Advertisement
If you have a new account but are having problems posting or verifying your account, please email us on hello@boards.ie for help. Thanks :)
Hello all! Please ensure that you are posting a new thread or question in the appropriate forum. The Feedback forum is overwhelmed with questions that are having to be moved elsewhere. If you need help to verify your account contact hello@boards.ie
Hi there,
There is an issue with role permissions that is being worked on at the moment.
If you are having trouble with access or permissions on regional forums please post here to get access: https://www.boards.ie/discussion/2058365403/you-do-not-have-permission-for-that#latest

Depressing Dublin House prices

1246789

Comments

  • Registered Users, Registered Users 2 Posts: 27,313 ✭✭✭✭GreeBo


    The whole point is that if normal people can't afford normal houses, then market conditions aren't normal. Anything that's priced much over a quarter of a million is out of the reach of all but the top 10% of households, so in a properly functioning market, there really shouldn't be much more than 10% of the market priced at that level.

    Houses in SCD are not "normal" houses though!
    You cant just ignore location value and desirability when you are talking about houses.

    0.25 of a million may well be out of reach of 90% of people...so what? There are lots of houses for far less than that. They most likely arent in SCD though. That doesnt make it a malfunctioning market or make it unsustainable.


    I dont believe that more than 10% of the *available* market is out of reach. The problem in SCD is lack of available property. This drives the prices up.

    A lot of posters seem to just ignore that (i.e. basic market forces) and are calling it a bubble or unsustainable.
    Is Dalkey unsustainable? If so it has been for the last 50 years or so. Its priced far higher than surrounding areas, even for similar houses.
    Its still not an unsustainable bubble. Its a high desirable area with very low levels of houses on the market. This pushes up prices. Its going to keep pushing them up right up to the point where there is no one willing or able to pay for the property thats on the market. Then the market shifts.


  • Registered Users, Registered Users 2 Posts: 10,673 ✭✭✭✭senordingdong


    barks1990 wrote: »
    I was trying to save up for a mortgage and when i finally got the mortgage approved, deposit together etc.The prices have now gone up to ridiculous levels what do you people reckon sit back and see what happens or try get something now as they may rise even higher than 20% by this time next year(so im told).

    Any advice and are any of you in the same boat?

    regards

    Who told you this?
    Was it the man trying ot sell you the house


  • Registered Users, Registered Users 2 Posts: 17,441 ✭✭✭✭jesus_thats_gre



    No matter how we try to parcel things- our economy is in terrible form- and people who should be earning reasonable wages are paying almost 55% tax from only 33k income levels. The system is setup to milk taxpayers- not to grow the economy- and it suits the government to get a few higher spenders spending- or to flush those with cash into the wider economy- which is what they have successfully done- from an economics perspective, it was a short term goal- but its mission accomplished.

    You wouldn't have any additional information on this would you? Is this an actual strategy that is used?


  • Moderators, Entertainment Moderators, Politics Moderators Posts: 14,539 Mod ✭✭✭✭johnnyskeleton


    ezra_pound wrote: »
    Overpriced property where yields are 4-8%???

    Hmmm...

    A low risk investment return of 7% is a good benchmark. When property yields go below 4% it can be indicative of a house price above it's investment value. During the bubble yields were approximately 2%.


  • Moderators, Education Moderators Posts: 5,520 Mod ✭✭✭✭spockety


    Availability of funding to those with the willingness to pay these prices is what's driving parts of the market. This time it's with mostly cash, not credit.

    Therefore the real question is how sustainable that is? Historically speaking what percentage of sales would be cash compared to now? If the availability of this type of funding changes (eg due to the pool of cash reducing or drying up), and we return to relying on a market driven by mortgage credit (with lending policies being as they are) then what is it that will happen?

    And if this dynamic doesn't change, then a large proportion of the population will be locked out of a market they would have traditionally had access to. Not just any market, however, shelter. This then brings more fundamental questions about the kind of society we want etc. How should we react to that potential situation?


