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

Timing belt · 21-09-2022 12:49PM

https://www.boards.ie/discussion/comment/119645169#Comment_119645169

Let’s not forget it was David McWilliams advice that was acted on to guarantee all deposits on Irish banks…The advice that escalated a situation that sucked deposits out of Uk banks and accelerated the collapse of banks and left the government with massive bill.

21-09-2022 01:07PM

https://www.boards.ie/discussion/comment/119645068#Comment_119645068

I am not disputing that the effect of their policies has negatively impacted the market, but you stated that was their aim to drive landlords out of the market and push up prices. You claim they did this intentionally rather than it being an unintended consequence of tenant focused legislation?

You think the investment institutions benefit from blatantly anti-landlord legislation which limits what they can charge and makes it extremely difficult to remove errant tenants and/or end tenancies? Your viewpoint seems to be contradictory.

Can you share some insight or policy document where it shows that they intended this to happen? I’m assuming you have something to back up your statement.

Or is it more misguided speculation on your part?

RichardAnd · 21-09-2022 01:11PM

https://www.boards.ie/discussion/comment/119645858#Comment_119645858

That's true. Has he ever addressed that on his podcast since or it is just "the thing we don't talk about"...

Villa05 · 21-09-2022 01:20PM

https://www.boards.ie/discussion/comment/119645169#Comment_119645169

In fairness to him he first touched on this scenario in xmass 2021. This episode prompted me to move my pension to cash and postpone AVC to the end of the year. Public service broadcasting at its best. It includes an interview with Paul McCully of Pimco

https://play.acast.com/s/the-david-mcwilliams-podcast/199-the-central-banks-have-spoken-what-does-it-mean

jimmybobbyschweiz · 21-09-2022 01:40PM

https://www.boards.ie/discussion/comment/119645169#Comment_119645169

The pre-crash state bailout to these funds has already happened with the council's and charities using State funds to take on 20/25 year leases at 85% of a ridiculously inflated market rent.

High house prices and rents are government policy!

21-09-2022 02:01PM

https://www.boards.ie/discussion/comment/119646089#Comment_119646089

Jesus wept. They are taking out leases at market rate, not because they want to, because they have to. The alternative would be an exponential increase in homelessness if those tenants are unable to afford to rent.

Villa05 · 21-09-2022 02:08PM

I think it'll cost a person more to not listen to DM than to listen.

The calibre of his guests speaks volumes of the respect he gets from his peers

Cyrus · 21-09-2022 02:08PM

https://www.boards.ie/discussion/comment/119645991#Comment_119645991

unless you are near retirement age trying to play the markets with your pension funds is a folly.

Villa05 · 21-09-2022 02:28PM

https://www.boards.ie/discussion/comment/119646267#Comment_119646267

Are you playing the markets or are the markets playing you?

growleaves · 21-09-2022 02:36PM

https://www.boards.ie/discussion/comment/119645937#Comment_119645937

Yes investment institutions do benefit from this overall because they operating at a large enough scale that they can some absorb bad tenants and lease at lower profit margins while small competitors are driven out of the market. Then they gobble up market share.

Even a medium-size real estate operation like the Healy Raes (who own 13 properties?) could survive as long as they didn't get really unlucky with say 10 bad tenants at one time.

This concept of bigger corporations' methods they use to cannibalise smaller businesses is something that Irish people are not as familiar with this though it happens in multiple industries as in the US. So you think it is some kind of conspiracy theory because you perhaps haven't been exposed to it.

WalMart and Jack Welsh's absorbtion of smaller shops all over the US is seen as a model by many corporate chains. They can absorb higher labour costs so push for rises to minimum wage, that's just one example.

More recently corporate farms in the US have driven down prices deliberately by flooding the market with goods so smaller operators can't compete. Then they buy smaller farms out and scoop up their assets (farm machinery etc) at knock-down prices.

It is just corporate capitalism in action. A web of regulation benefits bigger operations generally.

It does not strike me as implausible that lobbyists and TDs have a thumb on the scale. Though of course it can't be proved. Do you believe they are driving SMEs out of the market "by accident"? That's an unfortunate thing to do by mistake!

Marx even has a chapter on this in Das Kapital (written in the 19th century), saying the swallowing up of the petit-bourgeois (small business owners) by a larger ownership class is inevitable over time.

Cyrus · 21-09-2022 02:44PM

https://www.boards.ie/discussion/comment/119646386#Comment_119646386

there is a risk of trying to be too clever.

