Depressing Dublin House prices

The_Conductor

Lets get back ontopic folks- we seem to have meandered all over the place.......

spockety

The Spider wrote: »

A house is only worth what it sells for, that applies to high prices and low prices, if it sells for 500 then that's what it's worth if it sells for 100 the that's what it's worth.

With the caveat that the market is being artificially distorted at present, sure.

So at the moment I would say "if it sells for 500 in a distorted market then that's what it's worth in a distorted market".

The Spider

spockety wrote: »

With the caveat that the market is being artificially distorted at present, sure.

So at the moment I would say "if it sells for 500 in a distorted market then that's what it's worth in a distorted market".

Absolutely can't argue with that, but as it's said the market can remain distorted for a long time. And the market distorted or not is still the market.

spockety

The Spider wrote: »

Absolutely can't argue with that, but as it's said the market can remain distorted for a long time. And the market distorted or not is still the market.

Which is why I keep coming back to the idea that the real analysis that's needed is the nature of the cash end of the market. Where has it come from, where's it going, when's it going? Or is it actually totally sustainable and here for good.........??

Also the question of what is going to happen to all of the properties where people aren't paying their mortgages? How sustainable is that.. will it be dragged out for a decade to continue the distortion? What about the risk of everyone copping on to this and having large scale mass boycotting of mortgage payments as there is no comeback?

etc. etc.

Loads of talk from the media and commentators about how great the rises have been, with the caveat or danger soundbite about it being a "supply vs demand" issue. Well duh, of course it is supply and demand.. but where is the analysis of the issues affecting supply, and the issues affecting demand?

The only commentary I have seen is the need to build more family homes. Which is fine and true, but there is a lot more to the supply side than that which is not being analysed or questioned.

The Spider

spockety wrote: »

Which is why I keep coming back to the idea that the real analysis that's needed is the nature of the cash end of the market. Where has it come from, where's it going, when's it going? Or is it actually totally sustainable and here for good.........??

Also the question of what is going to happen to all of the properties where people aren't paying their mortgages? How sustainable is that.. will it be dragged out for a decade to continue the distortion? What about the risk of everyone copping on to this and having large scale mass boycotting of mortgage payments as there is no comeback?

etc. etc.

Loads of talk from the media and commentators about how great the rises have been, with the caveat or danger soundbite about it being a "supply vs demand" issue. Well duh, of course it is supply and demand.. but where is the analysis of the issues affecting supply, and the issues affecting demand?

The only commentary I have seen is the need to build more family homes. Which is fine and true, but there is a lot more to the supply side than that which is not being analysed or questioned.

To be honest, it's all guesswork, is the cash going to keep coming? I don't know, where's it coming from? I don't know either, I can make guesses like anyone else I suppose, but that's all they are guesses.

Are people being offered mortgages? That I can answer and the answer is yes, from personal experience and just by browsing the buying a house in 2013 thread. Are the banks being careful about how much they lend? Again yes they certainly aren't throwing cash at people, but will give the amount they think you can pay back.

How long will this go on for? I don't know but seeing as we just came from the bubble where prices rose for 16 years, and that housing supply in Dublin is 3 years behind what's needed, you can begin to guess how long it'll last.

How long will it take the construction industry to scale up again to deal with the shortfall? Again I don't know, but a lot of tradesmen went overseas.
Will people with new mortgages lose their jobs, again who knows.

You can only deal with what you know, and that means looking at what's happening now.

Caveat to the above I held off buying for years as prices seemed insane, would I be in a better position now if I bought in 98? maybe, maybe not.

The_Conductor

The Spider- a lot of what you are posting is total hearsay- and your 'personal experience'. There are stats available in a lot of cases for the variables you're playing with (such as the numbers of mortgages being granted- and comparisons with previous years etc). Instead of parrotting 'I'm right, and you're wrong (which you are doing a hell of a lot- and bugging the living hell out of quite a few people)- back up what you're saying with hard facts, and not comments along the lines of

'....That I can answer and the answer is yes, from personal experience........'

Randomly tossing in a thread title- is not supplying a source for what you're saying- its like grabbing the first book off a shelf and hitting people over the head with it- just because its a book (which may be fact or fiction- doesn't matter- you're still going to batter them with it...........)

