gloomy predictions for the Irish rental market were misplaced

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.
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I was referring to this type of logic above actually.

The point you seem to be making is that we're building houses that no one wants.

Builders could not stay in business if people weren't buying their developments.
 
It means that 40000 houses are 'needed' and 40000 are built for speculators and as holiday homes !

We currently build twice the demand from demographics . This will not last.

Mate just moved into spanking new , very well fitted out, €220k flat in Galway , it costs him €670 a month to rent.

That covers interest on mortgage at 3% + building service charges for the landlord .

The flat is not appreciating in value .

Where IS the return ?
 
tonka said:
It means that 40000 houses are 'needed' and 40000 are built for speculators and as holiday homes !
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I see...and you can back this up with solid evidence right? 40,000 homes and 40,000 holiday homes?

tonka said:
Mate just moved into spanking new , very well fitted out, €220k flat in Galway , it costs him €670 a month to rent.

That covers interest on mortgage at 3% + building service charges for the landlord .

The flat is not appreciating in value .

Where IS the return ?
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I'm sorry, I don't understand your point. He just moved in to a new apartment but it hasn't appreciated yet! Is that what you're saying? Appreciation usually takes some time.
 
We currently build twice the demand from demographics . This will not last.
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As the report says (emphasis mine) : The Irish housing market is currently in an unstable position. House prices are not only exceptionally high by historical standards but also very high.....relative to the richest countries in the EU.

Given this instability it would appear that anticipating price falls is perhaps the more reasonable position to be in right now.
 
Gabriel said:
I see...and you can back this up with solid evidence right? 40,000 homes and 40,000 holiday homes.
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If we build 80000 this year (we will) and we did last year , and shovel the Irish average of bodies into them (c.3) we have therefore housed 240,000 out of a population of 4M bodies

WHERE did this 240000 bodies come from ?
 
tonka said:
If we build 80000 this year and shovel the Irish average of bodies into (c.3) we have therefore then we have housed 240,000 out of a population of 4M

WHERE did this 240000 bodies come from ?
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You're beginning to become completely irrational in your logic now so I'll bow out of this at this stage.
 
I see that building homes has become abstracted from anyone living in them, how quaint .

Thanks Gabriel.
 
In complete contrast to the highly - almost desperately - optimistic report from daft and IIB, an article in yesterday's Sunday Business post quoted a landlord agency as saying the rental market is in a state of 'collapse' !
 
- they discuss the report on the Sunday business show yesterday and it seemed that
basically the message from the report was that areas like limerick and Galway are experiencing a decrease in rental price while place in Dublin esp. D4 ..D2 and D6 are seeing a rise.

I suppose in the end of the day if you got a sum of cash and you want to invest it
even with the poor returns in renting are there better options ??
 
zardebt said:
it seemed that
basically the message from the report was that areas like limerick and Galway are experiencing a decrease in rental price while place in Dublin esp. D4 ..D2 and D6 are seeing a rise.
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My opinion was based on the Galway market where building peaked in 2003 , funny how the experts are saying the same thing as i , rental down due to oversupply .
 
zardebt said:
-
I suppose in the end of the day if you got a sum of cash and you want to invest it
even with the poor returns in renting are there better options ??
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Zar, you're forgeting about risk the other element of investing. Return is what you get for risking your capital. Property IMHO is a very risky asset in todays world. Right now the world is a strange place because of the huge amount of cheap money sloshing about because of ridiculously low interest rates. In my view property is the worst asset on a risk/return basis, followed by equities (shares) and even debt (bonds). All are expensive by almost any criteria. Are there options? Well yes, COLD HARD CASH is an investment option. Right now my wealth is 50% in cash (govt-backed short terms), 30% in debt -mostly canadian mortgage bonds and german bonds-, 15% in selected natural resource shares, and 5% gold. I'm availing of the cheap rent in Dublin (rel to asset values), but I fear property values here will 'go Japanese' before ever becoming cheap again.
 
