Irish Property

I’m the first to admit I’ve called the S&P wrong (at least so far) this year. At least I put my money where my mouth was by going (very) long Irish property early in 2013. So far that’s working out – according to the chart below from Goodbody. Can this last is the question? There is certainly a feeding frenzy into Irish property at the moment driven initially by distressed debt investors (hedge funds) and cash buyers, now morphing into demand from Irish buyers (some  with mortgages,  some indirectly via the REITS). Goodbody point out, and I’d agree that we have not seen a supply reaction – no real house building is going on and it’s a similar picture in the commercial office sector. For now with government bond yields so low Irish property looks great by comparison. So long as this (desperate) hunt for yields continues and the supply shortages keeps rents rising then prices can keep rising.  A rise in rates (which looks unlikely admittedly) would obviously derail this. Perhaps simply prices will reach a level where yields don’t compare so favourably with government bond yields and a sell off begins. So we need to watch this carefully – property is incredibly illiquid so you need to be out early.

 

Irish Property

Irish property is rising very rapidly (too far too fast perhaps – hard to say). It has after all fallen a long way. The economy is not so much recovering as flat lining (largely due to SuperMario rather than Enda Kenny’s government).

 

 

Irish Home Prices 2014: Dublin prices surged 22% in 12 months to May and jumped 4.2% in the month

 

h/t FinFacts