Regards,

The_Conductor

The Spider

The_Conductor wrote: »

The Spider- a lot of what you are posting is total hearsay- and your 'personal experience'. There are stats available in a lot of cases for the variables you're playing with (such as the numbers of mortgages being granted- and comparisons with previous years etc). Instead of parrotting 'I'm right, and you're wrong (which you are doing a hell of a lot- and bugging the living hell out of quite a few people)- back up what you're saying with hard facts, and not comments along the lines of Randomly tossing in a thread title- is not supplying a source for what you're saying- its like grabbing the first book off a shelf and hitting people over the head with it- just because its a book (which may be fact or fiction- doesn't matter- you're still going to batter them with it...........)

Regards,

The_Conductor

Seeing as you asked for stats:

http://www.ibf.ie/Libraries/Research_Statistics/IBF_Housing_Market_Monitor_Q3_2013_FINAL.sflb.ashx


"Mortgage approvals and drawdowns

Mortgage approvals offer an early indicator of credit conditions in the
mortgage market, which underpins the bulk of transactions in the
housing market. Over 4,900 mortgages were approved in the third
quarter of this year, a 13% rise compared to the same quarter of 2012.
Mortgage drawdowns generally reflect transactions and again offer an
indicator of credit conditions. Around 4,000 mortgages were drawn
down in this quarter, 15% more than in Q3 2012."

So mortgage approvals are up 13% and drawdowns are up 15% which would indicate that the banks are lending more than they were?

spockety

The Spider wrote: »

Seeing as you asked for stats:

http://www.ibf.ie/Libraries/Research_Statistics/IBF_Housing_Market_Monitor_Q3_2013_FINAL.sflb.ashx


"Mortgage approvals and drawdowns

Mortgage approvals offer an early indicator of credit conditions in the
mortgage market, which underpins the bulk of transactions in the
housing market. Over 4,900 mortgages were approved in the third
quarter of this year, a 13% rise compared to the same quarter of 2012.
Mortgage drawdowns generally reflect transactions and again offer an
indicator of credit conditions. Around 4,000 mortgages were drawn
down in this quarter, 15% more than in Q3 2012."

So mortgage approvals are up 13% and drawdowns are up 15% which would indicate that the banks are lending more than they were?

That depends. What's the total pot of money that they released vs previous quarters?

There could be more draw downs of smaller amounts.

Edit: There is some interesting info on the IBF website.

http://www.ibf.ie/Libraries/Research_Statistics/IBF-PwC_Mortgage_Market_Profile_Q3_2013.sflb.ashx

Average FTB mortgage in Q3 2013 - 151,097.
Average FTB mortgage in Q3 2012 - 159,848
Average FTB mortgage in Q3 2011 - 171,357

Hmm.

Theboinkmaster

spockety wrote: »

It is madness.

Houses on Ballyroan Road and surrounding areas were selling below €300K not so long ago (the typical 3 bed semi with garage as you describe), which is probably their value in a market which isn't rigged. However I would expect damp executor fixer uppers to appear on the market for 450K-500K asking, such is the current madness.

And who knows, someone with a lot of money may actually pay that.

I'm not sure that it's couples on 150K between them that are going in for them though. I think the 150K couple is competing with the 75K couple who happen to have a €200-€300K stashed towards it from inheritance, savings, bubble-era sale, or something similar. So in fact they end up with a mortgage of about 200K (which is just about their max what with kids etc.).

It's all a bit out of kilter at the moment. The unmistakable key question still remains, is the amount of cash being spent (either outright or part funding) at the moment in line with historical norms, or if not is it sustainable or are we looking at a permanent shift in how the market operates in Dublin?

And again I ask (as earlier in the thread), how do we as a society react to that. Housing should not be treated as any other normal commodity. As a society we should be striving to provide high quality accommodation for families. It's not like we have a shortage of land (in spite of what some people like to spout).

And to anyone who says "this is just capitalism at work". No it is absolutely not. You are wrong. It is the rest of society acting as lender of last resort to failed lines of credit through NAMA, lack of repossessions, bank bailouts, bond holder bailouts, etc. That is not natural market forces, stop believing it.

