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Please could somebody walk me through the factors that are causing property prices in Ireland to boom with 278K EUR being the average FTB price as of Dec 05 according to this report

http://www.irishecho.com/newspaper/story.cfm?id=17779

yet in other Euro countries, eg France, for the same money you can buy a place that frankly I'd cut my left balon off for - see for yourself/drool over these:

http://www.frenchentree.com/french-property-sales-france/

I really don't undestand it - France and Ireland have the same IR's so why aren't houses in france subject to the massive price hikes seen over le channel ??

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I really don't undestand it - France and Ireland have the same IR's so why aren't houses in france subject to the massive price hikes seen over le channel ??

Some guesses:

1. Lax lending rules in Ireland, but not in France (i.e. how much can you borrow).

2. Recent GDP growth in Ireland, but not in France.

3. Culture of attaching high value to home ownership in Ireland, but not in France where middle-class families renting is seen as normal. Tenants probably have better rights in France (can anyone confirm this?)

4. Lower property transaction taxes in Ireland compared to France.

frugalista

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Some guesses:

1. Lax lending rules in Ireland, but not in France (i.e. how much can you borrow).

2. Recent GDP growth in Ireland, but not in France.

3. Culture of attaching high value to home ownership in Ireland, but not in France where middle-class families renting is seen as normal. Tenants probably have better rights in France (can anyone confirm this?)

4. Lower property transaction taxes in Ireland compared to France.

frugalista

You forgot to mention that Ireland is a tiny island.

A bit like Japan.

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You forgot to mention that Ireland is a tiny island.

A bit like Japan.

Do you think bubbles are more likely on islands? I think there is a good argument for that!

For example

The decode.com bubble in Iceland

or

Pyramid schemes on the Isle of Wight

Or are you trying to emphasise population density? I am guessing it is probably not very high in Ireland.

frugalista

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There's been the argument that house prices will continue to go up because there is a shortage of land etc.

However look at Japan, where higher population density than the UK or Ireland has not stopped prices from falling for 15 years.

Hong Kong has recently been through a nasty bust, and that has one of the highest densities in the world.

http://en.wikipedia.org/wiki/List_of_count...ulation_density

Germany and the UK have similar densities, yet house prices couldn't be further apart.

Recently I read an article by an Australian EA stating that house prices were high in Oz because of a shortage of land!

You just have to laugh...

Edited by BandWagon

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That article from the Irish Echo could win a prize for spin. He claims that the OECD:

…is due to publish a hugely positive report on the Irish economy with predictions that it will grow by five percent next year. The report will say that there is no chance of a fall in property values in the next two years and that instead they will continue to rise.

Well have a look :

OECD Economic Survey of Ireland

Thus, the most likely scenario is that prices will level out or decline slightly, housing construction will fall back gradually, turnover will decline and the market will remain subdued for some time. But even in such a scenario, government receipts would weaken sharply, so that a substantial structural budget deterioration would come on top of any cyclical weakening.

While this is the most likely outcome, there are alternative scenarios on the upside and downside that could have significant macro-economic implications. The first is that the housing boom may not run out of steam of its own accord, leading to serious overvaluation and imbalances throughout the economy. The eventual fall-out in this scenario could be severe.

The second scenario is that house prices fall sharply, either because they are more overvalued than they appear or because a negative shock hits the economy. The impact on activity and the budget could be large.

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http://en.wikipedia.org/wiki/List_of_count...ulation_density

Germany and the UK have similar densities, yet house prices couldn't be further apart.

That's true, but places like the UK and Ireland are more economically centralised than Germany, where industry is spread over a number of cities and regions. It's no good having loads of land in Wester Ross or Sligo when all the jobs are in London or Dublin.

frugalista

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Recently I read an article by an Australian EA stating that house prices were high in Oz because of a shortage of land!

You just have to laugh...

Went for a walk in Surrey today. From the top of a hill I could see the South Downs over 20 miles away. I could also see only 3 houses and 2 fields. The rest was woodland. I'm not sure we have a shortage of land here either.