  • Advertisement
  • Registered Users Posts: 1,992 ✭✭✭Mongfinder General


    This will only get worse but for the most part in Dublin. A couple of new lenders in the market providing sustainable mortgages will seriously kick things off.


  • Moderators, Education Moderators Posts: 5,520 Mod ✭✭✭✭spockety


    This will only get worse but for the most part in Dublin. A couple of new lenders in the market providing sustainable mortgages will seriously kick things off.

    I refer you to the recent news about investec's aborted entry...


  • Registered Users Posts: 1,992 ✭✭✭Mongfinder General


    spockety wrote: »
    I refer you to the recent news about investec's aborted entry...
    on
    Probably too busy lapping up the business they scored on the NCB deal. Taking commissions for buying and selling pork bellies, gold and FCOJ is much less of a headache.


  • Registered Users Posts: 261 ✭✭SeanSouth


    The people who will continue to buy in SCD are the same ones that have always bought there.

    1) People assisted with family cash & wealth
    2) Professional couples with dual income in the region of 150 - 250K
    3) Returned emigrants with savings
    4) Trader - uppers
    5) Re-locating high earners from within and outside the country.

    Everyone else will need to set their sights a bit lower
    The market is humming along at the moment with tight credit conditions
    Presumably the market will be more buoyant (not less) as soon as the banks start to function normally again

    I think its correct to draw a correlation between earnings, mortgage availability and house prices in lower price areas like Lucan or Blanchardstown. The higher price areas will have a different dynamic. In London, house prices in Chelsea, Fulham & Knightsbridge are normally well beyond the means of 99% of workers. I dont think South Dublin is directly comparable to London but it does indicate that certain property markets command prices well beyond anything that can be pegged back to mere income levels. There are 1.2 million people living in the greater Dublin area. Its inevitable that certain sought-after areas will be well bid and very often to a level that defies any sort of logic and well beyond the reach of any average income couple.

    Property prices in South Dublin have always been high. In 1990 nice houses in Foxrock, were commanding prices in the 150K to 190K
    bracket when the very top professional salaries were in the 45K bracket. There was no crash then or no expectation of a crash. Having the income is really not enough, you also need to have the wealth.


  • Moderators, Education Moderators Posts: 5,520 Mod ✭✭✭✭spockety


    South Dublin is a red herring. There are major affordability issues with housing in Lucan and blanch for the type of people who should realistically expect to be able to live in the decent parts of those areas.


  • Advertisement
  • Registered Users, Registered Users 2 Posts: 6,003 ✭✭✭handlemaster


    I'd say blanch and D 15 in general is affordable for the average Joe and Jane


  • Banned (with Prison Access) Posts: 7 barks1990


    If repossessions come into play prices will plummet and so they should.They need to free up stock asap but i highly doubt that will ever happen


  • Registered Users Posts: 1,992 ✭✭✭Mongfinder General


    barks1990 wrote: »
    If repossessions come into play prices will plummet and so they should.They need to free up stock asap but i highly doubt that will ever happen

    Paying interest only (non trackers) on a 300k mortgage beats the return on principal + interest 150k mortgage.

    The expected flood of property onto the market will happen across the country but a big part of it will be in areas that nobody wants to know about. So it's in the Bank's interest to keep revenues coming in, in other words get as much out of bad loans as possible. Certain areas will take a long time to recover but more sought after areas will see sharp rises. I don't think a flood of properties onto the market will depress prices in a more sought after area unless policy changes and the Bank's pursue family homes in these areas.


  • Registered Users, Registered Users 2 Posts: 23,771 ✭✭✭✭ted1


    barks1990 wrote: »
    If repossessions come into play prices will plummet and so they should.They need to free up stock asap but i highly doubt that will ever happen

    I honestly can't see to many houses on the south side being repossessed. Apartments yes by houses no. Few people purchased houses as investment properties because they were so inflated and offered a low return.


