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

yagan · 15-05-2021 3:07pm

coolshannagh28 wrote: »

Not just NAMA property they were initially enticed in to purchase tranches of banks bad assets and this allowed them to dip their beaks in the tax free waters ; this emboldened other less aggressive funds who incorporated as REITs to exploit the long term high yield rental market . The smart guys on wall st were also set a stunning example of the opportunities in Ireland by Wilbur Ross with his hugely successful bet on Bank of Ireland after which the floodgates opened.

And then he sold out with a big fat profit after three years. If you can see the bandwagon you're already too late.

If the reports of two month rental rebate continue after we open then I reckon that yield market is already sunk and then the cranes will stop swinging.

15-05-2021 3:08pm

Timing belt wrote: »

The fact is that we don't know where the top of the market is.... if we have meaningful inflation they didn't buy at the top of the market. There is plenty of room for yields on property to fall and funds to still be happy with their return as there investment is still growing.... If they sold what would they do with the cash? They won't leave it in a bank with negative rates, they won't buy government bonds with negative yields, they won't invest in the stock market as this has already been saturated which can be seen the price to earnings ratio's. They only way they could make money is if the timed it right and sold before government bond yields rise and the stock market crashes as investors pull out of stocks and shares and move back into government bonds. It's a big call to make as if they get the timing wrong they will loose big time.

The top of the market here already
People can not afford buy houses because builder sell property to cockoo fund at higher price than average buyer can pay.
So here we have 2 options
Or builders lie trying sell houses at high price
Or cockoo funds creating panic trough media trying sell property at higher price
By the way The property crisis because cockoo funds buy houses by my own opinion is bs !
Because any investor will not invest at top of the price

Villa05 · 15-05-2021 3:11pm

Timing belt wrote:

The fact is that we don't know where the top of the market is.... if we have meaningful inflation they didn't buy at the top of the market. There is plenty of room for yields on property to fall and funds to still be happy with their return as there investment is still growing.... If they sold what would they do with the cash? They won't leave it in a bank with negative rates, they won't buy government bonds with negative yields, they won't invest in the stock market as this has already been saturated which can be seen the price to earnings ratio's. They only way they could make money is if the timed it right and sold before government bond yields rise and the stock market crashes as investors pull out of stocks and shares and move back into government bonds. It's a big call to make as if they get the timing wrong they will loose big time.

Someone ressurected an old thread that was quickly shut down by the mods. It was titled. "Property market about to crash"

The most notable thing that hit me about it was the first post was 14 years ago in 2007

14 year cycles and the stopped clock, it just hit my gut for some strange reason

Timing belt · 15-05-2021 3:12pm

Revolution 1917 wrote: »

The multinationals keep them companies in Ireland due with low tax
But when tax will be the same in all world what the point keep company in Ireland when they could keep office in low paid work force similar tax country anywhere in world ?
That will bring renting market in Ireland way down
I am sure the new legislations will be brought due with Covid once it will be seasonal and people will work from home in any country they like.
Many many things could change property market
I am pretty sure if recession will not hit in 1-2 years time then other things will hit property market.

All the tax of tax reform is just a whitewash to make it look good... If the governments were serious they would not be creating new loopholes to facilitate lower taxes.... The only time I have ever seen a country close loopholes over night was when Mary Harney did so on the back of the Ansbacker scandal with the legislation she introduced it closed out more loopholes over night.... Loopholes that still exist 20 years on for most EU countries and for the UK and USA.

Villa05 · 15-05-2021 3:14pm

coolshannagh28 wrote:

Not just NAMA property they were initially enticed in to purchase tranches of banks bad assets and this allowed them to dip their beaks in the tax free waters ; this emboldened other less aggressive funds who incorporated as REITs to exploit the long term high yield rental market . The smart guys on wall st were also set a stunning example of the opportunities in Ireland by Wilbur Ross with his hugely successful bet on Bank of Ireland after which the floodgates opened.

