Housing market

littlesurfer

Just wondering if anyone has any thoughts on the property market at the moment. I've been putting off buying for a little while now but i'm getting impatient....people keep telling me to hang on that its coming down

kippy

Have you done a search or even browsed the forum?
There are three or four threads in hear of a similiar nature.
You'll find advice from both camps which may leave you even more confused than you are now.
Kippy

Paulw

Check any of the housing websites. Prices aren't decreasing at all, and the SSIA money is helping that.

As well, people are expecting to get some relief in the budget, so that will increase house prices even more.

You can sit and wait ... but you may be waiting years for the market to start to turn down again.

No one has any definite answer.

Afuera

Paulw wrote:

Check any of the housing websites. Prices aren't decreasing at all, and the SSIA money is helping that.

The Sunday Times doesn't share your views on this. According to them prices in Dublin are falling by 4,500 euros every month:
http://www.timesonline.co.uk/newspaper/0,,176-2460194,00.html

hmmm

Inventory is rising
http://daftwatch.atspace.com/

Prices are falling
http://irishhousepricesfalling.blogspot.com/

You'd be a right eejit to get in now when the market has hit the top. It's a long way down to a normal level.

littlesurfer

I haven't browsed this forum no, but i have been actively watching the market over the last year and a half. Ive definately noticed drops on the apartment market and in certain areas but nothing major.....

Mountjoy Mugger

littlesurfer wrote:

Just wondering if anyone has any thoughts on the property market at the moment. I've been putting off buying for a little while now but i'm getting impatient....people keep telling me to hang on that its coming down

I was told the same seven years ago - prices can't continue to rise, blah de blah. I waited 18 months more before I bought, of course at a higher price. Luckily for me, I bought. If I was to buy now, I'd be stuffed!

The waiting game is dangerous, buy when you can afford it. Speculating on falling house prices is dangerous.

miju

well from alot of the various examples ive seen posted on different fora i've seen drops up to 35% for higher end properties and for your more "average" price of 350k i've seen drops on up to 15% so i would agree littlesurfer that they are moderate

question thats on alot of peoples lips is if they'll go any lower, my personal bet is there's another 15-20% to go yet

miju

Mountjoy Mugger wrote:

The waiting game is dangerous, buy when you can afford it. Speculating on falling house prices is dangerous.

to be honest in a supposedly rising market where a large amount of asking price falls have been documented coupled with the daft price report saying prices have now officially stagnated PLUS the fact that was for figures before the slow down really started to bite as in the last month or two i'd say it's VERY safe to play the waiting game at the moment for those who can hold their nerve (and i'm including property investors in that as well as buyers)

Sponge Bob

utterly safe.

look at this graph, nothing is really selling

http://daftwatch.atspace.com/

littlesurfer

my gosh, that graff is really dramatic.....if places arent selling the prices will have to drop wont they??? Or will people just hold out for their asking price?

miju

well yes as shown in other posts asking prices have been dropping from between 15-35% depending on what level of the market the property market is aimed at

Sponge Bob

littlesurfer wrote:

my gosh, that graff is really dramatic.....if places arent selling the prices will have to drop wont they??? Or will people just hold out for their asking price?

An admixture of the two my friend.

If places ain't selling you simply keep lowballing and eventually someone who HAS to sell will engage with you and discuss your offer. Many fools will hold out much too long at their summer 2006 level asking prices. Thats the stage we are at now and thats why the inventory is building inexorably since the spring . They ask too much and the houses are not shifting.

Others, OTOH, will not drop their prices because they do not HAVE to sell.

I would expect dramatic downward price revisions by some of those sellers after the budget because I personally do not believe Brian Cowan will do anything to stamp duty to sustain current levels .

Not every area will fall at the same rate, some will not really fall at all. Keep a beady eye on prices where you actually want to live or nearby.

jdivision

Daft's results are unscientific, it's based on what's listed on their website rather than monitoring a basket of properties over a period of time.

SparkyLarks

Worth Also Remembering that the price drop willnot be equal across all types of accomadation. Ireland population bulge ( David McWilliams Popes Children) are now a getting older. This will mean generally they will be looking to settle down move away from the city centre into the burbs to 3 bed semi's and the like. Gross generalisation based on what I see my friend all of whom are popes children are doing.

I do notice that most of the dramatic drops i've seen have been on small city apartments. Is it possible that the demand for these will drop as the population grows older, so even if the overall market falls by 20% , apartments will fall faster at 30% than family homes at 10%.

I've been talking to a auctioner friend who says that prices arn't dropping really but houses are taking twice as long to sell. A house a year ago that might be listed at 290 and sell for 317 a month later. Now a house listed at 290 will sell at 317 but take 2 months to reach this price. That would translate into the rate of housing increases dropping by 50%.

