"The idea that house prices are determined by supply and demand is an infantile view of how the market works"

[nest egg]

"The idea that house prices are determined by supply and demand is an infantile view of how the market works. Asset prices in Ireland are very high, because there is a wall of money looking for somewhere safe to land — and property is regarded as a safe asset.

“That’s what is hiking prices in Ireland — not supply and demand. You could cover all your land in concrete and prices will still rise, so long as mainly foreign capital is free to invest in finite Irish assets.

“Liquidity will at some point dry up, and that will have an impact on house prices."

Seems like a succinct summary of what's happening the world-over, not just here. Given the ending of QE and increase in interest rates, it seems likely that all asset prices will take a hit as a result, or am I missing something?

Economist Ann Pettifor, who predicted 2008 crash, sounds alarm bells for Irish property market

This Thursday marks the anniversary of the 2008 crash, when Lehman Brothers folded and global financial markets imploded. As financial storm clouds gather again, economists talk about whether Ireland is prepared for a downturn, the new factors that could trigger a shock, and ask how long a new...

www.independent.ie

 

[mustang01]

Read this yesterday and was real food for thought. She’s not wrong, but the property market in this country consistently defies logic and rational thinking!

 

[nest egg]

Read this yesterday and was real food for thought. She’s not wrong, but the property market in this country consistently defies logic and rational thinking!

Except it does follow the logic that QE & zero interest rates have meant global capital chasing Irish assets, amongst others, inflating prices.

 

[AlbacoreA]

It's a bit of click bait title...

"...prices will still rise, so long as mainly foreign capital is free to invest in finite Irish asset..."

Sounds like supply and demand.

I would say they need to take the heat out of the market by ring fencing some of the market so it's protected from commoditization by limiting the profits that can be made on it. Remove investor interest in it.

But this article ignores population growth and historic low building output. Which is odd.

As for rising living costs much of this is due to recent events, Brexit, COVID, Ukraine. That's not something that can be solved internally unless we reduce our dependance on imports.

Successive govts have been asleep at the wheel when it comes to sustainable future planning. That might be because of our political landscape. Where there's often been no credible opposition.

I'm not sure what this article is telling us, and what it's suggesting for the future.

 

[Brendan Burgess]

Sorry guys. People can't have a balanced conversation without speculating on house prices.