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

We had a poster absolutely insistent that it was all coming down in August 2021 and would be 50-75% down by August 2023.

Primary claimed reason for them was WFH which, if anything, has put residential prices up in a lot of locations and only down for commercial property. Also major misunderstandings of vacancy figures, a conviction that the state would run out of money to buy properties for councils / fund AHBs and some nonsense about there being a massive probate backlog that would suddenly rush out. I think the OECD 15% tax rate was going to cause every single MNC to move HQ and all their staff to Hungary too.

Since house prices started to rise in 2014 we have had a selection of posters predicting a price crash of 20-50% ever year since.

Banks aren’t pricing mortgages based on the ECB rate. The historic relationship between mortgage rates and the ECB rate needs a positive yield curve something that we don’t have at present.

Instead we have an inverted yield curve where rates further out the term are lower than overnight rate’s despite inflation. To put simply the market expects lower rates than present in the future. Whether they have got it totally wrong or not is a different debate but that is the situation we have at present.

with regards house prices you also have to take into account that wages have been increasing which puts upwards pressure on house prices and as a result negates the impact of rising rates.

It is 91k for FTB nationwide, then 103k for Dublin FTB and think its 109k for mover purchaser. The point is correct though that the people buying properties seem to have substantial family incomes. This kind of makes sense as a lot of people (me included) don't buy until well into 30s and often as couple. Real killer at moment is buying with two young kids and uve to show ability to cover creche costs and sensitised mortgage repayments.

You don't seem to understand what you are saying

In a market with adequate supply, people can move freely when they need

A functional market

It doesn't cause demand

Yet again disproving the Irish times article that there is supply

its common sense that you could re-act to any changes in the market and not just plow on regardless

this is the whole problem, the government spent 10 years just sitting on their hands, probably on purpose, while this developed

there are low vacancy levels in dublin, high in leitrim which skews his figures and in the vacant properties left in dublin, considerable effort would be needed to bring these on line in comparison even to completion of new houses. The downside of new housing is these are not necessarily getting built where people want to live.

but it would takes years to both bring these online and to balance out the 10 years of no building

on the vanancy numbers these have been falling, the census which is the basis isn't that indicative as its not every year

but he uses a blended number which doesn't account for the fact that vacancy in dublin 2% and in leitrim its 12

it seems a mad article from a stats person to bring out

Also what nobody seem to point out here, is that there a lot of professional people on a good salary buying on their own. Everyone seem to mention here couples whose joint salary may be 130k, but I know two people who would be looking to buy on their own and they are not early 30.

Maximum damage phase of the celtic tiger was 03 to 07 where house prices were not allowed to correct naturally and subsidy after subsidy after loose lending were thrown at it to prop the pyramid scheme up. The weakest buyers were herded in at the maximum price at the end leaving the collapse inevitable.

Today Ireland has decided to relax lending, increase subsidies and place more of the cost of construction on the taxpayer by reducing/eliminating development levies in a time when every country in the world at a high level is attempting to fight back on inflation

This to me seems a blatant attempt to prevent property from falling to somewhat more affordable levels

Your last paragraph is a slip in your normal quality contributions

Base effects for measuring inflation will be less favourable after next month when the commodity price rise peaked as a result of the war

Globalisation effects are reversing

Lack of competition amongst banks domestically. The deposit levels at banks are back to pre covid levels so that source of cheap funding for the banks is depleting fast

Anti immigration movements

Esg discouraging investing in mining and gas oil exploration which provide the raw materials to allow for energy transition.

Global warming and more crop failures.

Wars are inflationary and detrimental to supply cgains

Many other factors just too numerous to mention. On the other side there will be global recession, but dropping rates to zero or negative will not be an option as it will stoke the inflationary fires again

This has probably been asked before, but is there any sign that banks will start offering interest on savings accounts in line with interest rates? I don't keep much money in cash, but I'd be happy enough with a 5% interest rate if it were available...

Well done, brilliant post