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

Something I have noticed since covid started.

Bad news about the virus. Stocks fall a lot.

After a few days people realize that this is just the same sh!te we have been living with for the last while. Stocks go back up even higher than they were before.

Thats the cycle. Watch them go back up over the next few weeks.

Then at the end of that you can only have good news when its all over.

People are used to this virus now, and will be fine living like they are now for a bit yet. Then when its all over well its time to party for the whole world.

And you know what, this doesnt effect property prices unless there is a lock down that halts construction activity or the process of house selling.

It wont effect rents because the government influence on rents via ill thought out rent controls is the major manipulator of that market, viruse or no virus. And all those controls are doing is raising rents and reducing supply. Its definitely reducing the supply of reasonably priced rentals.

I think the demand is already significantly impacted; WFH and migration are two significant factors in demand as a result of the pandemic that have not baked into asking rents yet. The government is ensuring the market is propped up but we don't live in a socialist country so the government does not have the power to support it indefinitely. Long-term social housing leases set a floor at 85-90% of current market rents as if that is somehow sustainable when looked at against salaries. There is nothing which would indicate those rents are even sustainable when looking at the median salary in this country, particularly with the cost of living already shooting up and groceries expected to rise next year in cost. There is a dam holding off a significant pressure release but it doesn't seem like it can hold forever and I sense something is going to give - call it a correction or a crash of some sort. There's so many red flags everywhere and fraud and high risk is prevalent in mainstream companies and economic transactions which are symptoms of excess. The latest ESMA risk report (European-level markets and securities regulator) has the level of risk across markets and securities at its highest level.

https://www.esma.europa.eu/sites/default/files/library/esma50-165-1891_risk_dashboard_no_2_2021.pdf

On the undervalued/overvalued rents, it reminds me of the EC report the other week claiming, based on certain assumptions, that Irish housing was undervalued. The IT published an opinion piece over the weekend arguing against the assumptions and models used by the EC to come to this conclusion.

https://www.irishtimes.com/business/economy/irish-house-prices-undervalued-shows-how-misleading-stats-can-be-1.4740982

"WFH and migration are two significant factors in demand as a result of the pandemic that have not baked into asking rents yet"

WFH did have impacted the rents price, the rents outside cities increased in double digits:

"This has led to rental prices in Dublin increasing 2.7% on a year-on-year basis.

The increases were even steeper across other cities with a year-on-year jump of 6.9% recorded in Cork, 8.3% in Galway, 8.9% in Limerick and 10% in Waterford.

The average rent nationally now stands at €1,516 per month. This is a spike of 6.8% and marks the 36th consecutive quarter where rents are higher than they were in the previous twelve months.

Excluding the cities, the average rent across the country stands at €1,153, an increase of 11.9% on last year. In Mayo, Roscommon and Leitrim rents rose by over 20% on a year-on-year basis."

We don't know the future, but we see that pandemic/wfh already had made impact in asking price outside cities, with double digit increase.

so why do you think rental prices went up much more outside Dublin? than in the City?

"even people who had their heads in the sand, that it is financial suicide not to put up the rent to the max you can"

people try to put rent price to the max regardless if it's in the city. In Dublin landlords equally try to the max what they can get. If in Dublin lower end properties would leave the market, the average would have gone up as well.

There are many actors here, and WFH is a very minor one, if at all.

It could well happen, but that's would be a gradual phenomenon, and I don't believe it's isolated to the city and to particular year, it's rather a national gradual problem.

As well based on the logic from previous comment's that would mean that rents in past year outside city stayed mostly stable, it just that the quality of homes for rent outside cities on the market are better than in previous years. Which I don't think that it's the case.

The results from the delayed census should make interesting reading, as it will reveal how many people are still officially in Ireland but are actually working remotely from overseas. I think it will be a lot as noises I hear is of people still leaving rather than coming back.

I also wonder how many landlords have decided to try and chalk up the two years needed for RPZ caps to expire. March 2022 is not that far away...

Does the new rental legislation fix the landlord issue raised yesterday?

Can they now raise to market rents where they were caught by rent pressure zones in the past?

There is a narrative that inflation is only temporary. But what people don't realise from that is that the price rises which occurred during the temporary period don't end, it is just the rate at which they increase which slows down. The translation for that is reduced spending power until wages climb up. If you are getting the same salary as in 2020 you are going to be poorer this year. As such, wage increases will be demanded or else the economy will start to grind to a halt with people not being able to spend as much cash. Of course wage increases will fuel further inflation. It's all spiralling upwards and the cat is out of the bag.

Eurozone inflation at its highest in 25 years. The ECB is revising its inflation forecasts every few weeks as it cannot grasp fully what is happening. This is troubling to say the very least when they are supposed to be responsible for ensuring price stability. If this new covid variant is treated by the ECB as requiring further QE and low interest rates or just a reason to delay taking action, inflation will continue to get worse and anyone can see this. However, with a lawyer and baby boomer at the helm of the ECB, it's unlikely anything will change and the bubble will inflate even more.

https://www.irishtimes.com/business/economy/euro-zone-inflation-soars-to-highest-rate-on-record-1.4742824

Did anyone who has been looking for over a year find an increase in supply at the start of last year, compared to the end of the previous year, or is there any stats available on that?

Well I have kept an eye on myhome for years and over the last 18 months it has not gone up more than 13k properties available country wide went under 12k at one point and currently its 12188. So the dial has not moved with this regards. Be interesting to get an idea of mortgage drawdowns vs new builds for 2021 when the info is available.

With Fianna fail back at the steering wheel the only way is up for house prices baby!

Renting is totally unaffordable now for working couples due to the governments hap. When buying a house now working couples have to outbid the council, the charities, the approved housing boards, the funds buying to lease to the council.

The government was the third most indebted in the developed world prior to covid and I'm pretty sure we've spent the highest per capita on our response to covid - we may be in second place already!!

The whole thing is ready to blow again imo but house prices went up 12% this year- so don't miss out n panic buy now!