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

Australia and Canada might be yesterday's trend as it was traditionally mining, building, nursing, police, teaching, engineering etc

Today's trend might well be the middle east.

My point relates to the demographic leaving, is it our youth that are leaving and those that have earned enough to tackle the property ladder that are returning,

rent affordability affects new entrants the most, so leaving may well be an easy decision for them

84% of Irish nationals left to go to the EU/UK/US/Canada/Australia. The entire rest of the planet, including the Middle-East, only took 16%. Today's trend is very much not the Middle East, people are leaving Ireland to go to the same places they always have.

The demographic trends are the same as they have been for 20 odd years since the Celtic Tiger made us wealthy - the vast majority of Irish people leave in their 20s for 1-5 years, then come home.

The reason more aren't leaving, and those that do leave mostly return quickly, is because the property markets in most of the main Irish emmigrant destinations are as bad or worse than in Ireland these days. London, Vancouver, Sydney, New York etc are some of the worst places on the planet for rental housing affordability.

Its completely true. This government very clearly wants a slow, steady increase in housing prices.

The government's big problem with the housing market from an electoral point of view though is rental prices. They want house prices to keep going up for both the vested interests, and for home owners - who most of the FF & FG vote base are. But the problem is rental prices being out of control, which hits young middle class people in their 20s and 30s.

This results in a double whammy of forcing people to live at home / damage the lives of older FF&FG voters, and reducing/greatly delaying the numbers of people in their 30s becoming home owners (ie, FF/FG voters who want house prices to keep increasing). Both of which are driving votes to opposition parties in large numbers now.

During the Celtic Tiger we had steadily increasing house prices, but rental prices were largely low/stable, so it wasn't an issue.

The biggest mistake was not restarting a social housing building program in the mid 2010s, a choice made purely for ideological reasons. The funding, the capacity, and the need were all there. If the 60,000 households we have now on HAP as a result were in social housing instead of in the private rental market it'd make a huge difference.

True that a lack of social housing programme is a main driver.

But the other major factor is population growth.

30k homes were built last year and similar number will be built again this year.

Yes. this number should be higher, but its still a pretty good return.

Realistically, how many homes could be delivered per year, given our planning system, building industry capacity and all other factors?

In other words, whats a realistic capacity for new home building annually if we threw all resource into it and shut down commercial construction. 40k, maybe 45k?

If thats the max number, its still going to tale a decade or so to catch up as our population is growing faster than can be accommodated.

5.3 million as of April.

Dublin over 1.5 million.

Both values now ever higher, as of September.

We only built 30,000 units last year, with a population of 5.2mn or so. In the mid 2000s, when we had a population of only 4.1mn, we hit 90,000 units a year.

It wouldn't be easy, and it would take a few years to ramp up to, but we could be building 100k+ units a year now if the political will was there.

Exactly.

I dont believe the business environment has the capacity to build anything like those numbers.

If we could, great. But there is a finite amount of labour and a limited appetitie for lending, as well as all the planning constraints.

Not to mention the construction focus on commercial and infrastructural projects, which further erodes building resource from the residential sector.

We needs those infrastructural projects to support a growing population - they cant be halted.

This is what people arent considering when they say SF will fix the housing crisis.

They absolutley wont because the resources arent there to do it!

Could we build more than 30k, yes. How much more though is debateable and whatever the realistic number is, it is not going to be enough to alleviate the housing crisis in the next decade. We would need to building 60k to 70k a year at minimum to do that.

It isnt going to happen under ANY govt over the next decade.

The government currently has billions of unspent available finance, including over €1bn in the department of housing alone last year. The state could finance developers to build social housing for them easily. It would provide a far better financial return for the state than the current governmental policy of long term leasing of private sector units at sky high costs.

The head of the construction industry of Ireland was on the record last week saying labour supply is no longer the problem (as was discussed in this very thread...). That being said, even if labour was still an issue with a 3-5 year plan its entirely possible to both train and import large amounts of labour - if the will is there.

So you do think SF will oversee the construction of 70k+ homes per year?

I'd love to know how they plan to do that and where they will get the resources from.

Given the raise in interest rates and the anticipated fall next year - wouldn't drawing down a 1 year fixed mortgage make sense?

Surely they cannot go much higher than they currently are

And if ultimatley, neither is going to achieve the housing required, we need to park it and look at other deliverables that each govt actually CAN produce.

Its at that point that SF run on empty.

https://www.linkedin.com/posts/cif_2_southcon23-constructionindustry-economics-activity-7105501973084282880-aniu?

Jim Power from the CIF is on the record recently at this conference stating labour is no longer the problem. Its planning permission. I'm sure you can find minutes of it if you care to look.

(which would stand to reason with the huge downturn currently happening in commercial development)

I would assume he knows somewhat better than you.

Increasing the supply of social housing by building more of it increases the supply of private housing. There are currently 60,000 households on HAP, because our recent FF&FG governments stopped social housing building a decade ago. If those households were in social housing instead of the private sector housing, as they should be, we'd have 60,000 more private housing units instantly.

Our current government is doing the opposite, and is both keeping social housing tenants in private housing on HAP, and in recent years leasing entire blocks of private sector housing to use as social housing. They're both wasting huge amounts of tax payers money on this, and outbidding taxpayers on this housing with their own tax money. Its terrible policy from any perspective of fairness, effectiveness, financial prudence, or even just logic.