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

From Bloomberg,

The International Monetary Fund warned inflation in many major economies has been cooling slower than expected, raising a potential risk to global growth from interest rates staying higher “for even longer

Paschals figures not Eoins

When it was announced in Budget 2023, then finance minister Paschal Donohoe said around 400,000 people were expected to benefit, with the refund likely to cost €200m

When a resource is significantly scarce, you'll pay in whatever terms the provider insists on in the majority of cases

Summer holidays now. The action will start again middle of September.

Most of that debt to the Government is owned by the government as a result of QE so figures are not comparable to historical figures as the true debt of the nation.

It’s a fiat currency and no longer the gold standard so those figures are more or less meaningless up to the point that people loose faith in the currency.

Youd want your head examined buying a 2 bed terrace for 420k

Yes its 20%. I know people who have paid out thousands and because they got some back on insurance dont bother with the 20% of the rest.

There does not seem to be much difference between heavily tax payer subsidised "affordable homes" and new pads in Bono's backyard

Glenveagh Properties to construct a €60m 135 unit apartment scheme for a site adjoining Howth Demesne, Deer Park at Howth in north Co Dublin.

60million across 135 units works out at 445k per unit.

If I'm not mistaken, these will qualify for up to 110k subsidy per unit under the government's plans to subsidise apartment building.

We are moving from the taxpayer subsidising the top 30% of income earners to the top 0.1% who might be able to afford Howth

Recessions are temporary, inflation is permanent until it causes a much bigger crash than a run of the mill corrective recession

😜 It is Larry Mullen Jr back garden not Bono, wrong hill 😊.

Yes the residents opossed, couldn't blame them. There are 3 big sites at the moment in Howth, all apartments. Imagine another one. Howth will look terrible soon, the charm is gone and the traffic is mighty.

Saying it took hundreds of years to get to 17 trillion, but has nearly doubled ten years later is fairly meaningless though.

Between 2014 and 2023, there was a jump from 17,824 billion to 33,167 billion. 86% increase in 9 years.
If we compare 9 year periods going back (each time from the beginning of the following period, so 2005 - 2014, 1996 - 2005), 86% increase over 9 years is by no means an outlier.

I've only gone back to 1933, as the data in your link only went back to 1929, so we can't go back another 9 years.
So of the ten 9-year periods, 2014 to 2023 would be the 4th lowest for % growth.

Edit: Posted before being finished.

To link all this back to the property market, this all really indicates that with a long term outlook in mind buying as soon as possible is the best option, as the cost and value of your debt will decline over time while the nominal price of property will increase.

Trump promising to cut corporation tax to 15% if elected. source twitter

Might want to work on new competitive advantages like, maybe, housing

Unsustainable because it means that, as salaries don’t rise as much, people can’t borrow as much and therefore further growth in house prices can only be sustained with more leverage and that is of course a dangerous game.

Speaking of leverage, on Morning Ireland yesterday an interviewee spoke about earnings multipliers for mortgages, who said that the rules are bent at a bank's discretion under certain conditions. The LTI criteria seem to be bent for high earners where bonuses and other income sources apply over a certain number of years.

Naturally enough banks would be aware of the risk profile of an income stream, but nevertheless it seems irrational to me to have more permissive lending based on historical high earnings, where that historical period spans a stock market boom.

Looking at a Central Bank report from 2016, it seems to show a significant increase in defaults as LTI increases: https://www.centralbank.ie/docs/default-source/financial-system/financial-stability/macroprudential-policy/policy-documents/2016-review-of-residential-mortgage-lending-requirements.pdf?sfvrsn=86c4da1d_12

Does anyone have any insight on these practices? For example, what sources of income and collateral apply here to increase LTI (I hope the answer isn't 'rental income' and 'properties'), or, are there any breakdowns from the Central Bank on lending by LTI?

The risk profile of buy to let makes it a very poor investment. Add on the eye watering interest rates for a BTL and it very quickly becomes not worthwhile. Much better returns elsewhere

What the government is doing is the main driver of house prices. The majority of ftb are buying 2nd hand homes. The driver of prices is new builds, this is where the majority of market interference is

I believe I'm not informed enough to fully understand some of this post

Just by way of clarification..does this mean that a large majority of govt debt is a direct result of quantitave easing...because in order to introduce more liquidity to the system govt bonds (debt) have been purchased from itself...or EU doing it for countries in EU?

Therefore its introduced more money but just by borrowing from its future self?

And a lot of this extra money doesn't make its way into the real Joe bloggs economy because its spent on investment in infrastructure etc so it doesn't have nearly as big an effect on inflation as people think?

Something along those lines?

Just to argue for the sake of it (i might learn something)...does it not mean that govts don't really have to tighten their belts due to the put it on the never never aspect of it....or at least prolonging the day of reckoning indefinitely...and that has a big influence on inflation as they will only squeeze majority of voters out of necessity......but at some stage the piper will have to be paid?