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

One of the lads here in work was in Dublin at the weekend for a concert and he actually spoke about how busy the pubs were.

Obviously this is not happening every night or is it happening in every town in Ireland

In my experience everywhere I've been lately is buzzing and filled with people, whether its shops, cafés or restaurants. I don't really do pubs these days so can't say if they're any different.

Everywhere is busy whether in Dublin or local places around my commuter town. A new restaurant and a new fast food place opened in my town recently and there's a brunch place due to open soon, along with a new coffee shop, both of which are hiring for staff currently. Another popular long running local cafe had the confidence to invest in a major refurbishment recently too which has allowed an increased number of tables.

We did have one restaurant close down back around November which might be mentioned in one of the above cherry-picked news articles that show one side of the story, but there have absolutely been more openings than closures around my way.

Pressure to pile on borrowers as ECB rate hikes tipped to continue into 2024

An analysis of the market by Bonkers.ie shows that property prices will have to fall sharply if thousands of people are to avoid being priced out of the market.

“Markets are pricing in the refinance rate getting to 4.5pc by the end of the year. This would be an all-time high.”

He said inflation figures from Spain and France showed that inflation was not slowing down sufficiently to allow the ECB to ease off on its rate-hiking path.

Already, some mortgage rates in this market are at levels last seen 20 years ago.

Vulture-fund owned mortgages managed by Pepper have variable rates of around 8pc, while non-bank lender Finance Ireland is charging up to 6.9pc on its variable rates.

https://m.independent.ie/business/personal-finance/property-mortgages/pressure-to-pile-on-borrowers-as-ecb-rate-hikes-tipped-to-continue-into-2024-42363396.html

I know many on this forum don't like to draw any comparisons with other markets but the hiking of IR's seems to have been the straw that broke the camels back vis a vis their property bubbles. As they too seem to be at full employment and are having net inward migration (like us) then it is going to be interesting to see what happens if and when the banks start to apply these increases here.

There is nothing to suggest (apart possibly some wishful thinking) that rates will come down quickly. The latest utterances I have seen from ECB sources is that once they peak they are likely to remain at that level for quite a time.

I have seen some speculation elsewhere that the main banks have been slow to raise rates here as they want to squeeze out some people who are keeping their trackers. Not sure how plausible that is?

Yup rates to climb in 2024.. Not fun for sure

Central banks talk tough to reduce the amount of rate increases required. If the talk changes behaviour/demand the the amount of increases is reduced.

Speculation is plausible, if your on base rate plus 0.5%, the jump in your mortgage repayments has been very significant and will be felt. Fear would push some into a fixed rate. Banks wold be making very little if anything on those mortgages, but if there put on a fixed rate and loose there tracker, that's a different story for banks bottom line

may be good news for some mortgage holders

Funds refusal to offer fixed rate mortgages may breach contracts financial advisor claims

https://www.rte.ie/news/business/2023/0301/1359477-funds-refusal-to-offer-fixed-rates-may-breach-contracts/

In my view, Ireland mortgageholders have been able to absorb the early rate increases better than other countries due to our lower LTI limits. But we may be getting to the point now where these increases will start to bite.

Observations in Aus of the impact inflation and rate increases are having on the domestic economy on the back of their quarterly GDP figures released today.

• Consumer spending boomed coming out of lockdown, but is slowing significantly post Christmas.
• Savings ratios declining which helped fund this spending.
• Minor positive growth of 0.5%, but primarily a result of imports dropping significantly on the back of weaker demand.
• The biggest contributors to inflation over the past year were housing (+9.8 per cent, due to both construction costs and rents), food and non-alcoholic beverages (+8.2 per cent) and recreation and culture (+10.2 per cent).
• Early signs inflation may have peaked, but Reserve Bank still may need to push rates further to dampen price & wage growth.

From my time in the food business the only down day of the week used to be Monday. A lot of places closed on Mondays and depended on the money earned the rest of the days to make it up. Usually Tuesday and Wednesday were slow put turned a profit. Things would ramp up from Thursday with Friday/Saturday generating maybe 50% of the whole weeks turnover, but lots more staff required to get it.

Since Christmas and going back a bit, but mostly since Christmas down days are Mon, Tue, Wed and even Thu now. This has never been seen before (apart from the pandemic). It wasnt even that bad after the last crash.

So now you have places having to close for 3 or even 4 nights a week. Staff then are leaving because they are not getting enough work. Getting new staff in they are looking for more money as not worth their while working 3 nights a week.

The whole industry is in the sh1t. And its not the only one either.

Dunno if it been answered/discussed but with the recent 4 hikes in my mortgage am I better looking at fixing a rate now or riding out the storm till they reduce again, which if history tells us, it will come back down again. Id hate to fix now at high rate.

Thoughts?