gloomy predictions for the Irish rental market were misplaced

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zardebt

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Early 2005 data suggest that previous gloomy predictions for the Irish rental market were misplaced - Rental values appear to have bottomed out and are improving modestly as the Irish economy strengthens and inward migration continues at a very high level - Signs of broad balance in rental market mirror the recent trend in broader housing market and bode well for outlook - Rents rising countrywide but variation suggest returns will increasingly reflect investment decisions rather than broad economic climate

http://www.daft.ie/report
 
It is true that rents in certain areas may have risen somewhat over the last 6 months. The reason for this is no doubt the big influx of eastern Europeans into Ireland over the last year. However this is largely restricted to certain areas of Dublin, Cork and Galway. They are largely young and mobile with as many occupants as possible per property.



It is the same as the irish labourers in London in the sixties and seventies. They definitely had an effect on certain areas of Britain such as Kilburn and Camden town but their overall effect on British property was negligible. The Irish in the sixties and seventies preferred to send their money home and buy houses and businesses in Ireland. Indeed I remember being on holidays in Mayo in the late eighties and coming across unfinished derelict houses. When I enquired why this was so I was told that someone in England had run out of money ten years before and was unable to finish it.



The immigrants from Eastern Europe are very similar to the Irish labourers of the sixties and seventies in that they will have a negligible effect on Irish property. It is worth remembering that Britain experienced large flows of immigrants in the sixties, seventies and eighties however this did not prevent property crashes in the seventies and late eighties. I believe what happens to Irish property and the irish economy will not be determined by irish events but by global events.
 
joe sod said:
I believe what happens to Irish property and the irish economy will not be determined by irish events but by global events.
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Well totally. We are the most global economy in the world. So when a world-wide recession hits, Ireland will be hit hard. It's only a matter of time. When this will happen and why is anyone's guess.
 
nahdoic said:
Well totally. We are the most global economy in the world. So when a world-wide recession hits, Ireland will be hit hard. It's only a matter of time. When this will happen and why is anyone's guess.
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Something like what happened after 911 perhaps?
 
Gabriel said:
Something like what happened after 911 perhaps?
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Did a recession happen? Central banks around the world seemed to follow the Fed - interest rates were slashed and a recession was avoided for the moment.
 
I was surprised with the report!! was anyone else.???

Since the large amount of construction , the introduction of section 50 20 ....... I thought
supply would have exceeded demand.....

or is this report just IIB wanting people to invest .,,, and up talking the figures !

Would be very interested in feedback !!
 
zardebt said:
Since the large amount of construction , the introduction of section 50 20 ....... I thought
supply would have exceeded demand.....

or is this report just IIB wanting people to invest .,,, and up talking the figures !

Would be very interested in feedback !!
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http://www.finfacts.com/biz10/irelandhouseprices.htm

“House prices in Ireland are finally responding to the scale of supply, and the era of double digit house price inflation may well be over. Demand for housing in 2005 is likely to remain strong, underpinned by strong employment growth and solid wage inflation, so a sustained price decline remains a low probability”, according to Dr. Dan McLaughlin, Chief Economist, Bank of Ireland Global Markets.

Bold text is my own.
 
Gabriel said:
http://www.finfacts.com/biz10/irelandhouseprices.htm

“House prices in Ireland are finally responding to the scale of supply, and the era of double digit house price inflation may well be over. Demand for housing in 2005 is likely to remain strong, underpinned by strong employment growth and solid wage inflation, so a sustained price decline remains a low probability”, according to Dr. Dan McLaughlin, Chief Economist, Bank of Ireland Global Markets.

Bold text is my own.
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And now for the small print ;-)

The words “looking forward,” “anticipates,” “probability,” “expects,” “will,” “believe(s),” “may,” “is expected to,” “likely”, and similar expressions, among others, identify forward-looking statements.

Readers should be cautioned not to place undue reliance on these forward-looking statements whenever any entity with a massive vested interest in the property market uses them, they speak only as of the date the statement was made and are subject to change without notice !!
 
CoffeeBrew said:
And now for the small print ;-)

The words “looking forward,” “anticipates,” “probability,” “expects,” “will,” “believe(s),” “may,” “is expected to,” “likely”, and similar expressions, among others, identify forward-looking statements.

Readers should be cautioned not to place undue reliance on these forward-looking statements whenever any entity with a massive vested interest in the property market uses them, they speak only as of the date the statement was made and are subject to change without notice !!
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It's easy to rubbish almost any claim, but the fact of the matter is demand for new housing is still high in this country and while supply has been increasing there is still some way to go before we reach a state of saturation.
 
I would agree with CoffeeBrew !!!

As for the market has not reached saturation well I am not too sure about that ......
I suppose once it does the building company will decrease their output which means less workers with SLOWER employment growth and solid wage inflation .. I suppose my fear is that one is driving the other ......
 
zardebt said:
As for the market has not reached saturation well I am not too sure about that ......
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http://www.finfacts.com/irelandbusinessnews/publish/article_1000716.shtml

"In a review of the Irish house property market, the European Housing Review 2005, which has been published by the Royal Institute of Chartered Surveyors...


...The country had the lowest number of dwellings per thousand inhabitants in the EU in 1980 and, despite the huge recent building boom, is still at the bottom of the housing availability league. This is reflected in the relatively high average household size (3 persons in 2001), though this was far less than the 4 persons per dwelling in 1971.6 This historic lack of dwellings is a root cause of current shortages and rising house prices....

...The sustained level of new housing supply may help to moderate future price pressures."
 
The demand for housing is always there. That's why when property prices crash they never crash to zero. Demand provides a floor.

