3 ms·

I'm not sure how many HN readers we have in Ireland, but as an American I'd be interested to hear their perspective on this article.

mrspuratic 5y ago
Almost certainly more than one reader... Since the terms "transport", "landlord" and "highest mortgage interest rates in the eurozone" appear nowhere, I believe the article is a relatively shallow analysis, though some good points are made. This is probably the most important assertion, to my mind: Put another way, nobody worried about the cost of building a home rising from €125,000 to €225,000 when credit had pushed prices up from €150,000 to €350,000. But when prices crashed back down to €175,000, the system had a real problem on its hands – one that policymakers have been loath to touch. It's long been my opinion (I have no economic background) that the last decade or so has seen successive governments sit out the problem: stalling until the indebted inflate their way out of debt. Attempts to stimulate supply have been wrong footed, attempts to reduce demand have resulted in grants and tax relief being withdrawn from the renter/owner (in stark contrast to the ever increasing reliefs granted to the investor, but I understand supply and demand). The lower end of the market is particularly competitive as a result. The Central Bank borrowing limits referenced have kept price growth partly in check, but favours foreign investment (pension funds in particular get bad press). Small scale private landlords are exiting the market, there's general unease with large scale commercial operations (a novelty here) given tight supply and not so ancient Irish history. A particular issue in Dublin city is the scale of privatised student accommodation to avail of various tax reliefs (recently some 18k units, in over 50 individual developments). I have a reluctance to take on personal debt, I was able to save and needed only a small mortgage for a house in Dublin city (and more importantly, within cycling distance of work). I consider myself one of the lucky ones. My mortgage repayments are approximately my previous rent, I rented for more years than my mortgage term (but ability to move according to work was my preference for a long time). It's no small irony that the house I live in was built in the 1950s, local authority housing designed by Dublin corporation architect HG Simms - back in the original Dublin housing crisis ... https://www.irishtimes.com/culture/art-and-design/hugh-linehan-to-understand-dublin-s-current-problems-you-must-understand-its-past-1.4725913 https://www.irishtimes.com/culture/art-and-design/hugh-lineh...
eliasmacpherson 5y ago
I lived there at the time, and it may be foolhardy to argue with an Assistant Professor of Economics, but it seems that the author is willfully ignoring the distinction between 'Unfinished' and 'Empty' houses. The Central Statistics Office (which often has difficulty counting things) found around 230,000 empty houses at that time. So while he may have a point that some of the 'Unfinished' ones never made it past the plans, there were also completed and empty housing estates, some of which were bulldozed. https://www.bloomberg.com/news/articles/2012-07-19/ireland-bulldozes-ghost-estate-in-life-after-real-estate-bubble https://www.bloomberg.com/news/articles/2012-07-19/ireland-b... Also, the author claims that he couldn't find empty estates near Dublin, but if he went as far as Celbridge he would have found some. Futhermore he seems to jump back and forth between rural Leitrim and Dublin to make his point, depending on what suits his argument. Rural areas had huge ghost estates. https://www.housing.eolasmagazine.ie/cso-publishes-breakdown-of-census-2016-housing-themes/ https://www.housing.eolasmagazine.ie/cso-publishes-breakdown... You can see a comment below from mandmandam below with a personal take too. The point about there being a credit bubble stands, and the author leaves out the commercial side of the bubble, purely focusing on residential. The wikipedia article is superior to this one, normally I would have more time and respect for Ronan Lyons than this linked instance: https://en.wikipedia.org/wiki/Irish_property_bubble https://en.wikipedia.org/wiki/Irish_property_bubble And as to there being a myth about the Irish property bubble refuting the laws of supply and demand, I don't think anyone has made this point in my earshot or viewing. This third myth is itself a myth of the author's own creation.
- ploika 5y ago
  He covered the empty estates issue well enough I thought: by the mid-2010s they were mostly fully constructed and occupied, including in rural areas. That chimes with my experience, having lived in a few different parts of the country (urban and rural) over that time period. It was rare for completed housing estate to be bulldozed.
  - eliasmacpherson 5y ago
    You will find that you are wrong about the occupation rates in rural areas, it's still at around 180000 unoccupied dwellings at the last count. Misleading not to make the distinction between Unfinished and Empty just to make a point, leaving out half the story in numbers terms. The article would have been more accurate if the titles of the 'Myths' were about Dublin and not Ireland. I don't have figures for the amount of bulldozing that went on, but it was enough to make headlines for the years between 2008 to 2012, the bottom of the market.
ploika 5y ago
Interesting and accurate (though he's the academic, not me, so that's not really my call to make). Ronan Lyons is a fairly well known name for people who would read the Business section of the newspapers. He compiles a a quarterly report for Ireland's largest property website that gets pretty much guaranteed coverage upon release.

