It’s a crack up boom and it could go on for quite a while before it suddenly ends. People don’t want to leave money in the bank when real rates are negative. So the only place to put it is assets. negative interest rates cause depositors to seek alternatives… a crack-up boom is where with a gathering herd instinct, first large and then smaller depositors seek to buy anything just to get rid of deposit money. Already, we can see these potential developments in the rapidly rising prices of gold and bitcoin and copper and well everything really. All predicted by Von Mises. Not that the central planners care because their egos forbid they give up a single ounce of their control.
I don’t know if the SSIAs really added much as the bubble was already being inflated by over 100% mortgages etc…
They started maturing in 2006 as the bubble began peaking so I’d class them more as secondary to that event. Maybe they did slow the slide, but banks were already rolling over developer debt at that stage.
’Oh, councillors will get their 50pc pay hike all right’
A TD on a €100,000 a year cannot afford to buy a modest three-bedroomed home in many parts of Dublin, the Fine Gael parliamentary party was told last week.
The remarks by veteran backbencher Bernard Durkan raised eyebrows among Fine Gael TDs and Senators, who had been discussing a motion calling for the implementation of a long-awaited €8,000 pay increase for city and county councillors.
The penny drops for FG backbenchers. How did we get here?
Mixed messages in today’s Irish Daily Mail.
The headline screams a run on Mortgages
While Karl Deeter is quoted as saying that he fears Ireland is heading for another crash. And Mortgage brokers are out the door with applications.
However recent Central Bank statistics suggest the following is happening:
Net lending to households decreased by €303 million in
April 2021, continuing a trend of subdued lending flows.
In annual terms, repayments exceeded new lending by
€242 million or 0.3 per cent, reflecting weak lending
flows over the last 12 months.
Central Bank April 2021
This is an ongoing situation as we have reported on the pin here in recent years. Where the residential lending market has seized up to an extent, as banks have sensibly pulled back from much new lending, or sought to escape stage left altogether (Ulster Bank and KBC)
Brian Hayes ex. Fine Gael MEP is trying desperately to whip up a sense that there is huge appetite for residential mortgages, as part of this role as chief Banking lobbyist, but this never seems to be reflected in the stock of loans, which has been declining or stagnant at best since 2008.
Meanwhile all that pork barrel Covid spending is coming back into the banks in deposits, a wall of cash for someone, that has resulted in a 12.9% annual increase in household deposits during the greatest economic sacrifice since WW2.
Deposits from households continued to reach new
heights, and stood at €131 billion at end-April 2021. Over
the month, households’ deposits recorded a net inflow of
€2.2 billion (Chart 3). In annual terms, lodgements
exceeded withdrawals by €14.9 billion, or 12.9 per cent.
Overnight deposits, which include current accounts, were
the driver of the monthly and annual increases in
Central Bank April 2021
Economist John Fitzgerald said prices are likely to rise even further next year when life gets back to normal after the pandemic.
“It’s likely that you ain’t seen nothing yet,” he said.
“Things are going to be more difficult next year when we get back to normal and house building is not back.”
The penny drops for more Irish people
A TOP ESTATE agency is asking prospective house buyers to provide detailed financial information and proof of funds before they can view properties at a new Dublin development because of “high demand”.
To secure a place at the launch of property group Quintain Ireland’s Somerton project in Lucan, Co Dublin, estate agents Savills has required house hunters to fill out a financial questionnaire.
It’s like joining the Masons to go view a gaff in Lucan these days
I wondered if we applied the golden rule of electronics to housing in Ireland, what do we get?
It’s hard to apply it to a non-functioning market because it assumed supply is not a problem. It assumes. Normal functioning market. systems. Government etc. etc. However is we assume Speed = Supply, maybe:
BOOMING BUBBLE Era
We got SPEED, (supply) we did not get quality, and we did not get price.
Post-Bubble COMMUNIST-BANKER Era (current):
Now we get Quality but not Price and not SPEED (being supply).
It’s like we aspire to perfect failure, what’s up with that?
Is it the general dampness, like is it airbone fluoride or something, not just the tap water?
Or is it that as the ESRI have confirmed, we have a proactive
House The Rest Of The World Policies, that no one is allowed to talk about. The levels of self censoring in Ireland on so many issues, is probably higher than that of former CCCP at this point.
House prices will ‘go beyond Celtic Tiger levels’ without dramatic changes in policy, according to a housing expert.
It comes as Tánaiste Leo Varadkar has set a target of building 40,000 new homes a year, warning that home ownership is now ‘out of reach for far too many’.
Yesterday, Dr Rory Hearne, author and lecturer in social policy at Maynooth University, warned that prices will go above the Celtic Tiger peak before they begin to fall.
‘I do think house prices are going to continue to rise,’ he said on Newstalk yesterday. ‘I think that they are completely unsustainable but they are going to continue to rise unless something dramatic changes.
Nothing to see here, it’s all in your heads
Daft.ie’s House Price Report for spring this year found similar figures, with house prices skyrocketing by 13% nationally.
Asking prices on its site rose by €34,000 to €284,000. This equates to a 3% increase on the previous three months, and means that prices have risen for four consecutive three-month periods for the first time since 2014.
Officially €845,000, for 3 bed, 2 bath, 1,453sq.ft.
A rather expensive humble abode.
Didn’t Leo get stung last time round having purchased near the peak?
His parents paid for a chunk of it iirc…
We’re all paying for it now.
…plus he bought with a 100% mtge if I am not mistaken.
Did he, did he sell it and lose money, if he still owns it he can rent it out to 10 or more Brazilians who are doing the jobs EU workers won’t do for such low wages, buy a few cheap bunk beds and away you go, Fianna Gaelers like Frank 40 gaffs Fahey can give him all the advice he needs
This is happening in many first world countries. I’m genuinely starting to wonder if property is actually a vehicle to a downward spiral for the first world.
I mean if this keeps up with no change for another 10 to 20 years where does it leave us?
It’s not an unrealistic thought that it could go on totally unchecked. Nothing looks like changing anywhere and it’s already gone on in different places, to different degrees, since the early to mid 2000s.
There are complaints about it but also some acceptance that this is just how it is and a perception that it’s the “market” and it is unchangeable