  • Registered Users, Registered Users 2 Posts: 6,003 ✭✭✭handlemaster


    Repossessions affect is been over played here. Its not going to have much of an impact on prices moving forward. T


  • Moderators, Education Moderators Posts: 5,520 Mod ✭✭✭✭spockety


    Why is nobody willing to talk about the fact this is all being driven by cash? Jesus it's like an elephant in the room the size of a closet.


  • Registered Users, Registered Users 2 Posts: 6,003 ✭✭✭handlemaster


    Its not all cash people are still getting mortgages


  • Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    Its not all cash people are still getting mortgages

    Over half of sales are cash sales (which is why they're not featuring in the statistics- other than Propertyprices etc).

    There is a limited amount of cash out there- and we're now at levels where people are saying there isn't a sufficient return available for the prices being sought, and are back sitting on the fence again (as evidenced by the rapid slowdown/stalling in price rises in South Dublin). I'm ready to call it a bounce- we may have minor increases over the next 3-4 months, but certainly no repitition of the 18-20% rises the vested interests are suggesting.

    Also- I don't see any reason for there not to be considerable repossessions in D22/24/15 and county Dublin areas including Lucan etc- which have a ridiculously high number of BTL properties (and presumably non-performing loans).


  • Moderators, Education Moderators Posts: 5,520 Mod ✭✭✭✭spockety


    Its not all cash people are still getting mortgages

    Yes but people with mortgages are competing with more people with cash. Cash buyers can allow themselves to be irrational when chasing and putting their own value on a property. Mortgagees are at the mercy of banks in telling them both how much they can spend and on what property. The market was what, 65% cash in 2013?

    That is far from normal I would imagine.


  • Registered Users, Registered Users 2 Posts: 23,771 ✭✭✭✭ted1


    spockety wrote: »
    Why is nobody willing to talk about the fact this is all being driven by cash? Jesus it's like an elephant in the room the size of a closet.

    Regardless of the finance prices are what they are


  • Advertisement
  • Registered Users, Registered Users 2 Posts: 6,003 ✭✭✭handlemaster


    Over half of sales are cash sales (which is why they're not featuring in the statistics- other than Propertyprices etc).

    There is a limited amount of cash out there- and we're now at levels where people are saying there isn't a sufficient return available for the prices being sought, and are back sitting on the fence again (as evidenced by the rapid slowdown/stalling in price rises in South Dublin). I'm ready to call it a bounce- we may have minor increases over the next 3-4 months, but certainly no repitition of the 18-20% rises the vested interests are suggesting.

    Also- I don't see any reason for there not to be considerable repossessions in D22/24/15 and county Dublin areas including Lucan etc- which have a ridiculously high number of BTL properties (and presumably non-performing loans).

    With regard to the areas you mention go on daft or other sites see how many houses there are for rent in theses areas which is what families want. Now look at the population of these areas ? BTL properties should not be empty. Performing ? I think so.


  • Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    Performing ? I think so.

    Performing- as in generating a rental income. Yes.
    Non-performing- as in, landlord's strategically keeping said rent and not paying the mortgage- unfortunately- also yes.

    Just because a property is let, and generating income- doesn't mean the bank are being paid.........


  • Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    GreeBo wrote: »
    But why *should* they?! Are you a socialist?
    You can should your way through life, but meanwhile life will continue ignoring you.

    Kindly refrain from personalising your posts- and stick with facts.
    Comments like the above come across as sneering at someone- and are not welcome in this forum.

    Regards,

    The_Conductor


  • Registered Users, Registered Users 2 Posts: 27,313 ✭✭✭✭GreeBo


    Kindly refrain from personalising your posts- and stick with facts.
    Comments like the above come across as sneering at someone- and are not welcome in this forum.

    Regards,

    The_Conductor
    Not sneering at all, a genuine question to ascertain the facts of his argument, I.e. people should be ableto afford houses, which I think ignores basic market forces.
    His argument, in my opinion, involves ignoring basic economics because of an ideal, I don't see how arguing that point is unwelcome on this forum?


