welcome to all the new subscribers we just hit four thousand the other day so a big thank you
to you all i did promise i would make an irish property update video so here it is within this
video we will discuss the current situation in the irish property market future predictions as
well as issues that are facing the irish property market we all know history repeats itself all the
time and we can learn from our past however when most people picture the future they tend to be
biased on recent events recent history prices continue to rise and due to the 2008 crash
many people believe that when prices fall they crumble our perspective of a crash is that when
prices fall they'll fall by more than 40 percent however it is extremely unlikely that prices will
fall by more than 10 within a year crashes like the 2008 are generally once in a lifetime event
i'm not saying that it can't happen i'm just saying it that it is extremely unlikely
a lot of agents expect that prices will continue to rise over the next year dng reported that they
expect price increases of 12 in 2021 and lower growth in 2022 of around 4.5 percent i know i know
agents are always going to talk up the market however i would hope that regular viewers of
this channel know that i don't always talk up the market and in some occasions i have talked down
particular sections of the market for new viewers my name is shane fleming and if you want to know
more about property make sure you've subscribed to the channel i create a lot of relevant content
that you might find very useful and it would be great if you could give this video a big
thumbs up i would be much appreciated i'd love to say the 12 in 2021 is far too high
and a growth of 4.5 in 2022 is also far too high however before i do that let's look at some key
factors i've said it way too many times in the past but the press tend to misuse percentages
in terms of explaining price increases i generally it happens when it comes to quoting asking prices
and not actually sold prices but i think i think this time actually d and g have misused uh
percentages as well within the report the central statistics office figures are quoted the annual
growth as of june 2021 was 6.9 however this is from june 2020 to june 2021 a full 12 months
not from january 2021 the annual growth rate from january 2021 to june 21 i.e six months is 4.4
nationally according to the central statistics office which is a few months behind the market
but to get to 12 growth in 2021 it would require a 7.6 increase over the last six months of 2021
or 1.2 growth per month which is exceptional growth on a monthly basis i feel the annual
growth for 2021 is probably going to be closer or somewhere in between eight to ten percent
so what might happen beyond 2021 and how is 2022 shaping up before i get into that i want
to address something very quickly because i get a lot of comments on some of my youtube videos
claiming that a black swan event is going to cause a property crash in the near future a black
swan event refers to something that no one could predict but has widespread implications originally
everyone thought swans were white until they saw a black swan this altered people's perceptions of
swans hence the name black swan markets go up and down all the time property prices rise and
fall there is a cycle to it inflation goes up and down interest rates go up and down businesses for
fail and uh governments get voted in and out and referendums happen all the time even outbreaks are
have happened in the past so none of these things can be actually classified as a black swan event
because they were predictable people actually predict these kind of things all happening all the
time for a real black swan event to happen it had to be unforeseen therefore i don't think there's
much merit in actually waiting around for a black swan to cause a property crash i think there's
far more merit in actually looking at current economic conditions and seeing what a possible
future might look like there are a lot of economic considerations that would point to property prices
increasing even further over the next few years there's record levels of savings at the moment
with over 120 billion on deposit to put that into perspective the entire nama book was 84 billion
uh generally speaking in terms of what you'd expect in terms of transactions over a year
in ireland you might expect somewhere between 15 and 19 billion in property transactions to happen
per year that basically means there's enough cash on the positives to allow for six seven years
of transactions to actually happen without ever needing to go for a mortgage i'm not saying that
all that cash is going to go into property and the likelihood is it won't however if inflation does
kick in a little bit some people may look to a property to actually protect some of their wealth
mortgage approvals are at record levels so access to capital at low interest rates
doesn't seem to be an issue for many people this would indicate that demand will remain steady
mortgage repairs are not increasing dramatically many landlords are actually leaving the market
because they're no longer in negative equity that trend will probably continue as prices increase
further this will mean more stock however it will lead to less rental stock increased regulation on
private landlords is forcing many of them out of the market which is further compounding the rental
crisis bill to rent schemes are being blocked in planning at every single point as rental stock
