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Why Ireland's housing bubble burst

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Re: Why Ireland's housing bubble burst

#11

Post by skeeter2020 »

jwond wrote: post #3
wredue wrote: post #2

I’m not sure what’s different, but I will chime in to say that I’ve been reading about Canada imminent bubble burst for 15 years. I mean, eventually someone may be right, but had I let this get to me and not buy my house 12 years ago, I would be in a much worse position today. Be careful with people trying to predict how markets will move.

People predicting the Canadian housing bubble would burst probably didn't think the government would resort to such absurdly high levels of immigration. https://globalnews.ca/news/10386750/canada-41-million-popula...

I'm interested that you used the word "absurd" - how come? Historically nothing sets up a country better for future success than lots of immigrants - if it's paired with government policy that doesn't discourage growth...

Re: Why Ireland's housing bubble burst

#12

Post by takinola »

tmnvix wrote: post #5

> 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. (emphasis mine) That wasn't the accepted wisdom at the time. Prices going up spelled 'supply shortage' to most. When the tide went out (i.e. credit availability) it revealed an oversupply. We should learn fr…

From the article, it seems like the distortions were introduced by policy makers. There was a tax benefit from building new homes in certain places. In those places, prices went down. However, the policy allowed the tax benefits to be claimed against any homes the developer built. This meant a developer could build in tax advantaged locations even though there was already over-supply there. This did not help locations where there were no such benefits so prices continued to rise there. This creates a situation where supply increases (in tax advantaged locations) and price increases (everywhere else). This is a policy failure not a market failure.

Re: Why Ireland's housing bubble burst

#13

Post by gonzo41 »

skeeter2020 wrote: post #11
jwond wrote: post #3

Earlier quoted context omitted.

People predicting the Canadian housing bubble would burst probably didn't think the government would resort to such absurdly high levels of immigration. https://globalnews.ca/news/10386750/canada-41-million-popula...

I'm interested that you used the word "absurd" - how come? Historically nothing sets up a country better for future success than lots of immigrants - if it's paired with government policy that doesn't discourage growth...

Poor immigrants now == booming growth over the medium term. Rich immigrants just spend the locals out of their homes. The west is importing the wrong type of migrants.

Re: Why Ireland's housing bubble burst

#14

Post by mandmandam »

Gary Stevenson [0] is the only economist who makes sense to me on this issue. He mostly speaks about the UK but we're basically all in similar boats with house prices across the English speaking world.

Gary put his money where his mouth is, and was the world's most successful trader for three years running. However, since he talks in a candid and coherent manner about inequality and the stunts the ultra-wealthy pull, you'll never see him get to talk for very long on any mainstream news source.

That hasn't stopped his new book from being successful though, due to the popularity of his YouTube channel.

0 - https://www.youtube.com/watch?v=GcaiTZKlCj4

Re: Why Ireland's housing bubble burst

#15

Post by phyrex »

skeeter2020 wrote: post #11
jwond wrote: post #3

Earlier quoted context omitted.

People predicting the Canadian housing bubble would burst probably didn't think the government would resort to such absurdly high levels of immigration. https://globalnews.ca/news/10386750/canada-41-million-popula...

I'm interested that you used the word "absurd" - how come? Historically nothing sets up a country better for future success than lots of immigrants - if it's paired with government policy that doesn't discourage growth...

The argument is that the immigration rate has nearly doubled compared to the baseline (https://www.statista.com/statistics/443063/number-of-immigra...) and that the country isn’t set up to absorb such a higher number of immigrants, not that immigration is bad as such

Re: Why Ireland's housing bubble burst

#16

Post by hugh-avherald »

tmnvix wrote: post #10
hackerlight wrote: post #8

Earlier quoted context omitted.

Did rents also go up? I'd expect investment demand to cause a dislocation between rent and price. If it's a supply issue then both will go up.

Haha. Do rents ever not go up? Edit: But seriously, it's available housing that matters. We can have a shortage of available housing with an oversupply if investment demand is high enough. That is what the Irish experience demonstrates. Only second homes and investment properties can be underutilised... This is why I believe that any government serious about tackling an accommodation crisis should start by determinin…

Rents fell during the pandemic in Australia.

Re: Why Ireland's housing bubble burst

#17

Post by akavi »

tmnvix wrote: post #10
hackerlight wrote: post #8

Earlier quoted context omitted.

Did rents also go up? I'd expect investment demand to cause a dislocation between rent and price. If it's a supply issue then both will go up.

Haha. Do rents ever not go up? Edit: But seriously, it's available housing that matters. We can have a shortage of available housing with an oversupply if investment demand is high enough. That is what the Irish experience demonstrates. Only second homes and investment properties can be underutilised... This is why I believe that any government serious about tackling an accommodation crisis should start by determinin…

Rents came down significantly during 2020 in San Francisco (I paid ~2500 $/mo in Nov 2020 for a place that rented for 3300 $/mo the year before)

Re: Why Ireland's housing bubble burst

#18

Post by LegitShady »

skeeter2020 wrote: post #11
jwond wrote: post #3

Earlier quoted context omitted.

People predicting the Canadian housing bubble would burst probably didn't think the government would resort to such absurdly high levels of immigration. https://globalnews.ca/news/10386750/canada-41-million-popula...

I'm interested that you used the word "absurd" - how come? Historically nothing sets up a country better for future success than lots of immigrants - if it's paired with government policy that doesn't discourage growth...

because the rapid growth has put so much pressure on house/rent prices, healthcare availability, general inflation on prices etc that overall the standard of living is falling for everyone.

Re: Why Ireland's housing bubble burst

#19

Post by mytailorisrich »

tmnvix wrote: post #5

> 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. (emphasis mine) That wasn't the accepted wisdom at the time. Prices going up spelled 'supply shortage' to most. When the tide went out (i.e. credit availability) it revealed an oversupply. We should learn fr…

Supply soared but I believe that population soared as well and continues to soar.

Exuberance may have been created by easy credit and speculation but the root cause was indeed a growing market fuelled by real demand, which is a common pattern. Growth attracts investors and speculators.

Re: Why Ireland's housing bubble burst

#20

Post by 3vidence »

skeeter2020 wrote: post #11
jwond wrote: post #3

Earlier quoted context omitted.

People predicting the Canadian housing bubble would burst probably didn't think the government would resort to such absurdly high levels of immigration. https://globalnews.ca/news/10386750/canada-41-million-popula...

I'm interested that you used the word "absurd" - how come? Historically nothing sets up a country better for future success than lots of immigrants - if it's paired with government policy that doesn't discourage growth...

First canada has one of the largest population growth rates in the world (very unusual for a G7 country)

Second, Canada had absolutely terrible business development investment. There is no capital to make use of the increase in population and as a result the GDP per capita is going negative every quarter.

Now that the quality of life in Canada is dropping, highly skilled Canadians are trying to get out as fast as they can making the Canadian market even less competitive.

I don't think this combination of variables has been present in previous population booms (post WW2). I think we are in new territory here being pushed aggressively by a few companies trying to find even cheaper labor than what was possible.

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