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

Austrian ECB member calling for 2% rises from here.

yeah it’s carnage and has caused everything to collapse 🙄…..it’s one bank that has lent heavily to one sector that finds itself in trouble. As for saying it was triggered by selling bonds that is also incorrect as the trigger was depositors pulling deposits that required the bank to liquidate some of its liquidity buffer.

There should be a limited loss on the sale of the bonds (liquidity buffer) if they managed the interest rate risk via a asset swaps or IRD’s but from the looks of it failed to do so and took on risk based on the belief that rates wouldn’t go so high for so long. Unless they were holding the bonds till maturity and are being forced to sell the loss on the market value of the bonds is already in their accounts. Plus if it the bonds are held to maturity they shouldn’t have to sell them and instead could repo them to get cash. It is a YouTubers wet dream as it makes headlines and gets clicks. If there was a real issue as opposed to a bad management decision then we would see the same happen across all the banks but we are not seeing this.

Anyway back to property

Also includes part time workers etc I believe which can skew the stats

British pension system

US retail banks (I believe there's at least 3)

If that's all that failed to manage there risk exposure in a massive risk on environment, we should be ok

Number of planning permissions for new homes drops sharply

This isn't great news for helping the supply deficit...

Part time workers in the 35 to 55 age category are usually mortgage holders with a caring role for either children or parents which is why household income starts to level off and fall at around family formation age group

I think @DataDude had a graph of household income by age which showed it better. Its household income that combines to pay a mortgage

Contagion spreading to other banks already.

"Shares of the three banks slumped between 20% and 60% in choppy trading that led to halts and resumptions."

This could stall or reverse fed direction. Time will tell

Michael Burry, Warren Buffet and Charlie Munger have all been saying that the current central bankers won't have the courage to do what it takes to fight inflation.

Interesting times ahead for central bankers decision making. Economy vs Inflation. Its sad because we are goosed either way 😅

I see that the last post on the “currently selling/buying” thread is from 6 days ago. I don’t remember seeing the thread so quiet.

won't affect many here as the massive pay rises we are all receiving after tax and the latest 16% increase in grocery bills will still leave us with loads of money to plough into over priced houses but the rate rises that are on the way will give pause to think for some would be house buyers here:

Homeowners could pay €6k more a year as ECB set to issue further interest rate hikes

Those who fixed their rate at 2.5%, on the average mortgage in the past five years of €253,950, could soon be facing fixed rates of up to 5.95%, costing an extra €5,870 per annum.

We’re at 3% now. We were at 0% this time last year. That already means about €150 per month for every €100,000 you owe.

https://www.irishexaminer.com/news/arid-41090545.html

I suspect bonkers is picking up rates that are no longer on offer or are technically there but only to people with offer letter out. Noone who goes sale agreed on house from today is seeing 3.5% rate. The market view is 50bps this month then 2 to 3 more 25bps moves this year. So 1.25% to be passed on. I would think by second half of year most people will be doing well to get a 5% rate. Two areas that could keep it lower are 1. Banks keep deposit rates low so dont need to pass on rate rises and 2. ECB soften on rate rises (seeing what happened Silicon Valley Bank from US rate rises may make them more cautious.

nobody is talking about a crash!

some commentators are simply pointing out that many would be buyers are now facing significantly increased repayments on would be mortgages this may in some cases have an affect on the amount they are ultimately able to borrow or pay for houses.. the seller can make their own decision on price based on the reality on the ground

many current mortgage holders and businesses are also in for a massive shock when they come off their current low interest rates

even mentionning the fact that the ECB are rising interest rates is now slapped down as talk of a crash its almost like bertie ahern in 2008 dismissing any or all negative reality news

Remember the Irish times during the Celtic tiger. There property section had a column where they would list 3 options of what the average Irish house price would buy you in Europe and beyond. They should do something similar on renting now

Would you have any links?- I'd be interested to see what's being said !