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

hometruths · 29-03-2025 05:19PM

https://www.boards.ie/discussion/comment/123309665#Comment_123309665

Intellectual Property can be transferred between jurisdictions as easily as profits. Bulk of our corporation tax derives from IP and other intangible assets being held here. That's the real danger.

hometruths · 29-03-2025 05:20PM

https://www.boards.ie/discussion/comment/123309604#Comment_123309604

Oddly enough same thing happened with HTB too!

DataDude · 29-03-2025 05:29PM

https://www.boards.ie/discussion/comment/123309689#Comment_123309689

Definitely this. Although thankfully this wouldn’t (immediately) lead to less jobs. Just lower the budget surplus.

Then on the pharma side it’s lower demand due to higher prices from tariffs. The idea that all the pharma plants will close here and re-appear in the US in a parallel shift is just not a real risk in any sort of reasonable timeline.

hometruths · 29-03-2025 05:58PM

https://www.boards.ie/discussion/comment/123309717#Comment_123309717

Unfortunately I think there is a potential job threat if the IP goes.

In order to max out the schemes for the lowest effective tax rate, MNCs must agree a business plan with revenue. For the business plan to be approved they must be shown to be high value jobs, and there is a presumption that the wage bill for qualifying jobs are a % of the profits booked.

No doubt there are MNCs - pharma particularly - who are producing stuff here that is reliant on the IP registered here, and as you say it's unlikely they're going anywhere soon because of IP law changes.

But there is no doubt there is a fair chunk of corporation tax revenue based on fairly fluid IP, and that has to be considered a real risk. Just hoping the 15bn figure attributed to IP related tax revenue, includes the companies that are embedded as well.

PommieBast · 29-03-2025 06:18PM

https://www.boards.ie/discussion/comment/123309798#Comment_123309798

I'm wondering what the story with the IDA tax breaks is now that Intel are closing down their Shannon site.

Villa05 · 29-03-2025 06:22PM

https://www.boards.ie/discussion/comment/123309691#Comment_123309691

Everything relating to housing is a circular dysfunctional doom loop. Every interference by government adds cost. Developers operate off a margin, the more the gov add costs, the monetary value of the margin increases

All the grants on top of that increase both the land and the margin. Easily the greatest way to burn taxpayer money.

Guaranteed that in any fall in tax revenue this scam will be protected at all costs

DataDude · 29-03-2025 06:23PM

https://www.boards.ie/discussion/comment/123309798#Comment_123309798

Without a doubt the corporate tax take could be gutted in a heartbeat. I think on balance of probabilities it will be.

I’m more optimistic on the jobs front. Although they definitely came for the tax. Ireland is now a legitimately good location for a tech company to be based given the workforce. Add in the inertia of firing and re-hiring tens of thousands of people plus exiting significant property footprints, it would need to be a seriously compelling argument and likely take many many years.

US? Salaries are literally double, if not more, in any of the legit tech cities. House prices double or triple dublin. Rents significantly higher.

Biggest threat would likely be from ‘the next Ireland’ which could be somewhere like Poland. They’re seeing absurd levels of wage growth currently shrinking their competitive advantage fast.
I just don’t think it’s an quick and easy decision for any company to just vacate Ireland en masse

hometruths · 29-03-2025 07:56PM

https://www.boards.ie/discussion/comment/123309863#Comment_123309863

Agreed, was chatting on here with somebody who PM'd me about the US threat to corporate tax, and ultimately we agreed that if we do get burnt the government would probably shut schools and hospitals and increase borrowing before they stopped turbocharging the property market!

hometruths · 29-03-2025 08:02PM

https://www.boards.ie/discussion/comment/123309864#Comment_123309864

Yep, that's I meant by "embedded", companies who came for the tax but will stay for the workforce. I think we have a solid base of them, so hopefully we can weather the storm. The worst impact of any shock will be because current tax take levels are so high, but it's worth remembering we have a fair bit of headroom.

I am also optimistic that our dept of Finance/Revenue will not be caught napping on this - this is not their first rodeo and they've come up with even more lucrative solutions after pressure was brought to bear on previous schemes.

DataDude · 29-03-2025 08:20PM

https://www.boards.ie/discussion/comment/123310121#Comment_123310121

Agreed on both fronts. We’d probably end up more like a ‘normal’ country. Running a bit of a deficit. Instead of the luxury of setting up sovereign wealth funds.

Do have some concerns that our only real plays to generate more income will be higher taxes on lower paid workers & property taxes (both horrendously unpopular). We never rolled back the USC on higher paid so any further increases not realistic without decimating competitiveness.

And the main big fish for reducing expenditure meaningfully would be trimming an absolutely rampant health budget or the state pension (even more unpopular).