  • Moderators, Education Moderators Posts: 5,520 Mod ✭✭✭✭spockety


    GreeBo wrote: »
    Not sneering at all, a genuine question to ascertain the facts of his argument, I.e. people should be ableto afford houses, which I think ignores basic market forces.
    His argument, in my opinion, involves ignoring basic economics because of an ideal, I don't see how arguing that point is unwelcome on this forum?

    I guess it's part an ideal of shared social responsibility, and part how in the name of God can you consider natural market forces at work when the market is being rigged to f**k by our own government and wider banking systems in a way it previously wasn't?

    The interference first with feeding the bubble and then with doing everything possible to prop it up and deny the natural collapse of that bubble through nama, bond holder bailouts, and most importantly of all; the tolerance and tax payer funded acceptance of ludicrous levels of mortgage debt going unpaid with no consequence by repossession.

    Market? Market my hole.


  • Registered Users, Registered Users 2 Posts: 2,497 ✭✭✭ezra_pound


    Quote: ezra_pound
    Overpriced property where yields are 4-8%???

    Hmmm...
    A low risk investment return of 7% is a good benchmark. When property yields go below 4% it can be indicative of a house price above it's investment value. During the bubble yields were approximately 2%.

    Exactly yield of 4- 8 % is not overpriced.


  • Registered Users, Registered Users 2 Posts: 78,537 ✭✭✭✭Victor


    GreeBo wrote: »
    Are you a socialist?
    Even if you are Senator McCarthy, such comments are inappropriate.

    Moderator


  • Registered Users, Registered Users 2 Posts: 27,313 ✭✭✭✭GreeBo


    spockety wrote: »
    I guess it's part an ideal of shared social responsibility, and part how in the name of God can you consider natural market forces at work when the market is being rigged to f**k by our own government and wider banking systems in a way it previously wasn't?

    The interference first with feeding the bubble and then with doing everything possible to prop it up and deny the natural collapse of that bubble through nama, bond holder bailouts, and most importantly of all; the tolerance and tax payer funded acceptance of ludicrous levels of mortgage debt going unpaid with no consequence by repossession.

    Market? Market my hole.

    So your argument is that if it wasn't for all the reality going on around us, everyone on "normal"incomes would be able to choose where to live...irrespective of how popular that area is?

    Look around, we are where we are. You might as well argue about how things would be different if gravity was just a bit weaker.

    Desirable places have and will always be beyond the reach of the vast majority. All have to do is compare house prices from 30 years ago...or was there underground government forces at play then too?


  • Registered Users, Registered Users 2 Posts: 1,425 ✭✭✭indiewindy


    GreeBo wrote: »
    So your argument is that if it wasn't for all the reality going on around us, everyone on "normal"incomes would be able to choose where to live...irrespective of how popular that area is?

    Look around, we are where we are. You might as well argue about how things would be different if gravity was just a bit weaker.

    Desirable places have and will always be beyond the reach of the vast majority. All have to do is compare house prices from 30 years ago...or was there underground government forces at play then too?

    You failed to answer what spockety wrote. The Government is doing all it can to stop the housing market find its natural level. CGT exemption for buy to lets, virtually no repossessions, Noonan already talking of incentives for builders, allowing legal profession make prosess for attempted repossession extremely expensive thereby benefiting lawyers like new beginnings etc. Foreign owned banks getting out of Ireland as they are not competing on a level playing field. In what other business do you keep an asset if you either wont or cant afford to pay for it.


  • Advertisement
  • Moderators, Education Moderators Posts: 5,520 Mod ✭✭✭✭spockety


    GreeBo wrote: »
    So your argument is that if it wasn't for all the reality going on around us, everyone on "normal"incomes would be able to choose where to live...irrespective of how popular that area is?

    Look around, we are where we are. You might as well argue about how things would be different if gravity was just a bit weaker.

    Desirable places have and will always be beyond the reach of the vast majority. All have to do is compare house prices from 30 years ago...or was there underground government forces at play then too?

    Oh dear. You are simply not reading what I am writing.


