From Celtic Tiger to Celtic Phoenix..

Discussion in 'Property Market Economics' started by C-mac, 18th Jul, 2019.

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  1. C-mac

    C-mac Well-Known Member

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    .. what a difference a decade makes:

    All cashed up but nowhere to live – renters squeezed by Dublin’s housing supply crisis

    I mention this news article because several comments abound that do their best to compare Sydney and/or Melbourne in present-state, to becoming another Ireland.

    Yes, Ireland WAS a basket case for a long time post-GFC, but of late I imagine if you were a landlord there now, due to severe supply-constraint (kinda reminds me of a quaint little Australian city, also on an island off the mainland just like Ireland is...); and increased economic prosperity + population, property rents and values are both on the rise in Dublin.

    Who woulda thought??
     
  2. Woodjda

    Woodjda Well-Known Member

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    Anyone who's looked at the history of asset bubbles could've foreseen this. There was housing mania which saw masses of money poured in to property on the assumption the rises would never end. Then a lot of these people got burnt and now they all remember the dangers of property so nobody is building. It's a typical overshoot in the bubble followed by undershoot in the crash.

    I'm not 100% sure that a property crash (another 20%+ drop) will occur in Sydney and Melbourne. But if it does you can guarantee there will be some massive bargains around in 4-5 years and rents will be squeezed in 6-7 years because very few people have the clarity to look at the actual value of an asset (ie current and future returns) when investing in that asset has caused so much recent damage.
     
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  3. DAZ79

    DAZ79 Well-Known Member

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    Don’t forget that this result came about through:


    1. A complete meltdown in the financial system

    2. A complete meltdown in the construction industry leading to chronic underbuilding for a decade

    3. Externally imposed austerity

    4. Mass emigration including all the builders.


    So yes, if you completely destroy the supply side eventually you will have a rental squeeze on your hands.
     
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  4. C-mac

    C-mac Well-Known Member

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    Exactly. It also helped that Ireland reestablished itself as a low-business-tax haven for large global companies.
     
  5. DAZ79

    DAZ79 Well-Known Member

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    That's been the business model since the 1990s.

    The EU is coming after them though. Rightly so, countries competing by whoring themselves to global multinationals at lower and lower tax rates is the epitome of a race to the bottom.
     
  6. hammer

    hammer Well-Known Member

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    This. It's a very expensive way to have a boom.

    Was it really worth it?