Current public sentiment towards the housing market?

[Duplex]

Economists Robbie Kelleher and Rossa White said the housing market remained the most obvious risk, but population trends had significantly increased the underlying demand for housing.

This statement is patently wrong as is obvious to anyone familiar with the deflation in rents. The demand for housing is not driven by population growth, but by speculation. I think that we now are approaching the European average for housing units per capita. However if the measure was the number of habitable rooms per capita, Ireland would top the league; that is we have more bedrooms per head of population that most European countries.

Do we have any information on the churn rate in the 'guest worker' population, how long do these people remain before returning home?. We know that most work in low end service sector and construction jobs, the areas of the economy most likely to be affected by a slowdown. So making any suppositions of population trends' involving the continuation of the current guest worker cohort is futile.

I'm consistently amazed at the pathetic analysis churned out by our banks, its embarrassing, please stop and go get a job in marketing somewhere chaps.

 

[damien60]

A.B.C
Alaways
Be
Closing

 

[phoenix_n]

you can now rent a 2 bed in prospect hall in finglas (or glasnevin if ur dreaming) for 1,000.

 

[ivuernis]

"When the economy slows down... immigrants will be more flexible and in the extreme, some will up and split, leaving the estimated thirty percent of new Irish housing stock rented by foreigners, tenantless" - David McWilliams
http://www.unison.ie/irish_independent/stories.php3?ca=36&si=1655827&issue_id=14373

 

[RugbyBoy]

also with texting, email, IM ,etc migrant workers know very quickly where the jobs are.

 

[Persius]

The preliminary 2006 census figures were published today at www.cso.ie
The population is recorded at 4.2 million, up from 3.9 million in 2002. A total increase of 317K. Of this, births over deaths in the state accounts for 131K. This "gives a derived net immigration figure of 186,000* for the 2002-2006 period"

* the footnote further states
"The number of non-Irish nationals enumerated as part of the 2002 census was 222,000, representing 5.8 per cent of the usually resident population. While the corresponding figure for 2006 will have to await the publication of the Principal Demographic Results in April 2007, it can be tentatively estimated from the derived flow data on migration that the stock of non-Irish nationals is likely to be about 400,000."

So, can't estimate churn rate or future rates of net inward migration, but it does look like 178,000 people immigrated to, or returned to, Ireland over the last 4 years.

So it does look like there are some arguements in favour of "demographics". More relevant may be whether this is made up of single people, childless couples or couples with children. This would determine what types of property will be most in demand over the next few years.

Full details: http://www.cso.ie/census/documents/2006PreliminaryReport.pdf

 

[Purple]

Does anyone have figures showing how many of the 178,000 inward migrants were returning Irish nationals and non-EU nationals? I would suggest that these are less mobile (to other EU states) in the event of an economic downturn.

 

[Bedsit]

Does anyone have figures showing how many of the 178,000 inward migrants were returning Irish nationals and non-EU nationals? I would suggest that these are less mobile (to other EU states) in the event of an economic downturn.

Yes but the thing to remember in relation to the non-EU nationals is that the in the event of a donwturn the government could (under public pressure) stop renewing work permits or maybe change citzenship and residency rules so that they would be forced to return to their native countries or go somewhere else.

 

[Amygdala]

Does anyone have figures showing how many of the 178,000 inward migrants were returning Irish nationals and non-EU nationals

From RTE "On average, there were 46,000 more immigrants than emigrants each year from 2002 to 2006, up from 26,000 in the previous period."

 

[Remix]

Some more details on the report from Davy Stockbrokers

There are no such mitigating factors to explain the pace of house price inflation in Ireland.
By most measures, house prices in Ireland look stretched and a period of stabilisation or
decline looks inevitable at some point. However, we do not have the tools to determine with
any confidence the timing or size of such an adjustment.

They offer three scenarios. The most pessimistic scenario calls for a 5% per annum decline in house prices.

i.e in their worst case scenario, years of panic buying,speculation and unjustified house price inflation will be followed by a nice gentle orderly decline. Hmmmm.

