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

I’m not making that argument now. I’m making that argument back in 2013.

There simply was no demand for houses at a price that those building them required. There were too many empty houses everywhere. Financing was also an issue no doubt, but if demand was there, capital would have found its way to produce the product. Hindsight is easy to apply here but if you said to someone in Ireland in 2011 that your great business plan was to start building houses, you’d have been sectioned.

House building only became viable again from 2016/17 onwards in many parts of the country. The government often takes a beating for that ‘house prices need to rise a bit further’ quote - but it was an inconvenient truth. It’s not sustainable for houses to be as cheap as they were. We are now suffering the consequences of houses being too cheap for too long.

You undoubtedly have a point now in some of the more expensive parts of the country. However I’d imagine there are still plenty of parts of the country where house building may not be viable even if the land is free. That is a difficult problem to solve.

Could you elaborate a bit more on the luas or possible share the map?

why is that a high risk mortgage?

One doesn't bother another. I concur your point though. I bough my first house without any help. An I think it'd fair to compensation those "help to buy" payments to people who didn't avail of them at the time when they bought. Just to be fair.

I think anyone on middle incomes with a couple of kids want to see house pricing fall to levels that will allow their kids manage to purchase a house in a decent location in the future.

At the time of the Noonan comments the Irish state and as such it's citizens were invested heavily via NAMA and the bank stakes it held in the Irish property market. I appreciate that the Irish state and it's citizens are invested in many ways in property but the above caused the links to strengthen even moreso.

As such there was a time when property prices needed to increase to cover some of the states exposure to it.

All of that said. It was and still is a farce.

I'm not speaking in support of the Journal article. It's just plain weird and spin as you describe it.

I do however think it's I'mportant to recognise spin on both sides of the argument. In the first 6 months of 2024 our housing output is significantly down on 2023. These are based on results not distorted forecasts. In that time raw materials and energy have significantly reduced in price

Is comparing ireland to the EU in terms of housing output a fair comparator.

The main economies of the EU have been drifting in and out of recession over the last 12months, while our government were bragging about a sovereign wealth fund on disputed taxes to the world (not very smart) .

Last year I identified this as an opportunity to substantially increase our output as we could take advantage of reduced demand for labour and raw materials elsewhere. A reduction of 8% in housing output in the first 6 month of 2024 over what was poor output in the first 6 months of 2023 is not what I was expecting, it is yet another missed opportunity.

That is my point. Unfortunately as we know banks aren't going to take the hit, there's much higher chance of us paying USC2 etc. A few recent posts in that topic touch on "responsible" selling (i.e. not selling to investors) why not applying the same pattern to borrowing? We all saw those taxi drivers owning 2-3 properties pre-crush time while you lost 10 on renting purely over their greed… Many times people realize the risk but they say "now or never", this risk is covered by other taxpayers. Two snr. managers getting 300K combined today may earn 0 this time next year, that is already happening. There's a simple way to mitigate it - just take higher incomes (> 100K p/p) as 30, 40, 50, 75%, 100% for each of the years it's been earned, how can it go wrong? Otherwise it's just borrowing at other people's expense.

cheap foreign labour is going to affect the earning potential of the top 0.5%?

as for your predictions on AI i cant see how a bank can be expected to apply that logic in any coherent way.

It already is sadly. I don't think 240K is within top 0.5, but I'll leave it to you.

I understand your points but as long as the economy continues to grow and wages continue to increase, house prices in economic centres will also increase, unless there is a considerable uplift in housing output.

Thr number of households in the state earning 6 figure salaries has doubled in the last 6 years. If 1 in 4 Dublin households is earning 100k+, its difficult to see a situation where a family home costs less than 400k.

We're probably 3 or 4 years away from 50k homes a year at least.

Just viewed a 4 bed in Galway city. The estate agent said that their current stock of houses for sale in the city is the lowest it's ever been. Really hits home what the market is like, pardon the pun. The market in Galway city has been incredibly dry since April/May time.

Government buying up properties for the new Irish leaving Paddy with fcuk all is adding to it aswell.

I don't, but I will 😀 Cheap (or more correctly cheaper) foreign labor is used in relative terms here. IT job market for instance is practically dead in Ireland I'd love to use "at present", but I think it's not needed. Agencies sourcing IT personnel started to work in other low margin market segments such as accounting etc. People from SEA/India took over a lot of IT jobs across all sectors (75K-200K p/a from what I can observe at my level), resulting in a lot of people who considered their work situation safe are sitting on the bench now with more to join them. To get a job now you have to first compete with a remote team and then if ye're lucky with local experts. AI of course has a long way to go until it starts affecting job market, but the first step in that direction is done, there'll be highs and lows but it will take its toll. I think the same will happen to finance, the likes of Revolut and blockchain in more remote future will kill canonical banking along with the jobs created by it. Have a look at BOI shares. It's a great market for people having truly unique/rare skills, I hope you're one of them 😎.