I bought my house a year ago at 330 price now might be 360, but if prices crash and my house is now worth 180,000 the big house I'm looking at mow costing 480 will only cost 240 so I only need to borrow an extra 60 instead of an extra 120. Great:D

antoinolachtnai

There are a number of problems with these graphs.

1. These are classic 'gee-whiz' graphs. Check Chapter 5 of 'How to lie with statistics' (Huff) for details.

2. The period is too short. Property is a seasonal business. You have to compare this November with last november, not with last July.

littlesurfer

littlesurfer wrote:

I've been putting off buying for a little while now but i'm getting impatient....people keep telling me to hang on that its coming down

All guess it depends on the location and the price. Where I am in South Kerry, there is little sign of any drop off. Just looking at a new apartment here in the middle of a town that has gone up 20k in 2 months and the developer will give it to me for the original price, so now a case of scrambling for the money. Even the linked Sunday Times article makes the point that prices nationally continue to rise, if more slowly than before. But on the other hand everyone hears the bad news in the higher end of the Dublin and Galway markets, so I'd be cautious...

hmmm

Deleted User wrote:

Just looking at a new apartment here in the middle of a town that has gone up 20k in 2 months and the developer will give it to me for the original price

huh? So the developer will give you an apartment at lower than the price he is advertising it for? Does that not make the point that prices are falling? Or do you believe he is really giving you a special deal?

gurramok

antoinolachtnai wrote:

There are a number of problems with these graphs.

1. These are classic 'gee-whiz' graphs. Check Chapter 5 of 'How to lie with statistics' (Huff) for details.

2. The period is too short. Property is a seasonal business. You have to compare this November with last november, not with last July.

Well, daft themselves who are independent have said its a record amount of inventory they have ever and also for myhome.ie. (http://www.timesonline.co.uk/article/0,,2098-2457432,00.html)

hmmm wrote:

huh? So the developer will give you an apartment at lower than the price he is advertising it for? Does that not make the point that prices are falling? Or do you believe he is really giving you a special deal?

Think Conor74 is trying to say is that the developer just can't sell that apt in south kerry for the 'risen price' and had to reverse to the price it was 2 months ago to get Conor74 in the door to persuade him to buy it:)

Sponge Bob

antoinolachtnai wrote:

Property is a seasonal business. You have to compare this November with last november, not with last July.

Actually you said it yourself and did not notice you just had . Nobody is questioning the overall accuracy of the figures , I take it, but rather what they 'mean' .

Property IS a seasonal business and those stats show that the 'normal' and seasonal september selling season simply did not happen this year.
The graph shows that. The inexorable rise in inventory in the past 1.5-2 months shows that sellers are not prepared to wait for the next season in March. To me normal market seasonality has been replaced by a steady rumble towards the exits in many areas .

Afuera

SparkyLarks wrote:

I bought my house a year ago at 330 price now might be 360, but if prices crash and my house is now worth 180,000 the big house I'm looking at mow costing 480 will only cost 240 so I only need to borrow an extra 60 instead of an extra 120. Great:D

I think you might be forgetting something here... If your house's price dropped to 180,000 then you'd have negative equity of 150,000 (assuming you haven't taken a huge chunk off the principle of 330,000 in your first year). You'd have to pay that back to the bank first, and then pay another 240,000 for the reduced price of the big house if you wanted to buy it. That would mean that it would cost you 390,000 overall to make the change :eek:

antoinolachtnai

I just cannot see the value of comparing inventory for July to inventory from September.

There is no doubt that there is something happening here, and there is no doubt that it is negative, but the question is how big the effect is, and the extent to which uncertainty about stamp duty is effecting it. Without seeing a year of figures, it's hard to know.

It could also be unrealistic price-setting, rather than a drop, of course.

Couple of things that might help you make the decision.

When you take out a mortgage as a FTB you're borrowing 'silly' money whatever way you look at it. Whether you borrow 300,000 or 200,000 you're going to be paying it off for years. It's really not that scary once you've made the leap.

You can hold off and watch as the "growth" in property prices slows (that phrase makes me laugh!) but you'll also be watching the interest rates rise and these will affect how much you can borrow.
I was told as I dithered over a house that it's better to be on the property ladder than looking at it - it was very good advice that I can appreciate now. Had I dithered longer I would not have afforded what I have now.

Only weeks ago we were told that Ireland's population is projected to increase hugely and that our population in 2010 will be the youngest in Europe. These people will need somewhere to live.

