recently compared the governments take on these twin threats to them acting like Comical Ali:

"Prominent backbencher Michael McNamara of Clare has accused members of Government of continuing to tell us that all is okay — just like Comical Ali as the bombs were detonating in the distance... There’s much talk about a €2bn reduction in our tax take, and that this has been foreseen for some time... Another, potentially bigger problem will be the impact on our GDP figure which for several years has been inflated by profits channelled through Ireland for corporation tax reasons.”

But, this apparent housing crisis is also muddied by a FF councilor saying this week in relation to objecting to the re-zoning of a 106 acre site in Finglas: "I just don’t see what the rush is".

So, the question is, do we have a housing crisis or don't we?

When push comes to shove, I've seen many years when the state cuts back on spending both severely and swiftly.

Link to comical ali article in Irish Independent last week here: https://www.independent.ie/irish-news/politics/higher-taxes-in-other-areas-to-make-up-for-shortfall-in-corporation-tax-green-leader-eamon-ryan-admits-40507583.html

Link to FF councilor remarks in Irish Times here: https://www.irishtimes.com/news/politics/finglas-rezoning-proposal-in-doubt-over-council-opposition-1.4592437

Hubertj wrote: »

People would want to be fairly stupid to think Sinn Féin’s stance on housing and planning isn’t politically motivated.

They must be sh1tting their pants now because it looks like they will have to come up with a solution themselves at this stage.
And while they are not short on moaning, I dont believe they will be any good at solutions.

Amadan Dubh wrote: »

I read this a few times and don't get it. If there is no rush then it is hardly seen as a crisis. I think people aren't appreciating the words "emergency", "crisis", "extreme" when used in respect of the housing market, thinking they are hyperbolic when to a lot of people they are suitable and appropriate. To others they seem to think the housing situation is a problem but not a devastating, destructive, severe one.

That's the thing. It's only when a politician goes off-script that we generally get a true insight into a Government's thinking on a specific issue. To me, this would be some evidence on the real thinking of the Minister for Housing and all the current government parties in relation to this specific issue.

Hubertj wrote: »

People would want to be fairly stupid to think Sinn Féin’s stance on housing and planning isn’t politically motivated.

Every parties stance on housing and planning is by definition politically motivated.

Balluba wrote: »

Bank of Ireland have announced that their threshold for negative interest rates on savings will be reduced to €1 million with an annual interest rate of 0.65%. In that event a saver with 1 million on deposit will owe €6,500 to BOI annual interest. Negative interest rates are now certain it is just a matter of how low the banks will set the threshold. All of us will be affected.
Surely this will make property even a more attractive investment??

How many people do you know have a million sitting in the bank doing nothing?

Anyone that does, has it there because they don't like risk, so they won't go near stock market, and/or property.

Ace2007 wrote: »

How many people do you know have a million sitting in the bank doing nothing?

Anyone that does, has it there because they don't like risk, so they won't go near stock market, and/or property.

Seasoned investors waiting for right time to deploy cash ! Nothing to do with risk !

Roberto_gas wrote: »

Seasoned investors waiting for right time to deploy cash ! Nothing to do with risk !

But then that's not the crowd who are just going to buy property with it to move it out is it? If they are waiting for the right time - moving it into property is the last thing they'll be doing.

Ace2007 wrote: »

How many people do you know have a million sitting in the bank doing nothing?

Anyone that does, has it there because they don't like risk, so they won't go near stock market, and/or property.

According to the Central Bank household deposits have reached a new record of €128 billion. Do you think that negative interest rates will not change this??

awec wrote: »

How much does this councillor work with the Minister for Housing do you think?

There are planning concerns raised, and planning requests refused on a daily basis. Does the fact that planning is at times refused, or ammendments sought, proof that there is no housing crisis?

Do you think that we need to just scrap the planning process? Build anything anywhere? Is that what it would take for you to accept that housing is needed?

I think the point is that some people will continue to misrepresent the contents of articles as it suits whatever agenda they have.

Ace2007 wrote: »

And divide that by number of households in Ireland, and your probably looking on average at 300k, which well below the 1m that you spoke about.

If you think that a large number of those over 65 will have 6 figure savings in the bank - they aren't the clientele that are going to be buying property.

We do not know yet how low the threshold will go. It was at 2.5mill, it is coming down to 1mill. The question is how low will it go, and will it impact property investment.

awec wrote: »

What is this script you are waffling about? Yes, he asked what the rush is. As per usual, you have taken this, mangled it, amplified it about 10000 times and have now decided that this is proof there is no crisis.

Housing is the issue that the government are getting absolutely slated for. If SF get in, it will be on housing. You think that the government are deliberately making up an issue that they are getting hammered on? That's like McDonalds promoting veganism. It's nonsensical. Conspiracy theorist stuff.

Is your belief that all planning processes should be scrapped, as in your mind that is the only logical thing that can happen in a time of housing need? Anything short of this is proof that there is no need for housing?

Well, all I know is that on the 14th June 2021, the Irish Times reported on a FF counsellor stating that "I just don’t see what the rush is" is relation to the rezoning of a 106 acre site in Finglas to residential.

And, on the 24th April 2021, it was reported in the Irish Times that the Office of the Planning Regulator sent a letter to DLR county council stating that "the council’s proposal to zone some 22,800 housing units – including part of the Cherrywood strategic development zone – was significantly in excess of housing supply targets calculated in line with guidelines that Minister for Housing Darragh O’Brien published in December."

Now, in the last two months, we have the Irish Times reporting on a FF councillor and the Department for Housing acting like there is no housing crisis or at the very least acting like there is no housing supply crisis.

What would a regular person take those two articles as signalling on the Government's current position on the housing crisis?

As I said before, ECB interest rates may be more influenced by the concerns of the eastern EU euro countries rather than the western members of the euro going forward.

Bloomberg reported today that Hungary and the Czech Republic are seeking to start raising interest rates to combat rising prices:

"Rate Hawks Urge Start of Hikes in East EU to Tame Inflation. In the debate over how dangerous the surge in global inflation may become, two hawkish central banks in the European Union’s eastern wing are preparing to take action. Policy makers in Hungary and the Czech Republic are urging for a liftoff in borrowing costs next week to prevent the jump in commodity prices, supply-chain bottlenecks and other global factors from transforming into inflationary pressures such as demand for higher wages in their own economies."

While these two countries aren't in the euro, from speaking to people from other eastern EU countries that are in the euro, inflation is taking off significantly in many of their countries and people there are getting worried and regular people on the ground are increasingly talking and complaining about it.

ECB interest rates may rise much sooner than many people are predicting with all sorts of consequences for the Irish housing market. Funds are currently accepting c. 3.5% yields on their property investments in Ireland. This may begin to shortly impact on their investment decisions regarding the Irish property market IMO

Link to article in Bloomberg today: https://www.bloomberg.com/news/articles/2021-06-14/rate-hawks-urge-start-of-hikes-in-eu-s-east-to-tame-inflation