Depressing Dublin House prices

GreeBo

desertcircus wrote: »

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.

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

jesus_thats_gre

The_Conductor wrote: »

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?

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%.

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?

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.

spockety

Mongfinder General wrote: »

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...

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.

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.

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.

handlemaster

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

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

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.

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.

handlemaster

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

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.

handlemaster

Its not all cash people are still getting mortgages

The_Conductor

handlemaster wrote: »

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).

spockety

handlemaster wrote: »

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.

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

handlemaster

The_Conductor wrote: »

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.

The_Conductor

handlemaster wrote: »

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.........

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

GreeBo

The_Conductor wrote: »

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?

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.

ezra_pound

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

Hmmm...

johnnyskeleton wrote: »

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.

Victor

GreeBo wrote: »

Are you a socialist?

Even if you are Senator McCarthy, such comments are inappropriate.

Moderator

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?

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.

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.