I’ve been making the point here for a while that as most manufactured goods become cheaper (both in relative and absolute terms), and as incomes and populations rise, there is a tendency towards an upward pressure on house prices. Without strong taxation measures and/or liberal planning laws, buying a house may become more and more unaffordable for people on average incomes. This is the case already in major cities such as London, New York, Paris, Milan, and also across much of Asia.
The radio and newspapers this morning were full of bubble stories. The Pin is going mainstream! And then I find this on the Indo of all places
So relieved that the voices of sense are getting some perspective in the media at long last- shame it will be ignored for all the reasons we have stated (if people thing house prices are rising they will pay more and more).
Are one in ten properties in Dublin empty? If that is for real then this bubble HAS to pop sooner rather than later.
It’ll pop alright. Even Inda coming out and saying there is no bubble will have lots of people thinking that there is a bubble
Order of The Pin Award for Thomas Molloy? He surely reader - maybe helps to write? - the Pin, but he’s still spreading the good word.
He is on The Right Hook every day at about 5.45pm. Speaks a fair amount of sense.
I agree that statement really needs some back-up. Anyone know where the stat it is from?
On the night of the 2011 census there were 528k houses in Dublin, 43k of which were empty, that’s 8.1%
UCD Urban institute estimate that Dublin needs 10k-15 new builds each year.
In the 3 years since the census new builds have been averaging about 1k per annum.
Given the lack of building over the past 3 years, I’d expect that vacancy rate to have fallen.
Furthermore, UCD Urban Institute also point to what they call normally functioning property markets, where vacancy rates at census run at approx 10% in predominantly rental areas and 2-3% in owner occupied areas. They estimate that an appropriate figure for Ireland would be 5.0%-5.5%.
Dublin’s 8.1% in 2011 was made up of 10.1% in Dublin City, 7.6% in DLR, 5.4% in South Dublin and 6.7% in Fingal.
Lack of supply of housing fuels new property bubble - But 18,000 ‘shovel ready’ units - enough for three years - lie idle (Indo)
DUBLIN has three years’ worth of supply of sites with planning permission available for building homes, but many are owned by insolvent developers who can’t get the funds to begin construction.
Writing in today’s Sunday Independent, Central Bank Governor Prof Patrick Honohan has promised to step in and stop house prices in the capital running out of control if the boom emerges.
“We have a toolbox of measures which can be used to cool down credit-fuelled demand. We will not hesitate to use them to prevent bank credit overheating the market,” he writes in Sunday Independent Business. (Fat chance of that happening as long as Enda and Noonan are at the helm!!)
“stop house prices in the capital running out of control”
15% increase one year
20% increase the next year
Glad things are still under control.
Note he qualified his remarks by saying “credit fuelled”. There is little the central bank can do about this cash led bubble.
In fairness to Honohan, he’s been screaming for more repossessions for years.
He was the one who introduced the Code of Conduct on Mortgage arrears that completely tied banks’ hands and meant that anyone even pretending to cooperate with the bank had to be given whatever forbearance they asked for… He also introduced a ban on foreclosures that lasted just until the Dunne ruling came about. He has definitely not been screaming for repossessions
Guess I’m wrong then.
He also claimed in front of the Dáil committee that strategic defaulters don’t exist, saying something like “what you do have is people prioritising unsecured creditors instead of secured ones”. In reality the most common form of strategic defaulter is a person who has not adjusted their lifestyle since the 1st bubble burst. They just reduced the amount that they are paying the bank so they are still taking multiple sun/ski holidays, driving nice cars and sending the kids to B’rock College etc. PH did not mention this cohort however. He is a politician and is too concerned with sounding popular so he will never say anything that does not sit with the political establishment…
Ok before anyone says anything, I’ll give you the whole ‘Ireland is in bailout discussions’ thing that he hit Lenihan with
Economic apartheid, it’s policy.
The fall of the Establishment parties.
Sindo explains why the Dublin house price bubble is not a house price bubble:
But as Ronnie Reagan once explained to us, “if you’re explaining, you’re losing”