Sponge Bob

Deleted User wrote:

Only weeks ago we were told that Ireland's population is projected to increase hugely and that our population in 2010 will be the youngest in Europe. These people will need somewhere to live.

Thats potentially very important information but only if its true.

1. who told us this????
2. who commissioned the report, not CRH or Sherryfitz I hope .
2. can you link to this report or to a good précis of the report ?
3. can you tell us all the assumptions they made to underpin the report ??

I fear this 'report ' is merely hot air from certain property sectoral interests designed to panic those not yet in this pyramid scheme to underpin the last lot they got in and therefore not a proper report at all,

Its not a housing ladder. its a PYRAMID nowadays.

As to where to put them !!! we have almost 300,000 empty properties already or almost 20% of the housing stock albeit not always 20% empty where the demand for accomodation is actually to be found.

gurramok

Deleted User wrote:

Only weeks ago we were told that Ireland's population is projected to increase hugely and that our population in 2010 will be the youngest in Europe. These people will need somewhere to live.

Its very well having a population increase, even if another 1 million extra souls were here by 2010, a vast portion of them would not be able to afford a house at todays prices like the natives and that rules out that FTB segment to prop up the pyramid!
They would have to live in a rental sector in which rents have been static for last 5 yrs and there are no shortage of places for them to live with nearly 20% of housing stock not lived in already!

antoinolachtnai

If a million people show up by 2010, rents will go up pretty rapidly and there will be a lot of building going on ...

gurramok

antoinolachtnai wrote:

If a million people show up by 2010, rents will go up pretty rapidly and there will be a lot of building going on ...

Who'd pay for those new housing thats needed as you say?

Its certainly not the vast majority of the population who cannot afford to buy now.
There is only a certain amount of wealth out there to purchase things, only solution is to drop prices so these extra houses and the present 100,000+ would shift. (60,000 new builds since '02 lying empty)

Sponge Bob

Sponge Bob wrote:

Thats potentially very important information but only if its true.

1. who told us this????
2. who commissioned the report, not CRH or Sherryfitz I hope .
2. can you link to this report or to a good précis of the report ?
3. can you tell us all the assumptions they made to underpin the report ??

I fear this 'report ' is merely hot air from certain property sectoral interests designed to panic those not yet in this pyramid scheme to underpin the last lot they got in and therefore not a proper report at all,

Its not a housing ladder. its a PYRAMID nowadays.

As to where to put them !!! we have almost 300,000 empty properties already or almost 20% of the housing stock albeit not always 20% empty where the demand for accomodation is actually to be found.

The United Nations projects the Irish population having grown to 4.02 million in 2010 and 4.3 million by 2020.
The CSO projects that the Irish population will increase from 3.9 million
in 2002 to 4.2 million by 2011 and to 4.4 million by 2021. Using the 1996 Census of Population as a benchmark, the CSO projects population using six scenarios corresponding to three fertility and two migration variants.

Plenty of these kind of predictions around. Almost as many as the predictions of doom!
To be honest I couldn't really give a fiddlers - there are far more important things in life.
The OP wanted opinions on whether to buy or not. The bottom line is, does he/she want a home?

Sponge Bob

Deleted User wrote:

The United Nations projects the Irish population having grown to 4.02 million in 2010 and 4.3 million by 2020.

Thats one report thats very wrong, its nearly 4.3m already and passed 4.02m round about 2003

The CSO projects that the Irish population will increase from 3.9 million in 2002 to 4.2 million by 2011 and to 4.4 million by 2021.

and the EXACT same CSO tell us it was 4.23m in April 2006 but LOOK !!!

I have a SOURCE

for my data and thats 2 reports there not A REPORT like you said .

The OP wanted opinions on whether to buy or not. The bottom line is, does he/she want a home?

The OP has a home, the issue for the OP is whether they should load their ass up with €300k of debt right now !

I recommend the OP chillax , have a good christmas and do some serious research till next March and then make their mind up .

hmmm

Deleted User wrote:

Had I dithered longer I would not have afforded what I have now.

That's where a lot of people in this country will get screwed. They are buying the absolute maximum of what they can borrow, and there is no safety net if things go wrong - sickness, unemployment, whatever. It also presupposes that houses hold their value - if no-one can afford to buy a house, prices will drop - it's just economics, a lot of people treat it as a religious argument.

antoinolachtnai

gurramok wrote:

Who'd pay for those new housing thats needed as you say?

Its certainly not the vast majority of the population who cannot afford to buy now.
There is only a certain amount of wealth out there to purchase things, only solution is to drop prices so these extra houses and the present 100,000+ would shift. (60,000 new builds since '02 lying empty)

Easy. It will be funded by investors and debt. The investors might be the people living there, or they might not. They might not even be Irish residents. If the rental cashflow is there, what's wrong with that?