  • Moderators, Education Moderators Posts: 5,520 Mod ✭✭✭✭spockety


    The Irish independent's prediction for 2014....

    Property prices to fall

    Residential property prices will end the year falling. There's a cash-fuelled bubble inflating in certain Dublin suburbs.

    The working through of the pent up demand, coupled with an exhaustible supply of cash buyers will see prices in South Dublin stall after the summer (it'll be a scorcher).

    The economic crisis has meant that potential house buyers have been saving for far longer than normal. They have way bigger deposits and need smaller mortgages.

    This won't last. The banks will eventually work through the cash rich buyers and when the barrel is empty . . . qualifying for credit will be ridiculously hard. This lack of money for homes will see a fall in prices. Not massive . . . but enough to jog the memory.

    Prices in the rest of the country will largely mark time.


  • Registered Users, Registered Users 2 Posts: 6,003 ✭✭✭handlemaster


    The indo has schizophrenia


  • Registered Users, Registered Users 2 Posts: 27,313 ✭✭✭✭GreeBo


    indiewindy wrote: »
    You failed to answer what spockety wrote. The Government is doing all it can to stop the housing market find its natural level. CGT exemption for buy to lets, virtually no repossessions, Noonan already talking of incentives for builders, allowing legal profession make prosess for attempted repossession extremely expensive thereby benefiting lawyers like new beginnings etc. Foreign owned banks getting out of Ireland as they are not competing on a level playing field. In what other business do you keep an asset if you either wont or cant afford to pay for it.
    All that you describe above applies equally to everyone.
    The "government" aren't specifically targeting residents or wanna be residents of SCD, so why do you maintain that SCD is artificially higher than the market would naturally have it?

    There seems to be a problem for some people to accept that there are places in Dublin that they are not going to be able to afford.
    Again, if this is all driven by government meddling, why have foxrock, dalkey etc always been historically more expensive than the same house elsewhere?


  • Registered Users Posts: 1,203 ✭✭✭moxin


    GreeBo wrote: »
    All that you describe above applies equally to everyone.
    The "government" aren't specifically targeting residents or wanna be residents of SCD, so why do you maintain that SCD is artificially higher than the market would naturally have it?

    There seems to be a problem for some people to accept that there are places in Dublin that they are not going to be able to afford.
    Again, if this is all driven by government meddling, why have foxrock, dalkey etc always been historically more expensive than the same house elsewhere?

    Thats a rather smug attitude.

    The vast majority or contributors here and in the general public have no desire to live in the uber rich areas.

    The problem at the moment is that most areas of Dublin including some "working class" areas are still way overpriced and there is no justification for it, the govt has done all they could to try to prop up the whole thing.


  • Registered Users, Registered Users 2 Posts: 27,313 ✭✭✭✭GreeBo


    moxin wrote: »
    Thats a rather smug attitude.

    The vast majority or contributors here and in the general public have no desire to live in the uber rich areas.

    The problem at the moment is that most areas of Dublin including some "working class" areas are still way overpriced and there is no justification for it, the govt has done all they could to try to prop up the whole thing.

    Smug? Believe me, I have nothing to be smug about...I can't afford to buy there either!

    Of course there is justification...the justification is that these are the place that the majority of people who want to live in SCD can afford; ergo the price is higher than it might otherwise be for the same building in a different location.

    People who grew up in Rathfarnham for example, but cant afford to buy there will buy nearby, in Knocklyon or Firhouse, thus increasing the cost of those areas compared to further afield or less desirable areas.

    I really have a hard time accepting that the government is in the middle of some sneaky plan to artificially keep certain house prices high....to what end? What does the government get out of it and in any case, how exactly are they driving demand in these areas?


  • Advertisement
  • Registered Users, Registered Users 2 Posts: 23,771 ✭✭✭✭ted1


    spockety wrote: »
    The Irish independent's prediction for 2014....

    Property prices to fall

    Residential property prices will end the year falling. There's a cash-fuelled bubble inflating in certain Dublin suburbs.

