Irish housing market- most volatile in the world

Numero uno…the greatest little country on the planet!

Irish house prices rose by 431% during the boom, new study reveals
Research by ESRI suggests State has most volatile property market in the world
irishtimes.com/business/eco … -1.3538768

irishtimes.com/business/fin … -1.3538822

surprised this isn’t getting more headlines; I wonder if he even believes it - or maybe just ass covering?

Basis ecomonics

Supply is not going to meet demand anytime soon, simply not going to happen. The only thing stopping prices rising will be lack of credit and even that will only slow down price rises.
Talk of reaching an equilibrium n 2 to 3 years time is crazy talk

The argument seems to involve the large tranches of property hoovered up at low prices by offshore entities.

If they dump then supply side issue resolved and a crash.

Surely the motivation for a dump isnt going to arise in a supply restricted market which floats their boat higher.

And if sensing steam running out, a controlled off loading. Why slit your own throat with a dump?

But if they face Margin calls from elsewhere. Quite possible with a major bubble on Wall st and elsewhere. DJIA up 50% since the Presidential election Nov 2016. Unprecedented.

Indeed, the giant pool of credit that fueled out building bubble created different types of asset class bubbles elsewhere which also collapsed when the flow went in reverse.

I think if supply does meet demand in the next few years then it will be because demand has fallen. There is a fair bit of churn in the young migrant workforce - Dublin isn’t as attractive as it was - the cost of accommodation and the long commutes are really getting people down. People are still coming to work here but the numbers are tightening and the percentage staying is definitely declining. Irish young people (particularly Dublin kids) are leaving - they want to live in the kind of proximity to the city centre that their parents did. When they have to leave the nest they leave the country (to be fair they have always done that - but now it’s more to avoid living in the commuter belt than to get out of a repressive society and see the world - the society is less oppressive and they’ve already seen the world). It’s all straws in the wind at the moment and it may never be enough to dent the housing market but I definitely feel that it’s there - I wouldn’t like to see it happen - especially as a consequence of something as stupid as a housing market hobbled by a government more concerned with maintaining dogma and enriching their friends than governing the country for the benefit of all of its people.

The stock market angle is interesting - I got the feeling that the stock market was tied up in the last housing crash but I’m not so sure. Active investors usually unwind illiquid assets first when they feel things are starting to slip. They need cash to buy cheap stuff to make money on. Passive investors will tend to remain invested and take the rough with the smooth and will take the view that they will still gain in the long run - they need to be non-leveraged and have deep enough pockets to sit out the troughs in the curve - property is a big feature of this classes investment portfolio. The problem that the Irish property market has is the number of leveraged property investors - they need to get out ahead of the crash - unwinding takes time one to two years for a large portfolio - some of them were around the last time and learned the lesson - holding out for another 5-10% gain is crazy if you are increasing the chance of losing it all. The way that the stock market could affect the housing market would be the active investors unwinding early, softening the market and putting the wind up the leveraged investors who then start to walk smartly to the exit, see everyone else doing it then break into a run. A declining stock market also affects economic activity in general so the ability to achieve higher prices for property will also start that softening process.

I think we are very close to the ceiling on house prices that even demand can drive - there simply isn’t enough credit to fuel further rises. Looking at MyHome there are 5100 houses for sale 2800 sale agreed so the marketing is still functioning but I think any price rises will have to be fuelled from wages and that can only happen if economic activity continues to expand.

I do think the bankers are using the two year figures based on previous experience so I wonder if they are seeing that unwinding process beginning.

When you talk about MyHome - I’d disagree that the market is functioning.
There is a very low level of property available on the market in Dublin. There were a lot of non-performing mortgages that were not forced to sell up.

There doesnt need to be a lot of credit expansion - if there is wage inflation for a few years. A couple in Dublin getting a 2-3000 raise each for a year expands their LTI by around 20k. Over 2 or 3 years (and wage inflation is coming in hard in more sectors now in Dublin) it could put 30-40k on to a 450-500k house. That’s considerable. Whether it’s sustainable in the long-term is a different question. But I think for the next 2-3 years that’s the path we’re on in Dublin at least.

It will be 5+ years until supply equals demand. In the meantime prices will raise another 20%

There was a piece on Newstalk that the market had slowed down in Dublin ? - I must listen back.

Is that the general feeling out there.

Supply and demand is all well and good - but at the end of the day the starter home for young couple has an upper limit

about 350 K - Looking at starter homes in D 5 area.

They got up to this level - but a few have reduced asking in last month or so.

Thank fuck for the mortgage limits so. Though I’m not on the ground but from talking to people I don’t see a huge fall off in price at the mid/upper levels. Plenty of couples earning good wedge with some inheritance/parental cash helping in enough cases.

Just bought a newbuild in Leopardstown. In our price bracket there certainly hasn’t been any fall off - perhaps a slight slowing in increase, but that’s not something you can really gauge anecdotally. There are plenty of second hand houses going up at crazy asking prices all the time though. Some may get lucky, but I suspect many either reduce their prices or decide against selling.

Congrats mmuirgheasa, well done.Another Pinster succumbs!

“Majority of under-occupied dwellings in Europe found in Ireland”

independent.ie/business/iri … 11949.html

Which of these bits of news is Ms Lagarde delivering in Ireland?

  • your property market is very overvalued, but we’re here to help.
  • Get ready to take the massive influx of immigrants/refugees that the rest of EU dont want…

Thanks. Was holding out for a long time, but head eventually won over heart and I gave up on my stylish mews dream in Portobello! Relief to be out of the rental market either way though, albeit with some survivor’s guilt about those still stuck renting.

Why are Irish house prices so volatile - and will the rollercoaster ever end?

irishtimes.com/business/eco … -1.3546811