Jump to content
House Price Crash Forum
Sign in to follow this  
Buddleia

Irish Property Mega-inflation : Opinions?

Recommended Posts

Was talking to two lovely Irish ladies last night. They were bemoaning the cost of property in Dublin, and the inevitability of having to rent in an obscenely priced market. Yet both were still desperate to get "on the ladder", talking silly schemes of "buying with a friend". Neither saw prices coming down.

I mentioned that over in the UK, the housing market appears to have peaked last year; that prices were in fact in slow decline; that the Irish housing cycle cannot be too far off the UK cycle, and that they were far better off staying renting for the moment.

Not a good idea: I was told that the Irish property boom is totally different to the UK boom:

- the Celtic Tiger has roared for 10 years and shows no sign of stopping

- skilled Irish migrants are returning home flush with money and with an eye on property

- the propulation of Dublin will DOUBLE (sic.) in the next eight years, maintaining pressure on housing

- Irish economy is not at all dependent on UK economy, so it doesn't matter what happens in the UK

... and plenty of anecdotal stuff like "Oh, if property's going to crash how come they are getting away with charging 3 Euros for an espresso on Baggot St. etc."

Seems to me however that Irish property is the most exposed in Europe :

- Ireland has the injustice of the biggest house price rises in Europe (179% between 1997 and 2004)

- Ireland has a primarily service economy dependent on overseas investment (Dell, HP etc.) and vulnerable in any global turn-down

- its interest rates are controlled by ECB, which - face it - is more concerned with stoking recovery in the continental power-houses than protecting a property boom in Ireland

Opinions?

Share this post


Link to post
Share on other sites

Foreign direct investment has fallen by 50-60% in Ireland over the past three years, and Irish competitiveness has plummeted. The latest delusion to grip the banks and politicians is that we will become a knowledge based economy where the Irish do all the design and R&D work while all the dirty production work will take place in India, China, E Europe, etc. which is a nice fairy story but utter gibberish. (You can imagine a group of Chinese engineers being told they’ll have to work on the production line as all the research is being done in Ireland) The economy is the housing market.

Ireland now 39 out 40 in competitiveness table

But despite this apparent two-pronged attack on Irish workers' livelihoods, industry experts believe that cheap labour presents a relatively insignificant threat to Irish jobs.

Wade through this ******** and complacency you can guess what happens next.

Manufacturing is old hat, we are told. :huh:

Share this post


Link to post
Share on other sites

Foreign direct investment has fallen by 50-60% in Ireland over the past three years, and Irish competitiveness has plummeted. The latest delusion to grip the banks and politicians is that we will become a knowledge based economy where the Irish do all the design and R&D work while all the dirty production work will take place in India, China, E Europe, etc. which is a nice fairy story but utter gibberish. (You can imagine a group of Chinese engineers being told they’ll have to work on the production line as all the research is being done in Ireland) The economy is the housing market.

Ireland now 39 out 40 in competitiveness table

Wade through this ******** and complacency you can guess what happens next.

Manufacturing is old hat, we are told. :huh:

The bigger they are the harder they fall! :D

Are there are Irish bulls out there still plowing money into the Irish market, or is it all going overseas?

Anecdotally, I've heard a lot of Irish desperate to own bricks somewhere in the world but priced out of Ireland are throwing money into shacks in Spain and even South America.

Share this post


Link to post
Share on other sites

The bigger they are the harder they fall! :D

Are there are Irish bulls out there still plowing money into the Irish market, or is it all going overseas?

Anecdotally, I've heard a lot of Irish desperate to own bricks somewhere in the world but priced out of Ireland are throwing money into shacks in Spain and even South America.

According to the OECD, Ireland, UK and Spain are overinflated house-price wise and out of step with the rest of the world. Ireland are about 9 months- 1 year behind the curve with HPC likely to begin its early stages in 2006. THey have lost their competitive edge now that the cost of living is so high. High wages to pay for high house prices = jobs lost to China and India. LIke the Tiger itslef, its lifespan is short, ferocious and self destructive.

Share this post


Link to post
Share on other sites

According to the OECD, Ireland, UK and Spain are overinflated house-price wise and out of step with the rest of the world. Ireland are about 9 months- 1 year behind the curve with HPC likely to begin its early stages in 2006. THey have lost their competitive edge now that the cost of living is so high. High wages to pay for high house prices = jobs lost to China and India. LIke the Tiger itslef, its lifespan is short, ferocious and self destructive.

Have you got a link for the OECD report? :)

If the Irish economy is out of step with the European big hitters (basically Germany and France), it's going to be affected badly by ECB interest rate movements that will be chosen to promote recovery in the big hitter economies, rather than to promote stability in a country whose population could fit several times into Berlin.

Scary times to be a small player in a big pond.

