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Why Ireland's housing bubble burst

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Re: Why Ireland's housing bubble burst

#81

Post by prionic6 »

me_me_me wrote: post #26
skeeter2020 wrote: post #11

Earlier quoted context omitted.

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...

> Historically nothing sets up a country better for future success than lots of immigrants Ummm citations needed urgently. I would point out, immigration policy vs anyone without a passport is welcome are two complete scenarios that the only thing in common is that outsiders are coming in. Unchecked immigration policy as a good thing is a myth. People from clashing cultures dont mix naturally. Only results are natura…

"Keep, ancient lands, your storied pomp!" cries she With silent lips. "Give me your tired, your poor, Your huddled masses yearning to breathe free, The wretched refuse of your teeming shore. Send these, the homeless, tempest-tost to me, I lift my lamp beside the golden door!"

Re: Why Ireland's housing bubble burst

#82

Post by ffgjgf1 »

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...

> Historically nothing sets up a country better for future success than lots of immigrants

That might be mixing up cause and effect…

Re: Why Ireland's housing bubble burst

#83

Post by ffgjgf1 »

me_me_me wrote: post #26
skeeter2020 wrote: post #11

Earlier quoted context omitted.

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...

> Historically nothing sets up a country better for future success than lots of immigrants Ummm citations needed urgently. I would point out, immigration policy vs anyone without a passport is welcome are two complete scenarios that the only thing in common is that outsiders are coming in. Unchecked immigration policy as a good thing is a myth. People from clashing cultures dont mix naturally. Only results are natura…

> The european countries don't really have distinctive minorities from their neighbors

Well… I wonder how that happened since it certainly wasn’t the case until the period between the mid/late 19th century and the 1940. I guess we’ll never know.

Re: Why Ireland's housing bubble burst

#84

Post by derf_ »

flextheruler wrote: post #54
randomdata wrote: post #49

Earlier quoted context omitted.

> I'm familiar with old blog posts from back as far as maybe 2005 that predicted the crash in 2008 accurately. The housing crash happened in 2006, though. I suppose being able to predict the crash even a few months in advance is impressive, but as you're hazy about the years, it is possible that it was really 2006 and the crash had already happened, which isn't so impressive. 2008 was the securities crash. That is wh…

On December 30, 2008, the Case–Shiller home price index reported the largest price drop in its history.

One of my friends started a website called "The Mortgage Lender Implode-O-Meter" to track all of the mortgage lenders going bust... in 2006. It is worth remembering that cheap credit with adjustable rates is what fueled that bubble and what made it unsustainable. A lot of the world (including Ireland) floats rates after the first 5 years of a mortgage.

Whereas in the US, anyone with a pre-2022 30-year fixed-rate mortgage now has a massive paper profit due to interest rates going up that can only be realized by slowly making their required payments. That gets vaporized instantly if they sell and pay off the mortgage.

Re: Why Ireland's housing bubble burst

#85

Post by chgs »

disgruntledphd2 wrote: post #79
TulliusCicero wrote: post #29

Earlier quoted context omitted.

Rising prices will usually indicate a supply shortage, but for property there's also the element of speculation. In contrast, rents are a more reliable indicator of a shortage, no speculation there.

> In contrast, rents are a more reliable indicator of a shortage, no speculation there. You'd think so, wouldn't you? However, again the Irish market disproves this to some extent. So generally you look at rents as a 12-14 year payback window of the house price (for investment). What happened in Ireland in the last decade is that rents increased, such that investors could pay more for houses, which increased rents et…

Number of empty properties in Ireland dropped by 9% from 2016 to 2022

Re: Why Ireland's housing bubble burst

#86

Post by tmnvix »

chii wrote: post #52
tmnvix wrote: post #33

Earlier quoted context omitted.

Strictly speaking, rents (for long term rentals) can be an indicator of a shortage of available housing, but not necessarily a shortage in the total housing stock.

What's the difference between > shortage of available housing and > a shortage in the total housing stock. I dont think there is any.

Second homes, short term rentals, and land banked properties are not available to use as a primary residence but are part of the total housing stock. I call these underutilised properties and suspect that there are more than most suspect.

Demand for purchasing these properties is not the same as demand for homes. That is what is often overlooked when people consider solutions to the accommodation crisis (i.e. usually happy to think no further than 'build more houses' without considering everything that pushes up demand).

Re: Why Ireland's housing bubble burst

#87

Post by chgs »

akavi wrote: post #17
tmnvix wrote: post #10

Earlier quoted context omitted.

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)

Demand for tiny city centre apartments collapsed during covid. That’s no surprise and just supports the economic principle of supply and demand

Re: Why Ireland's housing bubble burst

#88

Post by tmnvix »

chgs wrote: post #85
disgruntledphd2 wrote: post #79

Earlier quoted context omitted.

> In contrast, rents are a more reliable indicator of a shortage, no speculation there. You'd think so, wouldn't you? However, again the Irish market disproves this to some extent. So generally you look at rents as a 12-14 year payback window of the house price (for investment). What happened in Ireland in the last decade is that rents increased, such that investors could pay more for houses, which increased rents et…

Number of empty properties in Ireland dropped by 9% from 2016 to 2022

Interesting. Could you share a source?

Re: Why Ireland's housing bubble burst

#89

Post by tmnvix »

CalRobert wrote: post #74
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…

Ireland taxes income and capital gains very heavily, and has some truly obscene structures like deemed disposal (taking 41% of your _unrealized_ gains in ETF's). I remember how much it stung handing over 52% of my options to the government so they could waste it on being stupid and incompetent. They even have a history of going after people's private retirement savings after the fact - https://www.oireachtas.ie/en/de…

A similar story in NZ. 0% tax on capital gains when selling a property. There is a so-called 'brightline test' which means that if you hold a property for less than two years or purchase a property with the intention of selling it for a profit you are expected to pay tax on those gains, but in practice this doesn't happen. Still waiting for the day that the tax department gets serious about questioning people's intent (as it is plain to everyone that yield is abysmal and capital gains is the real game - has been for decades).

Re: Why Ireland's housing bubble burst

#90

Post by tmnvix »

lostlogin wrote: post #59
tmnvix wrote: post #23

Earlier quoted context omitted.

I live in NZ. We have a rapidly growing population with one of the highest levels of immigration in the world. From late 2021 mortgage rates went from as low as 2.5% up to around 7%. Subsequently, in my city, prices quickly dropped 20% and both the number of properties available for sale and for rent increased by as much as 50%. Where did those properties come from? In my opinion the increase is representative of the…

There has been an absolutely huge amount of building going on - and while developers are sensitive to mortgage rates, they would have started building prior to interest rate increases. That said, had building slowed? It’s building sites everywhere I go.

Consents are certainly down.

I spoke with someone that helps developers with submissions and interestingly they said they are really busy right now. Turns out though, they aren't busy with new consents but 'minor amendments' - the purpose of which is to reset the 5 year timeframe for the original consent. In other words, they don't want to go ahead right now.

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