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Oil prices and property seem unrelated. They are not.

In this episode I trace how the Iran war and oil above $100 a barrel will find its way into your wallet. It starts with the obvious first-order effects, fuel and heating bills. Then come the second-order effects most people miss, because oil and gas feed into around 500 products, from tyres and paint to fertiliser and insulation. Finally there are the third-order effects: inflation, higher interest rates, tighter mortgage approvals and developers being squeezed until projects stop being viable. That is the doom loop, and it is why people in finance are getting nervous.

First, a quick round-up of the Irish Budget. Landlords were overlooked again, capital gains tax was cut from 33% to 31%, Help to Buy went up to €35,000, a new 7% derelict property tax arrived, and Rent-a-Room relief went up to €16,000.

Then to Spain (a market I also keep an eye on) where an 87-year-old woman was carried out of her Madrid home of 70 years on a stretcher after an investment fund raised her rent from €500 to €2,650 a month. That image sparked protests in over 50 cities, a snap general election and a national strike called for 11 November. I break down the 750,000-home shortfall, 12.2% annual price growth, the proposed decrees against short-term rentals and why punishing landlords wins votes but will never deliver on the extra homes needed.

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In this episode:

• When oil went negative in April 2020, and why the reverse is now happening
• First, second and third-order effects of high oil prices on property
• How affordability and developer margins create a supply doom loop
• Why stimulus may be off the table as government bond yields rise
• Spain's housing protests, snap election and proposed anti-landlord decrees
• Ireland vs Spain: what the supply numbers tell us
• The political risk every landlord needs to price in

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CHAPTERS:
00:00 Intro
00:30 Irish Budget round-up: what landlords got (and didn't)
02:10 The day oil went negative
03:41 Oil above $100: why a property channel cares
04:30 First-order effects: fuel, heating, energy bills
05:23 Second-order effects: 500 uses of oil and gas
08:20 Third-order effects: inflation and interest rates
09:55 Affordability and the developer squeeze
11:39 The doom loop and recession risk
13:32 Elite Property Academy
13:55 Spain: snap election and national strike
15:30 The eviction that sparked a nation
16:38 Why Spain is angry: the supply gap
18:37 Landlords, Airbnb and the backlash
20:22 Spain's proposed emergency decrees
21:17 Why Pedro Sánchez called a snap election
23:12 Ireland vs Spain: the supply numbers
24:35 Elite Property Accelerator
24:55 Final thoughts: political risk for landlords

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Behind the Facade is hosted by Gavin J Gallagher, a Dublin-based property investor and developer with 30 years in the Irish and international market, and first-hand experience of three property crashes.

Need some help: https://workwithgavin.com

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Support the podcast: https://buymeacoffee.com/gavinjgallagher