Share this post


Link to post
Share on other sites

Have you got a link for the OECD report? :)

If the Irish economy is out of step with the European big hitters (basically Germany and France), it's going to be affected badly by ECB interest rate movements that will be chosen to promote recovery in the big hitter economies, rather than to promote stability in a country whose population could fit several times into Berlin.

Scary times to be a small player in a big pond.

http://neweconomist.blogs.com/new_economis...on_housing.html

"This analysis concludes there was overvaluation in australia and five European countries:

In the countries with high real house price gains (the United Kingdom, Ireland the Netherlands and Spain) and in Australia (where very high real prices have more recently been edging down) and in Norway, actual price-to-rent ratios were noticeably above their “fundamental” levels in 2004, suggesting overvaluation."

The full report, included terrifying graphs showing how far out of line with the fundamentals the UK and other bubble markets are, see especially the price to rent ratios!!

http://www.oecd.org/dataoecd/41/56/3575605...e%20prices'

See Table III.1 for the grpah that shows the UK has among the highest debt ratios with 104% of disposable income being spent. No wonder there is a debt crisis in this country with huge increases in County Court Judgements. We are at the beginning of an economic implosion it seems. Why is it that the OECD see it and Gordon Brown doesn't it?

See Graph III.3 where it says of the 37 upturns since 1970 24 ended in grief where the prices of houses dropped by one third to 100% of the previous real gains! England, Ireland and Spain are constantly cited as examples of markets about to crash.

This report is dynamite--anyone else read it? Talk about bed-time reading to send you into a peaceful sleep.

Edited by Realistbear

Share this post


Link to post
Share on other sites

55,000,000 Euro an acre in suburban Dublin, beat that.

Former hotel site

* Wates City bought Brittanic House for £143 million making it per acre the most expensive real estate in the world at the time of sale in 1999.

http://www.skyscrapernews.com/buildings.php?id=81

Trust England to have the most overpriced what ever it is.

Share this post


Link to post
Share on other sites

Was fed up this weekend being out pubbing/clubbing in London because I was surrounded by peole smoking left right and centre. I must have passive smoked the equivalent of 100 fags. Totally disgusting, couldn't breathe. I ended up saying to everybody, thats it I'm moving to Ireland, where they have properly banned smoking in all public places. I had a great time out there visiting packed pubs with no smoke.

Then I remembered that they are worse than the UK with HPI.

Wow no smoking but the Irish economy and House Prices still keep on going, shows that the UK can do it without problems, in fact I would go out more if they ban the filthy habit from pubs. But Labour can't organise any kind of proper legislation on anything.

Perhaps thats it - the smoking ban has actually helped their housing market?

Share this post


Link to post
Share on other sites

Patrick Minford, LSE Economist, Liverpool University on Ireland.

"So far inflation has been held back in spite of this runaway boom coming on top of already-strong growth (Ireland grew by an average of over 8pc per annum from 1994 to 1998). Its underlying retail price index (excluding mortgage rates, held down by the euro) rose 5.2pc in the year to March - much of it, though, due to tobacco tax and oil. Average earnings are rising by around 5.5pc, which, with productivity growth strong, is not yet a problem.

But this relative restraint of prices and wages is built on an incomes policy, buttressed up to now by high levels of immigration which has kept the supply of labour not so far behind ever-growing demand.

Experience with incomes policies shows that they do not last against the pressure of supply and demand; in Ireland, it can only be a matter of time before the dam breaks.

There are two main possibilities. Either the Government encourages yet more thousands of immigrants and allows house prices to be driven up to the stratosphere, in which case union demands will be fuelled by housing costs. Or the flood of immigrants is stemmed, in which case the wage demands will be fuelled by severe labour shortage.

Already there has been a transport workers' strike over wage demands of 20pc; other public sector workers are said to be planning similar demands. So far, the incomes policy has held but the whiff of a summer or winter of discontent is in the air.

http://www.euro-know.org/telegraph/dt000508.html

Share this post


Link to post
Share on other sites

Patrick Minford, LSE Economist, Liverpool University on Ireland.

"So far inflation has been held back in spite of this runaway boom coming on top of already-strong growth (Ireland grew by an average of over 8pc per annum from 1994 to 1998). Its underlying retail price index (excluding mortgage rates, held down by the euro) rose 5.2pc in the year to March - much of it, though, due to tobacco tax and oil. Average earnings are rising by around 5.5pc, which, with productivity growth strong, is not yet a problem.

But this relative restraint of prices and wages is built on an incomes policy, buttressed up to now by high levels of immigration which has kept the supply of labour not so far behind ever-growing demand.

Experience with incomes policies shows that they do not last against the pressure of supply and demand; in Ireland, it can only be a matter of time before the dam breaks.