    The working through of the pent up demand, coupled with an exhaustible supply of cash buyers will see prices in South Dublin stall after the summer (it'll be a scorcher).

    The economic crisis has meant that potential house buyers have been saving for far longer than normal. They have way bigger deposits and need smaller mortgages.

    This won't last. The banks will eventually work through the cash rich buyers and when the barrel is empty . . . qualifying for credit will be ridiculously hard. This lack of money for homes will see a fall in prices. Not massive . . . but enough to jog the memory.

    Prices in the rest of the country will largely mark time.

    When you said indo people stopped reading


  • Registered Users, Registered Users 2 Posts: 10,673 ✭✭✭✭senordingdong


    spockety wrote: »
    The Irish independent's prediction for 2014....

    Property prices to fall

    Residential property prices will end the year falling. There's a cash-fuelled bubble inflating in certain Dublin suburbs.

    The working through of the pent up demand, coupled with an exhaustible supply of cash buyers will see prices in South Dublin stall after the summer (it'll be a scorcher).

    The economic crisis has meant that potential house buyers have been saving for far longer than normal. They have way bigger deposits and need smaller mortgages.

    This won't last. The banks will eventually work through the cash rich buyers and when the barrel is empty . . . qualifying for credit will be ridiculously hard. This lack of money for homes will see a fall in prices. Not massive . . . but enough to jog the memory.

    Prices in the rest of the country will largely mark time.

    I imagine then that builders will simply keep the amount of building to a minimum in order to keep the supply and demand price of new houses high.


  • Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    I imagine then that builders will simply keep the amount of building to a minimum in order to keep the supply and demand price of new houses high.

    The issue is builders not being able to access credit to complete units (in locations where they have a hope in hell of selling). Most Dublin developed land- is in NAMA- and with their current issues, I imagine, nothing will happen anytime soon there.


  • Registered Users, Registered Users 2 Posts: 10,673 ✭✭✭✭senordingdong


    The issue is builders not being able to access credit to complete units (in locations where they have a hope in hell of selling). Most Dublin developed land- is in NAMA- and with their current issues, I imagine, nothing will happen anytime soon there.

    Oh right.

    Well is there any fact to the idea I put forward.
    My OH and I are in a position where we'll be looking to buy soon (Dublin suburbs) but will not have large amounts of cash to put forward. My concern was the prices would stop falling and the builders/developers would stop building to keep the market terms in their favour.


  • Moderators, Education Moderators Posts: 5,520 Mod ✭✭✭✭spockety


    GreeBo wrote: »

    People who grew up in Rathfarnham for example, but cant afford to buy there will buy nearby, in Knocklyon or Firhouse, thus increasing the cost of those areas compared to further afield or less desirable areas.

    Why would people who happen to grow up in one area moving into a nearby area increase the cost of those areas....? Are there studies on this that you can reference, or was it just a throwaway remark? If it's a throwaway remark that's grand, just let me know so I can ignore it.


  • Advertisement
  • Banned (with Prison Access) Posts: 559 ✭✭✭Maura74


    It is the same in London, however they saying that interest rates will rise next year and that will be a big problem for many people that have purchased a home within the last couple of years.


  • Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    Its not in a builders favour to simply sit things out- most builders are barely ticking over as things are- if they were to leave tradesmen on the sidelines, as they have done since 2007- significant numbers of them will vote with their feet and emigrate (as has been happening). Building costs are going up- because once plentiful skills, are a constraint (as anyone with the wherewithall, or without ties- has up sticks and left).

    The issue is more that there is a lack of zoned land, and/or incomplete units, in places that people actually want to live in. There are not thousands and thousands of unfinished units in Dublin- which is what we need- and indeed, the single biggest tranche of zoned land is currently overwintering horses out by Ballymun.

    There is a proposal to force developers to pay taxes due up front- aka to front load taxes, rather than allow them pay them on completion- to give them an added incentive to complete and get the hell out of there. Measures such as this- may be an added incentive to get things moving- but on a small scale, and from a poor baseline.

