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

Believe me wages going up lot does not compensate for these interest rate rises.

Say family joint income 100k and borrowing 400k at 4x to buy 440k house.

On 400k mortgage if rate goes from 2.5% last year to 5.5% now that is 12k pa. On higher tax rate need 24k gross income rise to cover that. Unlikely got 24% increase in family income.

Wage rises will not compensate for mortgage rates going over 5%. Will be price correction.

It's the stress tests for new lending that will be interesting. If new business rates get to 4% the stressed rate will be closer to 6%. Hard to see the level of allowed lending hold up at the levels seen over the previous 18 months. No doubt the gov will expand the subsidies or the shared equity scheme to try bridge the gaps.

The rest of the country doesn't exist for Dubs clearly.... He made a point that the mortgage is cheaper than the rent and he isn't wrong. Doesn't matter where you go the mortgage is cheaper and will be for a while to come. If you left your dublin centric view behind for two minutes you would find that Athboy and Rathangan both offer houses for the prices you mentioned within 40 minutes drive of the city

I can tell you from working in the industry 12+ years in senior management that Ireland is used as a hub to house employees to serve EMEA (not just as a tax haven.)

With regards to tech lay offs in dublin it’s important that we consider the economy as a whole across Europe, Middle East and Africa. Irish employees in comparison to UK for example as massively underpaid (cost of living considered) to serve these regions with most of the exec level decision making happening out of London.

Tech companies expected a bounce back in 2023 but again speaking from experience (not to sound like a d*ck) this is not looking likely. The first 1.5 months of 2023 are showing -26% YOY as a whole in tech sector generally speaking. Prior to covid it was consistently 15-20% YOY growth and 30-35% YOY Growth (in terms of revenue) from 2020-2022 resulting in massive overhiring.

Not to go off topic but as mentioned, these tech companies generally have senior decision making power in London. They are the ones making the decisions on who and where heads should be chopped, post Brexit (hopefully a coincidence) there is massive unease between regions and not just politically - you will see them lay off people in dublin quicker than UK.

To date, most lay offs have targeted roles in HR, finance, recruitment and basically any back office operations that can be streamlined. Sales has yet to be hit as they look to boost revenue, however, hiring more sales people (which is mainly what Dublin is used for) won’t fix the issue. They will be next to go and the fall out will be much worse than what we have seen so far re: tech lay offs.

Non bank lender so they don't have the deposits to offset the borrowing interest rates.

It would be a mistake to discount tech layoffs. What proportion of the market can afford current prices and nose bleed rents, I would suspect that quiet alot of that category would be in big tech.

I agree that redundancies and quick new job may result in a short buying boost but would imagine incomes for future sales rents would be reset at lower levels

Four days ago, RTE reported that companies are having difficulty recruiting staff because they cannot find housing. This is yet another reason to evict defaulters immediately (as opposed to letting them continue to occupy houses for years into their delinquency). The reason defaulters default is because they can`t pay but a working person could pay. So kick out the defaulter, sell the house and the person with the job could buy it. The evictees could muddle along just like others have to i.e. the renters, the homeless, those living with their Moms and such like. At least it would solve the problem for companies trying to recruit and retain staff.

Of course, companies could offer to pay their new recruits more but if all companies did that, it would not solve the problem as it does not increase the housing supply and in any case it would make Ireland`s cost of labour uncompetitive.

I doubt that banks will start evicting defaulters en masse though. Anti eviction legalities, and other government ploys to prevent houses going on the market will stay in place. Keeping houses off the market is the government`s way of keeping house prices high. The government will sacrifice anything, including the country`s competitiveness on the alter of maintaining elevated house prices.

Witness this first hand in my company since this time last year. Large financial multi national. Lost count of the amount of successful job applicants both graduates and experienced who ultimately turned down job offer due lack of affordable rental accommodation in the locality. I feel these people will ultimately end up emigrating.

The company resorted to bringing in workers from an offshore office in Asia and putting them up in hotels. None of them last longer than six months as who wants to live in a hotel and work.

Existing staff are now leaving in their droves (myself included) as we are so under resourced, 12 hour days are now the norm.

Its a situation that will get a lot worse across multiple organisations and industries.

Of course I appreciate that most people in the country live outside the Dublin area, it was my way of saying that his comments don't apply to a substantial percentage of people in Ireland, in particular people living in and around Cork and Galway as well as Dublin.

I just checked your time on Google maps, they say 1 hour to 1 hours 50 from Athboy to Westmoreland St., and if you leave at 7:30 am you'll arrive at 9:20 am. Slightly quicker is you avoid the M3!

Hardly surprising.

Matches what I’m seeing (new developments selling out, record prices for similar houses) etc.

Only exception are properties that need substantial work. Even the biggest idiot kind of realises now that a full refurb is NOT a “100k job”.