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

Villa05 · 27-06-2021 02:03PM

MacronvFrugals wrote:

Is there anyone left to come out against the shared-equity scheme?

Ff were always party before country. Getting more people with skin in the housing market bubble is viewed as good for the party, its impsct on the country is irrelevant to them

Murph85 · 27-06-2021 02:13PM

<SNIP>

hometruths · 27-06-2021 02:39PM

MacronvFrugals wrote: »

Is there anyone left to come out against the shared-equity scheme?

“Department of Housing officials warned shared equity scheme would hike up house prices”

https://www.businesspost.ie/houses/department-of-housing-officials-warned-shared-equity-scheme-would-hike-up-house-prices-6d0440fb?utm_campaign=article&utm_source=twitter&utm_medium=web

Interesting piece. More damning comments from Dept of Housing officials:

“It seems quite obvious, although it is not stated, the builders will only increase supply if they can get more for what they build. It is the builders who are receiving the incentive, not the purchasers,” the review said.

and

"How do we believe this won’t lead to house price inflation in a small cohort of the market?” it said. "How can this not lead to inflation?“

It added that “Developers get [the] benefit of increased risk-free profit” and "proposals simply circumnavigate prudential lending rules“.

yagan · 27-06-2021 02:45PM

You don't have to believe in a developer conspiracy against the public if they all think alike anyway.

The government has to build houses directly as the free market isn't driven by social stability, it's profit driven.

wassie · 27-06-2021 07:04PM

fergus1001 wrote: »

the new regulations coming in october means that if you want to build a new house in a rural area you will need to own a certain amount of land so your only option is to buy a house in a rural area

What new regulations do you refer to (planning Im assuming)?

Villa05 · 28-06-2021 03:33AM

Rea report ominous with prices rising by up to 1500 per week. Limerick and Drogheda seeing double digit increases in 3 months.
Remember the celtic tiger when your house earned more than u

Reminds me of the hbo mini series on chernobyl where the nuclear physicist was explaining how a nuclear reactor works and how balance is required. When it is lost - diisaster

This is happening without the shared ownership scheme. Imagine what will happen then

Hubertj · 28-06-2021 07:25AM

Villa05 wrote: »

Rea report ominous with prices rising by up to 1500 per week. Limerick and Drogheda seeing double digit increases in 3 months.
Remember the celtic tiger when your house earned more than u

Reminds me of the hbo mini series on chernobyl where the nuclear physicist was explaining how a nuclear reactor works and how balance is required. When it is lost - diisaster

This is happening without the shared ownership scheme. Imagine what will happen then

Why would people want to live in Drogheda?

cruizer101 · 28-06-2021 07:51AM

Hubertj wrote: »

Why would people want to live in Drogheda?

Easy enough access to Dublin via train and even not too bad down the motorway, whilst big enough to have a lot of what you need on your doorstep.
Beside the sea so beaches close, cooley mountains only up the road, Belfast not far for cheap shopping trips up North.
Plenty of reasons to live there, wouldn't be quite my cup of tea but can understand plenty of people wanting to live there.
With people going maybe partial WFH with offices in Dublin its an ideal location for getting more bang for your buck.

Why wouldn't they want to live there?

jill_valentine · 28-06-2021 10:11AM

Hubertj wrote: »

Why would people want to live in Drogheda?

Low house prices vs other towns with comparable access to Dublin. I've considered it myself tbh, pre covid I was working with people who were renting and commuting from Drogheda. It's a little less grim than Longford too imho, especially if you drive.

Villa05 · 28-06-2021 10:15AM

jill_valentine wrote:

Low house prices compared to comparable access to Dublin elsewhere. I've considered it myself tbh, pre covid I was working with people who were renting and commuting from Drogheda.