    We can add to our urban sprawl more and more- or we can accept that apartment living is needed- and apartment dwellers need reasonable facilities and amenities- and as they're paying property tax like everyone else- these should be supplied.

    Our whole system is dysfunctional- and there is no will there to change it for the better (which would entail a total remodelling).


  • Registered Users, Registered Users 2 Posts: 1,663 ✭✭✭MouseTail


    that wont really be a problem in Ireland, as anyone who managed to buy within the last 2 years here did so at the bottom of the market, and either purchased with cash, or were stress tested rigorously.


  • Registered Users, Registered Users 2 Posts: 27,313 ✭✭✭✭GreeBo


    spockety wrote: »
    Why would people who happen to grow up in one area moving into a nearby area increase the cost of those areas....? Are there studies on this that you can reference, or was it just a throwaway remark? If it's a throwaway remark that's grand, just let me know so I can ignore it.


    Because families who grew up in SCD have children who want to also live in the area; I assume we can agree on that?

    Typical families in affluent SCD are large, they have 2+ kids.
    There is little to no new development in SCD therefore not all of these kids, who are now adults looking to buy cannot find an affordable starter house so they look further afield, to places where there has been new development, Ticknock, Dalriada, Airpark etc.
    This pushes up the prices of these houses...demand pushes up prices, again I assume we are agree on that?

    Feel free to argue your point btw, without resorting to silly buggers. If you cant convince me with logic, perhaps your point isnt as defendable as you previously thought?


  • Registered Users Posts: 261 ✭✭SeanSouth


    @Moxin, how can you say that most areas of Dublin are way overpriced.

    It costs approximately 1300 euro per square metre to build a house. A three bedroom semi detached house of 120 sq mtrs will therefore cost in the region of 156000 irrespective of where you build it. If you can accept that a site in a working class area of Dublin will always command a minimum of 50000, then the lowest possible cost of a house in Dublin is 206,000. This type of house is already for sale in all working class areas of Dublin at this price level and below. In short, houses are now selling at the lowest price level ie the cost of construction and in many cases below the cost of construction. Everybody knows that this is the lowest that any market can go.

    The numbers are easy enough to track. If anybody in Dublin wishes to purchase a three bedroom semi, they will need a rock bottom minimum of 200K +. Otherwise they should set their sights at purchasing an apartment or renting, much the same as in all other capital cities of Europe

    Credit is a problem for developers now but the main problem for developers is being able to build a project in Dublin at a profit. If this were possible, there is no shortage of European investors interested in Irish property and waiting to get involved with viable construction projects. Some people seem to be wishing that NAMA will come in and dump development land to enable a certain select few to buy cheap houses. This is not going to happen. NAMA has been charged with managing that land in the best interests of the tax payer and the people of Ireland. Its not in the interests of the Irish people to have NAMA artificially collapse the market so that some cute hoors can get access to low priced housing.

    Regarding comments about banks not wanting to lend and credit becoming tighter. This doesn't make much sense either. Banks need to lend. Lending is the life blood of a bank. Its how they make profit and stay alive. A bank cant survive long term without lending. The banks have repeatedly said that the main problem with mortgage lending at the moment is lack of demand. Too many buyers sitting on the fence waiting for lower prices. Also the volume of transactions in the market is very low due to lack of supply.
    I suspect that 2014 will bring about a much higher demand for mortgages and I have no doubt that the banks will be lending. A couple earning 100K combined should have no difficulty in purchasing a good quality home in Lucan and that is also the situation today.A couple earning 60K (combined) will face difficulties based on affordability.

    The latest predictions from this weekend saying that as soon as the cash circulating, runs out, the property market in Dublin will then collapse is absolutely hilarious. This can only happen if there is a general consensus that Ireland and Dublin is doomed and has no future. I think most commentators have not written off Ireland and I suspect that the pent up demand for middle level residential areas of Dublin is enormous. There will be no more crashes.