Some of those new builds are probably holiday homes, to be fair.

How much wealth do you think there is in total? When will we run out?

miju

ireland ran out of wealth LONG ago , problem is we've been binging on cheap credit ever since and thats the REAL danger as theres a big credit crunch under way to mop up excess liquidity in the global markets since Sep'01

miju

jdivision wrote:

Daft's results are unscientific, it's based on what's listed on their website rather than monitoring a basket of properties over a period of time.

2 things here,

firstly, you've obviously dismissed the report as tosh WITHOUT reading it because that's actually what they do by the month

secondly, it is Irelands largest property website and therefore the best way of getting a snap shot of the entire market inventory and price as possible

littlesurfer

Wow, thats so much information to take in at one time......i think the general message is to hang on,...bar a few in disagreement.....

The OP has a home, the issue for the OP is whether they should load their ass up with €300k of debt right now !

I recommend the OP chillax , have a good christmas and do some serious research till next March and then make their mind up

Spongebob


i think thats what i'l go with

hmmm

hmmm wrote:

That's where a lot of people in this country will get screwed. They are buying the absolute maximum of what they can borrow, and there is no safety net if things go wrong - sickness, unemployment, whatever. It also presupposes that houses hold their value - if no-one can afford to buy a house, prices will drop - it's just economics, a lot of people treat it as a religious argument.

I most certainly won't get screwed. I didn't borrow the "maximum" available to me.
I bought my three-bed semi in Dublin by myself and had no problem paying the mortagage by myself for two years.
I now live with my fiance and we are both paying the mortgage, very comfortably.
We are also among the first 'inheritors' in our families. Both my parents and his own their homes.
I'm happy where I live, I don't want to move.
Not everyone who has bought property in recent years is mortgaged to the max, squashed into an apartment or commuting four hours every day.

hmmm

hmmm wrote:

huh? So the developer will give you an apartment at lower than the price he is advertising it for? Does that not make the point that prices are falling? Or do you believe he is really giving you a special deal?

gurramok wrote:

Think Conor74 is trying to say is that the developer just can't sell that apt in south kerry for the 'risen price' and had to reverse to the price it was 2 months ago to get Conor74 in the door to persuade him to buy it:)

Apartment sold 2/3 months back for €215k. Sale has just fallen through in recent days. In the meantime, the same apartments are getting €230k, but rather than putting it back on the market and waiting another 3 months he would rather get the money he was banking on getting all along for a quick sale. Hence, it's not a 'lower' or reversed price, it's just that an opportunity has arisen.

Sponge Bob

seems to me like an opportunity well taken by the builder Conor

jdivision

miju wrote:

2 things here,

firstly, you've obviously dismissed the report as tosh WITHOUT reading it because that's actually what they do by the month

secondly, it is Irelands largest property website and therefore the best way of getting a snap shot of the entire market inventory and price as possible

Actually I have read it but I have never trusted Daft's statistics because they're based on a completely unscientific base, they're as bad as the Dept of the Environments. It all depends on what gets listed there that month. So what if it's Ireland's largest property website, it doesn't matter as long as it's statistically inaccurate.

miju

Deleted User wrote:

Apartment sold 2/3 months back for €215k. Sale has just fallen through in recent days. In the meantime, the same apartments are getting €230k, but rather than putting it back on the market and waiting another 3 months he would rather get the money he was banking on getting all along for a quick sale. Hence, it's not a 'lower' or reversed price, it's just that an opportunity has arisen.

best of luck with the purchase , however i think you would need to ask yourself why the sale fell through for starters or indeed if it was sale agreed in the first place and secondly why the builder is not that bothered about €15k as they are not a charity by any stretch of the imagination

where is the apartment out of curiousity?

miju

miju wrote:

why the sale fell through for starters or indeed if it was sale agreed in the first place

Purchaser had some issue with raising finance. Saw the sale agreements, know contracts issued, know deposit paid to the auctioneer because the original purchaser now looking for it back...

miju wrote:

why the builder is not that bothered about €15k

Oh he would rather get the €230k, just that I told him I might know someone who would buy it straight away on the basis that the price was the same as he expected to get, and not the new market price. He saves on time and auctioneer's fees so it's not without its advantages for him.

miju

Deleted User wrote:

Oh he would rather get the €230k, just that I told him I might know someone who would buy it straight away on the basis that the price was the same as he expected to get, and not the new market price. He saves on time and auctioneer's fees so it's not without its advantages for him.

not to come across negative as that sounds fair enough , call me sceptical if you wish i just dont see why the builder would do that if he had full confidence in the market and could get an extra 15k which to be honest in a bouyant market wouldn't be much hassle

what location is the apartment?

miju

miju wrote:

call me sceptical if you wish

In fairness, I share your scepticism to a point. The apartment is 3 bedroomed, in the middle of a large town with lots of employment and good rental income, HomeBonded, in an area designated for tax relief, and the prices have gone up (though admittedly barely enough to cover stamp duty and any CGT). If I can raise the money, think I might give it a punt. Even if the market collapses, how far can a €215k property slump?

miju wrote:

what location is the apartment?

