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

Yes these people are investors. Looking to trade up and time the market is very investor led thinking.

So would fall into the 3rd option in my response to you.

we are at a stage where all new supply is heavily subsidised

Grants of up to 120k per apartment

Removal of service connection charges and development fees

75k reward for people that choose to remove there house from the pool of available supply

These measures immediately increased the price of land, most costs are calculated at a percentage of the sale price further increasing the price to the winning bidder

Most buyers can’t afford the new subsidy driven price so further buyer subsidies need to be invented to bridge the ”affordability gap”. These subsidies further increase the land/house price and round we go again

I don’t think anyone is aware of the value of euros particularly when that euro has been raised through taxation. Appears to be used as a weapon against the citizens that raised rather than a medium of value

Hmm the thing is, 2008 was not the same thing. Prices in the early 00s exploded because of a flow of cheap credit into the economy. Today, prices are high because there are too many people for too few houses. Even if the economy took a dive, that fundamental wouldn't change.

We never really know what will happen until it happens, and then it seems obvious. Personally however, I just don't see the USA's causing a major economic downturn in Europe over this.

This is true, yes. I just don't see it happened. Of course, I'm sure people said things like that in late-2007….

By the way, I don't think that Covid, or more correctly the lockdowns did not affect prices. All that funny-money played a big part in making prices jump dramatically.

Yes I should have said Brexit/Covid did not have a negative impact on prices.

If the jobs go, the number of people that can afford to pay 700k for a 3 bed semi will go with them. Prices will then come down, even if supply continues to slow.

Asylum seekers aren't coming here buying 700k houses; tech, finance and pharma workers are; if we lose them, we lose the house price ceiling.

You can see the impact even today, even when we have a huge deficit of housing supply.

The january median house price in Dun Laoghaire, where the jobs are, was 620k.

In Leitrim, where the jobs are not, the median house price was 165k.

DLR has over 6 times the population of County Leitrim.

Yes there are disparities between housing types and some other factors, but the fact remains that an exodus of well paid jobs can turn Dun Laoghaire into Leitrim, very quickly.

And they would have been right in 2007. I'd suggest reading this;

https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3667309

It is US based but available evidence since suggests it was a dramatic overreaction by markets, with interest rates increasing too quickly.

Yes there needed to be a market correction and pain as dumb loans were issued both in the US and here, but it just didn't warrant what happened. The fundamentals didn't support it. The fact that we had financial products that few understood along with discourse about demand mania spooked the world and tipped us over the edge.

The sharp money flooding came in very quickly once it was clear that it was an overreaction and we have seen dramatic house price inflation in the West since.

After the fact that what we are seeing is an (admittedly highly damaging) repricing of the economy, the best argument against a collapse here is because of that overreaction, imo of course.

Relax the kacks - Pharma not included in the tariffs so thats about 60% of imports from Ireland going into the US not being touched. Also for those saying people cant afford 700k houses you need to look at the alternitive countries that people may move to as the action of property prices going up and up and up is not just an Irish phenomenon its global. I think this will be more a Brexit scenario with regards to jobs but the corpo tax will diminish and I have said on here for years that we will be caught out with this as our gobsh1ts at the wheel have baked this tax into our spending a little like 08 with stamp duty. I can see some tax increases but the shame of it is what our taxes are spent on someone really needs to grab the purse strings and stop throwing money around like confetti. The corpo tax party is coming to an end. There is a fight to come in the next 5 yeasr as the country is now way too expensive with regards to costs of living and any increase in tax will see FF/FG not getting elected next time. The spend side has to be looked at no more 1.2 billion security huts or 300k bike sheds and organizations like RTE need to hit the wall and other organizations like the OPW need to be gutted from the top down and the employees penalised for not spending frugally going forward. The other organizations like ESB need to be told to cut their prices and look after the country and not its record breaking profits. We still have levels to pull and options to see the country grow but it means politicians actually doing the job properly.

Some positive news for a change:

"The Government is preparing to crackdown on Airbnb, effectively banning the long-term tourist rental of homes in large towns and cities.

The proposed rules are much stricter than previously expected, with restrictions set to prevent homeowners from renting out properties for more than 90 days a year if they live in an area with a population greater than 10,000.

Senior Government sources confirmed they intend to bring forward new legislation in the coming weeks introducing stringent regulations on short-term lets."

https://www.irishexaminer.com/news/arid-41605648.html

This should effectively kill off the professional Airbnbs in our cities and return it to the original aim - people renting out their own homes when they're away or similar.

It won't return a huge number of properties to the market, but better some than none.