We needed them to find the floor not to shoot to the sky. It's a long way down now

Timing belt · 15-05-2021 3:27pm

Villa05 wrote: »

Someone ressurected an old thread that was quickly shut down by the mods. It was titled. "Property market about to crash"

The most notable thing that hit me about it was the first post was 14 years ago in 2007

14 year cycles and the stopped clock, it just hit my gut for some strange reason

I remember in 2006 talking to a top banker in the UK and him saying that the banks have had a good run and need to ensure that they are in a healthy position to deal with the oncoming property crash..... It was in 2008 I saw the same banker enter downing street on the sky news following the collapse of the banking system.

You are right things do run in cycles but the problem is that by the time they come around again their are new people in charge that think it can't happen again. The big question is whether sufficient regulation has been introduced to prevent it from happening again and not just rely on people who have seen it happen before. I do think that from a banking perspective significant regulation has been introduced but unfortunately this has just pushed the risk away from the banks and into funds who are now undertaking shadow banking with limited regulation. The end result will be the same as it is the banks that are providing the lending the funds so if the funds go under the banks go under. Whether we are at that point or whether it is a years down the road is the big question and very difficult to call.

15-05-2021 3:32pm

Timing belt wrote: »

All the tax of tax reform is just a whitewash to make it look good... If the governments were serious they would not be creating new loopholes to facilitate lower taxes.... The only time I have ever seen a country close loopholes over night was when Mary Harney did so on the back of the Ansbacker scandal with the legislation she introduced it closed out more loopholes over night.... Loopholes that still exist 20 years on for most EU countries and for the UK and USA.

World changing so fast
That I will not surprised if I will go sleep in one country
And will wake up in different.

Timing belt · 15-05-2021 3:35pm

Revolution 1917 wrote: »

World changing so fast
That I will not surprised if I will go sleep in one country
And will wake up in different.

It's not changing it is only an illusion to make it look like something is being done to address the issues.... There is to much money to be made and to many lobbyists paying big bucks to ensure that their is no meaningful change and anything that is implemented is just a PR stunt

Hubertj · 15-05-2021 3:42pm

https://www.myhome.ie/residential/brochure/old-coastguard-station-site-union-hall-west-cork-co-cork/4501324

If you had the money you could build a lovely house here. Amazing idea to look at every day!

coolshannagh28 · 15-05-2021 3:47pm

Villa05 wrote: »

We needed them to find the floor not to shoot to the sky. It's a long way down now

I didnt agree with that strategy at the time however I have to accept given that banks are leaving Ireland like rats off a sinking ship it is obvious that there was no hope of getting the economy going using internal capital then and even less now.
We seem to be hostages to fortune now;reliant on FDI for employment and CGT and US capital from the Funds to sustain housing .
There are headwinds in both sectors and our national debt is at a level where our options are limited .

combat14 · 15-05-2021 3:54pm

Graham wrote: »

I disagree.

If anything I expect markets/economies to get pretty frothy over the next few years. A post-pandemic mini-boom if anything.

Uk already warning their june reopening under threat with indian variant even though they are ahead of us on vaccinations ..

full economic reopening still not gauranteed .. with house visits and market back to square one again if that happens

yagan · 15-05-2021 3:59pm

Timing belt wrote: »

The end result will be the same as it is the banks that are providing the lending the funds so if the funds go under the banks go under.

Is it just banks lending this time?

Banks are writing mortgages, but pension funds seem to be the main buyers this time.

Timing belt · 15-05-2021 4:17pm

yagan wrote: »

Is it just banks lending this time?

Banks are writing mortgages, but pension funds seem to be the main buyers this time.

Its not just pension funds Investing in property there are also investment funds that have borrowed from the banks...my point being that it ultimately ends up back at bank if there is lending on these properties. They might not be lending direct to developers but you can be assured they are lending to the fund that is funding the developer.