There are two main possibilities. Either the Government encourages yet more thousands of immigrants and allows house prices to be driven up to the stratosphere, in which case union demands will be fuelled by housing costs. Or the flood of immigrants is stemmed, in which case the wage demands will be fuelled by severe labour shortage.

Already there has been a transport workers' strike over wage demands of 20pc; other public sector workers are said to be planning similar demands. So far, the incomes policy has held but the whiff of a summer or winter of discontent is in the air.

http://www.euro-know.org/telegraph/dt000508.html

That's a good, good article. "Reinforced boom and bust" :ph34r:

Share this post


Link to post
Share on other sites

That's a good, good article. "Reinforced boom and bust" :ph34r:

Only trouble is - it was written YEARS ago.

He was broadly right on the options though.

The immigrant option has been driving this boom but has not had any union response, so sadly he was wrong. We are now in a situation in Ireland where 20% of the economy is the construction sector, and is sucking in thousands of cheap labour immigrants, who are in demand - building houses for immigrants!

Share this post


Link to post
Share on other sites

Dont understand the housing economy in Ireland, in the countryside it appears that if you want a new house fine, just build one in in the garden, move out of the old one and leave the old one derelict -

Unless you can find some idiot from abroad to buy derelict shacks with no instrinsict value - e.g. boggy land, sweage problems, etc., etc. How can there be any real value to property in Ireland when the countryside is littered with emply shacks?

For anyone thinking of buying in Ireland take time to drive of the beaten tracks- e.g. any samll town- you will soon see the number of EMPTY new and old houses littering the countryside.

Share this post


Link to post
Share on other sites

Just to turn this around, I wonder what would have happened to House Prices int he UK if we'd joined the Euro like Ireland? The biggest impact there has been interest rates very much less than the historic norm; had that also happened here we presumably would have had even greater HPI.

Share this post


Link to post
Share on other sites
Guest magnoliawalls

Just to turn this around, I wonder what would have happened to House Prices int he UK if we'd joined the Euro like Ireland? The biggest impact there has been interest rates very much less than the historic norm; had that also happened here we presumably would have had even greater HPI.

If the powers that be did not want rampant HPI they could have introduced measures restricting borrowing as a multiple of incomes and ensuring that everyone has a deposit.

Of course, less restrictive planning would also have helped.

Edit to add: and the most obvious measure would be a significant capital gains tax on property speculation

Edited by magnoliawalls

Share this post


Link to post
Share on other sites

No problem!

Now 85, 000,000 an acre

Former Vet College Site

I was reading yesterday that the guy who paid 85million per acre for that site will, under current density regulations, have to get 1.5 million for each 2 bed apartment he builds for the project to be viable.

This is risky because the adjacent site purchased recently for 55million per acre will need to sell similar apartments for 1 million each to be viable.

Share this post


Link to post
Share on other sites

A damming report on the ossification of the Irish economy, but is this doom mongering or a warning that should be headed by government and society.

Intel, Dell, Pfizer and HP are foreign-owned manufacturing firms in Ireland responsible for 90% of Irish exports. An Irish State-funded report predicts that most of these enterprises will have moved to low-cost economies by 2025. Growth in exports from the dominant indigenous enterprises will remain relatively low.These powerhouses are the key drivers of the Irish economy.

• 90% of industrial exports are made by foreign owned firms

• Most of the products we manufacture are designed elsewhere

• The bulk of our exports are marketed/sold by organisations based outside Ireland

• Ireland's industrial base relies on 149,654 jobs in 1,273 foreign-owned companies and on 147,895 jobs in 7,390 Irish firms. The service sector, with 240,000 businesses registered for VAT, employs about two-thirds of workers and accounts for 70% of GDP.

Thus, more than 42 per cent of the private non-farm employment increase of the past five years is accounted for directly by construction. This is before including rising employment in construction-related activities such as building suppliers, materials manufacturers, estate agents, mortgage brokers, etc. If we allowed for these, we would comfortably account for more than half of the private sector employment gains since 2000, and that's before speaking about multiplier effects.

Oh the humanity

:ph34r::ph34r::ph34r::ph34r::blink::o:unsure::huh:

Share this post


Link to post
Share on other sites

Eiregentina's public debt growth is a staggering 27%.

Oh the stupidity.

But :

the debt/GDP ratio will be about 29 per cent at year end – compared with 65 per cent in 1997;

From this article

Different debt?

Actually, given much of that 29% is mortgage debt, what did the 65% consist of 1997?

Disclaimer: am not an economist.

Share this post


Link to post
Share on other sites

But :

From this article

Different debt?

Actually, given much of that 29% is mortgage debt, what did the 65% consist of 1997?

Disclaimer: am not an economist.

I think that must be govt. debt.

Personal debt growth is 27%, I think the personal debt/income ratio is something like 200%. It is 150% here and it reached 150% at the peak of the Japanese housing bubble.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.