I agree totally with the last posting. However I am more bearish I am invested 20% in gold and silver. I have taken a small short term loss but as I see it events are slowly unfolding and I am going to sit this one out as I am concerned about having too much money in banks some of them are looking dodgy now.
 
joe sod said:
I agree totally with the last posting. However I am more bearish I am invested 20% in gold and silver.
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20% in Bullion is a tad bearish all right , too bearish for me TBH
 
I might add that said portfolio is up 4.6% in last 6 mths. Not great, but very low risk and +4.6% is better than -4.6%.... what would a 100% Irish property portfolio be worth now... or a UK property portfolio?... hometrack just reported their housing index today, yeap down again... 11mths of declines now, year-on-year their index is down -2.3%.... I can hear the property bulls now, "down 2.3% is hardly a crash....", yeah but the housing market is R-I-S-K-Y today... not to mention highly illiquid and difficult to assess actual market value... ok I'll stop banging my head against the wall... :) Im off to McSorleys...
 
joe sod said:
I agree totally with the last posting. However I am more bearish I am invested 20% in gold and silver. I have taken a small short term loss but as I see it events are slowly unfolding and I am going to sit this one out as I am concerned about having too much money in banks some of them are looking dodgy now.
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Joe, if u dont mind me askin, how are you investing in metals? Bullion or shares? If shares, what currency? I would also agree w Tonk that 20% is an aggressive position for what amounts to essentially an 'insurance policy' against all hell breaking loose (not implausible). And why 20%? Why not 30%?

I might also add, that it's refreshing to see some real investors on this board... I was beginning to think ireland was the exclusive refuge of 100% property bulls!!!!
 
Yes I agree with you it is a very bearish position and I am invested in gold and silver bullion not in shares. I also would not consider myself to be a serious investor. The reason why I have such a big proportion invested in bullion is that I have no faith in the global economy and the direction it is going. I have been doing a lot of reading over the last couple of years as to what is going on in the world and frankly the bears have more convincing and compelling arguments than the bulls. In the bears camp you have Warren Buffet, George Soros and now more recently Tony O’Reilly. The only figure in the bull’s camp that is a heavyweight in my opinion is Alan Greenspan. But his pronouncements over the last few years have been lame and unconvincing. I think his sole priority at the moment is to keep recession at bay until he is safely out of the Fed no matter what the cost.



I believe the reason why we have had high tech bubbles, property bubbles etc is because there is too much cash in the global economy. Also with the anglo saxon world being in so much debt the only out is to allow inflation to rise to reduce the burden of this debt. As the Americans have been printing more dollars to keep their economy above board, the Japanese and the Chinese have been printing more yen and yuan in order to maintain their exchange rates with the dollar. With all this printing going on I think it is sensible to have a substantial bullion holding.



You are right though maybe 20% is too much but I think 5% is too little, I think 10% would be better proportion. You are right it is an insurance policy to an extent and I would rather have a pretty good one. I also believe that bullion is returning to its rightful place as a serious investment alternative rather than just something for the heretics. It is also worth remembering that the financial establishment hate gold and silver because it is so simple, there is nothing in it for them. Its like something out of the middle ages to them. Also the Chinese and the oil producing countries are falling out of love with American assets and they will also want to hold more bullion.

 
Joe, any interesting links to investment views of Tony O'Reilly or Soros you'd like to share?
 
walk2dewater said:
I might also add, that it's refreshing to see some real investors on this board... I was beginning to think ireland was the exclusive refuge of 100% property bulls!!!!
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Might not be far of with that 100%, that's why any any sane individual who expects an end to the current Irish property madness is made to look like a pessimist and doom-and-gloomer rather than a prudent investor !

I've owned properties (PPRs) in the UK and the US so I'm not exactly timid about entering property markets, however I wouldn't touch the Irish property market today with the proverbial bargepole !!

Anybody consider a portion of their portfolio shorting financial and other property related stocks ?






 
Shall we who believe in the inevitable pool some 'resources' into a dedicated hedge fund with a view to shorting property stocks et al ? . An Investment Club :eek: of sorts :):)
 
Yeah I like it - even if initially the investment is simulated !

1. We could come up with an 'fund' - appropriately named ;-)

2. Identify the long and short stocks to go into it (Irish, UK ? and US ?)

3. Track the fund index and a simulated investment of say 100k

Might even be tempted to jump into it later myself ;-)
 
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