Media comment on downturn/slowdown


Irish Times - September 28th - … -1.3643730

FT - October 25th - … 5eac8f1ab4

Irish Independent - November 8th - … 05087.html

Irish Times - October 30th - … -1.3680682

I expect it all amounts to nothing really but curious what others think. It seems like this general sort of comment is becoming much more prevalent - whether it’s anything more than just hot air remains to be seen but I wonder is it the start of a serious downturn in Dublin anyway.


I don’t buy the argument that prices are softening due to increased supply. Supply is still only trickling up. It’s more the CB rules have been maxed out


wishful thinking perhaps but maybe we are going to break the boom/bust cycle and have a few years of marginal overall increases / decreases in property prices - CB rules are working by putting a ceiling on prices and supply is putting a floor in - could we just drift for a while or is that possible in ireland given the history we have - but then they do say that what happens next is often what you least expect…which might be stability for a while.


I’m not convinced the banks have figured out how to smooth out the lending rule exceptions over the course of a year - come January it’s back to ‘normal’ and July - December 2019 it’s a repeat of what we are seeing now?


I don’t think they care. They’re trying to make sales, if they need to use an (available) exemption to make the sale they do

The day comes when they can’t make an exemption - they worry about that then

Of course the CBI could enforce it on a quarterly basis rather than annual but no idea if they would want to


Anecdote on the commercial build side. Friend of a friend is a specialist architectural designer (I could say exactly what he does but I don’t want to doxx him), he’s been involved in a lot of big office developments in Dublin including a very prominent one that’s going up right now. Typically, he’s commissioned 12-18 months before the build proper starts and so his work acts like a canary for the build industry.

He says that all commercial build work has dried up since the summer, he’s worked his contact book and found nothing in Ireland but London is still going strong and he has has picked up a few bits of work from there. Says it fells the same in the lead up to the recession and reckons 2020 will be a bad year for construction in Ireland.

I’ve no way to evaluate his claims. As a layman whose knowledge of building comes exclusively from watching Dermot Bannon it does seem incongruous with the number of new cranes going up in the Dublin and the threat of an unstructured Brexit hanging over London.


I don’t think exemptions are the issue here. I don’t even think that in the house sales market supply is the issue. It certainly is in the rental sector. Sales appear to be ticking up at the moment but there were 5600 houses on MyHome in Dublin almost constantly since August. There are now just over 5500. Sales are running at between 3 and 400 per week which they have done all year bar a couple of months.

The problem is price , and it looks like prices are coming down - up until September most of the falls were in prices over 500k , now there are falls in all ranges and very few rises. The PPR numbers for the last quarter could prove interesting.

The main house-buying cohort are between late 20s and mid thirties. These people starting work in the recession, many work in low paid jobs in the IT sector (very few work in the headline high paid jobs) that don’t get pay rises. Their ability to save is crippled by the cost of rent. To put it crudely - you can’t save until you are sharing a bed with someone - then you have a remote chance of saving to buy a house but it will take you 4 to 5 years and you both need to be in the 60-70k bracket to afford a place to live in Dublin. The concentration of wealth means that more of the population is under the average salary - anybody know what the mean salary is in Dublin?

If exemptions were an issue there wouldn’t be such a sell on long running AIPs. Even if a higher level of credit was on offer most people are not in a position to take it nor do they have the desire to do it - the force of the race memory is strong here. The ‘young’ (i.e. people in that cohort that are looking to buy) people I talk to are taking long AIPs to be ready for a fall in the market - they now believe it’s going to happen, they can feel prices softening - when that starts to happen it becomes a self-fulfilling prophecy

The question I would ask of people who query this is ‘Who do you think is going to buy these houses?’ . Up until recently the answers could conceivably have been ‘investors’ - I don’t think they are interested - as I have argued before when the crazy gains go out of the market the investor/speculator market is gone. Purchase of apartments for rent by REITs is still going - it’s a simpler model,it has tax benefits but at this stage it’s mainly just the local REITs that are buying. The unfortunate thing is that we need more apartments for people to buy but I can see the REITs preferring to sit on empty property, trying to ‘comntrol’ the market rather than taking rent hits. This is not going to be very popular if it happens - I would not like to be involved a REIT in that case - they will become targets for a tsunami of hatred.


THe banks seem very slow in off loading their negative equity stuff. There will have to be some form or reality of off loading non performing stuff. The country is still shakey since we put the 50 billions to bail out the banks and the country. There is very little left for luxuries and comforts here.


The cranes that are up are up because plans are in place since last year.
Going by your architect friend,its where those cranes go next (if anywhere) that will tell the story.
if new house prices stall ,then builders will sit on their arse and wait for prices to rise to start building again.
A penal tax on unused land that has PP granted should cure that ,but are the powers that be willing ??