Depressing Dublin House prices

GreeBo

spockety wrote: »

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

So you dont have a point?
Ok...

The_Conductor

SeanSouth wrote: »

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

Have a look at the CSO population trends. Once emigration is factored into the equation- we had a small net increase (of 7,000) in the population in the year to April 2013- and the population is now in decline (projected to fall from 4.59m in April 2013, to 4.54m in April 2014)- its not a massive decline- but it is a decline nonetheless.

I don't know on what basis the reports that we need 25,000 new homes each year for the next X number of years comes from- because its certainly not from population growth..........

In addition to all of this- we now have the largest dependency ratio we have ever had- that is the portion of non-working members of the population, versus workers.

Something has to give. Building 25,000 homes a year for the next X number of years- seems wishful thinking, and some sort of fairy ideal, than it does coming to a sound decision, founded in economics.

Yes- by all measures, we do need to build more housing units- however, given population trends- these would not be traditional housing units- more likely sheltered housing for our growing retired population- alongside providing appropriate services for those with young families.

Ps- the CSO website is really really interesting.

The_Conductor

Spockety and Greebo- quit squabbling please.

murphaph

I think many of these cash buyers are actually buy to occupy but they are buying with money borrowed from parents.

GreeBo

The_Conductor wrote: »

Have a look at the CSO population trends. Once emigration is factored into the equation- we had a small net increase (of 7,000) in the population in the year to April 2013- and the population is now in decline (projected to fall from 4.59m in April 2013, to 4.54m in April 2014)- its not a massive decline- but it is a decline nonetheless.

I don't know on what basis the reports that we need 25,000 new homes each year for the next X number of years comes from- because its certainly not from population growth..........

In addition to all of this- we now have the largest dependency ratio we have ever had- that is the portion of non-working members of the population, versus workers.

Something has to give. Building 25,000 homes a year for the next X number of years- seems wishful thinking, and some sort of fairy ideal, than it does coming to a sound decision, founded in economics.

Yes- by all measures, we do need to build more housing units- however, given population trends- these would not be traditional housing units- more likely sheltered housing for our growing retired population- alongside providing appropriate services for those with young families.

Ps- the CSO website is really really interesting.

well remember that the people being born now wont be looking for houses for another 25 years...so its the glut of people who are now mid twenties (and early thirties due to the bubble) that are out looking to buy now.

The fact that so many couldnt or didnt buy 6 -8 years ago means that they are still trying to get onto the ladder now, further increasing the numbers past what they would ordinarily be.

I think what we really need to do, for many reasons (economy, "greenness", quality, etc) is raze a lot of the crap that is existing today, estate houses built in the 70's, 80's & 90's that are just crappy wind tunnels. Replace them with modern, efficient houses (not corporation) and upgrade our housing stock. I have no ideahow you do this, its a total pipe dream, but there must be some way? There are half to one million euro houses in SCD that are of terrible quality; if there were in Laois you wouldnt pay 100k for them.

The_Conductor

murphaph wrote: »

I think many of these cash buyers are actually buy to occupy but they are buying with money borrowed from parents.

Which begs the question- where are the parents coming up with these lumpsums of hundreds of thousands of Euro from........

GreeBo

murphaph wrote: »

I think many of these cash buyers are actually buy to occupy but they are buying with money borrowed from parents.

The old parents re-mortgage trick?

The_Conductor

GreeBo wrote: »

so its the glut of people who are now mid twenties (and early thirties due to the bubble) that are out looking to buy now.

Its this selfsame glut of people who are emigrating........
This is the age group who are predominantly leaving- its how we've always managed our population- several socioeconomists refer to it as our pressure valve.

Sure there are some 20/30 somethings in the market- but nowhere near the numbers you'd imagine.

The_Conductor

GreeBo wrote: »

The old parents re-mortgage trick?

Who is giving them the money to do this with?
If it were widespread- you can be sure the Revenue Commissioners would be sticking their oar in to get their pound of flesh.

If parents are doing this- its damn dangerous, and could come back to bite them in the arse.

GreeBo

The_Conductor wrote: »

Its this selfsame glut of people who are emigrating........
This is the age group who are predominantly leaving- its how we've always managed our population- several socioeconomists refer to it as our pressure valve.

Sure there are some 20/30 somethings in the market- but nowhere near the numbers you'd imagine.

Sure there are lots emigrating, but also lots who arent. and I would guess (no stats to back it up!) that those leaving are typically not in the SCD market. There are 5 people in my office, early 30s late 20s who closed on houses in the last 3 months. Ordinarily they would havehad houses years ago, but they stayed renting for longer than they wanted and bought now, with large deposits.

The_Conductor wrote: »

Who is giving them the money to do this with?
If it were widespread- you can be sure the Revenue Commissioners would be sticking their oar in to get their pound of flesh.

If parents are doing this- its damn dangerous, and could come back to bite them in the arse.

Well if you are sitting on a house worth half a million, Im sure the back will give you 100k to invest in a house that your child is living in. Its very dangerous alright, but has gone on for years. Hopefully the banks are a little more diligent about who they do it to, but people of my parents age who are mortgage free shouldnt have an issue getting a part mortgage, often the children can afford to pay off both, they just need to deposit because they cant get a large enough mortgage on their own

delthedriver

It is basic economics. The law of supply and demand.

