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Why Ireland's housing bubble burst

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Re: Why Ireland's housing bubble burst

#101
post #99

Earlier quoted context omitted.

> The resulting country is also completely ungovernable. Another way to look at it: By any reasonable measure — and for all its indisputable problems — the U.S. is clearly the most successful large, multi-ethnic society in all of human history. Sure, it's always a work in progress. But let's consider the movie, not just the freeze-frame. When people can vote with their feet, it says something that net migration to th…

The US already had the highest standard of living in the world at the time of independence, before it became a multi-ethnic society. The country de Tocqueville wrote about was an overwhelmingly British country. The subsequent trajectory of the US has been one of chipping away at that foundation. The accommodation of vast numbers of immigrants from societies that had no tradition of self government, and little in the…

> The accommodation of vast numbers of immigrants

Let's not forget that (European) immigrants were mostly wanted, so as to provide needed workers. Even the Chinese immigrants of the 19th century were wanted to help build railroads and the like. Racist anti-immigrant factions such as the Know-Nothings and the KKK never really gained the power needed even to try to stop immigration (with the notable exception of the Asian exclusion acts in the late-19th and early-20th centuries).

Scores of millions of Americans, including your servant, are descended from those European and Asian immigrants. Again, the "movie" is that over generations, those people became fully assimilated into American society and values.

As for "accommodating" the immigrants, that brings to mind Heinlein's dictum: Never argue with the weather. It's questionable whether the "British" America of, say, 1787, or even 1868, could have effectively prevented immigration.

We also shouldn't lose sight of the millions of involuntary "immigrants" who were brought here in chains from Africa.

Re: Why Ireland's housing bubble burst

#102
post #99

Earlier quoted context omitted.

> The resulting country is also completely ungovernable. Another way to look at it: By any reasonable measure — and for all its indisputable problems — the U.S. is clearly the most successful large, multi-ethnic society in all of human history. Sure, it's always a work in progress. But let's consider the movie, not just the freeze-frame. When people can vote with their feet, it says something that net migration to th…

The US already had the highest standard of living in the world at the time of independence, before it became a multi-ethnic society. The country de Tocqueville wrote about was an overwhelmingly British country. The subsequent trajectory of the US has been one of chipping away at that foundation. The accommodation of vast numbers of immigrants from societies that had no tradition of self government, and little in the…

> Looking at migrants is a misleading indicator of preference, because the choice to emigrate is an aberrational one.

Sure, most people don't emigrate. That doesn't mean it's misleading that the U.S. is the migration destination of choice.

Re: Why Ireland's housing bubble burst

#103
post #85

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

The real question is how that gets defined. We have multiple sources which disagree.

All I can say about my original post is that I've been in that area in the evenings after it gets dark and there's no lights which would seem to suggest that there's no one living there.

Additionally, I've looked in the ground floors of a few blocks and they look as though they've never been occupied.

If you're in Dublin it's well worth going down to the Point when it's dark and counting the number of apartments with lights on.

Re: Why Ireland's housing bubble burst

#104

Earlier quoted context omitted.

> Do you think there can only be shortages if there's price fixing? Clearly not. I just got finished pointing to government intervention as the most likely reason for a shortage. How did you manage to not finish reading the comment before replying? Price fixing can also theoretically lead to a shortage, but this is the least likely case. Usually price fixers want to push the price higher than buyers are looking to sp…

When I say fixing I primarily mean government fixing. But thanks for insulting my ability to read because I used the wrong synonym (fixing/control). Therefore I will ignore price gouging laws because that's a form of the above but also if reasonable they won't apply to a person selling their own single allocation. > In this scenario, eventually no amount of money can buy food. You could be the richest person on earth…

> So I still don't see a big difference here between 90 meals and 90 houses for 100 people.

The difference is that once the meals are consumed, that's it. 91st in line can't buy food no matter what. No amount of money is going to produce the 91st meal. As such, when food stocks are tight, you cannot rely on price to determine the buyer. You have to resort to some other mechanism. Given the limited information you provided, it would appear that you chose a first-come, first-served mechanism.

On the other hand, 91st in line for a house, if he has enough money, will buy a house from someone in the first 90 who got there first. There is always a house for sale. They don't disappear (freak disasters excepted). They are not consumable items. Even during the tightest inventory periods we've ever witnessed, there were still many houses available for sale.

Price can continue to determine the buyer here. Those who cannot afford them leave the market. Economically, this is not a 90 houses for 100 people situation. If there are 90 houses, then only 90 people will remain in the market. The other 10 are priced out. Those 10 are not market participants, they are simply dreamers. Dreamers don't count.

