Nice to be able to do that, fair play to you!

Smug.

Fair play for being realistic at the time but the increases are only very, very slight and in a few locations. Lets be honest, after another tough budget or three and with unemployment not budging it’ll be another few years of prices being at the same level, if you’re lucky.

I also notice that you say this is your pension investment… why not just get an actual pension? Why put your eggs in one basket like this.

Any rent allowance involved?

Which has led a glut of low priced property, for now. In addition if investors didn’t fund rental housing the government would have to, meaning you would through your tax. So what you’re actually saying is you wish to pay a lot more tax.

Thought process of a 3 year old.

Brian – it was everyone thinking that they needed to own property that also caused the boom. Lots of people buying big family homes they can’t afford now and starter apartments they should never have bought – that sort of thing.

The normal practice in most first world countries is to rent the place you live in.

Bang the bin lids…flamer alert !

Not you Donal

I agree with you Donal but greedy people buying up as much property as they could drove up prices even further and started bidding wars leading to ever more inflated prices.

Reap what you sow. People complaining now about negative equity etc. sickens me. Sickens me it does.

It’s the law of supply and demand, what you’re seeing here is a looming tipping point. As house values fall, and new building ceases, the market begins to bottom as the demand/supply equation reaches tipping point. That will lead to supply issues over the next couple of years. Firstly in the rental market and later in the availability of housing. If you’re in a position to, before the end of 2012 is the time to think about buying.

I agree, I think we are entering a new phase where toxic investment property has negative value. i.e no investment worth as the total cost of ownership exceeds potential return. This will cause a race to the bottom in rental prices and I have seen no contrary evidence to this trend. FG are going to target home equity in the coming budget, meaning new property taxes and increased charges which will only act as a catalyst to to exacerbate this downward spiral.

You’ve lost me Marcus, negative equity is only an issue if you sell, otherwise it only exists on paper. So how does it impact on the supply/demand equation in the rental market ?

Not really Sean, negative equity means you can’t sell.

Hi Sean,
I don’t mean negative equity, negative value refers to an asset becoming a liability, toxic property i.e one bed apartments in ghost towns will not be worth anything. If you had a one bed apartment you couldn’t rent or can rent at low return then the costs associated with maintaining the asset insurance, services etc. would exceed return. From and investment point this is a liability. Negative equity is a separate issue but also one that will have an huge affect on future investment trends.

Ok , but you said that the government was about to target equity in tax hikes in the upcoming budget. If there is no equity then what are they taxing ?

The majority of houses in Ireland are owned outright, the owners don’t have a mortgage and therefore would be deemed to have disposable income that the government would view as equity which can be targeting through taxation. The new property tax is direct taxation of home equity regardless of the fact of if there is any equity in the house to being with. How this plays out for anyone in negative equity now remains to be seen, but it won’t be pretty.

We’ll have to disagree to disagree as to how far off the bottom of the cycle Ireland is. If the bookies would take a bet on it I’d be backing 6 to 8 months. I agree with Wilbur Ross, who became a billionaire by buying when every one else was too scared, or thought it was the wrong time. He recently said Ireland will be the first country in Europe to recover from the Sovereign debt crisis.

Freudian slip…I meant to say agree to disagree

In the print edition of the Irish Independent this morning they quoted “Daft economist Ronan Lyons” which I thought was very funny. Although to be fair to said “daft economist” he is quoting statistics not an opinion.

Sean, the “statistics” are of asking prices and the dataset is skewed and incomplete. If you had a census of the fairy population of Ireland using the hearsay of 5 year olds as your data source, It would still be far more accurate than anything printed by Daft,the ESRI or the CSO.

Recessions, even really bad ones, don’t last forever…time will tell.

Hi Marcus,
You’re of course entitled to your opinion, but it seems a little odd that you would accuse the series of reports which first highlighted the cooling housing market in 2006 and which has reported falling asking prices without fail ever since (down up to 55% in the last report). Similarly in relation to the rental report, which tenants have used to reduce their rents by up to 30% in the past three years. It’s an easy but serious mistake to make to presume that once you don’t like the headline, the report must be wrong.

Regarding money affairs, TheJournal.ie has never paid me for my opinions (unfortunately!) but its sister company, Daft.ie, does indeed pay me to compile the reports, which I do on a part-time basis.

@Sean
I’m pretty sure all economists are daft!

Stand by for an avalanche of red thumbs. The prevailing culture in Ireland at present appears to be “woe-is-me” and god help anyone who doesn’t fit with it’s narrative of “we’re all rooned and it’s the govmint’s fault” Anyone seeing light at the end of the tunnel is a charlatan

Rents will, at best, stay flat as thousands of foreign nationals and young Irish steadily flow out of the country. This increase is just a blip. There is another recession and further budget cuts on the way. People are still losing jobs too…

I’m pretty sure I read a report on Journal.ie last week that most large businesses in Ireland are planning on hiring next year.

When the penny finaly drops, a lot of houses will be bought by people at realistic prices which lower rents will be able to service

Lamb there’s a few flaws in your argument; 1) Chinese official figures are always dodgy. The only reliable source of Chinese economic data is gigawatts of electricity generated, as well as coal and iron ore imports. All of which show that the Chinese economy is growing between 9 & 12% this year. 2) The majority of Chinese lending is to the US government so unless the USA has a sovereign debt crisis China is not exposed. 3) Europe and the USA are the only parts of the world in recession and crisis, and they only represent about 10% of the world’s population. In Australia, Canada, Asia and Oceania it’s a case of what recession, what crisis ? In fact they never even experienced the GFC.

Fact!