Well, Ronan is certainly consistent, I’ll give him that
He’s consistent alright. His analysis is consistently good quality. The issue I have is that the message is consistently exactly in line with the message that Daft want to convey. It will be a cold day in hell before he comes out and explicitly states that houses in Dublin are overpriced and that there is a very real danger of another price collapse
I wouldn’t class the current market as a bubble, but that doesn’t mean it’s not overpriced with a very strong possibility of price falls.
We have a supply issue.
We do not have a demand issue.
During the boom we had both.
You only need to tackle one side of the equation to solve the inequilibrium.
Wikipedia defines an economic bubble as “trade in high volumes at prices that are considerably at variance with intrinsic values… It could also be described as a situation in which asset prices appear to be based on implausible or inconsistent views about the future”.
To me the prices are not sustainable at present, and this is for both renting and/or buying property in Dublin. Eg… a rent of €1600/€1650 for a 3bed property in Marino (phibsborough, Glasnevin, Beaumount, Santry, etc, etc) … assuming a salary of €50~55k you are looking at paying over 50% of your disposable income… (Adding in payment for partner on minimum wage is comparable to childcare costs so I am only looking at single earner and assuming 2 kids). To me rent and purchase prices only make sense if there is going to be a big increase in salaries in the near future (implausible for me at least if my business is to remain in any way competitive) or if it is assumed that there will be no new supply (supply will increase quite rapidly in my opinion, and I see a lot of properties coming on stream within the next few years).
I think it’s a bubble and that it will blow up much sooner and faster than people think… but of course earlier this year I thought that it would have blown by now!!
A couple of interesting points in Ronan Lyon’s Sindo article today…
Firstly, no government minister is in charge of private housing
and secondly there is no will on the part of government to make housing cheaper - but ***they could if they so wished.
This is a QUALITY OF LIFE issue and part of the reason Ireland now offers a diminshing quality of life.
Hard not to agree, except that the ‘supply’ issue is really a sinister political mismanagement issue. It’s not as though Dublin is constrained physically like say Hong Kong. The ‘supply’ issue is more of symptom rather than the underlying problem.
Which is why I think current rises are on very shaky long-term (and even medium-term) ground.
Saying that a problem in Ireland has a fairly simple and understandable causes and assuming as a consequence that anything will ever be done to solve it is a triumph of optimism over experience.
It’s kinda tragicomic to read posts that wonder why politicians are not following a particular (often good) line of thought on housing. Irish politicians do not, to say the absolute least, have a record of successful intervention in housing, land, etc.
Relevant anecdote: Last week (very unusually) a politician (FF) called to the door. I raised some points about housing issues in Dublin. His reply was the usual old garbage, but what was more interesting was his response to my question about what he was basing his opinions on, what analysis, statistics, etc. He replied - without a trace of irony and in super-confident tones - that he was particularly well informed on housing matter as he had recently listened to two ‘debates’ on the Marian Finucane show and a discussion on Pat Kenny.
I didn’t know whether to laugh or cry, etc, etc…
This really doesn’t surprise me, tragicomedy…
Ross O’Carroll Kelly is the best bellweather of this:
irishtimes.com/life-and-styl … -1.1929721
The comments are good
Is it part of the comedy that the same IT page carries “Thomas, The Manual #1” … “the new Brown Thomas interactive menswear magazine”, in which a casual outfit (yes, just one of them, not an entire wardrobe) costs five grand? Or a case of life imitating art?
Just got an email from myhome.ie inviting to share sentiment on the market.
Fire away folks …
Here’s a nice question!
- In the next 12 months do you expect house prices to:
Increase by up to 5%
Increase between 5%-10%
Increase over 10%
Fall over the next year
Where’s my options for various % falls!!!
Hall on again with Pat Kenny, claiming credit for the recent changes in the dropping of fees charged by the Insolvency Service
Discussing bankruptcy, Kenny just paraphrased someone who’s come out of bankruptcy:
“I just screwed a bank, who screwed us over the years…so thats fair enough”
Hall said he met someone last week for the 1st time who got refused bankruptcy in the UK as they had made 1 transaction in Ireland in the previous 3 months, so the UK authorities said they’re centre of interest was not Liverpool !!! Reckons they’re tightening up over there
edit- should have put this in the Bubble tv/radio thread
Was under pressure to buy one of these off the plans for 430K in 2005 by the at that time other half, thankfully had more sense in the end, was just looking to see how much they are going for now and came across this nugget, it’s absolutely disgusting:
“In keeping with the modern theme, all apartments are pre-wired for cinema-quality surround sound throughout.”
…Yeah except the sound proofing is so horrible you’ll never be able to avail of that feature unless you like tormenting your neighbours!
How much are they going for?