I think the current South Dublin market is absolute madness - if you go view a house like this one

http://www.daft.ie/searchsale.daft?id=741652

in D14 on a Saturday there are literally 20 couples competing to buy this place for €0.5m.

Personally i think it's just panic and cash stockpiles - but it's depressing when you see a house like that. Very ordinary and in need of a good bit of work going for half a million Euro and to be fair D14 is nice but it's not exactly Foxrock or D4 - it is middle to upper middle class.

So IMO there's a bubble and when these cash buyers run out and potential buyers are those looking for a €400k mortgage to buy a house like that, it will burst. And then this house will come down at least €100k IMO in a normal functioning market as a bank won't and shouldn't give you €400k to buy that house, even with €100k deposit.

Am hoping this bubble bursts by 2015 and think it will.

Heisenberg1

markpb wrote: »

Comparing rent only with mortgage repayments is like comparing apples and oranges. You're ignoring purchase costs (stamp duty, solicitors fees, surveyors fees) and ongoing costs (insurance, property tax, repairs, maintenance, capital expenditure) as well as the flexibility that renting offers over purchasing.

I disagree with that for example. If Joe bought a house when they where at there lowest price and the mortgage is lets say 200k over 30 years is around €1000pm. His neighbour bob who only started to rent is now pay €1600 pm the extra €600 a month would more than cover the additional expenses you have outlined. As I said in an earlier post I have friends that are in this situation. Hardly apples and oranges.

The Spider

spockety wrote: »

That depends. What's the total pot of money that they released vs previous quarters?

There could be more draw downs of smaller amounts.

Found the below numbers


The total value of new mortgage lending in 2012 was €2,636 million

2013
Between Q1 and Q3 of this year some 9,800 mortgages (8,711 of which were for house purchase) were drawn down with a total value of €1.6 billion

So the amounts are definitely up, and that doesn't include Q4 of 2013

spockety

The Spider wrote: »

Found the below numbers


The total value of new mortgage lending in 2012 was €2,636 million

2013
Between Q1 and Q3 of this year some 9,800 mortgages (8,711 of which were for house purchase) were drawn down with a total value of €1.6 billion

So the amounts are definitely up, and that doesn't include Q4 of 2013

2012 = 2.63bn
2013 = 1.6bn to date

No?

In which case Q4 needs to be > 1bn for 2013 to exceed 2012.

Not saying it won't, but I can't see where the numbers say the amounts are definitely up?
Unless you have a typo..

The Spider

spockety wrote: »

2012 = 2.63bn
2013 = 1.6bn to date

No?

In which case Q4 needs to be > 1bn for 2013 to exceed 2012.

Not saying it won't, but I can't see where the numbers say the amounts are definitely up?
Unless you have a typo..

you're right, I'm wrong misread, will have to wait until they release the final figures to see, I went on the number in the original link, however the two links below give 2012 versus 2013 to date, so don't know where it'll be when they release the next figures.

Of course if it's down it does go back to the question about where the money is coming from.

http://www.ibf.ie/Libraries/Research_Statistics/IBF-PwC_Mortgage_Market_Profile_Q4_2012.sflb.ashx


http://www.ibf.ie/Libraries/Research_Statistics/IBF-PwC_Mortgage_Market_Profile_Q3_2013.sflb.ashx

Oral Surgeon

Heisenberg1 wrote: »

I disagree with that for example. If Joe bought a house when they where at there lowest price and the mortgage is lets say 200k over 30 years is around €1000pm. His neighbour bob who only started to rent is now pay €1600 pm the extra €600 a month would more than cover the additional expenses you have outlined. As I said in an earlier post I have friends that are in this situation. Hardly apples and oranges.

Yes but on a 85% mortgage, Joe needs to front €30K deposit, €2K stamp and €2-3K legal fees. You'd be a long time saving that with €600/month.

spockety

The Spider wrote: »

you're right, I'm wrong misread, will have to wait until they release the final figures to see, I went on the number in the original link, however the two links below give 2012 versus 2013 to date, so don't know where it'll be when they release the next figures.

Of course if it's down it does go back to the question about where the money is coming from.