Socially, there can be a 90 houses for 100 people situation. I get you are wishing you could use shortage here, but what are you communicating? Everything with a price attached has more people dreaming of ownership than there are units available. That's why there is a price attached. That's literally what price is for – to reduce the number of potential buyers until the number of buyers matches the number of units available for sale, with price increasing until that is satisfied. Basic supply and demand.

When using shortage to include dreamers, everything is in shortage, always. What is the point in drawing particular attention to something that is always the case? It's pointless. You are not saying anything. Nothing has been communicated.

Re: Why Ireland's housing bubble burst

#105
post #99

Earlier quoted context omitted.

> The resulting country is also completely ungovernable. Another way to look at it: By any reasonable measure — and for all its indisputable problems — the U.S. is clearly the most successful large, multi-ethnic society in all of human history. Sure, it's always a work in progress. But let's consider the movie, not just the freeze-frame. When people can vote with their feet, it says something that net migration to th…

The US already had the highest standard of living in the world at the time of independence, before it became a multi-ethnic society. The country de Tocqueville wrote about was an overwhelmingly British country. The subsequent trajectory of the US has been one of chipping away at that foundation. The accommodation of vast numbers of immigrants from societies that had no tradition of self government, and little in the…

> created a top-down society that can scarcely be called America.

Really? The U.S. is notably less top-down than many other places that either of us could name. And nostalgia for an imagined bygone "British" past is unproductive.

Re: Why Ireland's housing bubble burst

#106
post #72

Earlier quoted context omitted.

> the houses in Canada aren't being bought up by rich people, they are being bought by middle and upper-middle class Canadians. Sales don't happen in a vacuum. The middle and upper-middle have to pay that much because second in line is willing to pay almost as much. Matthews could make an offer of $999,999 on every house for sale in Toronto. He may not get any of them in the end, but in doing so he forces you to pay…

> Sales don't happen in a vacuum. Sure, but your examples don't make any sense. Matthews isn't bidding $999,999 on every house. Nor will sellers agree to $2 just because there aren't other buyers. Property taxes are actually quite low in Toronto compared to other cities. $6k per year on a $1M house is pretty low carrying costs that will prevent you from taking a $999,998 loss. > To stick with the hypothetical for the…

> Nor will sellers agree to $2 just because there aren't other buyers.

But that's what the house is worth. As the saying goes, something is only worth what someone will pay for it, and $2 is the only possible offer here, given the hypothetical scenario.

Absolutely someone will give in to the $2 offer eventually. People pass on. The estate isn't going to leave the property just sitting there paying $6k per year doing nothing, when, again, it is only worth $2. It is not worth $1M in this hypothetical scenario. I don't know where you dreamed up that idea. Given the conditions of the hypothetical, there is literally only one buyer, and that buyer is only paying $2. It's a $2 house no matter how you slice it.

Again, it's other buyers willing to pay more that push you to pay more.

> But the overlap between home buyers in Toronto and tech investors who do seed rounds in Silicon Valley is very small, especially for entry level homes.

A few things:

1. Even just one party losing interest in buying a house who has decided to reallocate the funds to a different investment can start to change the dynamic. This idea that every homebuyer needs to consider investing in something else is unfounded.

2. There are knock on effects when someone provides seed funding. Maybe they sold their stocks in Coca Cola to cover the seed, for example. That opens a vacuum that someone else needed to fill – can't sell Coca Cola stock to nobody. Eventually the money is going to be drawn away from housing given the change in allocation, even if through many layers of indirection.

3. The money also isn't leaving necessarily because of investment. There is also an outflow on the consumer side. Tech wasn't showing promise because nobody wanted anything to do with it... If you were prepared to spend every last dime you have on your house to buy into a market you otherwise couldn't afford, but then Jobs just announced that "one more thing", that shiny new iPhone is beyond your grasp. But you want it! It's so cool. So now what you are willing to spend on a house has been reduced, and when you make an offer it isn't going to come in as high. Multiply that out across many players and soon there is a lot less interest in keeping the prices high.

Re: Why Ireland's housing bubble burst

#107

Earlier quoted context omitted.

