UCD professors report

[z106]

One of the big things in his report to serioulsy increase the chances of a crash was that rents should rise in line with property prices - which they obviously haven't !

Who agrees / disagrees with the statement that property can be deemed overvalued if the rents don't rise in line with property values ?

What is the main reason why doesn't occur ?

If there is a general lack of supply should this not be reflected in both the rental and buyers market to a similar degree ?

 

[robd]

One of the big things in his report to serioulsy increase the chances of a crash was that rents should rise in line with property prices - which they obviously haven't !

Who agrees / disagrees with the statement that property can be deemed overvalued if the rents don't rise in line with property values ?

What is the main reason why doesn't occur ?

If there is a general lack of supply should this not be reflected in both the rental and buyers market to a similar degree ?

This is ta true statement. It's nothing new though. Davies reported the same in their Housing Market report last year.

House price increases where speculative based on mis-investment caused by cheap money (ECB interest rates of circa 2%). Rent prices are more aligned with wages. Thus increases in rent are more likely to track wage inflation.

If their was a general lack of supply it would have been reflected in both. Their was a lack of rental supply circa 2000 which caused rental prices to jump significantly. Rentall prices stagnated and dropped over the next 6-7 years. Recently they jumped again. This can be partly attributed to a drop in supply due to investors attempting to sell. It can also be party attributed to investors seeking to get higher returns as interest rates have increased their borrowing costs. Of late supply has been on the up again so rents should ease back.

Really their hasn't been a shortage of rental supply in 7 years. In fact their really isn't a shortage of property. CSO reports indicate >250k vacent properties.

In conclusion property price increases over the last 5 years can be soley attributed to speculative demand due to mis-investment caused by low borrowing costs. The end.

 

[ClubMan]

CSO reports indicate >250k vacent properties.

Doesn't this include (a significant number of?) second homes (e.g. holiday homes) not intended to be rented out? And does "properties" mean residential units or actual properties?

In conclusion property price increases over the last 5 years can be soley attributed to speculative demand due to mis-investment caused by low borrowing costs. The end.

I don't necessarily see that this is true and would need more hard evidence to accept it.

 

[Madangan]

Doesn't this include (a significant number of?) second homes (e.g. holiday homes) not intended to be rented out? And does "properties" mean residential units or actual properties?

I don't necessarily see that this is true and would need more hard evidence to accept it.

Out of curiosity does anyone know if there has been any attempt to break down this figure of 250,000 empty properties. By the sheer number of people I know alone who have second homes purely for private use in Wexford and Mayo alone ( to name but two places) I would have thought that a very substansial minority of the 250,000 are second homes.

Lastly has there been a breakdown of the location of these ghost houses/apartments? If you need to live in or near dublin the existence of an ample supply of renable or buyable house in Leitrim donegal or kerry etc.. isnt really of much use or relevance to you..

 

[gonk]

Davies reported the same in their Housing Market report last year.

Davy's are stockbrokers. I have never known any Irish stockbroker, even at the height of the property boom, to do other than suggest equities are a better investment than property. That's what they sell, after all.

 

[Brendan Burgess]

Discussion of the future direction of house prices is not allowed on Askaboutmoney.

Brendan