Town in Kerry.

miju

Deleted User wrote:

Even if the market collapses, how far can a €215k property slump?

how long is a piece of string but for an indicator all you have to do is look at the 10 year slump from japans bubble and the current US slump for indicative price drops

asking prices have been falling in kerry by the way, so my scepticism of the builders generosity wouldnt be unfounded http://irishhousepricesfalling.blogspot.com/

Paulw

Prices in Dublin are certainly not dropping, but they are not increasing as quickly as they were.

There is no way of knowing when the market will turn, and there is no way to know by how much.

As the phrase goes - a bird in the hand is worth two in the bush. It's better to have a property than to just sit there and wait until the prices stop increasing. That's as long as you don't over do it when buying in the first place.

Buy what you can afford.

Calina

Paulw wrote:

As the phrase goes - a bird in the hand is worth two in the bush. It's better to have a property than to just sit there and wait until the prices stop increasing. That's as long as you don't over do it when buying in the first place.

Buy what you can afford.

Life is not that simple. I'd prefer to have no property and rent near work and avoid the whole commuting nonsense that goes with buying a property that is similar in size and facility to the one I rent. I'd also prefer to have no property if the only property I can have is a one bedroomed apartment in a giant estate which goes on forever, relatively poorly served by public transport, still a building site, subject to arguments in the Management Company.

I'm sick to the teeth of people saying "buy what you can afford" because it's not just money. Quality of life is important too and if you choose to buy what you can afford but then spend three hours commuting every day, then the price you are paying may not be money, but life...

miju

Paulw wrote:

Prices in Dublin are certainly not dropping, but they are not increasing as quickly as they were.

you obviously didnt have a look at the link in my previous post with plenty of examples of asking price falls , daft report even said prices on dublin south are beginning to fall

Capt'n Midnight

some of the fall is due to speculation about reduction in stamp duty soon, so we'll see how things are in the aftermath of the budget.

overall the prices are artificial , perhaps double what they are worth - how much does it cost a builder to build a house at the moment ?

miju

the whole stamp duty issue is a big red herring

to be honest Capt'n Midnight , me and a few others were recording price drops on ask about money WELL BEFORE it became an issue in the first place and to be honest i think it's really a non issue for a couple of reasons

mainly being any changes are only going to prolong the property for another couple of months before price rises (if there is any) will bring everyone back to where we are now

hmmm

Surely if stamp duty was the issue, buyers would just put down a booking deposit now and claim it back if there are no changes? This SD thing is just a desperate attempt to hide a market that has run out of greater fools.

miju

exactly hmmm that would be another of the reasons and indeed there is evidnce (anecdotal) that buyers are doing this already just not in sufficient numbers to keep the number of sales up

it would appear the be the latest in the list of "reasons" with the last one being "it's off season and will pick up in sept" of course when this didn't materialise stamp duty then became the white elephant that it currently is, finally IMHO the interest rate rise due in december shortly will cancel out any rise in bullish sentiment caused by any stamp duty changes (if there is any)

also, what i've noticed recently is 3 seperate threads on other sites is where the seller has been gazundered and accepted , now this is a new phenoma that i find interesting as last year if you tried to gazunder you would be just looked over and the next buyer would gladly take your place , seems some buyers can sniff the nervousness / panic in the air

TheBigLebowski

Of course the issue of stamp duty is having affect on the market. It doesn't matter if it is a red herring. Red herrings affect the housing market. Personally I know of 2 people who are due to close shortly but are pushing it out until after the budget. Who would hand over thousands in stamp duty now only for it to be dropped next week (possibly) for 1st time buyers. Obviously it is not the only thing affecting the market and I am not the type who thinks house prices only go up, but to suggest that concerns about stamp duty are not having an impact on house sales at the moment is incorrect.
By the way, I think that they will make changes to the stamp duty in an effort to boost the market a little bit. The government can see which way the market is going and they need to try and get it moving again to bring in the money. They are fairly reliant on stamp duty money and can't afford a housing crash. Probably not a good idea long term but when did this government ever think long term?