Lessons from Ireland's property boom

caronoel

Irelands property boom is back with a vengeance it seems, with house price inflation now nudging double digit levels and a surge in homelessness.

A good discussion here, from RTE, on what this means for FTBs and those renting:
https://www.rte.ie/news/player/2017/1009/21250747-the-boom-is-back/

Someone in the audience highlights an organisation called Gleeson homes:
https://www.gleeson-homes.co.uk/

They seem to be building affordable homes in the UK. I've not heard of them before, but shouldn't the UK government be encouraging such organisations to address our own housing shortage through HTB and other mechanisms?

GreatApe

After the crash i kept saying Ireland didn't have a housing bubble people here would ridicule the notion pointing to empty estates and some poorly built housing.

None of that mattered Ireland didn't have an excess of housing they had fewer than France and Germany per capita.

Now house prices are rising again thanks to its population growth and a return to economic growth.

caronoel

GreatApe wrote: »

After the crash i kept saying Ireland didn't have a housing bubble people here would ridicule the notion pointing to empty estates and some poorly built housing.

None of that mattered Ireland didn't have an excess of housing they had fewer than France and Germany per capita.

Now house prices are rising again thanks to its population growth and a return to economic growth.

The issue is that the houses are in the wrong places. Not enough were (and still are) built in the cities and too many in rural areas.

Also, the Irish government was sitting on a huge land bank though NAMA (nama.ie/property) and offered CGT incentives to investors, which has now resulted in land banking.

GreatApe

It's not a problem house prices in Ireland are just reacting to its booming economy and population

If they don't restrict house building everything will be fine.

And yes jibs are mostly created in the bug cities and there is inky so much empty space there so cities tend to do better in booms

Thrugelmir

caronoel wrote: »

Irelands property boom is back with a vengeance it seems,

Suggest you go to Eire. In the south west a very different picture. A 4 bed detached bungalow in an acre plot can cost as little as £160k. Trouble is there's very little work. Dublin is like London. Nor has much affordable housing been built for years. As few as 2,000 units in the past 5 years.

chappers

GreatApe wrote: »

It's not a problem house prices in Ireland are just reacting to its booming economy and population

If they don't restrict house building everything will be fine.

Therein lies the problem, Irelands economy has always been poor and it has in more recent history used the financial and construction industries to help bolster it's economy, via tax breaks and incentives.

The problem wasn't over supply as you said, the problem was that the wave/bubble wasn't driven by a consumer requirement but by an investment demand. Investors were getting on the band wagon as it was an easy buck. the problem came twofold at the crash a banking crisis that flattened the mortgage market along with a worldwide recession which shut down investment.

The fact is there were whole housing estates and properties, unfinished, unsold or both. The market there was so finely balanced it was hit almost overnight.
The problem was that there were lots of rural developments due to land grabs, relaxing of planning etc which didn't have a traditional market when the crunch came.
I was in Co. Mayo before the crunch and some of the grandiose houses that were being built were astounding. There was no way that there was any sort of local market for that number of high end highly priced houses, well not in a sensible mortgage market anyway.

If the Irish government once again tries to bolster the housing market to in turn bolster their economy, I'm afraid the outcome will be the same as every other time they have tried it

caronoel

Thrugelmir wrote: »

... Dublin is like London.

Nor has much affordable housing been built for years. As few as 2,000 units in the past 5 years.

What do you base either of those assertions on?

Rich2808

Thrugelmir wrote: »

Suggest you go to Eire. In the south west a very different picture. A 4 bed detached bungalow in an acre plot can cost as little as £160k. Trouble is there's very little work. Dublin is like London. Nor has much affordable housing been built for years. As few as 2,000 units in the past 5 years.

South west Ireland is beautiful - the Ring of Kerry is like the Lake District. And housing is relatively cheap - and plentiful. It is more a retirement destination than a place to work - and post Brexit it may be the only guaranteed foreign retirement option Brits have.

Kerry airport has two flights a day to London - Shannon even more. So it's easy to escape the quiet if you get bored.