Hi All,
I was reading this thread in last few weeks and I just wanted to share my own impression about the topic.
I'm not irish, but I worked in this country for more than 5 years in one of these high-tech companies in Limerick. I have been renting a place all the time and I was thinking to buy at some point, but I gave up the idea.
I am sure a correction was due at the end of 2003, but the coming of eastern europeans, the new mortgages and some incentives from the government saved the situation. This is to reply to all the people that use the argument of "it has been said before about a crash and never happened". I was taking care of my full house (the landlord didn't want to rent just one room and I had to put the adverts in the papers ....) and during the year of 2003 I had to pay many times for the empty rooms in my house.
At that time, many landlords were struggling to find tenants in Limerick and I'm sure they would have been forced to seel their houses.
However, the incoming of eastern europeans saved them during the year of 2004, I could see this with my own eyes, as I was still involved in the renting market.
I guess the interest rates from ECB also helped the landlords a lot.
For a foreginer, the prices of houses versus their quality looks very, very high now. Not sure how many talented young foreigners will want to settle here when they find out a bit more about the system. I must say I didn't pay attention to my salary in the first years, but when I discovered how much money the people in the public sector are making (I know about the county council ones) and this story about the so called "benchmarking" I felt very humiliated. Definitely I don't want to stay in a country that ripps-off the people from the producing sector to give it to the ones sitting and moving papers from one office to another.
The increase in prices from the first half of the year in Limerick near Dell factory is absolutely ridicolous and denies the right of young people to have a roof. Second hand houses that were 170.000 in september last year are 230.000 or even 250.000 now. I feel sorry for the people that will buy them for living. Anyway, if the rumours of Dell opening a factory in the city of Lodz from Poland will become true, then it will be disaster for the prices in Limerick. The factory from here doesn't have to be closed, it's enough for the more than 50% polish workforce (maybe 1500 people) to return home and the rental situation from 2003 will be back because all these people are renting around here.
Myself, I decided to move already (2-3 months from now) from this place, as my personal standard of living has deteriorated too much. While I was 2-3 years on salary freeze because of the international bad economy, the people in the public sector were getting 10% increases a year. It's too much humiliation to support them from my taxes from a frozen salary.
Most of the foreign people are here for the money, usually in low-paid services. Until now, these were sustained by huge borrowing by the irish people. But this borrowing has already become MAD !!!! 260 billions for the public sector !!!! From where will you pay this ????? Dell is the second biggest exporter of Ireland and has lost 50% in the share price for the last year. Intel is number one and has problems, too. A decent salary here starts to look like a good salary in USA, so I don't see any reason for an american company to come here. Also, the main reason of the Irish boom (CORPORATE TAX) will be surely cancelled in 2-3 years. Europe has had enough watching how german, french, italian money paid for goods packed here are dissapearing from their economy. Opposition from irish representatives in the EU-Finance Commission is very very strong. They will not accept any increase in Corporate tax. But guess what ?? The rest of Europe is working on a law to retain the profits in the country where the product is sold.
In other words: even if Microsoft Office is packed in Ireland and sold in Germany, the profit might remain mainly in Germany from now on. This was a very clever way for the americans to sell their products in EU without paying import tarriffs. Check about this company called Round Island One from Dublin: they sell all the Microsoft software for Europe and Asia. The american IRS is watching since last year, because the american are losing tax money too, from this.
In conclusion, a crash in housing is sure because there will be physical limits: no more easy money from the banks, less foreign companies and less money from the corporate taxation even if the foreign companies will remain.
The irish government will do everything to hide this, there is no doubt about it. The sad story is that young irish people that bought houses now will remain to clean the mess after the party of those that have 40-50 years now.
All the best and make anyone aware about this, before it's too late !