Well, it kind of answers it actually. It means that there is an increasing dependency on cash to drive the market. The PPR should be able to tell us the entire value of all transactions in 2012 and 2013. However I've seen at least one house on there marked as sold for 2.1m when in fact it was 210K, so god knows how many other dodgy numbers there are in there to make it useless.

I still expect mortgage lending to increase overall in 2013 from 2012.

The Spider

Theboinkmaster wrote: »

I think the current South Dublin market is absolute madness - if you go view a house like this one

http://www.daft.ie/searchsale.daft?id=741652

in D14 on a Saturday there are literally 20 couples competing to buy this place for €0.5m.

Personally i think it's just panic and cash stockpiles - but it's depressing when you see a house like that. Very ordinary and in need of a good bit of work going for half a million Euro and to be fair D14 is nice but it's not exactly Foxrock or D4 - it is middle to upper middle class.

So IMO there's a bubble and when these cash buyers run out and potential buyers are those looking for a €400k mortgage to buy a house like that, it will burst. And then this house will come down at least €100k IMO in a normal functioning market as a bank won't and shouldn't give you €400k to buy that house, even with €100k deposit.

Am hoping this bubble bursts by 2015 and think it will.

two houses on the same street 2010 was more expensive than 2011, I don't know what that tells you, whether it was a bottom and they're rising again?

http://www.myhome.ie/priceregister?RegionID=1265&LocalityIDs=1308&MinYear=2010&MaxYear=2011&Keywords=Eden+Park+Drive%2C+Goatstown%2C+Dublin+14

spockety

The Spider wrote: »

two houses on the same street 2010 was more expensive than 2011, I don't know what that tells you, whether it was a bottom and they're rising again?

http://www.myhome.ie/priceregister?RegionID=1265&LocalityIDs=1308&MinYear=2010&MaxYear=2011&Keywords=Eden+Park+Drive%2C+Goatstown%2C+Dublin+14

Well the other difficulty with the available data is that it doesn't account for size or condition. Two houses on the same street... one may be a 2 bed terraced bungalow and the other a 4 bed detached. Granted that would be exceptional, but what wouldn't be exceptional in the 3/4 bed semi stakes are houses that are extended/renovated and in fabulous condition, vs. those that are in need of gutting.

Piriz

The Spider wrote: »

two houses on the same street 2010 was more expensive than 2011, I don't know what that tells you, whether it was a bottom and they're rising again?

http://www.myhome.ie/priceregister?RegionID=1265&LocalityIDs=1308&MinYear=2010&MaxYear=2011&Keywords=Eden+Park+Drive%2C+Goatstown%2C+Dublin+14

it suggests absolutely nothing! the houses could be in vastly different conditions...

one thing that could impact the supply is the increase in bankruptcy this year

estimates range from 3,000 to 15,000 cases could be processed.

http://www.irishexaminer.com/business/cwojeyaugbey/rss2/

The Spider

spockety wrote: »

Well the other difficulty with the available data is that it doesn't account for size or condition. Two houses on the same street... one may be a 2 bed terraced bungalow and the other a 4 bed detached. Granted that would be exceptional, but what wouldn't be exceptional in the 3/4 bed semi stakes are houses that are extended/renovated and in fabulous condition, vs. those that are in need of gutting.

Google mapped it, they're pretty identical from the outside anyway on streetview, also cant see any sign of an extension on the satelite view

Piriz

The Spider wrote: »

Google mapped it, they're pretty identical from the outside anyway on streetview, also cant see any sign of an extension on the satelite view

are you for real? this is the type of discussion you want to have to analyse Dublin property prices..looking for extensions on google satellite...

f*ck sake!

Theboinkmaster

The Spider wrote: »

two houses on the same street 2010 was more expensive than 2011, I don't know what that tells you, whether it was a bottom and they're rising again?

http://www.myhome.ie/priceregister?RegionID=1265&LocalityIDs=1308&MinYear=2010&MaxYear=2011&Keywords=Eden+Park+Drive%2C+Goatstown%2C+Dublin+14

Taking a step back for a moment do you not think those prices are not absolutely mental relative to average salaries in this country?

