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

Fair enough

Supply and demand dynamics is how bubble thinking justifies the state of the housing market. McWilliams spoke about this in 2014 at the tail end of the 09 crash and it is eerie to see the same justification being wheeled out again. The immigration numbers ie increased demand, cannot be taken at face value as it doesn’t account for the incomes of those immigrants (ie ability to pay the average rents) nor those it take into account long term settlement plans (ie house buying likelihood). Personally, when I drill down barely past the surface of these immigration statistics and see “non-EU”, I can make an educated guess that a lot of these people are not earning the type of salaries needed to pay what house prices are supplying.

It comes back to the government and its funnelling of the fruit from the magic money tree into the housing market to keep the whole show on the road. I just cannot believe that the housing market in its entirety can be propped up by the top 10% of earners (based on average rents and house prices which indicate it is only top earners that can afford rents and house prices).

To gauge the trajectory of the Irish residential property market, look at the budget surplus each year; €20bn surplus this year means there is road to run yet into next year. However, see this surplus dramatically cut in a given year and then we will see some decline in the trajectory of house prices and rents for the coming year in Ireland.

The mainstream narrative will claim the cause of the housing market trouble are the broader uncertainties which lead to the government deficit; but it is not. It is the deficit which lead to less money the government could use to prop up the market. I am not saying this is right or wrong; personally I think it is not better than spending that money on other things like healthcare or infrastructure but I also understand there is an element of the old school American dream in modern Ireland where you can buy your own home and make yourself gradually wealthy over time consequently. Not a very progressive, European mentality mind you but Ireland has quite clearly hitched its wagon to the Anglo-American circle, not the Continental European circle.

The same David McWilliams who has been saying on his podcast for the last couple of years that we should be building 50 or 60k homes a year?

McWilliams just tells people what they want to hear. He gave younger people the advice of "going on strike" for two years and refusing to buy houses as they were too expensive. I don't think he was serious, but that's his career; he tells disgruntled paddies that our government is corrupt, that we're getting screwed and that we're right to be upset. What he will never address is WHY this happens and who is responsible.

The interesting thing will be FG. The party nationally is polling well, but at the end of the day all politics are local, and FG have more than half their sitting TDs retiring at next election.

Will all these new fresh faces be convincing enough to actually win 27% of dail seats?

From BPFI report: 13% of all homebuyers relying on inheritances to fund their build or purchase of a home.

Average LTV of FTB mortgages is 86%, just shy of permitted 90. Obviously many are coming very close to LTV limits.

Expect calls for loosening LTI and LTV limits in the coming years as house prices continue to rise

https://www.businesspost.ie/news/building-slowdown-more-apartments-and-cash-gifts-the-key-points-from-bpfis-housing-report/

Allow me to craft an allegory:

"Gentlemen, we have a burst pipe in the attic of the house. The bucket that's capturing the water is too small, what can we do?"

"Easy! We just to build a bigger bucket!"

How many people take their local rep into account though? If someone is minded to vote FG in the General Election, I doubt who the candidate is will make much difference. Its the party they are voitng for, not the local candidate.

Granted, there will be some exceptions.

We completed 32,695 housing units in 2023, and the figures for 2024 so far are actually down from 2023. There isn't a hope in hell we're going to hit 50,000 units in 2025 with the current housing policy.

Given how long it takes to scale up housebuilding, the plan should be to keep scaling up to a high figure regardless of whatever the deficit number is.

When house prices start to level off then home building can stabilise or contract slightly, but the risk of over building is massively exaggerated.

We only overbuilt last time because demand cratered in a once in a lifetime financial crash. And after half a decade of no building demand quickly rebounded and has since surpassed previous record highs.

No, don't be silly sure we have an AHS of 2.75, that's all that matters.

No experts opinions, endless real world experience, continuous % price increases year on year, massive demand over supply or reports from different bodies will change that. No deficit at all (according to one homeowner).

I have read it, I have stated that I don't believe the 250k deficit in entirely accurate. However you have consistently denied any real deficit in the market based on the AHS figure.

There is a massive deficit in the market, I cannot put an accurate figure on the amount (not my job or expertise) but all parties are in agreement that a dramatic increase in building is desperately needed in order to even make a dent in the current deficit.

We are in a vastly different environment in practically every sense than in 2007 so that is entirely irrelevant.

It's your incessant use of it, when the number doesn't take into account the make up of this figure. Larger volumes of adult children living with older parents.

I don't think it's as radical as 250k as in the hypothetical scenario where 250k stock went onto the market tomorrow, I don't think there'd be the demand immediately for this level of stock. That's my reasoning for doubting the 250k deficit.

You have stated multiple times across this thread that you don't believe there is a deficit "There is no deficit at 2.74." "So where and what is the data that supports the idea of a deficit?" "I do believe if you go looking for the data to calculate a deficit, it can't be found."

We can be pedantic nitpicking in the market or not, there is clearly a deficit which you have repeatedly denied existing in housing stock.

Quoting the average household size is meaningless without factoring in demographics. The average household size is absolutely meaningless and tells you nothing about the demand for housing on its own. When comparing it over time it tells you even less information.

Take a simple example 3 people living in a house 2 parents one teenager. A 15 year old may be happy to live at home with their parents but 10 years later that now 25 year old will not be as happy. If there is no separate house for that 25 year old you suddenly have a housing shortage with the same household size in this very simplified example. More houses are required for the same number of people.

The Irish population is aging so you would expect house hold size to decrease as children become adults and want to move of home. It hasn't.

To say there is no housing deficit based on a single figure is crazy. It firstly ignores the context of this figures ie you are suggesting that children should never age/leave home/want a place of their own. You've actually gone down the road of suggesting children don't want to move out of home for tax reasons to dismiss that pent up demand. That simply insulting to anyone in there 20's and 30's or even older living at home because they can't afford to move out because of the housing deficit.

Focusing on the average household size also ignores every other piece of data out there, rents, house prices, the distinct lack of ghost estates, mortgage approvals, issues the public are concerned about in opinion polls etc etc.

It's crazy we have some sort of housing crisis for the guts of 10 years at least and we still have people pretending it's a mirage.