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

Our debt levels have been through the roof for well over a decade now, what do you think is likely to change now with regards to bondholders? I mean if the fact that we are still in the middle of a pandemic and that we are still suffering fall out following on from Brexit has not spooked them what will and with all of that uncertainty prices went up 12% this year? So tell me what will the straw be that breaks the camels back? Could it be as with most commodities that are there to be bought and sold their behavior when there is a supply shortage prices go up and/or a surge in demand (and we have the perfect storm of having both). As I say prices wont be going south any time soon. Throw in net migration inwards last year of over 55K, it will be interesting to get a stat for 2021. Throw in the fact that births are still going up faster than deaths even with a global pandemic killing people in this country and you have to ask where are all the extra houses needed for these people not to mention the large amount of new houses needed before 2020? Throw in the number of house completions this year is no where near solving the housing crisis

https://www.cso.ie/en/statistics/construction/newdwellingcompletions/

For another thread, I recently calculated that Ireland's national debt stands at just over €150,000 per taxpayer. I am not including the 37% of earners who pay no income tax.

I have been extremely nervous of Ireland's debt levels for at least a decade. I just hope I can get out in time. Now we have Powel saying inflation is not temporary so debt is going to start hurting soon. Good thing that Ireland is so lightly taxed and the Government can just push harder on the Revenue peddle to open the tax throttle a bit more to maintain speed up that debt mountain. /s

I suppose housing demand will decrease as soon as Fed acts on interest rates and the ECB copy them.

So you reckon MNCs making over 750 million a year having to pay an extra 2.5 % on their earnings will make them run for the hills? I cant see it happening. If you think Ireland are in a little bubble of inflation and prices rising you need to open your eyes, property price rising is a global phenomenon and the price hikes on other things such as building material and fuel is also been seen globally so will it be a case of out of the frying pan and into the fire for MNCs then?

As posted in another thread:

Irelands national debt is €248,828,484,716

https://commodity.com/data/ireland/debt-clock/

There are only 1,651,900 taxpayers, since 37% of earners don't pay tax: https://assets.gov.ie/86995/006fad3c-ebb5-4b0e-b067-92f8102d6e43.pdf

So the debt is actually €150,632 per tax payer.

There was a net immigration of 28k and a natural population increase of 27k in the year to April 2020. This led to a total population increase of 55k in the year to April 2020. Both these fell compared with the year to April 2019.

The average household size is 2.5 people. If the population let's say did increase by 50k a year then we should just need to build 20k houses a year. This is is obviously taking that no previous house become derelict. Obviously with a migration from rural to urban over the last few decades and falling house hold size in Ireland ment we should have always been building more than population increase divided by 2.5. But now are household size are at developed country norms and WFH will slow down the urban rural migration, perhaps 30k a year is enough longterm to meet demand.

In economics terms accommodation is what they call price inelastic, which means a small shortage of something can have a disproportionate increase on its price. The big prices increase recently are partly to blame for the lack of building over the last 10 years. Obviously the construction industry was crushed in the downturn. But now we are getting to normal building output. A decade of building between 30k to 40k house which it looks like we could achieve will help sort out the problem. Within 20 years Ireland's death rate will be the same as are birth rate. Since 1991 are fertility rate fell below the replacement rate of 2.1, Currently it is at 1.7. Ireland is getting old tho we are still relatively young compared with our European neighbours.

It's not surprising but it could just be the start of the political/reputational risk manifesting. Considering the words used to describe SF by those of a certain generation, often reflected in mainstream media opinion pieces and by our FF/FG politicians, will it be a surprise that other institutionals in a few years get spooked and think SF are some sort of mish mash of a communist, terrorist, fascist party? It will probably be self-fulfilling that SF will affect our foreign capital investment prospects given the attitude to them by so much of corporate Ireland and the establishment in this country.

It looks like the foreign and economic policy of just doing whatever corporate U.S.A. wants is going to backfire for Ireland medium term when there's nothing left over after our MNC gravy train is not as lucrative as it has been.

Have you taken away what would be garnered in non-income related tax and taken it away to give a proper idea of what the income tax payer is paying??

Are you talking about the Government revenue? If so, I think that's probably somewhere in the second link.

Stock market is taking a beating because of Covid and the introduction of restricted travel again and the fact that it is highly likely that countries will go into lockdown again. This can be seen by investors pilling into the safety of Government bonds which results in lower yields. The news from the fed has been priced into the market for weeks/months as they have very strong forward guidance so not to spook the markets.

Even if the Fed raised rates 2/3 times in 2022 the rate would only be 0.50%-0.75%. The yield on Irish property is around 3.75% at the moment so I don't think it will cause a big slow down in property.

What they have in common is they are bonds/fixed income and their price increased because the yield dropped.

If the expectation is that interest rates were going higher then the price should fall and yield goes higher.

The market is pricing in the new variant and the slowdown in economic growth from lockdowns and travel bans etc

Interesting new development, Avant to CUT interest rates, presumably they dont see any medium term upward pressure?

Bond prices have an inverse relationship with yield.

When yield goes down price goes up…when yield goes up price goes down.

The big driver of yield on fixed income/non government bonds is the 10 year treasuries.

As the stock market falls investors leave equity and look for safety in government bonds which increases the price of the bond and reduces the yield. This is what is happening at the moment because of fears of lockdowns.

If the fed tapers as it has said it will do... then they buy less bonds and the yield goes up... The expectation of this happening should send yields higher but instead we are seeing yields drop because of the flight to safety. Your list of top movers yesterday is mainly fixed income whether it be a bond/preference share. As the yield on government debt drops there is more demand for this fixed income and hence why the price rises. If the market was pricing in rate hikes then price of this fixed income should drop because difference in the interest rate to the rate on the fixed income reduces... This is not what we are seeing in the market. Instead we are seeing fear of lockdowns driving the yield lower on government bonds even after the fed announcement to tapper.

They have a range of rates and LTV etc, some currently as low as 1.95%, I guess the devil will be in the detail when they announce it next week.

Avant only really want to lend in the major cities and their suburbs is what my mortgage broker told me, worth mentioning for anyone hoping to go with them for a rural house.