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

That doesn't make any logical sense whatsoever. The lock in effect occurs when homeowners can't change properties because interest rates have risen since they got their mortgage, so its now in their best interests to stick with their lower interest mortgage rather than getting a new, higher interest mortgage on a new property.

If you're not familiar with how tracker mortgages work, I am not sure how much I can help here, but I will give it one more try.

From 2011 to about 2022 tracker mortgages were worth their weight in gold as they tracked ECB rates downwards. Many people held tracker rates of ECB +0.75 and it was as close as free money as you'd ever get.

For almost ten years they were paying about 1% interest. And even if interest rates rose, the tracker deal was always going to be better than fixed and variable. Variable rates were obviously based off ECB rates but they never got close to within 0.75.

The banks were keen to get people off trackers, so if you moved house and remortgaged you had to give up your tracker and move to a higher variable or fixed rate.

Unsurprisingly many people chose not to move and keep paying off the mortgage at such low rates.

Or to put it another way, it was "in their best interests to stick with their lower interest mortgage rather than getting a new, higher interest mortgage on a new property". A classic case of lock in effect, in your own words.

? People trying to find housing in Leitrim will tell you there literally is a huge deficit of housing stock in Leitrim. Leitrim has a population of 35,000 and has 8 properties to rent - how can you not call that a huge shortage of existing stock?

Again I think you're missing the point here. A shortage of property available on the market is not necessarily evidence of a shortage of total housing stock.

Yes Leitrim has 35,000 people, but it also has a housing stock of 18,500.

Apply the very low assumed household size of 2.5 and 5% spare capacity which shows a deficit nationally to Leitrim:

AHS 2.5 = 35,000/2.375 = 14,736

Even with house hold size of 2.5 with ample spare capacity to allow for a health supply for sale and rent, Leitrim has a significant surplus of stock.

This is the core of where your figures are just completely wrong. Per the CSO we only had 1,836,728 occupied dwellings recorded in Census 2022. So the "spare capacity" figure is significantly higher than 5%, its closer to 15%. And its not "spare capacity", unless you plan on CPOing all of those homes to force them into the market.

This was for a population of 5,149,139 in 2022, which even at 2.7 household size would give a deficit of almost 100,000 household units.

With the greatest of respect, I think you're misunderstanding these figures too.

In short we had 2,112,121 units, but because only 1,836,728 of them were occupied you're interpreting that as evidence that we had a deficit of almost 100,000 units?!

IMO that's just madness, and there's no point in me explaining why.

There is no doubt one of us is completely wrong, but we are so far apart in our understanding of the data, I think it's best we agree to disagree.

Well the ESRI disagree with you as they have tested the theory:

We find that Ireland has a high average household size on a cross-country basis. However, this appears to be strongly influenced by demographics, with high fertility rate, younger population and thus high share of households with children important factors in explaining the cross country trends. Indeed, a majority of the differences between Ireland and other countries disappear in a regression setting when socio-demographic and basic economic factors are controlled for. 

If you're interested you could read it, and let us know what it is that you disagree with? That might be an interesting discussion.

Or give us some data that shows how all these single people are going to shift the AHS? That could also be worthy of discussion.

Or if you're not interested in discussing any of it, stop quoting my posts asking questions, just put me on ignore and stop wasting your time with the back seat modding?

https://www.esri.ie/publications/household-size-in-ireland-stylised-facts-and-cross-country-trends

Your initial claim wasn't about tracker mortgages - it was all mortgages - thats a very deliberate moving of the goalposts.

Erm, no, it was specifically about tracker mortgages. Second post on this page which you quoted. To remind you:

It started in Ireland as a hangover due to a perfect storm from the cumulative effect of low rate trackers, negative equity, mortgage arrears, lack of repos etc.

So now I've no idea whether you're arguing these points in bad faith, or are just blinkered for whatever reason. The rest of your post is similiarly questionable.

Either way, it doesn't really matter, so for the third time, I don't see us getting anywhere with this, let's just agree to disagree?

500k affordable houses in Coolock getting a savage review by Mark Keenan in the Indo and rightly so:

Roll up, roll up! Qualify under Ireland’s greatest ever ‘Affordable Housing Scheme’ and you could be lucky enough to pay even more than market values for your home.

Step right up and swallow the bullshit: it’s completely and wholly “affordable”. Why? Because the council, the Government and the developer say so. Honestly, they do.

Even though you’ll pay a lot more than existing homes cost or the very same as other brand new three-beds available on the open market.

Nail on head here, the affordable schtick is based on a discount to the market price, but other than the developer's say so and the council's agreement, there is nothing to suggest the market price of these houses is anything close to 500k.

Council have responded to the pressure and outcry over the prices, not by telling the developer to stop dreaming, but by making the houses more "affordable" by increasing the subsidy.

Prospective purchasers with lower incomes will now be able to buy the same three-bed house for as low as €360,931. However, the council will take a considerably higher equity stake, almost 28 per cent, in homes sold at this price.

https://www.irishtimes.com/ireland/housing-planning/2024/07/12/affordable-homes-dublin-city-council-bows-to-pressure-with-new-lower-prices-at-oscar-traynor-woods/

So it doesn't make a lot of difference. The open market is not willing to value these houses at 500k, but the taxpayer is. So that's what they're worth.

It's so crazy that there really is only two credible explanations, that Keenan highlights:

Ignore especially those who tell you there can only be one of two explanations: that either (a) someone, somewhere in local government has been getting enormous backhanders or (b) someone, somewhere in local government has been inconceivably incompetent, thick and stupid.

https://www.independent.ie/opinion/comment/mark-keenan-why-do-affordable-houses-in-coolock-cost-the-same-as-luxury-pads-in-carrickmines/a2029479016.html