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

Median house price in Cork is €380k as of mid-2024. Median house price in Galway is €390k at same.

Very far from "extremely cheap by international standards".

My thoughts on this.

"HOUSEHOLDS ARE SPENDING almost as much of their incomes on mortgage repayments as they were in the latter stages of the Celtic Tiger, according to new economic analysis...

... On average, households spent 33% of their disposable income on mortgage repayments between July and October this year. It’s the highest share of spending on mortgages that Ireland has seen since 2007 and early 2008."

This is interesting as this would be close to the limit of what bank's would be willing to offer retail customers in terms of DSR (mortgage payment/net income). This metric doesn't imply that people are about to start defaulting on their mortgage though unless there is a dramatic shift in the economy (which would lead to defaults regardless), but it could possibly have an affect on the demand side for house purchases if people can no longer meet the minimum DSR criteria in future applications. Though this could also mean that people downsize their expectations relative to their salary. That said, there seems to be no shortage of state/institutional demand.

However, we seem to be entering a period where interest rates should be dropping so this should ease the pressure on DSRs for retail customers.

"For example, for a household with a net income of €40,000, spending 33% of disposable income on mortgages repayments would equate to €13,010 per year or €1,100 per month. For a household with a net income of €65,000, it would be €21,450 per year or €1,787.50 per month."

This is assuming that DSRs are flat across incomes. Unlikely.

"The immediate outlook isn’t great for prospective homeowners either, with the number of homes completed in the first six months of this year lower than in the same period of 2023 (although the completion rate picked up after that)…

Seasonal patterns typically show an increase in house completions in the final three months of the year – but it’s unlikely that home completions will exceed 33,000 by the end of this month. As a result, the ESRI is maintaining its forecast that just over 33,000 units will be completed in 2024.

That is well short of the 52,000 homes needed per year to address the supply issue, according to the Central Bank..."

Yes, this and net migration will keep house prices elevated. This is the most important point here.

"The report estimates that house prices are overvalued in the region of 8% to 10%, which means that householders are particularly vulnerable to a “painful correction” of prices like that which was seen between 2007 and 2012."

The peak to trough fall between 2007 and 2012 was around 50% and this was due to a Ponzi like housing market backed by a poorly regulated credit bubble. This is simply not the environment we find ourselves in now.

Another rate cut. That ESRI paper needs revising. 😁

Families now taking on Celtic Tiger-level debts to buy home, ESRI report warns | Irish Independent

I know a small number of people who have taken over 35% or more debt to their income ratio, because they desperately wanted to buy house. They're happy now because the property prices have further gone up and had they waited, they may not have been able to buy today is what some of them told me. Sad state of affairs.

There is a canary in the coalmine that died a long time ago; rents being far more than mortgages. This is completely wrong and can only be effected in an inefficient (ie highly interventionalist) market. It springs to mind “free money” as often the rent on a property covers the mortgage and then some…there is no such thing as a free lunch; it is the taxpayer that is subsidising homeowners in Ireland and one’s belief in the corporate tax boon goes parallel with one’s belief in the property market; sky’s the limit essentially.

The state is entering the hotel business

link dumping again…..

what is your opinion on it and how does it link to this property thread or would it be better suited in some political thread.

A rather significant milestone

Citywest is the holding point before dispersal across the country, it's purchase represents the pernamancy of the issue. There appears to be no attempt to implement manageable quotas

State has multiple vacant properties, inaction on converting them to some form of use displays complete incompetence in any form of housing provision.

Barring ipa from the workforce is in itself a denying of a human right

These and multiple other related points have a profound affect on property prices/rents

Flush with money from taxpayers, yet simply incapable of providing infrastructure the country needs for both housing and industry

No new large industry can be supplied with water in the greater Dublin area due to capacity constraints

Hotels as homes and homes become hotels

Your around here long enough to know that Airbnb fills the gap of hotels full with IPA

Tourism figures to ireland are up 8% annually in October 20024 compared to the previous year

A real black pill is that illegal aliens (which is what most "IPAs" are) make up only a fraction of the total immigration into the state. However the state has clearly shown that is actively wants this number to increase, for reasons I will not speculate on here.

I would imagine that it's more to with supplying cheap unskilled labour and driving up rent-prices, but as I said, I don't to speculate. I don't think this is the place to discuss the Great Replacement, whether it exists or not.

This is a class example of why the impact of immigration on housing can’t be discussed. It’s not all extreme left or extreme right which is what most responses default to.

Those 3 points you raise are not subsidies to homeowners.

Couple of things in response..

Point 1. There is a planning reform act that will be implemented in the coming year. Judicial reviews by nimbys will be much harder to achieve.

Point 2. If employers cannot house staff, employers will leave Ireland.

So why would employers not house their foreign staff?

Point 3. Govt has to spend on HAP because they dont have enough council properties.

If you've a social housing list of 1000 families and only 100 council houses available, you need to pay market rents to house the other 900 families.

Part of the issue is that you cant legislate for a number of inbound asylum seekers.

It isnt legally possible to define a cap. Without a cap, you have to prepare for what you think may arrive and you had better work off the high estimate.

Asylum immigration isnt a tap the govt can turn up or down.

I do agree that there needs to be a better balance of control, but its very hard to control which way the wind shall blow.