Medium & Long Term Property Market Chat

neutral guy wrote: »

From last news today Bus Eirean canceling his 3 express bus lines to Cork,Limerick,Belfast
What I think is just a start and this will affect future property market on many locations

Bus Eireann struggled to compete with other operators on these routes. It's work practices were a shambles it tried to reorganize last year. However drivers refusing to do a litter pick, drivers going sick and having to be replaced on overtime, rules regarding pickup and drop off of buses, drivers insisting on bringing the same bus home as they started out with all made the service uncompetitive. Inflexibility increased cost and reduced passenger numbers. Private bus operators will fill the gap as they created the market anyway

neutral guy wrote: »

We are not talking about drivers here.

You were equating the dropping of the services as the start of something and that it would effect property prices. I explained why it has happened and that more efficient operations will replace any gap in services. For the last 15 years since motorways were put in place private bus operators have operated intercity services. At the start BE presumed there would be no demand for services. Every one of these routes have two operators on tgem. Most BE expressway services were multi stop at intermediate towns. Most private bus operators were end to end with minimal stood.
BE stopping inefficient services will have no effect on property prices and is the star of nothing

schmittel wrote:

For unrelated discussion of economic, please use the economics forum.

Interesting, mentions economically based terms in op, then directs economic debate to another forum, what exactly would you like to be debated on this thread?

Wanderer78 wrote: »

What is properly functioning property market, and have we ever experienced it?

The noughties was the nearest everybody left borrow what they like, builders left borrow what they like, lenders left lend what they wanted to. We know how that ended.

schmittel wrote: »

Actually thinking about my previous two posts, therein lies the political solution.

Imagine if a party stepped up and said here's our plan to overhaul the mortgage process:

scrap the CB lending limits
allow buyers to borrow as much as the bank will be willing to lend them
allow banks to take rent payments into account as well as savings
if the borrower gets into arrears they can hand the keys back to bank
this will increase competition and reduce rates

BUT in order to do this we will have to overhaul the repossession process, here's our plan:

repossessions will be accelerated on a case by case basis. For example mortgages that owe 1 million, have 5 spare beds, and have not paid anything in 10 years will be first on the list.

All repossessions will be means tested with those most easily able to afford a change in circumstances will be prioritised.

If you are in genuine difficulties and in a house that is equivalent of the social housing alternative, we will convert it to social housing.

i.e nobody who is in dire straits will be homeless.

I can't imagine anybody would have a problem with the above. In fact I think it would be kind of popular.

Wow I am actually in agreement with you for once on what should happen, the problem is we have way too many left leaning parties and organisations which seem to shout loudest and when family homes come under fire you will hear every bleeding heart sad stories from the "how Daddy had to sell the Porsche and Mummy cant do her Cantonese Monk Yoga classes anymore and now they want to take our 10million mansion family home " to the real hardship that would happen to the average Joe if their house was taken from them. There is not one party out there who have the balls to start taking back family homes during a pandemic it would ruin them completely. It would be labelled as the banks winning over the common man again .

fliball123 wrote: »

There is no way that there will be repossessions en mass. Every top party is gaining when they are talking about helping the poor , the homeless so if they start fecking people out of their family house when jobs are being lost and little chance of getting another the lefties will be out in the street, Cant see it happening it would spell the end of the current gov if it did

they seem to be doing an amazing job, truly helping those folks out of temporary(permeant) accommodation!

fliball123 wrote: »

Well I am not saying its right I mean at the end of the day someone has to pay for it so the people paying their mortgage in the right way are paying with higher interest rates

pay for what, by whom? why are people paying higher rates?

fliball123 wrote: »

Well if you compare mortgage interest rates here with the rest of Europe we are paying more due to the the built in risk factor of banks not being able to repossess (or the difficulty in repossessing) the family home

or it could be seen as, the banks are screwing us, the banks feel theyre not protected enough by new protection measures for a potentially serious downturn, banks have been experiencing a decreasing demand for new credit, since 08, and has now accelerated in the last few months.....

Ray Palmer wrote: »

Robots won't replace jobs like people think. Easy to see in the real world. Go to the USA and go into a car park. They have people instead of automatic barriers.
It is simply cheaper to hire a person. A robot will have to be cheaper and customers will have to be happy about that. The French are not going to allow machines do their jobs and customers won't accept it. That means EU restrictions and taxes on robot use. On top of the limitation of their use that technology won't overcome.

This effect on housing will be pretty limited in the long term as shops and restaurants etc... will require humans. Such jobs require population density. There are huge social and economic pressures for population density. Covid is temporary.

There is simply going to be less hosuing built for a long time. We were undersuppling housing beforehand and this is going to get worse. Even with migration slowed we have an increasing population. Do you think people with free time aren't making more babies?