To comfortably afford that and make it livable you'd need €200k in cash and €400k mortgage so probably just one salary at €110k. And that's just goatstown.....

Price is €475k (for the one i linked on daft). Say fees and competitive bids bring it up to even €500k and you want to put in €100k to modernise and bring up BER rating etc.

€200k cash
€400k mortgage - one earner in household on €110k

So bascially that's the demographic who can afford to live in D14 - no way IMO they'd be in D6 Rathgar or somewhere like that in a much nicer house.

Intuitively i think that house is only worth €300-400k.

Oral Surgeon

Piriz wrote: »

are you for real? this is the type of discussion you want to have to analyse Dublin property prices..looking for extensions on google satellite...

f*ck sake!

No it's great, you can see what sort of car they had like 3 years ago too!!

Zamboni

Theboinkmaster wrote: »

Am hoping this bubble bursts by 2015 and think it will.

There could be a super nose dive crash once the "pent up" demand subsides when the cash runs out.
All the ladders have been pulled up by the older generations. Wages, pensions etc.
Jobbridge and internships are the order of the day.
These people will have a far reduced capacity to attain a mortgage and sellers could be left hanging.

The average salary nowadays is nowhere near the 42k that gets spouted about either.

The only way a crash can be avoided is new entrants into the mortgage market...
And two potential players, Tesco and Investec have shown they are withdrawing their interest because they have no recourse against defaulters.

Theboinkmaster

Zamboni wrote: »

There could be a super nose dive crash once the "pent up" demand subsides when the cash runs out.
All the ladders have been pulled up by the older generations. Wages, pensions etc.
Jobbridge and internships are the order of the day.
These people will have a far reduced capacity to attain a mortgage and sellers could be left hanging.

The average salary nowadays is nowhere near the 42k that gets spouted about either.

The only way a crash can be avoided is new entrants into the mortgage market...
And two potential players, Tesco and Investec have shown they are withdrawing their interest because they have no recourse against defaulters.

So do you agree with the cash bubble theory? Do you think this will start to burst this year?

The Spider

Piriz wrote: »

are you for real? this is the type of discussion you want to have to analyse Dublin property prices..looking for extensions on google satellite...

f*ck sake!

Listen Pal, did you ever buy a house? did you ever go and look at a house, you're telling me you wouldn't use a tool like google streetview to see the house or street before you went and had a look, pretty standard.

And as for your throwaway comment about they could be in vastly different conditions, that's true but I doubt it's 155500 worth of difference unless all the fixtures and fittings were ripped out by tenants, which and I know I'm assuming here, I doubt in a residential area like goatstown.

Piriz

we are discussing the current economic forces in the housing market in Dublin not whether i bought a house or use google imaging to compare houses that were sold years ago on one street... your a time waster... your input is brutal!

Zamboni

Theboinkmaster wrote: »

So do you agree with the cash bubble theory? Do you think this will start to burst this year?

The crash will come, but when? I've no idea.
It is impossible to estimate on what proportion of private wealth will be diverted into property.

Also - Jan O'Sullivan is starting now to push for limits on private rent prices.
That will put investors noses out of joint and limit BTL interest.

The Spider

Piriz wrote: »

we are discussing the current economic forces in the housing market in Dublin not whether i bought a house or use google imaging to compare houses that were sold years ago on one street... your a time waster... your input is brutal!

As opposed to your non existent input, the prices were used to show the difference in price from 2010 - 2011in the same street, for what it worth another one sold for 320 in 2012

Piriz

The Spider wrote: »

As opposed to your non existent input, the prices were used to show the difference in price from 2010 - 2011in the same street, for what it worth another one sold for 320 in 2012

An hour ago i highlighted the numbers expected to be processed for bankruptcy this year and suggested it could impact on supply. I provided a link to the article.

You provide a link to two houses that were sold over a year apart from each other 3-4 years ago and want to us to generalise this to fit the thread topic...

spockety

Check out 6 The Lawn, Woodpark, Balinteer.

Sold in 2012 for 315k.
Went back on the market in august 2013 unmodified, and is apparently sale agreed now at 420k.

That is the 30% increase you see referenced in the media.

It's also quite insane. Fair play to the flipper, very well played.