You might be forgiven for questioning who owns Davy Stockbrokers

 

[JumpShot]

317K population increase over 4 years Apr-02 to Apr-06 according to preliminary census results

284K new dwellings completed over 4 years 2002 to 2005.

a. Imigration will need to increase from current levels to meet the supply of houses being built, even allowing for lower average household size. in the future

b. less houses need to be built in the future

[broken link removed]

 

[beattie]

317K population increase over 4 years Apr-02 to Apr-06 according to preliminary census results

284K new dwellings completed over 4 years 2002 to 2005.

a. Imigration will need to increase from current levels to meet the supply of houses being built, even allowing for lower average household size. in the future

b. less houses need to be built in the future

[broken link removed]

In relation to point b above there is now way that developers who have paid astronomical sums to buy land over the past year or so cannot afford not to bring them to market so there will be a huge amount of housing coming on stream for the next few years

 

[Duplex]

The building boom will end and I suppose only then will we know how much of the economy was reliant on construction and related spin offs.

 

[ivuernis]

Discussion on possible impending stagflation in the US economy and its effects on consumers... a harbinger of things to come for the Irish economy perhaps...

 

[macbri]

On the census,the vasy majority off immigrants in the last 2 years have to come from new EU states-estimates suggest that there are between 100-200 thousand polish immigrants alone.

This immigration will only support the housing rental market as vast majority will end up in minimum wage jobs(tourism,catering etc).

Again-this begs the question-what is driving current housing demand? given 2006 projected housing output at 90000-100,000 and housing density falling from 3.1 in 2002 to 2.55 .

 

[Duplex]

On the census,the vasy majority off immigrants in the last 2 years have to come from new EU states-estimates suggest that there are between 100-200 thousand polish immigrants alone.

This immigration will only support the housing rental market as vast majority will end up in minimum wage jobs(tourism,catering etc).

Again-this begs the question-what is driving current housing demand? given 2006 projected housing output at 90000-100,000 and housing density falling from 3.1 in 2002 to 2.55 .

To get some idea of what is happening in Ireland look no further than Florida. The Florida bubble began to burst a year ago so it may provide some indication how things will play out here. I've attached a report from a realtor in Florida who tells it like it is (rare).

http://globaleconomicanalysis.blogspot.com/2006/07/ghost-housing-market.html

 

[Persius]

On the census,the vasy majority off immigrants in the last 2 years have to come from new EU states-estimates suggest that there are between 100-200 thousand polish immigrants alone.

This immigration will only support the housing rental market as vast majority will end up in minimum wage jobs(tourism,catering etc).

Again-this begs the question-what is driving current housing demand? given 2006 projected housing output at 90000-100,000 and housing density falling from 3.1 in 2002 to 2.55 .

Some of the other EU countries are now opening up their labour markets to the accession countries (Spain, Portugal, Belgium and Finland I think). All of the old 15 EU members are obliged to open up their labour markets by 2012. I think Ireland will be a less attractive location for Poles, Latvians etc by then.

I think the demand is basically coming from the Irish pysche. The long held view that "you can't go wrong in your own home" and "rent is dead money for poor quality and no security of tenancy" along with the more recent view that property "investment" is a one way bet.

One result of this is that loads of singles in their 20's feel they should be getting on the property ladder, and are thus driving up demand (along with investors/speculators). I guess this was very rare 10 or 15 years ago, where mainly maried couples purchased. Increasing maritial separation and now divorce is probably also driving demand to some extent.

I see a little bit more caution in public sentiment now, but still the majority opinion (amongst those I talk to) seems to be bullish regarding property.

 

[shnaek]

We were chatting around the table at work here and I was amazed that all 6 people at the table said you'd be crazy to buy now. One of those people had been looking at houses for the last few months. Another had only been saying a few months back how now was the time to buy, with SSIA's coming out etc.
So the 'public' sentiment here is definitely bearish.

 

[Howitzer]

Did they have strong reasons for their change of heart or simply following the herd, then and now.

 

[delboy159]

You have to take into account the current media blitz of negativity. I remember a few years ago when equity markets were suffering and the papers had headlines of "Equity SSIA's loosing money" etc. etc.

A lot of my friends transferred from equity to deposit SSIAs because of this. I was trying to tell them that it was silly to pull out - you were selling at a low price - stay in the funds, buy at the low market and only transfer when things recover - you have 3/4 years...... But still they transferred..... Now they are saying that in hindsight they were silly why did they listen to the media hype. It's the same thing now - there are no real cold hard facts, yet people are jumping on a band wagon beause thats what the papers are feeding them this week.

Bottom line - I'm looking to buy in an area (I would call very vulnerable to price drops) down the country and prices are not dropping - as much as I'd like them to - thats a cold hard fact, not media hype...