is limited and rents are high more people will want to buy therefore further increasing demand
many new housing developments have been blocked by tds and councillors some tds and councillors
have even taken high court action to stop approved developments new supply coming onto the market is
extremely limited the state housing bodies and council remain the biggest competitor to the
private market as they are buying and renting up everything they possibly can for social housing
this is further limiting the number of units available on the private market thus increasing
the price even further some people may have watched some videos on the us house market
about to crash or slow down the irish property market is very different but they do share some
characteristics and one of the characteristics that they both share is that the market generally
slows down in july and august because people go away on holidays this has been happening for years
and i do not read much into this slowdown i do not think it's a sign of things to come just yet
supply is at its lowest level with about 30 less stock than normal generally speaking supply does
increase a little bit in september so fingers crossed that actually that will happen as prices
increase more sellers may actually be tempted to put their house on the market but one barrier to
this will be they will struggle to actually find a house they want to buy afterwards ireland's
population continues to grow and ireland also has a changing household dynamic the number of people
within a household is getting smaller families are getting smaller also so therefore there is a need
for more houses because there's more families but there's also a need for smaller units as well many
people believe that immigration of young people will grow rapidly therefore reducing the ease
on housing however it's more likely that ireland are going to have a net migration as ireland's gdp
is going to attract more people into the country ireland's gdp in 2021 is likely to hit 7.2 percent
and forecasts for gdp in 2022 are projected to be at 5.2 percent this is extraordinary levels
of uh gdp growth within those two years and it is some of the highest gdp growth in the world as
ireland and the rest of the world reopen over the next few months hopefully employment will improve
inflation has been kept low for many years and there's a number of reasons why that has happened
some of those reasons include limited wage growth competition global supply chains as well as
multinationals have really improved to help keep inflation down that is because they have supplied
goods from china the supermarkets have also been afraid to increase prices due to competition
and there has been a race to the bottom for many services including real estate agents however with
supply chain issues some products are likely going to experience inflation construction products are
likely one of those which will push up the price of construction which will reduce the supply
there are four main economic factors that determine how property prices might react
gdp employment inflation and interest supply and demand are the effect of these factors
gdp is going up which would result in higher prices unemployment is likely to fall as the
economy opens again resulting in higher prices inflation is likely going to be a key factor
because of limited supply on the market for both properties coming onto the market as well as
construction cost increasing which would result in increased prices as well if inflation does start
to run away in the overall market the likelihood is interest rates will be increased to try
reduce any price inflation the next economic factor is population ireland's population is
growing this will result in increased demand which in turn will increase prices factoring all of this
in if we were to get a 4.5 increase in 2022 i think that would be a reasonable result for both
buyers and sellers generally speaking it's seen that a four percent increase
annually is a good stable increase overall within an economy so barring any major stock market crash
or international incident or black swan event i do not see prices falling dramatically at all in 2022
and if everything remains the same as it is now and there's no change to access to capital
and international markets remain stable i can actually see a price increase far greater than 4.5
in 2022. perhaps the housing for everyone plan will have some hope but realistically we need 350
000 houses over the next eight years the only way to achieve that is a better planning system
promote development and stop all these objections we need all forms of housing
people need options around housing either to rent or to buy a house or an apartment
studio or co-living the more options people have the more each one of those elements will have to
compete with each other and compete with each other on price things like vacant property tax
downsizing grants all they really do is plaster over the cracks they don't solve the problem the
only way to solve the problem is to develop more i will review the housing for everyone proposal
tomorrow so make sure you subscribe to channel so you don't miss it if you want me to provide
an update on commercial property put your comments down below and i will create a video on commercial
property and the outlook for commercial if you are genuinely interested in property there is
going to be some sort of playlist around here as well that you can check out too