The US already had the highest standard of living in the world at the time of independence, before it became a multi-ethnic society. The country de Tocqueville wrote about was an overwhelmingly British country. The subsequent trajectory of the US has been one of chipping away at that foundation. The accommodation of vast numbers of immigrants from societies that had no tradition of self government, and little in the…

> The accommodation of vast numbers of immigrants Let's not forget that (European) immigrants were mostly wanted, so as to provide needed workers. Even the Chinese immigrants of the 19th century were wanted to help build railroads and the like. Racist anti-immigrant factions such as the Know-Nothings and the KKK never really gained the power needed even to try to stop immigration (with the notable exception of the As…

> Let's not forget that (European) immigrants were mostly wanted, so as to provide needed workers.

Sure. I’m talking about the long-term effects of that deliberate policy choice.

> Again, the "movie" is that over generations, those people became fully assimilated into American society and values.

Quite a bit of evidence shows that core cultural values, such as levels of social trust and attitudes towards the nature of government, are durable across generations: https://cis.org/Richwine/Still-More-Evidence-Cultural-Persis.... Scandinavian Americans, German Americans, and Italian Americans to this day exhibit differing levels of social trust that mirrors those of their cousins back in Europe. The waves of immigrants didn’t “fully assimilate” into American society, they changed it into something entirely different.

An overlooked aspect of Donald Trump—who is barely a third generation American—is that he was the last nail in the coffin of British America. British American culture is no longer prevalent enough to sustain even one political party. The Trump GOP has dropped the distinctly British American idea of limited government and replaced it with a cult of personality that can appeal to immigrant Germans, Italians, and increasingly Latin Americans. If Trump acts like a Latin American dictator it’s because that’s what it takes to get all those people from disparate cultural backgrounds into a coalition that can get close to 50%.

People notice this shift, but because we have this mistaken notion that “white people” are a single group, we overlook what it means. It gets framed as the “death of the Reagan GOP.” It is, but more accurately it’s the death of the British American GOP.

Re: Why Ireland's housing bubble burst

#108
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...

To things in perspective, Canada has roughly the same number of immigrant and foreign student as the US but they are 1/10 the population.

And regarding the house prices... last year they built around 200k new homes (all types, including condos) for >1M new Canadians.

Re: Why Ireland's housing bubble burst

#109

Earlier quoted context omitted.

> The accommodation of vast numbers of immigrants Let's not forget that (European) immigrants were mostly wanted, so as to provide needed workers. Even the Chinese immigrants of the 19th century were wanted to help build railroads and the like. Racist anti-immigrant factions such as the Know-Nothings and the KKK never really gained the power needed even to try to stop immigration (with the notable exception of the As…

> Let's not forget that (European) immigrants were mostly wanted, so as to provide needed workers. Sure. I’m talking about the long-term effects of that deliberate policy choice. > Again, the "movie" is that over generations, those people became fully assimilated into American society and values. Quite a bit of evidence shows that core cultural values, such as levels of social trust and attitudes towards the nature o…

> core cultural values, such as levels of social trust and attitudes towards the nature of government, are durable across generations

Interesting. Does that take into account the mixing of cultures as the generations go by? My own immigrant ancestors came to this country in the 19th- and early-20th centuries — from four different countries in northern- and southern Europe; two different religions; and arguably three distinct subcultures. My own kids have three more countries stirred into the mix from my wife's side — and her outlook and attitudes have influenced mine in the decades we've been together. Then there's the influence of the different places I've lived and worked. I can't imagine I'm unique.

> more accurately it’s the death of the British American GOP.

Which "British America[]"? The New Englanders like the Puritans, and later the Adamses? The mid-Atlantic Quakers? The Virginians? The Cavalier enslavers who came from their Carribean sugar plantations to grow cotton? Very different subcultures. (And if you want to talk about "top-down," consider the southern American subcultures.)

And which British American GOP — the now-extinct liberal northeasterners and -Midwesterners? The hard-core racist Southerners who were right-wing "Democrats" until the Nixon-Reagan-Atwater "Southern strategy" coaxed them to the GOP? The California Reaganites of Proposition 13?

> If Trump acts like a Latin American dictator it’s because that’s what it takes to get all those people from disparate cultural backgrounds into a coalition that can get close to 50%.

My guess is that Trump appeals to a certain fearful, hero-worshipping, authoritarian mindset that's widely distributed among the human population, and whose adherents have far greater ability to communicate and organize than ever before. We see that mindset today in the followers of Putin, Orbán, Kim, Maduro, etc., as well as those of Trump. (For that matter, the fascist Oswald Mosley was a Brit.)

Re: Why Ireland's housing bubble burst

#110
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…

I believe there are European-based low-cost ETFs that closely mirror the US ones. Both from Vanguard (VWCE, VWRA come to mind) and BlackRock (IWDA).
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