Is the Irish housing bubble about to burst?

24 comments

  4. I learned this handy trick a few years ago. If you see an article with a question as the headline, the answer is always no.

    If the answer was yes, that would be the headline. So if the answer is yes in this instance, the headline would be “housing bubble about to burst” says x person/organisation

  6. 9k of the 25k house built last yr went to owner occupiers. Everything else is bought up as investments/social housing. Demand is insanely high.

  7. There’s no bubble to burst. There’s a serious lack of housing. It’s simple economics. Supply and demand plain and simple. If there comes a point in a few years that the market is saturated with housing then it’s maybe possible but developers are good at reading the trends and don’t really leave themselves exposed. They are not going to build 20k plus homes if there’s no demand

  9. High prices does not equal “bubble”. A shortage of supply is a genuine feature of the market, and I think prices are a genuine reflection of market conditions. Prices will only move with shifts in demand (e.g. interest increases, reduction in purchasing power, migration) or supply.

  11. Interest rates are like gravity for property. There is a lag of a few years but as interest rates go up, prices go down. People wanting a house is not demand. People’s ability to borrow for a house they want is demand. As interest rates go up, people’s ability to borrow is reduced, so they can’t offer the seller as much. There are two sides to the supply and demand equation. It seems that many people don’t understand the demand side. The supply side is still limited of course and more building is needed.

  12. Looool

    Been to open houses this Saturday. Absolute stampede, many cash buyer offers at/above ask already.

    Irish houses are largely build costs plus a bit. Land value is very low outside the expensive Dublin postcodes. Very limited downside.

  14. No one can answer your question with any degree of certainty, as it depends on many inter related factors.
    However for people saying, “it won’t burst due to demand outstripping supply”, that is true, until it isn’t!
    Interest rates are rising in order to combat inflation. Rising interest rates have a deflationary effect on house prices. Rising interest rates also have a negative effect on an economy’s growth.
    If inflation isn’t tamed and we continue to have high inflation but the high interest rates also cause the economy to go into a recession then things get difficult.
    If the recession is deep and people lose their jobs then buying power drops and house prices can drop.
    Also if there’s a severe recession then large numbers of migrant workers will lose their jobs and they may leave the country, this freeing up supply also.

    So, I think it’s the economy you need to look at. If the economy stays strong, I can’t see a property crash. If the economy falls into recession, property prices are under pressure.

  15. Prices might fall but it will be more difficult to borrow. Rents won’t fall as long as long as there is a massive supply shortage.

  17. Nope. Wishful thinking.

    As long as people have jobs, banks have money to lend there won’t be a crash. Too many need somewhere to live. To many want to buy.

    For a crash you need that demand to fall away. I just don’t see it happening anytime soon.

  21. The thing about it all is that investors are not interested in an asset that has peaked or has no real potential for further profit in the short term. A drop off in investment, high interest rates and potential recession certainly indicate a dip may be coming.

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