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 Post subject: Re: What is "the long-term economic value of" Irish property
PostPosted: Fri May 18, 2012 9:24 am 
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Yeah - lets compare Germany & Ireland based on one statistic GNP per capita and ignore everything else.


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 Post subject: Re: What is "the long-term economic value of" Irish property
PostPosted: Fri May 18, 2012 10:35 am 
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Landlord wrote:
Fenian84 wrote:
Taking a different approach from most on this tred. Lets compare Ireland to another country of similar GNP per capita and overall tax rate. I am picking Germany, GNP per capita €43,000, Ireland €42,000 as of 2010. http://en.wikipedia.org/wiki/List_of_co ... las_method)_per_capita

Both have an overall tax rate of the economy of 43% of GNP according to Eurostat.

Interestingly german house prices have barley moved in nominal terms in the last 16 years, and in real terms since 1990. You could not argue that german house prices are in bubble territory. Infact probably German property is close to its ''real'' long term value which given Ireland similar GNP and overall tax on the economy would be a good bench mark to measure how over/under valued Irish property is.

Average german house price is €175,000 in 2011,
http://www.globalpropertyguide.com/Euro ... ce-History

Average Irish house price €177,000 q1 2012.
http://www.finfacts.ie/irishfinancenews ... 4141.shtml

So maybe we are close to long term value.

+1



I've tried to post a reply here, but I'm genuinely lost for words.

It seems that when one looks around for a country to compare to Ireland, Germany is a reasonable selection.

Fenian84 and LL - can I ask in all honesty, how can that be possible? One of the richest countries in the world v. a bankrupt country being run by the IMF. I honestly would like to hear a narrative on how that makes for fair comparison.


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 Post subject: Re: What is "the long-term economic value of" Irish property
PostPosted: Fri May 18, 2012 10:49 am 
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Larry wrote:
Landlord wrote:
Fenian84 wrote:
Taking a different approach from most on this tred. Lets compare Ireland to another country of similar GNP per capita and overall tax rate. I am picking Germany, GNP per capita €43,000, Ireland €42,000 as of 2010. http://en.wikipedia.org/wiki/List_of_co ... las_method)_per_capita

Both have an overall tax rate of the economy of 43% of GNP according to Eurostat.

Interestingly german house prices have barley moved in nominal terms in the last 16 years, and in real terms since 1990. You could not argue that german house prices are in bubble territory. Infact probably German property is close to its ''real'' long term value which given Ireland similar GNP and overall tax on the economy would be a good bench mark to measure how over/under valued Irish property is.

Average german house price is €175,000 in 2011,
http://www.globalpropertyguide.com/Euro ... ce-History

Average Irish house price €177,000 q1 2012.
http://www.finfacts.ie/irishfinancenews ... 4141.shtml

So maybe we are close to long term value.

+1



I've tried to post a reply here, but I'm genuinely lost for words.

It seems that when one looks around for a country to compare to Ireland, Germany is a reasonable selection.

Fenian84 and LL - can I ask in all honesty, how can that be possible? One of the richest countries in the world v. a bankrupt country being run by the IMF. I honestly would like to hear a narrative on how that makes for fair comparison.

Some pinsters have no problems drawing comparisons between Ireland and Germany when it comes to discussing rentals :)

However is Ireland not one of the richest countries in the world?
Do we not have one of the highest incomes per capita in the world?
Do we not pay some of the highest SW in the world?
Are our average incomes not similar to our German neighbours?
Is our min wage not higher than Germany?

The IMF is running the country not because we are broke but because we are unable to live within our means.


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 Post subject: Re: What is "the long-term economic value of" Irish property
PostPosted: Fri May 18, 2012 10:59 am 
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Location: Local bubble zone
Landlord wrote:
Larry wrote:
Landlord wrote:
Fenian84 wrote:
Taking a different approach from most on this tred. Lets compare Ireland to another country of similar GNP per capita and overall tax rate. I am picking Germany, GNP per capita €43,000, Ireland €42,000 as of 2010. http://en.wikipedia.org/wiki/List_of_co ... las_method)_per_capita

Both have an overall tax rate of the economy of 43% of GNP according to Eurostat.

Interestingly german house prices have barley moved in nominal terms in the last 16 years, and in real terms since 1990. You could not argue that german house prices are in bubble territory. Infact probably German property is close to its ''real'' long term value which given Ireland similar GNP and overall tax on the economy would be a good bench mark to measure how over/under valued Irish property is.

Average german house price is €175,000 in 2011,
http://www.globalpropertyguide.com/Euro ... ce-History

Average Irish house price €177,000 q1 2012.
http://www.finfacts.ie/irishfinancenews ... 4141.shtml

So maybe we are close to long term value.

+1



I've tried to post a reply here, but I'm genuinely lost for words.

It seems that when one looks around for a country to compare to Ireland, Germany is a reasonable selection.