Going from ridiculous excess to tightening the belt buckles in short order would be painful.

hometruths · 29-03-2025 08:47PM

https://www.boards.ie/discussion/comment/123310169#Comment_123310169

I'm hopefully the mitigating measures will be focussed on the big players. We've cutting great deals for these guys for years, and Revenue and govt have very close relationships with the biggest MNCs. I am not saying that as a criticism, quite the opposite - it's one of our biggest strengths. It is something successive governments have done fantastically well, perhaps almost too well!

There's no doubt that damage limitation talks have been ongoing to try and keep them here, stressing the long term tax benefits etc etc, probably even coming up with new schemes to counter the worst of the expected Trump measures.

People can whine all day that Apples effective tax rate is only 2%, but it is our 2%, and I'd far rather have that 2% and the jobs that go with it than 15% of the profits on their Irish sales. Govt know the value of that 2% and will fight tooth and nail to defend Apple's right to have a miniscule effective tax rate. We might be about to find out how beneficial it was to take Apple's side in the EU 13bn extra tax fight, and the confidence it will have given all the MNCs.

I think that will hold true of any future government too, even if SF are involved. No Irish government will kill the golden goose just to get a few more lefty votes.

As said, my biggest worry is how easy it would be to dismantle the IP schemes, and I do think we'll take a big hit there. I also reckon most people are overly focussed on tariffs and headline tax rates, and don't realise how vulnerable the IP tax take is. If we lose a big chunk of that, it will be gone very quickly and we won't get it back.

Interesting times for sure.

Villa05 · 29-03-2025 09:51PM

Has the sovereign wealth fund gone live? Might be wise to delay, I've a feeling 2025 will be a repeat of 2022 as far as share prices are concerned

Harris needs to be removed from any diplomatic role, thought we dodged a bullet when Martin got Taoisech for 3 years, but putting Harris in Foreign affairs is a major own goal. Hide him away in education or social welfare

spockety · 30-03-2025 10:55AM

So - where do we think we are?

I'm seeing a lot of folks on here suggest that the Irish Property Market isn't even subject to cycles, and the only way is up. No matter what potential economic/societal shocks are introduced to the conversation, there seems to be a lot of explaining why they won't make any difference to Irish property prices. I think that points to there being plenty of gas in the tank to fuel a prolonged "Denial" phase, but I don't think we're there yet. I'm going to go with "Euphoria" combined with a touch of "Anxiety".

I look forward to hearing all the reasons why there's no cycle in Irish property. Thanks in advance. 🙂

DataDude · 30-03-2025 11:43AM

https://www.boards.ie/discussion/comment/123311080#Comment_123311080

It’s not that they’re is no cycle or never a drop. It’s just it’s exceedingly rare. House prices have dropped in nominal terms less than 10 years out of the last 100.

Sure it’ll drop again at some point. It just probably won’t be this year or next. If you bet house prices will drop. You’ll be wrong far more often than you’re right. That’s just the statistical reality.

And yes there’ll always be plenty of oeople strongly saying this year is definitely different. Brexit, COVID, interest rates, cost of living, trump.

Barry_Soweto · 30-03-2025 12:04PM

https://www.boards.ie/discussion/comment/123311080#Comment_123311080

There's no bad price to buy a house at according to 'experts' these days as prices will always go up.

Saw a clip of Eoin Magee the other day saying buy if you're happy to live in the house for 15 years, buy.

Same commentary and advice is seen anywhere online. The advice essentially boils down to this…"buy at any price because you'll end up in the green anyways"

The problem with this advice is it misses out all the events and feelings in between the time of buying and a potential drop in house prices. The vast majority of buyers in the last 15 years never experienced a drop in their property price after buying.

Say there is a drop of 20%, that's not going to happen in a vacuum. It'll likely mean the economy is not good.

So you've paid 600k for a semi D in Drimnagh. Your property is now worth 480k. You've lost your job and are on the dole. The house next door, identical to your house has just sold for 480k. The economy isn't as good so immigration isn't as strong. The rental demand isn't as high so you can't even rent out a room for as much as you thought.

Saying 'price doesn't matter' doesn't take into the psychological effect when you do overpay.

greenfield21 · 30-03-2025 12:16PM

https://www.boards.ie/discussion/comment/123311170#Comment_123311170

Its quite evident that this time the risks are much different than anything Ireland has faced before. Whilst house prices don't fall often, when they do they usually fall of a cliff.

Villa05 · 30-03-2025 12:29PM

https://www.boards.ie/discussion/comment/123310106#Comment_123310106

My concern would be that prospective buyers see this spending as a safety net in that the future price of there property could never fall below what they pay because this spending will always prop up the price.

The reality is that this spending increases the risk in the same way that the multiples of income required to purchase a home did in the noughties.

Corrections become crashes when the well suddenly runs dry. We were able to tap the banks for some of the cost of the crash in 08. There is no comeback when it's taxpayers money pumping the bubble

PokeHerKing · 30-03-2025 12:35PM

As always it just comes down to whether you're a Bear or a Bull. Brexit, covid & Trump.