Edited by spleeper

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That's true, but places like the UK and Ireland are more economically centralised than Germany, where industry is spread over a number of cities and regions. It's no good having loads of land in Wester Ross or Sligo when all the jobs are in London or Dublin.

frugalista

Very true. There are actually remarkable bargains (relatively) to be had in places where it isn't possible to commute to a city. My mum is considering trading her 350Kish place in dublin for a larger nicer 80K place in Leitrim or similar, pocketing the leftover 200K and starting her own small business up there.

And I've never even discussed downsizing with her before she mentioned this. I'm so proud :)

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Please could somebody walk me through the factors that are causing property prices in Ireland to boom with 278K EUR being the average FTB price as of Dec 05 according to this report

I really don't undestand it - France and Ireland have the same IR's so why aren't houses in france subject to the massive price hikes seen over le channel ??

I think fundamentally it's the different economic histories of the two places. France has been stable but unspectacular for a long time. Ho hum. No reason to suddenly start spending five times as much on somewhere to live.

Ireland has very recently experienced massive growth in employment, salaries, inflation, immigration, and lending. We're just not used to the new prevailing economic conditions. House prices rose to reflect the new higher average salaries etc, low IR's gave them a kick along the way, they overshot dramatically and now it's only the old irrational exuberance keeping them where they are. It all timed nicely to tie in with the global housing boom too, which probably helped.

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Recently I read an article by an Australian EA stating that house prices were high in Oz because of a shortage of land!

You just have to laugh...

..why..?? :huh:

..land is very short in australia... most of the massive area of that country is uninhabitable bush..!!

..i recently read a report which describes the ecology there as so fragile that a population of only 18 million... for the whole continent... is the sustainable limit....

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..why..?? :huh:

..land is very short in australia... most of the massive area of that country is uninhabitable bush..!!

..i recently read a report which describes the ecology there as so fragile that a population of only 18 million... for the whole continent... is the sustainable limit....

Only uninhabitable until you build houses on it surely?

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That's true, but places like the UK and Ireland are more economically centralised than Germany, where industry is spread over a number of cities and regions. It's no good having loads of land in Wester Ross or Sligo when all the jobs are in London or Dublin.

frugalista

yes , and Australia has the most urbanised population in the world....in most states 90% of the jobs and houses are in the state capitals!............so Aus is ''effectively'' more densely populated than here!

Western Australia is the most extreme....as it's almost as big as Western Europe and 90% of its population live in Perth!....and Queensland is the state with the LEAST concentrated population....

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Went for a walk in Surrey today. From the top of a hill I could see the South Downs over 20 miles away. I could also see only 3 houses and 2 fields. The rest was woodland. I'm not sure we have a shortage of land here either.

gerrofff moy laaand..!!!

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[sNIP]

Recently I read an article by an Australian EA stating that house prices were high in Oz because of a shortage of land!

You just have to laugh...

There's plenty of land, as long as you don't mind living in Wop Wop... or Penrith. I think that's what the EA means.

More of Australia's population lives around the rim than ever before and the supply of "Ocean / harbour glimpses" near civilisation is finite.

Edited by aussieboy

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Went for a walk in Surrey today. From the top of a hill I could see the South Downs over 20 miles away. I could also see only 3 houses and 2 fields. The rest was woodland. I'm not sure we have a shortage of land here either.

There's not, the North East is actually the most urban part of the UK, not the South East. Once you get about a couple of miles away from major roads there's sweet FA in most places.

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Take a look at house prices in NZ (4 million people and twice the size of England!!) and you can see that the idea of limited land forcing up prices is rubbish. You've probably all seen the study quoted in this article( http://www.keanewzealand.com/news/article....onentid=989280) but it raises an interesting question.

Why are houses more expensive relative to incomes in Auckland than Melbourne when

a) Auckland's population density is a third of that in melbourne AND

B) NZ has interest rates 1.5% higher than Aus AND

c) business confidence and economic prospects are better in Melbourne AND

d) Melbourne's prices despite a small dip are still considered to be very overpriced.

Answer:

NZ houses are grossly overpriced and taking account of our high interest rates and low incomes probably the most unaffordable in the OECD.

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  • 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%



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