    Supply is the big issue for 2014. Supply will not come in any great numbers from new development. I suspect that most of the supply (up to 10000 units) will come from repossessions and even this level will not be sufficient to satisfy the pent up demand waiting in the wings now. I suspect that the main source of repossessions will be from the "newer" areas of west Dublin and beyond, built between 2002 and 2007. Hopefully much of this stock will come from repossessed buy to let investors.

    Finally I would predict that even in a worse case scenario, where credit becomes too tight and cash buyers dry up and foreign investors suddenly get cold feet, the result of this will not be lower prices for all, it will be instead a stagnant market with almost no transactions. Supply will remain tightly restricted until such time as prices increase again. What a lot of contributors dont seem to fully understand is that lower prices will bring less supply, not more. Lower prices are a disincentive to developers to start building again. Lower prices with a trickle of supply is no good to anyone. Its very hard to envisage how lower prices might open the floodgates of supply to satisfy all the bears on this forum


  • Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    SeanSouth wrote: »
    In short, houses are now selling at the lowest price level ie the cost of construction and in many cases below the cost of construction. Everybody knows that this is the lowest that any market can go.

    There is no unwritten law that property has a fundamental level (aka its construction cost) below which it cannot fall. If people are only willing or capable of paying a certain amount- the seller has the option of taking this, or refusing it- and whether or not they accept this price, is probably determined by factors outside of the construction cost altogether (aka with executor sales- its liquidating the asset, for whatever they can get- regardless of what it might cost to build the house).

    Liquidity- in the form of cash buyers, are becoming a constraint- which leaves us with traditional mortgagees- who are finding it harder and harder to access funds. This lack of funds- is more an issue than anything else.

    Executor sales are going to continue to feature as the predominant sale type for the perceivable future- both because of a lack of new construction, but also because of the lack of people capable of accessing funding. So- there is a shortage of property- but there is an even greater shortage of people with money...........


  • Moderators, Education Moderators Posts: 5,520 Mod ✭✭✭✭spockety


    GreeBo wrote: »
    Because families who grew up in SCD have children who want to also live in the area; I assume we can agree on that?

    Typical families in affluent SCD are large, they have 2+ kids.
    There is little to no new development in SCD therefore not all of these kids, who are now adults looking to buy cannot find an affordable starter house so they look further afield, to places where there has been new development, Ticknock, Dalriada, Airpark etc.
    This pushes up the prices of these houses...demand pushes up prices, again I assume we are agree on that?

    Feel free to argue your point btw, without resorting to silly buggers. If you cant convince me with logic, perhaps your point isnt as defendable as you previously thought?

    I wasn't making a point.. You were.


  • Registered Users, Registered Users 2 Posts: 23,771 ✭✭✭✭ted1


    spockety wrote: »
    Why would people who happen to grow up in one area moving into a nearby area increase the cost of those areas....? Are there studies on this that you can reference, or was it just a throwaway remark? If it's a throwaway remark that's grand, just let me know so I can ignore it.
    Because it increased demand and that's the basis for pricing.


  • Registered Users Posts: 261 ✭✭SeanSouth


    What you don't seem to understand is that you cant have a situation where prices are less than construction costs in a market where there is currently no excess supply. All current statistics infer that demand is rising now and will rise further in the coming years. The main way of increasing supply is to build more. You cant build more if the market price is less than the construction cost.In this scenario, prices can only increase.In spite of emigration, the population in Ireland is growing. More housing is needed each year. Recent reports say that 25000 new houses are needed each year for the next number of years. If people want lower prices the minimum they can expect to pay is the cost of construction + site cost and that can only happen in a situation where there is enough supply to meet demand. Hoping for anything else doesn't make any sense


  • Registered Users, Registered Users 2 Posts: 23,771 ✭✭✭✭ted1


    MouseTail wrote: »
    that wont really be a problem in Ireland, as anyone who managed to buy within the last 2 years here did so at the bottom of the market, and either purchased with cash, or were stress tested rigorously.
    Don't think the stress testing properly accounted for property tax, USC, water charges, bank fees, health insurance levies ( basically anything the government are involved in or control)


  • Advertisement
Advertisement