Villa05 · 15-05-2021 4:41pm

Timing belt wrote:

I remember in 2006 talking to a top banker in the UK and him saying that the banks have had a good run and need to ensure that they are in a healthy position to deal with the oncoming property crash..... It was in 2008 I saw the same banker enter downing street on the sky news following the collapse of the banking system.

All sounds eerily familiar

Investment funds have had an incredible run and now set price for sale/rent that only government can pay it for social/affordable tennants

Questionable regulation of their practices. I wonder are they planning for a crash it certainly looks like it to me

Incredible amount of savings post CoVid mirroring SSIAs of 2006

Shared ownership mirroring 110% mortgages

20 year fixed rate mortgages great product for consumer mirroring tracker mortgages, note Avant have dropped their rates in response to the 20 year product

Pent up demand

Feels likke my de lorean has landed back in 06

Donald Trump · 15-05-2021 4:50pm

derekgine3 wrote: »

Agreed, a huge crash will likely arrive in around 4-5 years. If people are not paying high rent they should park their hard earned savings in cash and some safe haven stocks and be ready to pounce.

This insanity won't last forever and the biggest correction in history is coming, however, short term it does not look good.

A crash may not happen in that timeframe if there is a lot of inflation. Under that scenario, those with parked cash will see its real value diminish and those with "high" mortgages now will see that inflated away.

It is likely though that that worry is also driving the market currently

yagan · 15-05-2021 5:00pm

Villa05 wrote: »

Incredible amount of savings post CoVid mirroring SSIAs of 2006

I'm sure it's been covered many times before but SSIA was a savings scheme, whereas PUP was a basic income.

In the USA on the other hand every home, regardless of how wealthy or poor they were got stimulus cheques.

In relation to 2006 at that stage the banks were approving 110% mortgages so the SSIA savings boost wasn't even relevant.

PUP savings of people without mortgages or rent has probably already gone on a new car.

Timing belt · 15-05-2021 5:25pm

Donald Trump wrote: »

A crash may not happen in that timeframe if there is a lot of inflation. Under that scenario, those with parked cash will see its real value diminish and those with "high" mortgages now will see that inflated away.

It is likely though that that worry is also driving the market currently

If there is to much inflation then yield on gov bonds rise causing the stock market to crash and a drop in most asset prices as investors chase yield by investing back in the bond market. Central banks won’t be able to undertake QE to lower yields as that will lead to more inflation. Whether this would lead to a drop in house prices is unlikely as the yield is still significantly higher

L1011 · 15-05-2021 5:54pm

yagan wrote: »

I'm sure it's been covered many times before but SSIA was a savings scheme, whereas PUP was a basic income.

In the USA on the other hand every home, regardless of how wealthy or poor they were got stimulus cheques.

In relation to 2006 at that stage the banks were approving 110% mortgages so the SSIA savings boost wasn't even relevant.

PUP savings of people without mortgages or rent has probably already gone on a new car.

The savings boost is not down to PUP. It's the employed not spending on commuting and holidays, to over simplify it

derekgine3 · 15-05-2021 6:30pm

Donald Trump wrote: »

A crash may not happen in that timeframe if there is a lot of inflation. Under that scenario, those with parked cash will see its real value diminish and those with "high" mortgages now will see that inflated away.

It is likely though that that worry is also driving the market currently

Interest rates hiked up in response to said inflation will start the crash, imo.

Agreed, the worry is the "brainwashed/ignorant" money desperately trying to get on the ladder before "it's too late", now where have i heard that before? Albeit the situation is different and the worry is inflation and being priced out and i sympathize with those stuck paying high rent.

Those that are in no rush to purchase but are buying now need their head examined. Smart money is leaving the market in their droves to take profit before the next crash, which may take a few years. Either way, supply with outstrip demand within half a decade, that coupled with interest rate hikes will spark a mass global recession, worse than the GFC, imo.

15-05-2021 6:52pm

derekgine3 wrote: »

Interest rates hiked up in response to said inflation will start the crash, imo.