mrspuratic 5y ago

Almost certainly more than one reader... Since the terms "transport", "landlord" and "highest mortgage interest rates in the eurozone" appear nowhere, I believe the article is a relatively shallow analysis, though some good points are made. This is probably the most important assertion, to my mind: Put another way, nobody worried about the cost of building a home rising from €125,000 to €225,000 when credit had pushed prices up from €150,000 to €350,000. But when prices crashed back down to €175,000, the system had a real problem on its hands – one that policymakers have been loath to touch. It's long been my opinion (I have no economic background) that the last decade or so has seen successive governments sit out the problem: stalling until the indebted inflate their way out of debt. Attempts to stimulate supply have been wrong footed, attempts to reduce demand have resulted in grants and tax relief being withdrawn from the renter/owner (in stark contrast to the ever increasing reliefs granted to the investor, but I understand supply and demand). The lower end of the market is particularly competitive as a result. The Central Bank borrowing limits referenced have kept price growth partly in check, but favours foreign investment (pension funds in particular get bad press). Small scale private landlords are exiting the market, there's general unease with large scale commercial operations (a novelty here) given tight supply and not so ancient Irish history. A particular issue in Dublin city is the scale of privatised student accommodation to avail of various tax reliefs (recently some 18k units, in over 50 individual developments). I have a reluctance to take on personal debt, I was able to save and needed only a small mortgage for a house in Dublin city (and more importantly, within cycling distance of work). I consider myself one of the lucky ones. My mortgage repayments are approximately my previous rent, I rented for more years than my mortgage term (but ability to move according to work was my preference for a long time). It's no small irony that the house I live in was built in the 1950s, local authority housing designed by Dublin corporation architect HG Simms - back in the original Dublin housing crisis ... https://www.irishtimes.com/culture/art-and-design/hugh-linehan-to-understand-dublin-s-current-problems-you-must-understand-its-past-1.4725913 https://www.irishtimes.com/culture/art-and-design/hugh-lineh...

eliasmacpherson 5y ago

I lived there at the time, and it may be foolhardy to argue with an Assistant Professor of Economics, but it seems that the author is willfully ignoring the distinction between 'Unfinished' and 'Empty' houses. The Central Statistics Office (which often has difficulty counting things) found around 230,000 empty houses at that time. So while he may have a point that some of the 'Unfinished' ones never made it past the plans, there were also completed and empty housing estates, some of which were bulldozed. https://www.bloomberg.com/news/articles/2012-07-19/ireland-bulldozes-ghost-estate-in-life-after-real-estate-bubble https://www.bloomberg.com/news/articles/2012-07-19/ireland-b... Also, the author claims that he couldn't find empty estates near Dublin, but if he went as far as Celbridge he would have found some. Futhermore he seems to jump back and forth between rural Leitrim and Dublin to make his point, depending on what suits his argument. Rural areas had huge ghost estates. https://www.housing.eolasmagazine.ie/cso-publishes-breakdown-of-census-2016-housing-themes/ https://www.housing.eolasmagazine.ie/cso-publishes-breakdown... You can see a comment below from mandmandam below with a personal take too. The point about there being a credit bubble stands, and the author leaves out the commercial side of the bubble, purely focusing on residential. The wikipedia article is superior to this one, normally I would have more time and respect for Ronan Lyons than this linked instance: https://en.wikipedia.org/wiki/Irish_property_bubble https://en.wikipedia.org/wiki/Irish_property_bubble And as to there being a myth about the Irish property bubble refuting the laws of supply and demand, I don't think anyone has made this point in my earshot or viewing. This third myth is itself a myth of the author's own creation.

ploika 5y ago
He covered the empty estates issue well enough I thought: by the mid-2010s they were mostly fully constructed and occupied, including in rural areas. That chimes with my experience, having lived in a few different parts of the country (urban and rural) over that time period. It was rare for completed housing estate to be bulldozed.
- eliasmacpherson 5y ago
  You will find that you are wrong about the occupation rates in rural areas, it's still at around 180000 unoccupied dwellings at the last count. Misleading not to make the distinction between Unfinished and Empty just to make a point, leaving out half the story in numbers terms. The article would have been more accurate if the titles of the 'Myths' were about Dublin and not Ireland. I don't have figures for the amount of bulldozing that went on, but it was enough to make headlines for the years between 2008 to 2012, the bottom of the market.

ploika 5y ago

Interesting and accurate (though he's the academic, not me, so that's not really my call to make). Ronan Lyons is a fairly well known name for people who would read the Business section of the newspapers. He compiles a a quarterly report for Ireland's largest property website that gets pretty much guaranteed coverage upon release.