Villa05 · 21-09-2022 05:03PM

https://www.boards.ie/discussion/comment/119646527#Comment_119646527

The risk of being in is much greater. Don't fight the fed works both ways

Most pension funds are passive, and esg focused not a place you want to be right now

MayoSalmon · 21-09-2022 05:22PM

https://www.boards.ie/discussion/comment/119645955#Comment_119645955

Not sure if he did a podcast on it though...

https://www.independent.ie/business/irish/banking-inquiry/bank-guarantee-was-the-only-decision-says-david-mcwilliams-31026335.html

argolis · 21-09-2022 05:30PM

https://www.boards.ie/discussion/comment/119616748#Comment_119616748

Everyone keeps quoting these low Daft rental numbers. 330 is not the true figure. When the numbers get low enough, anyone wanting to rent out a decent place is not going to list it on Daft. You'd expect to be inundated and if you were to have a public viewing you'd be risking crazy queues, crazy people and social media attention. I imagine what most landlords do now is check their work/social circles first, which has a good chance of success because demand is so high.

After that, most landlords would approach an agent. They either ask the agent, or the agent will suggest, if they know of any tenants that they can recommend and there's also a very good chance this will succeed because so many landlords on their books are selling up.

I say this with my own experience of selling a now ex-rental and out of curiosity asking the agent if I did want to continue renting it, would they have any tenants they could recommend, which they did. I suspect this off-market activity is widespread.

When rental stock comes back up, this sort off-market, unmonitored activity will probably die down and boost the "public" Daft numbers.

Timing belt · 21-09-2022 07:24PM

https://www.boards.ie/discussion/comment/119647254#Comment_119647254

He generated a bank run in the UK when over night billions left Uk banks and flooded into Irelands banks. Then once the Uk banks were in difficulty it caused panic with the Irish banks.

jimmybobbyschweiz · 21-09-2022 07:52PM

https://www.boards.ie/discussion/comment/119646214#Comment_119646214

HAP is a two birds with one stone policy for the government; it puts a very high floor under the rental market which we know by know inflates the whole property market and it also appears to deal with the populist-termed homelessness problem.

It is ultimately a hugely expensive demand-side expenditure that does not increase supply. If rents only fell to 80/85% of their current levels, they would still be unsustainably high which is why I think there is scope, based on a simple measurement against what wages are in this country, for a more significant correction. Then the state (IE the taxpayer) will be on the hook for above market rents for institutionals when the correction occurs - it's ridiculous.

LJ12345 · 21-09-2022 08:08PM

https://www.boards.ie/discussion/comment/119644954#Comment_119644954

yes when you look at the micro perspective but when you pan out and look for the domino effect and where it could start, it’s probable the imploding Chinese property market and its economy will be the final straw when it becomes visible that the debt is being called in, the interconnected global web of reits and funds and lending practices is probably going to end up as movie material one day. China is an incredibly dubious player to have as one of the worlds leading economies.

https://www.bloomberg.com/news/articles/2022-08-24/blackrock-ubs-among-funds-slashing-exposure-to-china-property

21-09-2022 08:09PM

https://www.boards.ie/discussion/comment/119647820#Comment_119647820

And the alternative to Government support for Hap recipients?

Complaining about HAP while failing to understand why it is necessary shows a lack of understanding. Homelessness isn’t a “populist termed problem”, perhaps you should ask families living in hotels if it is real, or just a catchphrase.

Timing belt · 21-09-2022 08:14PM

https://www.boards.ie/discussion/comment/119647882#Comment_119647882

Hotels and hostels are practically full now so would be lucky to be housed anywhere at this stage and it’s meant to get worse over the winter.

21-09-2022 08:18PM

https://www.boards.ie/discussion/comment/119647902#Comment_119647902

I could be wrong but it seems that our Swiss resident thinks eviction of HAP recipients is a price worth paying for lowering of rents for private tenants.

Timing belt · 21-09-2022 08:23PM

https://www.boards.ie/discussion/comment/119647879#Comment_119647879

China is an insulated economy with an artificial exchange rate and trillions of USD and other hard currencies They may burn investors to teach a lesson but there won’t be a major collapse as they have the resources to refinance the economy and are not reliant on international bond holders to bail them out. Let’s not forget that they introduced the 3 red lines policy to control the property market and orchestrate what’s happening.

Timing belt · 21-09-2022 08:28PM

https://www.boards.ie/discussion/comment/119647914#Comment_119647914

Think it’s more a case of burn the economy…set fire to everything!!!!! I won’t be impacted and will still have my job and level of pay so will be better off than I am now… make people sleep under bridges I don’t care as long as I can buy cheap.

LJ12345 · 21-09-2022 08:52PM

https://www.boards.ie/discussion/comment/119647937#Comment_119647937

The Chinese govt are not propping up the Chinese developers or their property market. The 3 red lines were brought in to bring developers back in to line that attempted to dictate to their govt and to speed up the inevitable fallout from their obvious bubble. What matters here is the global funds and Chinese funds which invested globally. The sell off from that debt being called in will satiate demand for the remaining solvent funds. This could be the reason Irish developers are reporting their intention to scale back.

