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

There has always been this kind of thing going on I did this with my first mortgage as well to meet the LTV ratio needed to get the loan and we were not in a bubble when this happened.

With Avant cutting their interest rates from tomorrow, would people expect other providers to follow suit in the coming weeks/start of new year to remain competitive?

No good reason to object. That is the N11 going outside the development, a main road from Dublin City all the way south through Wicklow with multiple bus routes going right outside the door. Further, it is not a far walk into town from the development. There are zero residential streets to be burdened with the new development so any objections are fundamentally and absolutely NIMBY based.

Will be good to see that development go up as Kielys is a large premises sitting idle for a few years at this stage which is tragic for a village so close to the city centre. Donnybrook as a village has a large number of vacant commercial premises, it looks like a bit of a kip at the moment.

Probably not. As discussed just recently, Avants lending criteria is so strict they only lend to only the most prime borrowers which rules outs the vast majority of folk looking for a mortgage. The other lenders know this.

Yes (to avail of the lowest rates) - Because the vast majority of borrowers don't have 20% deposits, LVRs, serviceability & income criteria. Also it is not available in all locations - typically major urban areas. My broker said he doesnt write a lot of loans as they are only interested in taking the cream (i.e. lowest risk borrowers). Doesnt seem like a strategy in attracting market share.

There's even a view held on other forums that Avant's not in it for the long term in the Irish market.

They have broadened the locations (it is nationwide now) and the majority of mortgage holders will meet the leverage requirements (this isnt just new mortgages it is switchers also). I dont think that stands up to scrutiny to be honest.

Houses in say Mapas estate have gone extremely expensive, nothing under €800k, these days which is somewhat extreme. The same goes for normal houses around Hyde Park, granted not 4 bedrooms plus, and neighbouring roads in Glenageary estates. Where total wrecks are going for €750k (and well over asking) but still need at least €200k work. These are all mind boggling figures.

Evergrande is officially in default and has been downgraded by Fitch - the next couple of years are going to be catastrophic for China.

Closer to home. the Central Bank's deputy governor had a speech published today on the regulator's website. One thing that drives me mad is seeing statements along the lines of "It's expensive in Ireland, but....it's expensive in other places", like what does that mean? How is it a "but"? A but in this context is generally, in my experience, used by those who don't want to see affordability challenges overcome and essentially are pretty happy with the status quo in the housing market "No sex please, we're Irish". Unsurprising from our Central Bank to see such a pitiful ode to the crisis, I've already stated my position on their post-08 performance.

Her statements smack of the "thoughts and prayers" comments on social media when someone has died or "share to raise awareness"; utterly useless and self-serving. However, you'd think the deputy governor of the regulator might be more concerned about house prices rocketing to Celtic Tiger levels, increasing 90%+ in 9 years. "This time it's different" - for sure it ain't.

https://www.centralbank.ie/news/article/housing-policy-should-focus-on-the-sustainable-supply-of-housing-to-meet-the-growing-needs-of-citizens-deputy-governor-sharon-donnery-9-december-2021

"Thoughts and prayers".

She gets paid for making comments like that?

"This time it's different" - for sure it ain't.

The ones who laughed at this phrase comparing 2008 crisis to 2020 got totally wrong. I think it's time to recognize.

From what commentators say, a huge part of their GDP is based on activity in the residential property sector. And a lot of Chinese have almost all of their wealth invested in the sector via their own house and in other properties. As in, the average Joe in China is almost fully invested in the property sector for their personal wealth. And a lot of this activity has been funded by debt. We all know what happens when individuals are given easy access to credit which goes into property; risk of a crash dramatically increases.

Some of the stats I've seen are Chinese GDP relies on the sector for around 25% of its activity and new home sales have dropped around 30% each of the last two months.

The big curveball is that we have very little visibility on China and it is a communist country so how will they handle the fallout?

When covid first began I was expecting a price crash because I did not fully understand QE yet.

The world economy would have collapsed without the QE anti-gravity machine given the length and totality of the trade embargoes (aka lockdowns).

Fair play to you if you predicted that wouldn't happen and fully understood why not at the time.

If you look up any high yield and/or Asian bond fund factsheets and investor reports, you'll see that the exposure to Chinese entities and the likes of Evergrande in particular, runs into the billions. I looked up a few Irish funds of well known asset managers and counted billions in exposure to bonds of Chinese entities. If what they say is true, these are the bondholders with effectively worthless pieces of paper.

There is another huge contagion risk to crypto from a Chinese real estate crash. In particular to Tether and, by extension, Bitcoin. A lot of younger guys throwing their cash into those retail trading apps to trade cryptos will be taking a bath if they haven't already taken profits. This is an obvious direct hit from the Chinese property crash but I'm sure many of us could anticipate plenty of other areas where there are contagion risks from a crash.

Since this is an Irish property market discussion thread I'll have to tie this into our market in some way; Chinese investors have gobbled up real estate outside of China, to what extent they have bought up Irish properties I do not know but would suspect these properties will be sold over the next few years to shore up cash.

It's a communist country though and the regime seems to talk of the excesses of capitalism as needing to be corrected so it seems that the rich are going to have to take their medicine and the Chinese State won't be bailing out any wealthy parties. This would be so different to how we dealt with the financial crises after 08.

Repossessions seem to be politically unpaletable for any of our parties for some strange reason. Maybe Renua might have supported it but they didnt last long enough for us to find out!