Current public sentiment towards the housing market?

Status
Not open for further replies.
CapitalCCC said:
I very much doubt whether the ECB even notice the Irish inflation rate when assessing the level of inflation for Eurozone, we're pretty tiny!
Click to expand...

True. Although, I think it gives us zero scope for complaining about rising rates if our inflation is so out of control.
 
Afuera said:
And why don't you factor in all the money being earned in Ireland and then sent home to Eastern Europe then as well while you're at it?

His predictions of inflation at 3.9% in Ireland (almost twice the recommended rate by the ECB) aren't exactly going to encourage them to go easy on increasing their rates further.
Click to expand...

In response to Point 1: Open market economies work best. Unfortunately for the Polish, they have come here to earn cash to buy at home. But by the time they save up enough cash, prices in Poland are likely to have substantially increased as a result of foreign investment.
In response to Point 2: You can't argue it both ways. ECB are not going to vary the rates according to the Irish inflation.
 
Afuera said:
Have you got any figures to back this up?
Click to expand...

That's where the report from a real economist like Dan McLoughlin comes in! Of course I don't have figures but based on the amount invested, I had expected it to be very substantial.
 
Fergal said:
In response to Point 1: Open market economies work best. Unfortunately for the Polish, they have come here to earn cash to buy at home. But by the time they save up enough cash, prices in Poland are likely to have substantially increased as a result of foreign investment.
Click to expand...
I'm not talking about earning cash in Ireland so they can buy property at home. I'm talking about the huge amount of cash that is flowing out of Ireland annually to support families back in Eastern European countries, otherwise known as remittances.

Fergal said:
In response to Point 2: You can't argue it both ways. ECB are not going to vary the rates according to the Irish inflation.
Click to expand...
No I wasn't arguing that the ECB was going to set their interest rates according to the Irish needs. They haven't been doing this up until now so I don't think that's going to change.
I was mearly pointing out that Ireland will have absolutely no argument to present the ECB should they decide to continue to raise interest rates.
 
Fergal said:
No I'm not kidding. Germany: 15% unemployment, high tax, social welfare state. Manufacturing not yet out sourced to lost cost economies. These are factors bearing on the value of property in Germany. But I agree that Germany may well recover and its prospects seem to be improving.As for "We've got property income, that's about it", not exactly in-depth analysis. My original point that Irish overseas investment is making a substantial return still stands.
Click to expand...

Interestingly enough, if you say to anyone that the German and French economies are healthier than the Irish economy, you get back unemployment. Thing is, unemployment in France is ca 9% and falling and in Germany it's ca 10% and falling. Both Germany and France have massive issues with consumer confidence, something which currently isn't an issue here.

We've got a feel good factor at the moment because we're borrowing heaps of money and spending it. Unfortunately, that money *has* to be paid back and you know what? Those wonderful economies of the UK, the US and Ireland - you know, the posterboy economies for more or less untramelled capitalism - are heavily endebted, and they are not even making enough money through trade to be able to pay them back. We have a falling trade surplus. Both the US and the UK have growing trade deficits even accounting for services and knowledge exports. We all have rising debt levels. The US is showing serious signs of a housing bubble. We appear to be also. The UK is currently showing a slight rise in property prices but it's not all that huge from what I can remember.

So while people can bury their head in the sand and say that we've got a better economy than they have in France and Germany, that situation will not last for long.

Irish property prices bear little or no relation to any of the economic fundamentals in this country except that money supply increased drastically due to low interest rates.

Property prices in Germany are relatively lower because renting is not such a big deal there, this whole "rent is only dead money" doesn't make any waves there, and security of tenure is quite a lot better. If I lived in Germany I'd be very happy to rent. People in Germany like to make a long buck. People in Ireland like to make a quick buck. We wouldn't have half the BTL brigade in this country if it weren't for cheap money and few obligations on landlords.
 