In the event of a shock to the property market or even sustained pressure with increasing interest rates it's difficult to say how far that floor is below current prices. It ranges from overly optimistic (no correction) to darkly pessimistic. Personally, I'm concerned enought to adapt my own "Don't Buy Here" strategy.

Also as discussed many times before, assets prices are set at the margins. It doesn't take a huge change in sentiment to have a significant impact.
 
CoffeeBrew said:
The demand for housing is always there. That's why when property prices crash they never crash to zero. Demand provides a floor.
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I'm not sure what point your trying to make here? Wasn't zardebt's question that he's not sure whether we've reached saturation yet? Housing supply is directly related to demand. If people weren't buying houses it would be uneconomical for builders to build them. Therefore supply will, at some stage in the future, meet or nearly meet demand, which will result in a decrease in supply. We're not seeing that right now for the reasons as set out by the Royal Institute of Chartered Surveyors.

CoffeeBrew said:
In the event of a shock to the property market or even sustained pressure with increasing interest rates it's difficult to say how far that floor is below current prices. It ranges from overly optimistic (no correction) to darkly pessimistic. Personally, I'm concerned enought to adapt my own "Don't Buy Here" strategy.
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No one knows what will happen to interest rates...but the general view is that they are likely to remain low for sometime and increases will be small.

Again, your presumption is that house prices are severely overpriced. If you're wrong, which I personally believe you are, then you'll possibly never own a house in Ireland, waiting for the magical bubble to pop. I believe that price rises will merely slow and (eventually) reach a new floor.
 
Dunno Gabriel .

Lets see, 60,000 leave school per year at 19 ish and 'form' a household with an average of 3 persons. Thats requires 20,000 gaffs a year assuming nobody fecks off to Australia . Thereafter they recycle into other households but the basic formation group is aged about 19 .

60,000 immigrate requiring another 20,000 gaffs (actually its less because immigrants frequently sleep 5 or 6 to a house or flat to save money which is what they come here to do ) .

I make the natural household formation (rate per annum) out to be 40,000 by that reckoning and we had problems building more than 40,000 units a year until fairly recently.

Here is our build rate (from http://www.environ.ie/DOEI/doeipub.nsf/0/27f8d54f8e43126f80256fbd003f03e6/$FILE/HousecompletionsTable%20%202.doc )

Year Number of House Completions
1993 21,391
1994 26,863
1995 30,575
1996 33,725
1997 38,842
1998 42,349
1999 46,512
2000 49,812
2001 52,602
2002 57,695
2003 68,819
2004 76,954

Nowadays we build 80,000 units per year . Where are we getting the bodies to fill them again ????? I believe interest rates will remain low for a long time to come as well by the way .
 
"Wasn't zardebt's question that he's not sure whether we've reached saturation yet? Housing supply is directly related to demand."

...........just in case my husband is reading this ---ah I am a SHE ......
I wouldn't want him asking more question when I get home tonight other than
where is my dinner"...
 
tonka said:
Dunno Gabriel .

Lets see, 60,000 leave school per year at 19 ish and 'form' a household with an average of 3 persons. Thats requires 20,000 gaffs a year assuming nobody fecks off to Australia . Thereafter they recycle into other households but the basic formation group is aged about 19 .

60,000 immigrate requiring another 20,000 gaffs (actually its less because immigrants frequently sleep 5 or 6 to a house or flat to save money which is what they come here to do ) .

I make the natural household formation (rate per annum) out to be 40,000 by that reckoning and we had problems building more than 40,000 units a year until fairly recently.

Here is our build rate (from http://www.environ.ie/DOEI/doeipub.nsf/0/27f8d54f8e43126f80256fbd003f03e6/$FILE/HousecompletionsTable%20%202.doc )

Year Number of House Completions
1993 21,391
1994 26,863
1995 30,575
1996 33,725
1997 38,842
1998 42,349
1999 46,512
2000 49,812
2001 52,602
2002 57,695
2003 68,819
2004 76,954

Nowadays we build 80,000 units per year . Where are we getting the bodies to fill them again ????? I believe interest rates will remain low for a long time to come as well by the way .
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If your logic/figures are correct, which I doubt, where are all the empty houses?
 
zardebt said:
"Wasn't zardebt's question that he's not sure whether we've reached saturation yet? Housing supply is directly related to demand."

...........just in case my husband is reading this ---ah I am a SHE ......
I wouldn't want him asking more question when I get home tonight other than
where is my dinner"...
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My apologies zardebt :)
 
Gabriel said:
I'm not sure what point your trying to make here? Wasn't zardebt's question that he's not sure whether we've reached saturation yet?
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I was commenting on the relationship between demand and prices. A topic introduced to the thread by none other than yourself when you quoted Dr. Dan.


No one knows what will happen to interest rates...but the general view is that they are likely to remain low for sometime and increases will be small.
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If there's one thing we can learn from what's happening overseas is that small increases in interest rates are taking a toll - a more severe toll than was anticipated.

Again, your presumption is that house prices are severely overpriced.
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I would hate to be in a position of having to defend todays house prices.

If you're wrong, which I personally believe you are, then you'll possibly never own a house in Ireland, waiting for the magical bubble to pop.
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whoa there horsey - I'm not waiting for the bubble to pop anymore than you are waiting to get rich from your property (well I hope you're not anyway!).
I've outlined my own humble approach on this thread:
 
Thanks Coffebrew, I was wondering where that recent report on empty properties was.

[broken link removed]

19.4% of Habitable houses on the Atlantioc Coast are empty (normally)

1 in 6 in County Galway , they are all around me . One neighbouring house is inhabited for 2 weeks a year as I see it .
 
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