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

It does seem to be ramping up, and couple that with the fact that housing output was restricted since 2016 because Labour was tied up building office blocks and other commercial property. This inflationary period would also shake out alot of business and many may not survive it

the realities of rising interest on asset values: "State’s biggest private landlord cuts value of its homes as interest rates bite

Goodbody Stockbrokers analyst Colm Lauder said that the results show “the start of a re-pricing” of Irish private rental sector (PRS) assets as higher market interest rates feed through, resulting in lower dividends."

sounds like the REITs are heavily exposed .. and with rent pressure zone price freeze in place perhaps they will have to hold back some stock to drive up future rent prices .. a vaccancy tax of 10% on unlet properties over 3 months may be required similar to the incoming site vaccancy tax .. the next government could in less than 2 years time bring in many creative measures which should have REIT shareholders concerned

all seems very bubblish

It's similar to the quantitative easing effect

Buy anything, as long as there is an entity in the market that will buy it off you at a higher price or bail you out if things go wrong ie the central banks

In the Irish property market its the government plus you have the added incentive of tax free gains on rent and price appreciation.

wow so their gearing could be heading for 45%+ now after repricing their own assets due to interest rate rises reducing dividends. As Warren Buffett says “Only when the tide goes out do you learn who has been swimming naked.” This will hold true as interest rates continue to rise this year.

What are some possible REIT options for this year:

- Raise rents significantly difficult to do immediately with many areas designated legal rent pressure zones

- Set up new company and transfer assets/ debt to that

- Hope property values significantly increase which is not guaranteed given high cost of living, rising interest rates and the fact there already been a massive increase since 2012 in values

- Sell parts of their portfolios to reduce gearing

- Discontinue repricing their own portfolio value given rising rates are increasing costs with the knock on effect of reducing dividends - probably not legally permissable option

- Other which there of course probably many

Interesting times ahead - either way it is still not good news for renters

Irish property never had the easy money upmove, hence it won’t go down.

scarcity trumps everything else.

Scarcity narrative (and also high levels of immigration) have been trotted out in markets that are currently imploding.

actual hard cash affordability trumps everything

there is a reason why the government has been issuing energy credits, extra child benefit payments etc. a massive portion of the domestic economy is struggling the same as across many parts of the world ... throw rising interest rates on top of massive mortgages / large borrowings, on top of 10%+ inflation with zero to low pay rises and you have a perfect storm

they certainly could do that to solve issues of financial distress but it is a sign of where things are going with rising rates

once buyers are aware that REITs are being forced to sell property due to asset value repricing and legal gearing issues offers will be priced downwards accordingly

I was at a viewing today and there were maybe seven or eight other parties there; none of them Irish apart from myself, the majority Chinese. As long as Ireland is still seen as a good place to come economically, I don’t see major drops happening. Mind you, maybe you could say the same about the UK, and their prices are sliding back.

According to the data available, property prices haven't decreased year on year and are higher than their peak in 2007. That's the bit that matters when making a decision to buy and sell IMO.

Many forecasts in the past have been wrong from Brexit, to COVID and inflation...a lot of posters here are always saying wait 6 months, wait 12 monts, wait 5 years and you will get a bargain. Or they post the stat of the property market in Sydney expecting the same to happen here, really??? How can anyone take these posts seriously is beyond me.

Those who bought during COVID are better off IMO as they were able to lock in long term low fixed interest rate, escaped a bad rental market and most importantly, and it needs to be mentioned, are in a much better mental health position due to their circumstances of controlling and getting on with their lives as they wish.

Some people will be forced to sell at times, probate/divorce/moving location for job etc

If I was one of you millionare grandads sitting in a 700 grand house that I bought for 51 grand in 1993, I would be trying to sell it now so I can collect the last fool's money before Irish house prices start to reflect reality again.

Based on this assessment I believe that a record number of houses will appear on the market this summer.

Downsize hopefully. 3br houses available for people with kids, 2 br apartments for empty nesters.