Fergal said:
No I'm not kidding. Germany: 15% unemployment, high tax, social welfare state. Manufacturing not yet out sourced to lost cost economies. These are factors bearing on the value of property in Germany. But I agree that Germany may well recover and its prospects seem to be improving.As for "We've got property income, that's about it", not exactly in-depth analysis. My original point that Irish overseas investment is making a substantial return still stands.
Click to expand...

German unemployment is nearer to 11% than 15%.

Manufacturing - EADS are announcing job cuts and Benq (formerly Siemens mobile phones) declared bankruptcy and Siemens phone networks division is being split off on a joint venture with Nokia.

Also taxes are higher in Germany so people working in Germany don't have the same amount of cash to service a mortgage.

As for Irish overseas investment, Quinn Plastics are planning to open a manufacturing plant in Germany in 2008, hopefully it works out well for them. http://www.rte.ie/business/2005/1114/quinn.html
 
But are Irish investors earning big bucks from their foreign investments?
What locations are netting high rental yields. Not Spain, Hungary, Bulgaria, Cape Verde, Florida or France not even the UK. In fact I wouldn't be surprised if these 'investments' were drawing money out of that Irish economy as rental incomes don't match finance, servicing and management costs.
 
Hearing very credible reports of people (some through their brokers) seeking a freezing or moratorium on their present repayments/interest. I kid you not. Unsurprisingly I'm told the Banks have been accomodating these requests. Advice was that June rate hike has kicked in, Aug rate hike about to kick in, October rate hike will take another couple of months to kick in. Decembers rate hike and those after still awaits. All told there's a lot of kicking ahead.
 
This net rental yield issue on foreign investment property is important. It's impossible to find verifiable data on net yields in many/any overseas markets. Call me cynical but if yields were good the information would be all over the Internet? In Spain for instance it seems that 10-12 weeks occupancy a year is considered good. What that means in net yield terms is anyone's guess.


[broken link removed]
 
He says the pace of employment growth continues to surprise, with the service sector replacing construction as the main engine of jobs growth.
Click to expand...

Am I correct in saying that the service sector is not, in general, an exporting sector. It covers transport, food, banking, retailing etc.

So does that mean that our three largest sectors of employment (Services, Construction and Public) contribute almost nothing to exports?
 
conor_mc said:
Am I correct in saying that the service sector is not, in general, an exporting sector. It covers transport, food, banking, retailing etc.

So does that mean that our three largest sectors of employment (Services, Construction and Public) contribute almost nothing to exports?
Click to expand...
no, gambling, tourism (invisible export) and U2 and Enya are all services that involve money from abroad coming to Ireland.
 
conor_mc said:
Am I correct in saying that the service sector is not, in general, an exporting sector. It covers transport, food, banking, retailing etc.

So does that mean that our three largest sectors of employment (Services, Construction and Public) contribute almost nothing to exports?
Click to expand...

some services are exporters for example call centers, consultancy, etc, they are not all servicing the Irish economy. I'm not sure what % of service organisations are exporters though.
 
fatmanknows said:
Hearing very credible reports of people (some through their brokers) seeking a freezing or moratorium on their present repayments/interest. I kid you not. Unsurprisingly I'm told the Banks have been accomodating these requests.
Click to expand...

This is known, rather pleasantly, as a repayments holiday. In the rest of the world it's known as a Negative Amortization mortgage. It's not known as such here as that specific type of mortgage is not allowed by the central bank.
 
dontaskme said:
no, gambling, tourism (invisible export) and U2 and Enya are all services that involve money from abroad coming to Ireland.
Click to expand...

I recognise that a portion of the service sector does in fact export, but I would've thought that the majority of it is non-exporting? I'm open to correction, it was just a rough guess....
 
dontaskme said:
Well, that money is tied up in the fund for something like ten years. The 20% gains are only on paper as yet. And there is an anti-speculative tax in Germany that punishes owners who try to sell within ten years or so.
Click to expand...

As regards your tax question look into this [broken link removed]

As regards 10 years tied up funds, and 20% on paper..........Alternative 3.75 northern rock ?
 
Status
Not open for further replies.
Back
Top