There will be no inflation.
Inflation is song of media to make people spend money.
People in USA during Great Depression was working for 2 bucks per month even when billions been printed.
The next thing rich people who buy politicians does not want inflation because them money will worth nothing
Any economy rules does not work anymore
Also ECB has good experience from those times when recession started in 2008 and they lifted rates killing the Europe economy after
Believe me they learned this lesson very well
For those who does not remember we had 2 recessions the first one in 2008 and the next one in 2013.
The inflation is the media weapon to make people spend them money trying tell them if they will not spend then them money will worth nothing.
But in reality if people will not spend them savings we will have deflation
Did you forget what media was singing in 2007 ? Buy property now because it is best time and if you will not inflation will eat your savings ?
Why banks in Ireland try put people on Fixed rate for 20 years if rates will up ? Did anybody think about it ?
People never learn.

yagan · 15-05-2021 7:02pm

Revolution 1917 wrote: »

There will be no inflation.
Inflation is song of media to make people spend money.
People in USA during Great Depression was working for 2 bucks per month even when billions been printed.
The next thing rich people who buy politicians does not want inflation because them money will worth nothing
Any economy rules does not work anymore
Also ECB has good experience from those times when recession started in 2008 and they lifted rates after that killing the Europe economy
Believe me they learned this lesson very well
For those who does not remember we had 2 recessions the first one in 2008 and the next one in 2013.
The inflation is the media weapon to make people spend them money trying tell them if they will not spend then them money will worth nothing.
But in reality is people will not spend them savings we will have deflation
Did you forget what media was singing in 2007 ? Buy property now because it is best time and if you will not inflation will eat your savings ?
Why banks in Ireland try put people on Fixed rate for 20 years if rates will up ? Did anybody think about it ?
People never learn.

I've been thinking similar thoughts, however I do think real commodity inflation will happen but over a longer period.

It was really noticeable how commodities picked up again once China started reopening, and then stayed up even as the USA and Europe went back into the winter lockdowns.

There is logjam inflation that will settle down as production catches up with demand, but in reality it's no longer the west setting the pace and if that pace increases consumers will feel it.

If older people whose only exposure to the internet has been Facebook start asking about Bitcoin then their savings aren't going to help much.

Cyrus · 15-05-2021 7:04pm

Sale agreed already

Interested to see what the price was but can't say I'm surprised

https://www.google.com/url?sa=t&source=web&rct=j&url=https://www.myhome.ie/residential/brochure/sheemore-1-cunningham-road-dalkey-county-dublin/4495891&ved=2ahUKEwiY4f7ioszwAhXhoXEKHdNPAPgQFjAFegQIDxAC&usg=AOvVaw2OHsC9bffGj-v_nTQZM6Fu

derekgine3 · 15-05-2021 7:07pm

Revolution 1917 wrote: »

There will be no inflation.
Inflation is song of media to make people spend money.
People in USA during Great Depression was working for 2 bucks per month even when billions been printed.
The next thing rich people who buy politicians does not want inflation because them money will worth nothing
Any economy rules does not work anymore
Also ECB has good experience from those times when recession started in 2008 and they lifted rates killing the Europe economy after
Believe me they learned this lesson very well
For those who does not remember we had 2 recessions the first one in 2008 and the next one in 2013.
The inflation is the media weapon to make people spend them money trying tell them if they will not spend then them money will worth nothing.
But in reality if people will not spend them savings we will have deflation
Did you forget what media was singing in 2007 ? Buy property now because it is best time and if you will not inflation will eat your savings ?
Why banks in Ireland try put people on Fixed rate for 20 years if rates will up ? Did anybody think about it ?
People never learn.

That is a very good point and something i have considered but having seen prices rise in many areas of life so far (some of which may be due to supply issues) i was leaning towards inflation but you make some good points.

I don't for a minute trust the banks or government, they certainly don't have the people's best interests in mind with this 20 year fixed rate.

The only way i see deflation is if the velocity of money remains very low (which could easily happen). Either way, if inflation does occur it will not be by some sort of post pandemic boom, it will be due to the money printing artificially rising prices of various asset classes.