The report that stated more Dublin workers lived outside Dublin than inside is quite dated, would be interesting to see how that has regressed over the years since

Balluba · 28-06-2021 10:37AM

Daft Q2house price report is out this morning.

fliball123 · 28-06-2021 10:41AM

Balluba wrote: »

Daft Q2house price report is out this morning.

prices up 13% so much for the doomsdayers. We could be looking at another 2/3 years of price increases

MacronvFrugals · 28-06-2021 10:53AM

fliball123 wrote: »

prices up 13% so much for the doomsdayers. We could be looking at another 2/3 years of price increases

Your son will be sweating for your early death :P

fliball123 · 28-06-2021 10:55AM

MacronvFrugals wrote: »

Your son will be sweating for your early death :P

Maybe but the doom and gloom and crash talk from 2019 to the end 2020 can now be put to bed in hindsight. God knows what way things will go but one thing is for sure there needs to be less government involvement in the market and their focus should be on building.

SmokyMo · 28-06-2021 11:11AM

fliball123 wrote: »

Maybe but the doom and gloom and crash talk from 2019 to the end 2020 can now be put to bed in hindsight. God knows what way things will go but one thing is for sure there needs to be less government involvement in the market and their focus should be on building.

What do you would have happened without government massive intervention for the past 1.5 year?
The is no 'free' market, especially in Ireland.

fliball123 · 28-06-2021 11:16AM

SmokyMo wrote: »

What do you would have happened without government massive intervention for the past 1.5 year?
The is no 'free' market, especially in Ireland.

Well the FTB incentives only make sense if there is no supply issue, as this combination has pushed prices up for new builds and has also has the knock on affect of pushing up second hand properties. The money, resources, time and effort should of been on using Nama to start building. I know there are issues with regards to costs of both labour and materials but they need to start somewhere. There also needs to be a more punitive tax burden on Vultures and REITS.

Marius34 · 28-06-2021 11:17AM

SmokyMo wrote: »

What do you would have happened without government massive intervention for the past 1.5 year?
The is no 'free' market, especially in Ireland.

We can't know well what if, less the "experts" on this thread would know.
But that doesn't change the fact that crashers totally failed with their expertise.

woejus · 28-06-2021 11:17AM

MacronvFrugals wrote: »

Your son will be sweating for your early death :P

there's a sitcom plot in that I reckon

where's that head the ball poster who was always going on about his son's "war chest" - wiped out in a single quarter of vertiginous price rises lolz

timmyntc · 28-06-2021 11:18AM

fliball123 wrote: »

Well the FTB incentives only make sense if there is no supply issue, as this combination has pushed prices up for new builds and has also has the knock on affect of pushing up second hand properties. The money, resources, time and effort should of been on using Nama to start building. I know there are issues with regards to costs of both labour and materials but they need to start somewhere. There also needs to be a more punitive tax burden on Vultures and REITS.

FTB incentives will always push prices up.
If theres not a supply issue, prices will rise miniscule amounts but will still rise.

If the government really wanted to help FTBers, they would build more houses.
Have new builds specific for FTB or something.

Amadan Dubh · 28-06-2021 11:24AM

fliball123 wrote: »

Maybe but the doom and gloom and crash talk from 2019 to the end 2020 can now be put to bed in hindsight. God knows what way things will go but one thing is for sure there needs to be less government involvement in the market and their focus should be on building.

It was a bubble before covid, for the same conditions that have been at play during covid, except that covid had made it much worse. The simple reason is this; what would happen if the QE tap was turned off?

Commercial property is the canary in the coal mine and just look at the property fund suspensions which occurred in 2019/2020; these had nothing to do with covid. Seems odd that there were runs on property funds if everything was on more stable ground pre-covid. Hopefully politics will kick in before the bubble can pop (ie interest rate rises and significant investment in public housebuilding programmes) but potentially a large pension fund going under is what would indicate the chains have broken and the market is crashing.

As a separate point; with the whole WFH thing becoming stabilised into something that is clearly a long term adoption for most companies, with the Daft report today, will we start to see people moving over the border to N.I. where rents are significantly cheaper than the Republic? From going on propertypal.com and searching for rentals, it's crazy how much cheaper they are over the border.

https://www.propertypal.com/16-queens-square-17-queens-square-belfast/477716/photo-12

£775 for a nice 2 bedroom, in the heart of Belfast City centre. You'd be down in Dublin City centre on public transport in 2 hours. Even if you wanted to just stay for a year or two you'd save good money doing that compared to renting down here.

