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

McWilliams likes making that prediction. He does so fairly often, like back in 2019: https://m.facebook.com/story.php?story_fbid=pfbid02T5nv4jXZTmHeWiwyEbSHQm5m4P5WBXTTdFYaMpHY7rXanERcPf9r3RVieqpHPTQLl&id=6303603305

Eventually he'll be correct of course.

Don't see it getting cheaper in the next 12 months.

The Ukraine war ending and the 100k refugees head home may push the needle.

That said, some builders look to be in difficulty, not able to afford rates that subcontractors are charging, and I'm sure interest rate rises are having a large impact there too.

It's up to the ECB to deal with interest rates, so look at inflation in Germany and France to get an idea whether they will increase. Not looking good for rates dropping anytime soon, and I'd imagine Irish banks will be slow to reduce rates, seeing as they were slow to increase them.

Why extract one sector of the CRE market to back up the claim. The one sector that was changing massively anyway for a long time before 2019 as people changed their shopping habits and no longer used physical shops for purchases. Just look at Philip Green and how the high street changed his property portfolio…this was way before 2019. It was around 2016 that more retail shops started closing than opening.if it was only retail that McWilliams was talking about in 2019 then it was not a prediction as was happening for years before.

On the Other hand in 2019 he was saying that all the new hotels being built were never going to be filled and we had a massive oversupply. Have you tried to book a hotel room recently is there any sign what he was saying was correct.

in regards office space there was very much a divided opinion in 2018/19 and many like McWilliams highlighted the big tech head quarters as a sign the market had peaked….This assumption comes back to a phenomenon in the UK whereby every time a UK Bank opened its new shiny new HQ the bank was either taken over or got into difficulties. (many believe that this is because they paid more attention to the HQ than the actual business). There is little to no Empirical evidence to support this but make for good reading.

warehouse space was always going to be a growth area because of brexit and the fact that it looked unlikely that an agreement on trade would be reached

That leave residential property in the CRE market (I think the definition in the regs is 6+ residential properties = CRE) There is still no signs of slowdown here because as investors pull back AHB have stepped in. Take Apartment building in cork at the moment currently just shy of 1,000 hardly any BTR as investors and majority all being built for AHB as either social or affordable and I would expect to see a very similar situation in Dublin.

Saying McWilliams prediction in 2019 was right is not necessary the case when you jump into the facts..Also you can’t ignore the elephant in the room of his prediction in 2019 that house price will fall and don’t buy now as you will loose which he then doubled down on during Covid. Anyone listening to his advice then are financially worse off today.

I deliberatey chose 1 paragraph as it emphasised that retail performed better than office space despite being down 30% in the 3 years after the peak being called in Irish commercial property, that's 2 of the 4 main commercial real estate segments

With regard to hotels, they were always going to get a bounce coming out of covid. As a person that has almost always holidayed in irl, since covid we have gone abroad. We have been priced out and we are not alone. The medium/long term effects of this have yet to be felt. The wheel always turns!

Ukraine aside, We also have over 14000 in emergency accomodation, usually hotels at huge cost to the taxpayer. At the same time we have a boom in residential properties acting as airbnb's. You cannot legislate for the depths of stupidity where homes are for the odd tourist and hotels are used as housing for families

What proportion of CRE is warehousing?

We were continuously told here from 2016 to 2020 that we could not build more residential property because Labour was busy building offices, hotels etc. Had we a plan we could have a more balanced approach with less commercial and more residential and then we might have some hotel beds for tourists and homes for families

I do recall David calling for a buyers strike, but here is his opinion piece on the market January 2020

Do we have any recent figures on govt take up in hotels?

Especially the split between international protection & people on housing waiting lists.

AHB = social and affordable housing and is what what we are hearing day in day out is required by all parties. This is what traditionally was called council housing….Only difference is that by doing via a AHB any debt doesn’t get consolidated into the national debt….regardless of what political party is in power they will all use these vehicles for any social housing. Correct me if I’m wrong but this is what you have repeatedly said what is needed (I.e. social and affordable housing)

The only difference between SF and current government Policy is that SF want to use public land so that there budget figures look better in a short media clip. But Once you take into account the land value at market prices you end up in same financial cost to tax payer. Neither SF or current government can change the cost of building social housing directly to the same standard.

Just to be clear I’m not talking about a policy of renting or leasing instead of building because were specifically talking about CRE getting into difficulty and not building BTR. We have seen signs of something similar over the past year or two and the example I gave was the apartments being built in cork at present where the majority are AHB and very little private BTR because yields are to low despite eye watering rents to break ground on projects with planning approved.

It’s irrelevant as to the split because there is a legal requirement to house international protection.

what we do know is that in homeless numbers they are not included despite the need to house.

the average worker gets a look in today with the Help to Buy…. that’s the only help they get…does it push up prices of course it does when the supply isn’t adequately addressed. it’s SF policy to remove this but yet again it doesn’t address supply issue.

When it comes to supply they are of the belief that building more social housing will fix the problem and the private market will continue to deliver the same level of housing at present despite workers being redirected to build social housing and the loss of the HTB subsidy.

It’s not like as a country we don’t know what happens to house building when costs are more expensive than the sales price. Are peoples memories really that short?

So the way I see it is unless SF can explain the following then anyone that is working and paying tax beyond the min rate is going to be substantially worse off if they are looking to buy a house.

• - how they are going to control building cost to ensure that private housing doesn’t cost more than it would sell for so housing
• 
  
• - how they will find extra workers to build their social housing without impacting the private housing market.
• 
  
• - how they will cut the cost of building to offset getting rid of HTB
• 
  
• - how they are able to build housing so much cheaper to the same standard in their alternative budget besides fudging figures to exclude or not take into account all the relevant costs such as the public land they are building on.

Of course the could get rid off Vat on residential property (if legally allowed by EU) but then how will they balance the books for this loss of gov income. Will they increase tax elsewhere or make cut to government spending or will the savings in HAP or Hotels cover it. Basically share how the figures genuinely stack up without the smoke and mirrors.

Further offsetting the ECBs inflation fight:

Yes I agree and have asked the question myself of potential SF voters. Not had a reply yet.

Essentially, I dont see how SF will benefit the average worker in terms of housing access.

Their policies are aimed at those that qualify for social welfare only and there will be a negative impact on everyone else as a result.

Its amazing that people arent seeing that, especially the younger folks who have a career ahead of them.

I see what you are saying and emergency accom is of course playing a large part in taking up any new stream rental accomodation and diverting that stock away from the private market.

But people on the social housing waiting lists are also being accommodated in govt purchased homes. (new homes, purchased from private developments)

So even if there was nobody in emergency accom, there are still 10s of thousands on the social wait list.

Dublin City has 13k on the wait list alone. Thats about the same as the total emergency accom count for the whole country.

Emergency accom and social wait list combined are certainly hoovering up available rentals new to market and of course, many hotels are taken up with the same cohorts.

What does need to happen is that the local councils start building their own council homes again, rather than pilfering private stock.

DLR built 2 social housing units in the whole of 2022....thats a disgrace by anyones standards.

But I do agree with you and have said it myself that although SF may want to embark on this massive social home building venture, where are they going to get the funds and the labour from, without negativley impacting the 25k-30k private homes that are built each year and are needed.

I dont think SF have an actual costed plan, nor the answer to that question.

€1250 for mortgage interest relief and €800 for the rental credit, that'll probably go down like a lead balloon!

Also, it appears the vacant home tax is being raised from 3x LPT to 5x