Timing belt · 21-09-2022 09:12PM

https://www.boards.ie/discussion/comment/119648036#Comment_119648036

Never said they were propping up developers said the deliberately introduced policy and it is engineered and If it gets to a stage of contagion they will step in bail out banks etc or take over developers companies and turn them into state assets. The last thing they want is social unrest so they will only let it go so far.

Irish developers are scaling back because they no longer can guarantee that it will cost x to build.

Villa05 · 21-09-2022 09:46PM

https://www.boards.ie/discussion/comment/119647710#Comment_119647710

Is it common to hang out the person that was calling the scam for years prior to the bust or is this just an Irish phenomenon

mcsean2163 · 21-09-2022 10:04PM

https://www.boards.ie/discussion/comment/119645955#Comment_119645955

His response is that it was meant to be a guarantee limited by time. I think the limitation is easier said than done.... however, probably wasn't the worst to have the IMF come in rather than the government digging an even bigger hole. The bank guarantee (total cost 42 billion https://pai.ie/bank-bailout-costs-state-nearly-e42-billion/) didn't cost that much in comparison to the day to day running of the country (national debt 37.6bn (2007) 241bn (2022)). NTMA don't care about hundreds of millions anymore....😂 , so 241 -38 -42 =161

161 billion to pay government salaries, unemployment, etc. Crazy where we've ended up in 15 years. People to continue to shout for more spending on this thread saying GNI matters not gross national debt😝

LJ12345 · 21-09-2022 10:09PM

https://www.boards.ie/discussion/comment/119648126#Comment_119648126

I was filling you in and elaborating on my earlier post, as you took what I said on a different tangent to what was intended. I’m referring to the fallout of reits and funds.

irish developers are reporting handsome profits. In a market which is allegedly so short on supply with so much demand and materials likely to drop in price (demand for building supplies slowing globally as many more countries appear poised to begin a downward spiral), it seems unusual they would put any halt on construction. Perhaps they believe a hard recession is inbound, perhaps they’re attempting to blackmail the govt for more incentives or maybe they’re trying to scare people into buying. Either way, what they say and what the situation is doesn’t corroborate well.

jimmybobbyschweiz · 21-09-2022 10:25PM

https://www.boards.ie/discussion/comment/119645937#Comment_119645937

Of course it was and is FG policy for the market to rise! Here is Noonan back in 2014 talking about it https://m.independent.ie/life/home-garden/homes/michael-noonan-wants-house-prices-to-rise-further-30192456.html

And getting into bed with the institutionals is not a big shock when we know FG are all about the big corporates. Here are a few examples;

- Owen Keegan of DCC is former Davy and Davy have done so many deals with DCC via their controlled entities to get on board with these social housing long term leases. I don't think this is a coincidence when these have been consistently described as being poor value for the State and not assisting with the delivery of more supply of homes.

- We had a 4% RPZ rental increase limit imposed a few years ago. Firstly, it was odd that it was not a rental freeze as even 4% rent increases per year far outmeasured inflation. However, institutionals have their targeted yields and the 4% p.a. increases align with those targets so that clearly seemed to be institutional driven.

- Pat Farrel is head of Irish Institutional Property, which is the largest real estate institutional investor lobby group in ireland. He is paid for this role. What are his qualifications? Former FF, with plenty of political contacts which of course are valuable, hence why is leading the lobby group.

- The housing charities, AKA the NGOs that FG love to hide behind, typically have an institutional investor representative involved with them. For example, look at the tentacles of institutional investors on the board of Cluid https://www.cluid.ie/our-board/ these housing charities allow for indirect lobbying of the government by institutionals.

The housing market in Ireland is ridiculously manipulated and not for the long term sustainability interests of most people, but instead to enrich a select few. It is a pyramid scheme where good quality State cash is being siphoned off and put into the pockets of property owners where it dies essentially; it requires constantly growing cash piles of State cash to keep increasing in value as the State is the whale in the market, blowing up the bubble.

Timing belt · 21-09-2022 10:28PM

https://www.boards.ie/discussion/comment/119648284#Comment_119648284

it was his idea and he was unable to see the knock on impacts… how is that hanging him out…wouldn’t trust him with my piggy bank not to mention my pension

Timing belt · 21-09-2022 10:35PM

https://www.boards.ie/discussion/comment/119648392#Comment_119648392

How long does it take to break ground and build and then sell? Unless all delivery’s and machinery run on Air costs have gone through the room.

if you wanted an extension built and the builder couldn’t say how much it would cost would you go ahead and give it the green light or wait till

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