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

You'd really be wanting to see salaries jump a minimum of 10% across the board this year alone; it's getting to the point where the average salary in Ireland of €49k will need to become the median salary and the median salary of anywhere from €33-38k will need to become the minimum to survive. This isn't an attack on social welfare, but to assist with making a point about how expensive it is to live in Ireland already; a single parent on the single parent allowance with HAP assistance of €1250 pm in Dublin is getting €24k p.a. from the State just from those two benefit payments - this is the State measured minimum cost of surviving. By comparison, someone on €36k earns €29k after tax - €36k and you are treading water but that is approximately the median salary, it's a slow motion and seemingly unavoidable car crash what is coming. Particularly when central banks are throwing more fuel onto the fire with zero interest rates and QE.

If we need our population to grow to fill the demand for lower-paid jobs to service the economy and to fill construction sector roles to get the housing built, quite simply it's not going to be possible without wages shooting up in isolation to the general cost of living (which won't happen). We're just going to hit a wall until something somewhere gives.

If wages in Construction go up then we will see an increase in building costs and more housing developments shelved.

The increase of Energy, new & used cars and Shelter account for circa 4.5% of the 6.2% year on year inflation surge.

Energy has a weighting of 7.32% for the basket of goods and has seen an increased 29.971% year on year. This accounts for 2.19% of the overall 6.2% inflation and is not a surprise seeing as in 2020 we saw oil prices going negative.

New and Used Cars have a combined weighting of 7.12% for the basket of goods and has seen an increase of 9.8% for new cars and 26.49% for used cars year on year. This accounts for 1.25% of the overall 6.2% inflation and upward pressure should stop once the chip shortage gets sorted.

Shelter has a weight of 32.56% of the basket of goods and has seen an increase of 3.5% year on year. This accounts for 1.13% of the 6.2%. This is the one that will be worrying the fed.

Even if the Fed raised rates it would have little effect on inflation as people would still need Food, Energy and Shelter.... And in america they need cars to get around more than in Europe. Raising rates would not stop people from spending on these items.

Wages are not increasing as fast as inflation... in the USA the average worker is worse off financially (unless they have a pile of Debt) in real terms as wage increases are lower than inflation. Regardless of the impact on Real disposable income if wages increase it will put upward pressure on property as they will be able to borrow more to buy a house

Interesting were the comments from the ceo of Circle Voluntary Housing Association where he claimed that the struggle to deliver affordable housing was not due to building costs but was to do with land costs.

I've noticed at least 4 properties very local (in neighboring estates) to me that have sold in the last year, to what I can only assume, a non-private buying entity. All 4 were stripped immediately after sale with skip loads outside each property, structural works carried out and decorated all to the same standard, with the same Sofas and Blinds visible from the front of the property. The properties were left idle for months afterwards then with no one living in them. This is largely my assumption, but highly likely they were not privately bought. This is in Dublin Northside.

I'm actually very curious to see if it is possible to find out more information about who bought them (Council, private investors, housing bodies) (Beyond their sale price listed on Property Price registry). I can't help but feel this is a bit alarming at the rate this must be going on alongside private buyers trying to buy themselves, increasing competition in an already heated market.

Edit: In fact, highlighting one property (no. 58 below) sold originally for 295k, was renovated as mentioned above and later sold for 369k several months later with no for sale advertisement, no one still living in it.

Thanks, I wasn't aware this was retrievable from land registry.

Re: property flipping, this was one of my thoughts. If the same person/entity is behind them, they certainly move quick. What I found unusual was the fact it was not re-advertised when sold the second time, and it still remains vacant. I'm curious to know if it was a private "flipper" or a corporate entity that bought it originally, and then subsequently was it sold to the council/housing body in a "Ready to move in" condition at a huge profit?

In Dublin, govt/council taxes and charges cost as much as the land.

"The methodology adopted was to take 10 active sites, either with construction underway or just very recently completed, across the Greater Dublin Area and where we had members involved, and to establish the actual cost, including all non-construction costs of delivering a three-bed semi-detached house."

For a house costing 330,493, vat and levies awere €51,060. Land acquisition costs were €57,500.

http://www.surveyorsjournal.ie/index.php/the-true-cost-of-building-a-house/

Revealing report despite being from 2016 so land acquisition costs may be bit dated and influenced by the preceding crash and Nama sales.

So much that could have been done in 2016 to address the supply side but gov persisted with demand side policies.

Pooled cost of finance at 10% and lenders demanding a margin of 15%

Cost of construction only 45% of delivery price

QE creates asset inflation but not inflation in the wider economy as is evident of years of QE. It is the governments fiscal spending that generates the inflation as the cash gets out to the wider economy. And let’s not forget that governments want to see inflation and this is why they are stimulating the economy with their fiscal spending.

if rates rise to fight inflation then the market value of the debt will decrease which means the government could buy back at a large discount and reduce the nominal amount of the debt.

Good points well made. As a counterpoint, have you considered:

1. ah shur be grand.
2. let’s not rock the boat.
3. any plans for the Christmas?

I'd suggest 15% of unspent savings distributed to all staff as a bonus, everyone getting the same, and a bonus for employees dobbing in emptying the bucket behaviour to an outside stand alone office with jail terms for breaking the dobbers annonymity and revealing them to their parent org. Oviously repercussions for the emptyers.

That said, I doubt that phenomenon is behind the buying spree of existing housing stock, the scale is too large. Sheer laziness is more likely.

Inept or corrupt DCC officials and politicians who have a say in this policy? Both in my view.

As with 08, the big loser once again is the taxpayer as this is where our public funds are ending up - why is it so difficult to reform taxes and why do we need to introduce new taxes? Because public spending is high so taxpayers are told we need to introduce something new to replace something cut. It is a con and the middle classes are being treated like cash cows for the cash their labour raises. You only have to follow the money on these things to see why it is being implemented as a policy; but it is not for the good of society.

From the attachment above, there is a list of corporate entities who are profiting from the DCC long-term leases, set out below. I think it would be quite easy to link persons connected with the below entities to those who have a hand in creating and implementing the long-term social housing lease policy.