Marius34 · 28-06-2021 11:52AM

Amadan Dubh wrote: »

It was a bubble before covid, for the same conditions that have been at play during covid, except that covid had made it much worse. The simple reason is this; what would happen if the QE tap was turned off?

Commercial property is the canary in the coal mine and just look at the property fund suspensions which occurred in 2019/2020; these had nothing to do with covid. Seems odd that there were runs on property funds if everything was on more stable ground pre-covid. Hopefully politics will kick in before the bubble can pop (ie interest rate rises and significant investment in public housebuilding programmes) but potentially a large pension fund going under is what would indicate the chains have broken and the market is crashing.

As a separate point; with the whole WFH thing becoming stabilised into something that is clearly a long term adoption for most companies, with the Daft report today, will we start to see people moving over the border to N.I. where rents are significantly cheaper than the Republic? From going on propertypal.com and searching for rentals, it's crazy how much cheaper they are over the border.

https://www.propertypal.com/16-queens-square-17-queens-square-belfast/477716/photo-12

£775 for a nice 2 bedroom, in the heart of Belfast City centre. You'd be down in Dublin City centre on public transport in 2 hours. Even if you wanted to just stay for a year or two you'd save good money doing that compared to renting down here.

If you call 2019 as Bubble, this Bubble may never end.

hometruths · 28-06-2021 12:00PM

Marius34 wrote: »

If you call 2019 as Bubble, this Bubble may never end.

This bubble is different.

28-06-2021 12:03PM

schmittel wrote: »

This bubble is different.

Thanks for sharing that paywall.

hometruths · 28-06-2021 12:08PM

Deleted User wrote: »

Thanks for sharing that paywall.

Timing belt · 28-06-2021 12:13PM

Amadan Dubh wrote: »

It was a bubble before covid, for the same conditions that have been at play during covid, except that covid had made it much worse. The simple reason is this; what would happen if the QE tap was turned off?

Commercial property is the canary in the coal mine and just look at the property fund suspensions which occurred in 2019/2020; these had nothing to do with covid. Seems odd that there were runs on property funds if everything was on more stable ground pre-covid. Hopefully politics will kick in before the bubble can pop (ie interest rate rises and significant investment in public housebuilding programmes) but potentially a large pension fund going under is what would indicate the chains have broken and the market is crashing.

As a separate point; with the whole WFH thing becoming stabilised into something that is clearly a long term adoption for most companies, with the Daft report today, will we start to see people moving over the border to N.I. where rents are significantly cheaper than the Republic? From going on propertypal.com and searching for rentals, it's crazy how much cheaper they are over the border.

https://www.propertypal.com/16-queens-square-17-queens-square-belfast/477716/photo-12

£775 for a nice 2 bedroom, in the heart of Belfast City centre. You'd be down in Dublin City centre on public transport in 2 hours. Even if you wanted to just stay for a year or two you'd save good money doing that compared to renting down here.

According to the Vulnerabilities in the residential real estate sectors of the EEA countries issued Sept 2019 by the ESRB (European Systemic Risk Board) the Central Bank of Ireland’s own valuation metrics indicate that house prices are now in line with or just above values justified by economic fundamentals (see page 101)

This doesn't sound like a bubble was in existence in 2019.

The same report highlighted the impact of funds/Reits on Irish property prices.
e.g.
The LTV limit was calibrated based on the past experience with losses of loan defaults, and it should currently provide sufficient security against a potential accumulation in house price overvaluation. While the house prices have continued to grow significantly after these limits were introduced, this may be related to the high share of non-mortgage-financed purchases (and to housing supply shortages).

With regards living in NI and working in ROI to save money... I think you would need to look at the tax impact as you would be a UK resident and therefore liable to tax in the UK.

28-06-2021 12:13PM

Marius34 wrote: »

We can't know well what if, less the "experts" on this thread would know.
But that doesn't change the fact that crashers totally failed with their expertise.

