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

Work in financial services. Not a particularly glamorous company, but you’d know of it. C.1000 employees in Ireland.

Highest annual ‘inflationary’ increase in past decade until now was 3%.

This year staff below senior management are getting 8% on average and grades above that getting 5%.

My wife’s company (much bigger company) everyone got 5% last year and she’s expecting similar or more this year. It’s obvious some sectors are struggling big time, but there’s a large chunk of people between public sector, a certain parts of private sector, getting very large increments in 2023. Wage inflation is very real and no longer just for tech employees!

How will this impact property? Will it increase prices from additional wages? or will it reduce prices from increased interest rates due to entrenched inflation?

McWilliam’s promoting the proposed 3% vacant site tax in his latest podcast. Anyone see any unforseen consequences in his vision

How the investment funds affect the US housing market. Lots of parallels with our own market and crystal ball on where Fine Gael are taking us.

You can see the lobbyists singing from the same hym sheet as our own. It's is incredible the stupidity in incentivising this process. Bet you they don't have tax free status in the US

If you have a loan with an outstanding balance of 350k that you will make a payment on in 1 year, and your interest rate goes up by 2% just for that year, then the interest cost goes up by 7k compared to what it was before.

That doesn't mean your repayment will go up by 7k. That is due to the way they calculate the loan repayments. What will instead happen, if say your repayment goes up by 4k, is that you will have an additional 3k owing on your outstanding principal at that stage. So your future repayments will be higher, even if the rate decreases back down by the 2%, than they would have been.

This just a simplistic example to describe the concept. You are correct that the mortgage repayments will not increase by 7k per year, but that 7k is still being added on to the principal owed (minus your additional repayment amount).

It's a vacant site tax not a vacant house tax? IIRC it only applies to hoarders of development land

I believe site tax is different and will be assessed differently. Heard discussions about it on radio earlier actually - its up to local authorities to mark affected land and sites (criteria is land that has access to services and could reasonably be expected to get planning permissions for 1+ dwellings), all kinds of exceptions for landowners who own a small holding for farming or grow a bit of veg.

Likely to be some more loopholes too for bigger developers, but hopefully its gets some of these vacant sites in regional towns to be sold on.

I dont know about the cities, but in larger towns huge numbers of sites are held by a few businessmen looking to gain more influence in the town. Land hoarding really sets places back.

From revenue: 3% applies from 2024 on serviced zoned land. Properties liable for lpt are exempt only applies to land zoned since 2022 (not sure why, maybe that's when first proposed)

Whenever it starts it makes sense

With regard to empties there are numerous carrots, grants etc if they are not working, the stick needs to accompany the carrot

Agree on regulations, maybe a period of time with rent a room conditions applied to property that is brought back to market from a state of dereliction

any increase in inflation in germany is indeed concerning

it is worth also remembering that the average age of first time buyers here (both single and joint applicants) seems to be increasing all the time.

"The median age for a sole purchaser increased from 34 years in 2010 to 42 in 2019, the CSO found.

For joint purchasers, the median age rose three years, from 35 to 38."

The age profile has most likely increased again since, meaning that many FTBs are looking at approx. 20-25 year mortgages at best rather than then 30 year mortgages often cited here .. continued increases of interest rates on larger home loans (which is the case here after 10+ years of substantial rises) will be felt even more accutely by older borrowers on a shorter morgage term but then again perhaps the pressure to buy before pension age is even stronger as renters find it more and more challenging to save for a deposit when faced with current nose bleed rents.. more and more the bank of mam and dad and the hope of inheritances are being mentioned which all points to a highly priced market reaching towards a tipping point which we are starting to see in other housing markets around the world as interest rates continue to rise

https://www.irishexaminer.com/news/arid-40315109.html

Less than the difference between the rent for a similar house even now buying it with an extra 2% on the rate.

I think it started to look ominous for the CRE sector many moons ago. Older buildings which are currently vacant have an extremely grim future. Too expensive to upgrade and conversion costs to other uses probably making zero financial sense. Maybe the only thing is a major government subsidy to convert them to apartments.

56k is that right?

This is nothing new banks were doing this since 2016