So far the Bulls have been right. Will Trump be 3rd time lucky for the Bears? Nobody knows.

30-03-2025 12:44PM

I just don’t see the prices dropping even with a recession with the the lack of supply. Two partners on minimum wage at 30k a year is 60k with a 24k deposit is 264k which would allow you to buy something fairly decent outside of the likes of Dublin and Cork. Include the various different schemes and potentially could get a new build which are pushing house prices further upwards. Minimum wage is only going to keep going up.

I remember when I started working 13 years ago my first job out of college I was on 22k which was minimum wage and only allowed 3.5 your salary.

The supply just isn’t there and who has the bigger deposits win at the end of the day.

I’m on 65K, hoping to buy around October and will have a 50k deposit as it’s going to be needed.

hometruths · 30-03-2025 12:57PM

https://www.boards.ie/discussion/comment/123311255#Comment_123311255

Agreed, I'd share that concern, but in fairness to prospective buyers that's a fairly rational positional to hold right now as things stand.

It's not just the government spending, it is also the narrative that provides the safety net.

That's why I get so incensed about the myths we had a 250k deficit that's probably closer to 300k now, and that vacancy is very low, and that nearly 70% of young adults are living with their parents etc etc.

If these things were true it would be reasonable to think as long as we cannot get ahead of this supposed deficit, prices will at least be underpinned. We hear exactly that thinking on here all the time.

Villa05 · 30-03-2025 01:07PM

https://www.boards.ie/discussion/comment/123311268#Comment_123311268

I suspect most homebuyers do not know or care what the term Bull or Bear means

There buying a place to live to escape rent and may be completely unaware of the role hyperfinacialisation is playing in making that process so difficult.

Perfect breeding ground for unrest and political views at the extremes

PokeHerKing · 30-03-2025 01:22PM

https://www.boards.ie/discussion/comment/123311318#Comment_123311318

Id say the average Irish person is as obsessed with house prices as they are the weather.

Whether they're familiar with wallstreet terminology is a bit moot. Everyone has an opinion on house prices and whether they'll go up or down.

Which translates to Bull or Bear.

Villa05 · 30-03-2025 01:39PM

There's a strong argument building for the EU not to retaliate for US tariffs and let the boycott of US products and service build. A message from consumers is far stronger than politicians

Will the EU be smart enough to see it and see how it plays out in the short term

https://www.bloomberg.com/news/articles/2025-03-30/anti-american-sentiment-rises-in-europe-as-trump-fuels-anger

Villa05 · 30-03-2025 01:51PM

https://www.boards.ie/discussion/comment/123311351#Comment_123311351

Is that a function of investment knowledge or the difficulty in attaining a basic necessity?

Markets purpose is often to cause the maximum pain to the maximum amount of people at the worst possible time

PokeHerKing · 31-03-2025 05:59AM

https://www.boards.ie/discussion/comment/123311402#Comment_123311402

It's a function of society. People know the value of a Euro. People have opinions.

If you're buying a home to live in that you can afford then prices going up, down or around makes no difference.

spockety · 31-03-2025 06:42AM

https://www.boards.ie/discussion/comment/123312733#Comment_123312733

That's not strictly true. There is the opportunity cost of ploughing a huge amount of money into property that could be spent elsewhere in your life, which becomes particularly acute in a falling market.

There were a couple of posts here recently from people who were thinking of trading up, and could afford to, but decided not to because the whole market is just bonkers in terms of what you get for your money now. If kind of sentiment spread, it could grind the middle to higher end of the market to a halt, or at least impact it.

timmyntc · 31-03-2025 07:03AM

https://www.boards.ie/discussion/comment/123312755#Comment_123312755

If kind of sentiment spread, it could grind the middle to higher end of the market to a halt, or at least impact it.

Arguably it already has. Irish property market is already at very low volume of trade. And increasing prices and debt levels for buyers means there will be less trading up in future, because high mortgage means more interest and less equity built up.

Quite a few mortgages being given out now that dont leave much scope for overpayments because the monthlies are so high, how could anyone afford to save a lot on top of repayments.

PokeHerKing · 31-03-2025 07:19AM

https://www.boards.ie/discussion/comment/123312755#Comment_123312755

What's not strictly true?

spockety · 31-03-2025 07:31AM

https://www.boards.ie/discussion/comment/123312785#Comment_123312785

That prices going up, down, or around makes no difference. For anyone with a bit of financial sense, it can make a huge difference to the decision.

DataDude · 31-03-2025 07:32AM

https://www.boards.ie/discussion/comment/123312771#Comment_123312771

People have always and will always generally borrow up towards the max of what banks will lend. It feels tight for a few years. Inflation happens. Promotions happen. The repayments become very manageable.

It has been such forever. Be brave to bet against it continuing to be such. Especially with wage inflation at the highest level in donkeys years.

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

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