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

based on the below, is there any value from this vacant home tax?

Does seem a crazy budget, the only reason for such spending that I can think of is to try and stop wage inflation setting in

Any thoughts?

They are trying to get ahead of the recession…days of austerity are gone even IMF changed there opinion and said austerity made previous recessions deeper…so trying to spend there way out of it… just be thankful that we are in the EURO.

The current energy crisis will go on much longer unfortunately - many eurozone countries have been net importers of electricity for years now, russian gas being removed from the market just caused all prices to spike. Those 2 nordstream pipelines going boom on monday has put to bed any hope that gas may once again transit, so high gas prices are the norm in europe for the next decade.

So long as gas and energy are expensive in europe, cost of construction and materials will be too. Houses wont fall that low anytime soon

You do realise that the UK and Ireland are different countries? The chaos over there came as a direct result of absolutely insane government policy by the Tories. Ireland is in a vastly different position with a pretty responsible government in place as shown by the costed and targeted budget this week. Even if we do get similar populists like Sinn Féin running the show in a few years, our PR system means they'll still be accountable by other parties and by the public, unlike the Tories who were gifted a massive majority by FPTP without getting half of the popular vote, so they'll be unlikely to be able to do as much damage.

It shows that the government learned a lesson from ‘08 by not writing a blank cheque in the way of a energy cap. If they had done so like SF wanted them to investors would probably be looking for a greater yield on government bonds to cover the risk.

So the value of Uk bonds dropped and as they are used to provide collateral for most trades the collateral wasn’t sufficient and they had to cover the difference with cash collateral and in the process draining liquidity from the market. To stop this from getting worse the BOE stepped in and bought bonds and provided liquidity to the market. If they didn’t take action then yes you could have contagion… but they did act.

if anything it shows the damage that can happen with the likes of SF policies and them demanding a blank cheque being written.

There overall exposure to property is small compared to there other investments. Also Property is a illiquid asset and takes at least 6 months to liquidate so existing property investments wouldn’t be impacted directly in a liquidity squeeze. If anything the property returns may be securitised and sold to provide liquidity.

The biggest risk is that as yields rise the value of the bonds fall and generate a margin calls and you end up in a cycle like one that existed for a few days at the start of covid whereby margin calls feedback into the cycle resulting in more margin calls. The BOE and all central banks are well aware of this risk and hence why they stepped in as is their job.

And yet again, it's the least culpable pay the price, those that do not own

They don't even have the deceny to put in a form of regulation and oversight that works and is cheaper to offset these extra costs.......

According to newstalk business news yesterday a well known Conservative party donor made a fortune shorting British bonds after yesterdays fiasco. People are blind

Well they are all coming down the demand has gone through the floor, areas like construction is starting to stall globally. Regardless of what is needed to make something if the demand is not there the price drops or they stop production.

Nobody took responsibility, homebond, home insurance etc all refused to pay out - the government could have held them to account, didnt.

The regulation to stop this happening again still doesnt exist - it easily could happen again, just that this time there will have been more taxes collected by govt in the interim. And for those decrying MICA homeowners etc for it, the big money redress scheme has so far only paid out to 14 houses.

Everyone is getting shafted except for those responsible

Hopefully the decade of cheap credit comes to and end. Personally I think ECB policy of having negative interest had good intentions but they got carried away. Just look at how much the euro has fallen against the dollar. I guess we will see a .75 increase in October, think that is the final meeting they have for the year. Expect more increases next year.