Fenian84 and LL - can I ask in all honesty, how can that be possible? One of the richest countries in the world v. a bankrupt country being run by the IMF. I honestly would like to hear a narrative on how that makes for fair comparison.

Some pinsters have no problems drawing comparisons between Ireland and Germany when it comes to discussing rentals :)

However is Ireland not one of the richest countries in the world?
Do we not have one of the highest incomes per capita in the world?
Do we not pay some of the highest SW in the world?
Are our average incomes not similar to our German neighbours?
Is our min wage not higher than Germany?

The IMF is running the country not because we are broke but because we are unable to live within our means.


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 Post subject: Re: What is "the long-term economic value of" Irish property
PostPosted: Fri May 18, 2012 11:01 am 
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Posts: 137
Wait for the database (if it ever happens). Then all this opinionated waffle can be cast aside. The database will have the following benefits:

- transparency for potential buyers, who, knowing the real prices houses are transacting at, might cast aside their paranoia about estate agent shenanigans and be encouraged to come out and play

- transparency for potential vendors, who, knowing the real prices houses are transacting at, might cast aside their bubble price delusions and come out to play at realistic asking prices

And the property market might gain some traction at a more rational level than before. And everybody lived happily ever with their stress-tested, non-crippling mortgages. Amen.


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 Post subject: Re: What is "the long-term economic value of" Irish property
PostPosted: Fri May 18, 2012 11:45 am 
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Landlord wrote:
Some pinsters have no problems drawing comparisons between Ireland and Germany when it comes to discussing rentals :)
.

It appears that desirability of answer and validity of comparison are highly correlated

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 Post subject: Re: What is "the long-term economic value of" Irish property
PostPosted: Fri May 18, 2012 12:28 pm 
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Esselte wrote:
Landlord wrote:
Some pinsters have no problems drawing comparisons between Ireland and Germany when it comes to discussing rentals :)
.

It appears that desirability of answer and validity of comparison are highly correlated



I compared rentals in Ireland with rentals in Germany to demonstrate that Irish rentals are still quite high. We should have considerably lower rents than they do, in my opinion, since they have actual indigenous wealth.

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 Post subject: Re: What is "the long-term economic value of" Irish property
PostPosted: Fri May 18, 2012 12:45 pm 
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Joined: Jan 2, 2012
Posts: 103
Esselte wrote:
Landlord wrote:
Some pinsters have no problems drawing comparisons between Ireland and Germany when it comes to discussing rentals :)
.

It appears that desirability of answer and validity of comparison are highly correlated


First of all, I choose this approach of comparing Ireland to another country because in general I think we look to much inn on ourselves in how we value stuff in Ireland, whether it be PS pay, semi state companies pay, social welfare, house prices etc.

I picked germany because there has been no property bubble there in the last 20 years, also the GNP (which measure the domestic wealth of the country not like GDP) per capita is similar and overall government tax on households is similar on GNP per capita.

regarding us being bankrupt, our government is bankrupt because its spending more than it has coming from tax, if are spending matched germanys in terms of PS pay premiums over industrial wage and social benefits then we would not have a deficit (easier said than done). Ireland can get to a balanced budget with out a huge hit on GNP per cap. Infact the EU-IMF forecasts ireland to be growing in terms of GDP 2012-15 even tho we will be reigning in the deficit over those years.


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 Post subject: Re: What is "the long-term economic value of" Irish property
PostPosted: Fri May 18, 2012 12:53 pm 
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Fenian84 wrote:

regarding us being bankrupt, our government is bankrupt because its spending more than it has coming from tax, if our spending matched germanys in terms of PS pay premiums over industrial wage and social benefits then [b]we would not have a deficit [/b](easier said than done). Ireland can get to a balanced budget with out a huge hit on GNP per cap. Infact the EU-IMF forecasts ireland to be growing in terms of GDP 2012-15 even tho we will be reigning in the deficit over those years.



(a)One hell of a big if!

(b) We do have a huge deficit!


And we'll have a serious debt to GDP ratio to go with it by 2015! (well we are getting there already)

In summary:

If, buts, maybe and a lot of hot air


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 Post subject: Re: What is "the long-term economic value of" Irish property
PostPosted: Fri May 18, 2012 12:57 pm 
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Posts: 103
kennyb3 wrote:
Fenian84 wrote:

regarding us being bankrupt, our government is bankrupt because its spending more than it has coming from tax, if our spending matched germanys in terms of PS pay premiums over industrial wage and social benefits then [b]we would not have a deficit [/b](easier said than done). Ireland can get to a balanced budget with out a huge hit on GNP per cap. Infact the EU-IMF forecasts ireland to be growing in terms of GDP 2012-15 even tho we will be reigning in the deficit over those years.



(a)One hell of a big if!

(b) We do have a huge deficit!


And we'll have a serious debt to GDP ratio to go with it by 2015! (well we are getting there already)

In summary:

If, buts, maybe and a lot of hot air


Last edited by Fenian84 on Fri May 18, 2012 12:59 pm, edited 1 time in total.

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