I would not describe myself as a bull, but seeing as there have been so many requests for bullish arguements I'm going to try and construct some logical evidence for the purpose of lively debate!
The non fundamental perspective.
Bears have been using the fundamentals as a logical reason for the current stalling of house prices in the market. However, these same figures and arguements have been used for the last 5 years - and proved non fundamental. The fact that prices increased in spite of these so called fundamental laws, prove that these factors have moved from fundamental to peripheral considerations in the market. Sentiment, govenment intervention and banking lending criteria are moving from peripheral to fundamental factors.
Economic logic v's Practical logic
The common sense arguement that people will gain a better yield from a savings account today than they will from a buy to let is economically logical. However, most practical/normal people do not have reserves of cash that will earn 3.5% or 3.75% on deposit, the only way they can generate wealth is by borrowing, buying, renting, investing in the asset (in the form of subsidising rent to meet mortgage) and thus accumulating wealth based on this formula. In future the asset will be debt free - with significant value, but will also by an income stream.
Irish connection to owning property
This is one of the most overstated and misunderstood aspects of Irish property.... We do not have a connection to owning property - 50 years ago and even 25 years ago, actually, less than 15 years ago most 20 somethings were living at home or renting in a small room or flat. That was the actual social culture at the time. People were not salivating at the prospect of property ownership, they were content as they were. The amount of people in their 40s/50s who tell me how they they remember when they bought in Leixlip or Blanch that they could have stretched to Rathmines or Clontarf - but it wasn't worth the hassle.
This attitude I believe held up house price growth for many decades - very few people had their "investment property" and it was not uncommon for children to "live at home" until they got marrried. That attitude does not back up the "love of land" perspective.
Government Intervention
Interest rates, supply and demand, new house builds, age demographics are economic statistics that underpin the housing market in a logical market. However, the Irish government has had a massive influence on the develpoment of the market. Stamp Duty is/was an unnecessary form of market control by the government - which can be ammended, eliminated or increased as the governemnt sees fit. This has had a massive psychological impact on how people buy. a 2nd hand house and a new house, same size and spec. A FTB'r will pay more for the new house as there will be no Stamp. They need cash for stamp, whereas the more expensive new build will be looked after by the mortgage.
Also the impending reduction/elimination of espects of stamp on the upcoming budget or next election has a lot of people "waiting and seeing about buying"
Irish negativity v's Irish optimism
It has been accepted that up to the late 80's/mid 90's many of Irelands more aggressive and most hungry for success were forced to emigrate. Those who remained were conditioned by a Catholic society to knuckle down and get on with a formula driven life. With the advent of 3rd level education being much more widespread in this country and the graduates not having to leave as jobs now exist - the nature of an Irish person is a lot more business like and hungry to succeed and achieve. This has created a situation whereby people realise the long term benefit to property investment. A whole generation were exposed to market economics, accumulation of wealth through investment as opposed to work, risk reward ratios etc.
Try that for a start!
) but its a good response; Banks are not lending as much money as they were a few months back; and its naturally costing more with the rate rises.