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

It’s a fair point on the FHS. I’m on the fence about whether it’s good or bad, I can see both arguments. As a scheme however, I think it’s primary purpose is pretty clear - given Ireland has some of the highest rental yields in the world and some of the more restrictive lending limits from banks, we are extremely susceptible to the pitfall of

‘Sorry FTBer, I’m not letting you buy this place because you can’t afford the €1,700 mortgage (fixed rate), so instead this 70 year old person is going to buy it cash and rent it to you for €2,500 and increase it by 2% a year for the rest of your life’

FHS primary goal is getting people out of a rent trap and into home ownership (at whatever cost)…because politically, once people own a home. They’re more likely to vote FF/FG - irrespective of how much debt they’re in (actually probably more likely the bigger the debt as they need to protect the economy at all costs then!).

Agreed, but it’s par for the course with any lobby group. Law society, insurance Ireland, vintners association, farmers association…there may at times be small hints of truth buried in the spiel of nonsense…up to public (and politicians) to challenge sensibly.

Genuine, workable, creates a 2nd tier more affordable buying option. Affordability is retained in the home rather than recycled and lost in the private market

Bit of a cave in by SF under pressure from FFG party of home ownersship narrative populism and magic money tree economics.

We need to focus on affordable but profitable rentals as our young people are finding it impossible to start life here and are leaving hence the doubling to over 10,000 that have left for Australia in the last 12 months

Its difficult and costly replacing 10k well educated with 30k whom may not speak our language

https://bpfi.ie/publications/bpfi-mortgage-approvals-july-2024/

More positive, albeit somewhat confusing news. July sets the new record for FTB mortgage approvals* since 2011 (by a large distance too) and SSB at all time highs also. 3.3k FTBs vs previous high of 3k. Difficult to objectively argue that the trajectory here is anything but extremely positive.

The average approval value also set another new record. Total value of FTBs mortgage approval was €1.01bn in the month. Previous all time high was €926m, and had never been above €870m other than that.

Given the incredibly low levels of stock for sale, you’d wonder what they’re all finding to buy.

*A mortgage approval is defined as a “firm offer” to a customer of a credit facility secured on a specific residential property. A mortgage approval arises when the lender issues a formal offer of mortgage finance to the customer (whether it be in print or some other durable form) for a specific residential property

This is precisely it, and it's the root of the problem. Building on the level required to house that many people is probably not even possible, and even if it were, why would we want to do that? The situation in the UK is getting to the point there the Green Belt around London is to be used for housing, and this comes from a government that claims to be concerned about the environment.

If I may be indulged in some philosophical language, I will say that this globalist pipedream of infinite growth is going to destroy Europe. Ireland is not the property of people who are currently here. Rather, it is our responsibility to maintain this land for the future. What is happening here is that the country is being turned into a globalist economic hub that has as much identity as a Starbucks outlet.

As far as I can see the only drawback from a buyers point of view is it limits your potential for enjoying the upside on capital gains on your property

 The owner never truly owns their home, the don’t own the land, they aren’t free to sell at market price

This is the whole point of having a 2nd tier market.

There's not much point in the state subsidising affordable housing, if it can be sold at market price and end up on Airbnb a few years later.

Reduces the risk of boom bust housing policies. Look at @DataDude figures posted this morning. Mortgage approvals up 20% by value (if I'm reading it correctly). Would buyers take on this level of risk if there was an alternative less risky product. The scheme is a more prudent approach and in doing so, makes the private market less risky by pulling away demand

The property appreciates at the level of wage inflation. This provides scope for an inflation linked investment product much sought after by pensions. This allows the market to open up to prudent investors rather than speculators that drive boom bust cycles

Rental situation predicted to get much worse.

I'd question the timing of this report also. Limerick is cited as one of the better supplied rental markets. I suspect the survey was done while colleges were closed boosting the numbers. Population nearly doubles when students are back

This would imply the problem is far greater than even this report suggests

Theres not a hope of 615 rentals available in Monaghan

Given the size of the county that would be an enormous amount of available stock. I do question how CSO finds out about "available" rentals

Your theory works if you have secure housing, not so much if your renting

The RPZ's incentivise selling up and buying a fresh home that can be rented at current market rates

The path to ownership is now loaded with taxpayer initiatives through developer grants and waivers on costs and multiple grants for buyers. This deems all new supply as council housing by the back door without the state having any asset and only affordable to a minority. Effectively council housing is only available to the wealthiest.

The economy has evolved to such an extent that your security of housing not your salary is the key determinant of your quality of life. This is the power that the system has passed onto 1 sector in the economy. It has the power to break us and it will

Definite pick up in the Daft ads for Clare this week. I was previously told by an EA in July that they were advising people to wait until September to list houses. Anything has to be better than the dismal summer for houses we have had.

I’m not really sure what this has to do with my post. I do wholeheartedly agree with your comment that your housing situation is more important than your salary in terms of your quality of life though.

All I was saying is. Net wages are up almost 30% in 5 years. If cost of living (excluding housing) had gone up 30%, then peoples remaining income to spend on housing would also go up 30%….in reality cost of living has only gone up 20%….ideally this would improve living standards for people…but for those without permanent housing, their extra income is being soaked by housing costs which have gone up 35-40%.

The maths seems sensible. House price & rent growth since 2018 are predominantly underpinned by increasing salaries and pushed a bit more by a lower cost of living burden (I agree this is a bad thing by the way. Real wage growth should be spent on fun stuff, innovation, or saving…not ploughed into housing which is just a further wealth transfer to the best off)

Houses are expensive, but they are not that expensive.

Single Median income to average house price ratio is approx 7.5

HTB will give you 10% or up to €30k, so that would bring it down to approx 6.8.

Not great, but not terrible, considering other parts of the world.

A dual-income couple on an average salary can easily afford an 'average' house.

The issue is that there are too few houses on average to buy.

I wonder how many of those 615 properties are just flats above boarded-up shops.