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Why Ireland's housing bubble burst

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Re: Why Ireland's housing bubble burst

#31

Post by randomdata »

shell0x wrote: post #20

Meanwhile in Toronto a house is $1m+ while salaries are 100k-150k.

That's driven by the farmland bubble. Southern Ontario farmland prices are up 700% since the mid-2000s, which has priced urban sprawl out of the market. With Toronto (i.e. the cities around the City of Toronto) unable to expand like they once were able able to, that has increased buying pressure on the land that is already within the city limits, thereby also driving up the cost of housing in those cities.

While Canada as a whole has recently seen some small increases to the cost of housing on the back of increasing lumber and labour costs, the country has a whole has remained largely stagnant, even falling in some cases. The gigantic gains seen, which bring up the country average, are limited to the prime agricultural areas, namely Toronto and Vancouver, where farmers are now willing to pay more than developers for undeveloped land. Something that is historically unusual.

Re: Why Ireland's housing bubble burst

#33

Post by namdnay »

e12e wrote: post #28

> Ireland had arguably the world’s largest housing bubble and crash in the 2000s, with prices quadrupling in the decade to 2007, even while supply soared, before crashing by more than half between 2007 and 2012. So, prices doubled in the years from 2000 to 2012 - a little under 5% yearly growth. Is that really a crash? Or am I misunderstanding "quadrupled then halved"?

The crash is if you bought a house in 2006 and needed to sell it in 2012 :)

> So, prices doubled in the years from 2000 to 2012 - a little under 5% yearly growth. Is that really a crash?

2008 was still a stock market crash, even if the average growth from 2000 to today is very good

Re: Why Ireland's housing bubble burst

#34

Post by [deleted] »

e12e wrote: post #28

> Ireland had arguably the world’s largest housing bubble and crash in the 2000s, with prices quadrupling in the decade to 2007, even while supply soared, before crashing by more than half between 2007 and 2012. So, prices doubled in the years from 2000 to 2012 - a little under 5% yearly growth. Is that really a crash? Or am I misunderstanding "quadrupled then halved"?

[deleted]

Re: Why Ireland's housing bubble burst

#35

Post by dazc »

coldtea wrote: post #13
chrisseaton wrote: post #5

Earlier quoted context omitted.

> even during the covid crisis. Well yeah people wanted more space and had more money to spend - of course prices went up. Not sure why you've said 'even'?

Because tons of professions, small business, workers laid off, etc suffered from the lockdowns, so there was not exactly clear that "people had more money to spend".

In the UK, people who suffered were low wage, casual workers such as hospitality staff- typically not people who were in the house buying market to begin with.

Public sector workers and corporate employees tended to fair well because they were 'working from home' and not paying a siginificant part of their income on getting to the office and back.

Factor in, also, much less properties available. I was looking for a house at the time and anything that came onto the market was getting snapped up in no time at all. This lack of supply soon translated into increasing asking prices.

Re: Why Ireland's housing bubble burst

#36

Post by ashtonkem »

toomuchtodo wrote: post #25
ashtonkem wrote: post #21

Earlier quoted context omitted.

That’s only true if we cutoff immigration, which is how the US has offset the downsides of lower fertility. Even if we can’t defer those problems forever, we can slow down the transition, making it less painful than the one experienced by Japan.

Birth rates are down worldwide except in Africa, and if I had to forward look based on current developed world policy (Japan, US, Europe migrant policy), I don’t think the US is going to drastically increase immigration quotas. Again, like Japan. Older citizens will want to keep their culture static, and they weight that higher than economic growth.

I think you're drastically underestimating how many people emigrate to America. As of 2018 44 million Americans were born in another country and immigrated here[0], representing one fifth of the world's immigrants. As a percentage of the US' population (13.7), this is very close to the all time high of 14.8% in 1890. Our immigration wave right now is damn close to the peaks of the Ellis Island period of Italian and Irish immigration in the late 1900s. And that's as a percent of the current population, by total numbers this is the biggest wave ever.

Japan is trying to increase its immigration for the same reasons I mentioned, and they're struggling for the reasons you mentioned. Only 2% of their population is foreign born[1], which is up from past figures, but still a drop in the bucket compared to the US system.

You're totally right that there's going to be political and cultural issues over immigration, there always is. But America has the political and social institutions necessary to maintain a high level of immigration over long periods of time, which can help damped the blow of fertility change even if it's insufficient to fully reverse the trend.

0 - https://www.pewresearch.org/fact-tank/2020/08/20/key-finding...

1 - https://www.oecd-ilibrary.org/sites/e025d47d-en/index.html?i...

Re: Why Ireland's housing bubble burst

#37

Post by pxue »

mandmandam wrote: post #6

I object to the characterization of Ireland's housing issues as somehow accidental, or solely due to broad market forces. At every major decision point there were intelligent people screaming in the ear of media and politicians that property developers were getting away with murder. I knew teenagers who emigrated as the writing was so clearly on the wall, and the entire time our print and TV media were inflating the…

You can approach things like this in two ways:

- academic, like the author. Look for the facts and numbers and derive your understanding of the events from it, and only it.

- investigative, like the events of Spotlight. Pull on a thread and see how deep it goes.

You need bit of both to discover the whole truth.

Re: Why Ireland's housing bubble burst

#38

Post by namdnay »

coldtea wrote: post #13
chrisseaton wrote: post #5

Earlier quoted context omitted.

> even during the covid crisis. Well yeah people wanted more space and had more money to spend - of course prices went up. Not sure why you've said 'even'?

Because tons of professions, small business, workers laid off, etc suffered from the lockdowns, so there was not exactly clear that "people had more money to spend".

In France? Not really. There was a massive injection of public money. Anyone furloughed was paid 80% to stay at home.

Re: Why Ireland's housing bubble burst

#39

Post by ploika »

rossdavidh wrote: post #15

I'm not sure how many HN readers we have in Ireland, but as an American I'd be interested to hear their perspective on this article.

Interesting and accurate (though he's the academic, not me, so that's not really my call to make).

Ronan Lyons is a fairly well known name for people who would read the Business section of the newspapers. He compiles a a quarterly report for Ireland's largest property website that gets pretty much guaranteed coverage upon release.

Re: Why Ireland's housing bubble burst

#40

Post by [deleted] »

JKCalhoun wrote: post #12
wonderwonder wrote: post #2

Very curious to see what happens with the US housing / real estate market. I think stocks / equities are going to see a severe down turn this year and a good deal of money is going to leave the market. At the same time inflation is very high so sitting in cash is a loser as well albeit not as bad as riding the markets down. Will that money from the stock market go into real estate or will real estate crash too as the…

Depends on how much the real estate market is being fueled by the Stock Market. We've seen a bull market now for the last, what, 13 years? Is this continual wealth driving all the other prices upward? As we saw in 2008/2009, financial markets are linked more so than they tell you. Diversifying your portfolio is a good idea, but having both real estate and stock investments is probably not in fact diversifying.

[deleted]
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