They’ll keep shouting “crash” until there’s a crash. Even if it’s in 3 or 4 years time. And then say they were right.

Timing belt · 28-06-2021 12:18PM

Deleted User wrote: »

They’ll keep shouting “crash” until there’s a crash. Even if it’s in 3 or 4 years time. And then say they were right.

The infinite monkey theorem

Amadan Dubh · 28-06-2021 12:24PM

Timing belt wrote: »

According to the Vulnerabilities in the residential real estate sectors of the EEA countries issued Sept 2019 by the ESRB (European Systemic Risk Board) the Central Bank of Ireland’s own valuation metrics indicate that house prices are now in line with or just above values justified by economic fundamentals (see page 101)

This doesn't sound like a bubble was in existence in 2019.

The same report highlighted the impact of funds/Reits on Irish property prices.
e.g.
The LTV limit was calibrated based on the past experience with losses of loan defaults, and it should currently provide sufficient security against a potential accumulation in house price overvaluation. While the house prices have continued to grow significantly after these limits were introduced, this may be related to the high share of non-mortgage-financed purchases (and to housing supply shortages).

With regards living in NI and working in ROI to save money... I think you would need to look at the tax impact as you would be a UK resident and therefore liable to tax in the UK.

Actually, I didn't even think of the tax concern. I mean, whatever about working in Germany or Spain, surely there's a slim to none chance you'd ever fall foul of tax laws living in NI and working in the Republic.

On the 2019 bubble point, I am reading your post but coming to my same conclusion. The bubble is due to stifled supply (when the economy rebounded and demand due to immigration rocketed) mixed with non-mortgage financed purchases with deep pockets hoovering up land and developments.

Supply consistently falling far short of demand, the State supporting 1/3 of all tenancies and likely growing given the increases in rents and house prices is ongoing, rents and house prices close to or hitting Celtic Tiger highs despite LTV limits and muted wage growth. There's nothing economically sound about what has happened.

As I said, remove QE and massive state supports for the property market and look what will happen. It's overdue a significant correction. The real economy won't be allowed to grow while property sucks so much money out of it.

Villa05 · 28-06-2021 12:39PM

fliball123 wrote:

prices up 13% so much for the doomsdayers. We could be looking at another 2/3 years of price increases

Would it be a case of 3 year price increases in what looks like 3 months. Looks like the pandemic spending had some effect. Imagine spending so much money with the net effect driving up the price of assets you are the primary customer of through inflation linked long term leasing

People say this time it's different because there is no credit splurge. Wonder how "free money" dished out by the very same sector that caused the last crash works out in comparison

Timing belt · 28-06-2021 12:39PM

Amadan Dubh wrote: »

Actually, I didn't even think of the tax concern. I mean, whatever about working in Germany or Spain, surely there's a slim to none chance you'd ever fall foul of tax laws living in NI and working in the Republic.

On the 2019 bubble point, I am reading your post but coming to my same conclusion. The bubble is due to stifled supply (when the economy rebounded and demand due to immigration rocketed) mixed with non-mortgage financed purchases with deep pockets hoovering up land and developments.

Supply consistently falling far short of demand, the State supporting 1/3 of all tenancies and likely growing given the increases in rents and house prices is ongoing, rents and house prices close to or hitting Celtic Tiger highs despite LTV limits and muted wage growth. There's nothing economically sound about what had happened.

As I said, remive QE and massive state supports for the property market and look what will happen. It's overdue a significant correction.

I agree that supply falling short of demand and a high level of immigration around 2019 pushed prices higher but I don't know would I call it a bubble in 2019.

I know you talk about QE being removed but that is a process that will take at least 10-15 years to unwind as the central banks taper QE. They are not going to overnight start selling all the government bonds they hold and instead will rollover a smaller amount as they mature. If inflation is temporary as the central banks are predicting then we will remain in a low rate environment for some time to come and if the economies of the world don't see economic growth start you can be sure that more QE will be undertaken by the central banks. Although its unlikely at present rates could go lower in an effort to kick start the economic engine if it starts to stall.

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