There is a worse housing shortage coming and house prices don't drop in that situation. Even with less money in the economy it doesn't mean value drops. If property price drops everything has dropped including wages of everyone. Unlikey but a larger divide in households is. Not all will be effected equally. Lots of low skilled jobs are going one way or the other. While other jobs are not effected at all and even in more demand. For some households that means more money while others it could mean no money. It depends on how the income is earned some will have a couple half affected and some with no effect at all with the worst case both.

House prices in my view will actually go up in value as a percentage of median wage. In price terms that could mean a drop but they won't be more affordable to most people.

we ve no clue what the future holds for us, we ve been extremely crap at accurately predicted it in the past, we may never get any good at it, we ve no real clue how tech is gonna change our world in the future, and past outcomes, of increasing employment due to tech, is not guaranteed in the future, we simply havent a clue. but if we dont get a handle of our wealth distribution problems, and quickly, we mightnt have a future to be worrying about, and property and land is playing a critical role in this problem.

Ray Palmer wrote: »

There is simply going to be less hosuing built for a long time. We were undersuppling housing beforehand and this is going to get worse. Even with migration slowed we have an increasing population. Do you think people with free time aren't making more babies?

There is a worse housing shortage coming and house prices don't drop in that situation.

Actually housing construction has held up remarkably well given the covid restrictions with Cairn Homes stating a few weeks ago that they are already back to 85% pre-covid construction levels. We're also expected to have house completions hit 18,000 this year despite the construction shutdown (link below).

In relation to the pre-covid projections for housing demand going forward, those projections were primarily based on mass immigration continuing indefinitely which is unlikely now for at least the next 5 years e.g. hospitality wil be on its knees and construction work will be well down e.g. we will be building less offices, hotels, student accommodation units etc. even if residential building stays up or even increases.

According to the Central Bank last December: "The paper finds that around 34,000 dwellings would be required per year until the end of the next decade assuming unchanged household formation rates. This scenario is based on net inward migration of 30,000 per annum, a figure in line with the levels of inward migration observed in 2017 and 2018. Assuming a lower level of net inward migration of 10,000 per annum, annual average housing demand is estimated at around 26,500 per annum out to 2030."

I think we can reliably predict that the levels of net migration of c. 30,000 (that's the amount of immigration exceeding emigration each year) in the Central Bank report above won't be anywhere near this higher figure for many years to come and we're still continuing to build plenty of homes. We also had c.90,000 vacant livable homes in Ireland pre-covid as per the GeoDirectory Survey Q2 2020. That's three years housing supply right there even at the higher projections for housing demand.

Never mind all those student accommodation units (about an extra 15,000 bed spaces built or already now under construction in Dublin over the past few years) that will need people to fill them over the next two years as the international students aren't coming back next year either as they would have to decide to come here from next January and we will still be in lockdown at that stage. The Point Campus in Dublin has already requested permission to convert 600 of their units to residential permanently.

In relation to more babies etc. the population of 0-34 year olds in Ireland actually declined by 72,000 between 2011 and 2016 so I don't see where that will come from without continued mass immigration.

I won't even go near the upcoming changes by the OECD to the international tax regime and all sides agree this will not be good for Ireland no matter the outcome.

Link to projected 18,000 house completions this year despite covid: https://www.irishtimes.com/business/construction/house-completions-to-hit-18-000-despite-construction-shutdown-1.4356648

schmittel wrote: »

The politics of it is exactly why the first part of the post is important. i.e governments says:

"We are going to reform the mortgage lending rules to make it better for everybody who is struggling to get a mortgage, but in order to do so we need to start repossessing where necessary.

The unfortunate consequences are that this family is going to lose out 10million mansion."

To be honest I am more surprised that politicians have the balls to allow them to keep the 10 million mansion, as per the current situation.

have any political parties included addressing long term mortgage arrears in their manifestos? Has a party even attempted to develop a policy on it? All i've ever read or heard is "engage with the banks and work something out". If there was a medium term plan it could attract more lenders to the market if they deemed that risk was reducing.

Wanderer78 wrote: »

...and im sure it would resolve our housing and accommodation issues?

Lower mortgage rates means people have more disposable income. More competition in market means consumers have a choice. Prices will fall obviously. If mortgages Also get cheaper for those that are it will help them as well.
Medium to long term government policy on different types of affordable housing is also required. There is no magic fix despite what a bomber writes in a book. What we don’t want is no construction for years so we end up with another crisis down the line

Wanderer78 wrote: »

have lower rates, resolved this issue in the past? have prices fallen in the past due to these type of measures?

Have prices fallen in the past due to a recession? Have repossessions been addressed in the past? How many new entrants to the banking/mortgage in the last decade (avant aside)? I don’t know the answer to the last 2 questions!