Those hoping for a post covid boom will be severely disappointed, many jobs will not return, banks will be stricter with lending to average joe, once government supports are withdrawn sh1t will hit the fan and confidence will dip to near all time low.

Timing belt · 15-05-2021 7:26pm

derekgine3 wrote: »

That is a very good point and something i have considered but having seen prices rise in many areas of life so far (some of which may be due to supply issues) i was leaning towards inflation but you make some good points.

I don't for a minute trust the banks or government, they certainly don't have the people's best interests in mind with this 20 year fixed rate.

The only way i see deflation is if the velocity of money remains very low (which could easily happen). Either way, if inflation does occur it will not be by some sort of post pandemic boom, it will be due to the money printing artificially rising prices of various asset classes.

Those hoping for a post covid boom will be severely disappointed, many jobs will not return, banks will be stricter with lending to average joe, once government supports are withdrawn sh1t will hit the fan and confidence will dip to near all time low.

Since when did the CPI included Asset classes? The inflation people are talking and measured via the CPI does not include assets/investments.

The velocity of money is low because of the QE and printing of money.... There is more money in circulation so it doesn't circulate as much. Once Central banks start tapering their QE they will be pulling cash out of circulation and the velocity of money should start to increase.

Finally how is a 20 year fixed rate mortgage a bad think especially when rates are at a historical low... Are you expecting them to go lower?

Cyrus · 15-05-2021 7:39pm

Hubertj wrote: »

How long was it up for?. House could do with some upgrades but is a really nice setting

4 to 5 weeks so pretty short given the price point!

janandbren · 16-05-2021 8:26am

Thoughts on story broke this morning by Killian Woods on the business post? The state itself investing in the cuckoo funds? Though I'm completely shocked by it myself, I feel this board where I have to admit is my first time posting, has replaced all my reading of social media so I appreciate all of the wide range of opinions from you all! Came straight on here to see the chat but maybe I'm too early?

Woah · 16-05-2021 9:06am

janandbren wrote: »

Thoughts on story broke this morning by Killian Woods on the business post? The state itself investing in the cuckoo funds? Though I'm completely shocked by it myself, I feel this board where I have to admit is my first time posting, has replaced all my reading of social media so I appreciate all of the wide range of opinions from you all! Came straight on here to see the chat but maybe I'm too early?

Would have been outraged/upset over it but at this stage nothing surprises me.

Zenify · 16-05-2021 9:11am

I'm not a subscriber so couldn't read the entire story but this looks like madness. I'm sure a lot of other media will pick up on it too during the day.

Ozark707 · 16-05-2021 9:17am

Zenify wrote: »

I'm not a subscriber so couldn't read the entire story but this looks like madness. I'm sure a lot of other media will pick up on it too during the day.

It just gets worse and worse for the government on this. This coupled with the constant drip feed of articles on how people are forced into non optimum solutions (such as moving home in their 30's) is ensuring this will stay top billing. Question for me is there any quick wins at all the government can get. Personally I can't see it and if rents go back up quickly... oh boy.

Zenify · 16-05-2021 9:26am

I just read the full article and it is shocking. Absolutely crazy. It lists all the homes they've snapped up amd all the state funding they've got that was supposed to be for building houses.

This was also a shocking statement:

Urbeo was co-founded by Bill Nowlan, who is widely credited with the introduction of the favourable tax framework now enjoyed by real estate investment trusts (Reits) in Ireland. The firm is not registered as a Reit, a system set up in Ireland to provide institutional residential investors with tax breaks. Nowlan led the Irish Reits Forum to promote the introduction of Reits. Introduced by the Finance Act 2013, a Reit is an Irish resident company which sources at least three-quarters of its income from leasing property. These firms are exempted from paying corporation tax on rental income and do not pay capital gains tax on property disposals.

Government taking advise from the very people who are profiting from said advise. This should not be allowed.

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