MouseTail

The_Conductor wrote: »

Have a look at the CSO population trends. Once emigration is factored into the equation- we had a small net increase (of 7,000) in the population in the year to April 2013- and the population is now in decline (projected to fall from 4.59m in April 2013, to 4.54m in April 2014)- its not a massive decline- but it is a decline nonetheless.

I don't know on what basis the reports that we need 25,000 new homes each year for the next X number of years comes from- because its certainly not from population growth..........


Ps- the CSO website is really really interesting.

Look closer at those stats, and you can see where the bulges are. There is a bulge of millenial babies, and another in the pre and primary school age, hence the post primary building programme. Also bear in mind the marriage break up stats which we never really had before.
Unless house building resumes at a sustainable level, we are looking at a chronic shortage in the medium term.

I agree, the CSO site is a time vacuum!!

As for cash buyers, you would be very surprised at the cash piles people have, some from inheritance, some from savings. I know quite a few couples cashing in stocks now to purchase homes. The Central Bank released statistics in October which showed that there was a substantial increase in people moving money from long term accounts and bonds to short term accounts.

murphaph

Indeed. Some folks have quite substantial savings tucked away. This money is now being forced into play because the kids can't get mortgages.

delthedriver

murphaph wrote: »

Indeed. Some folks have quite substantial savings tucked away. This money is now being forced into play because the kids can't get mortgages.

The cash is also being brought into play because of the miniscule return from banks nett of DIRT.

Why wouldn't someone put their cash in a property where the market is rising?

Not only would they see capital appreciation, but also with rents rising they will have an additional monthly income far in excess of bank returns.

GreeBo

also a lot of private pensions go into investment property.

Handy enough number, your contributions pay the mortgage (obviously gross so way cheaper) and in the end you have a house.
Meanwhile any rental income comes in and tops it up ( you cant live in your own pension property)

delthedriver

It's simples eh?:)

Silverbling

I am 48, and thought the time to buy was last year, unfortunately my half of the divorce will never buy a property in Dundrum.

I am renting and working to pay the rent until the day I drop dead.

I will go against the rest, if you can afford a mortgage on a house you can grow into in an area you like then snap it up.

To me 30 years just went in a flash, buy buy buy before it all goes nuts again, I can see it in Dundrum I now have cheap rent of €1600 because I have been here for years, houses on my road with no BER are renting for €2600, its worse than the boom

delthedriver

Silverbling wrote: »

I am 48, and thought the time to buy was last year, unfortunately my half of the divorce will never buy a property in Dundrum.

I am renting and working to pay the rent until the day I drop dead.

I will go against the rest, if you can afford a mortgage on a house you can grow into in an area you like then snap it up.

To me 30 years just went in a flash, buy buy buy before it all goes nuts again, I can see it in Dundrum I now have cheap rent of €1600 because I have been here for years, houses on my road with no BER are renting for €2600, its worse than the boom

Sound advice

delthedriver

Why is everyone trying to get into the Southside?

What is wrong with Clontarf, Raheny, Sutton, Howth,Castleknock ??????

Glenbhoy

Silverbling wrote: »

I can see it in Dundrum I now have cheap rent of €1600 because I have been here for years, houses on my road with no BER are renting for €2600, its worse than the boom

Your post prompted me to have a look at 4 bedroom houses in Dundrum on daft - 2 properties, one pretty ****ty looking for €2400 and one okay looking €3000 - I'd be shocked if they achieve anything like asking - anyone know of anyone actually paying that sort of money for similar properties?

I know rents have increased and supply of decent properties is low, but I also know of someone who took up a lease last month for a good 4 bed semi in nice part of D6W for €1700.

Shedite27

delthedriver wrote: »

Why is everyone trying to get into the Southside?

What is wrong with Clontarf, Raheny, Sutton, Howth,Castleknock ??????

ssssssssssshhhhhhhhhhh!!!!!!!

delthedriver

Shedite27 wrote: »

ssssssssssshhhhhhhhhhh!!!!!!!

Is it postcode?????? Or these places are on the Northside????

The_Conductor

delthedriver wrote: »

Is it postcode?????? Or these places are on the Northside????

Bingo.......
Not all of the prestigious and desireable areas in Dublin are on the Southside.
Ok- calling them prestigious and desireable may be a bit of a stretch regarding some of them- but as a generalisation- it holds. Plenty of very nice places to live on the Northside too. Also- there are some absolute nightmares on the Southside- akin to the worse of the Northside. You can't tar an entire area with a good or a bad brush- every area has its good and its bad spots.

Shedite27

The_Conductor wrote: »

Bingo.......
Not all of the prestigious and desireable areas in Dublin are on the Southside.
Ok- calling them prestigious and desireable may be a bit of a stretch regarding some of them- but as a generalisation- it holds. Plenty of very nice places to live on the Northside too. Also- there are some absolute nightmares on the Southside- akin to the worse of the Northside. You can't tar an entire area with a good or a bad brush- every area has its good and its bad spots.

Exactly. IMO, most "non-dubs" coming up to work in Dublin after college get attracted by the southside (myself included), and spend 3/4 years only knowing the southside apart from the occasional jaunt to the Airport or Croker. As a result there's far more competition for southside houses than northside. There's much better value northside.

alias no.9

Just to share some first hand experience...

We bought this year after nearly 2 years looking for a long term family home. It'll come as no surprise that supply is extremely limited, mostly executor sales with an occasional divorce settlement sale or BTL repo. There is very little difference in the quality or condition of the stock over the 2 years just more people looking and becoming aware of how few desirable houses are out there. Taking the time to find the right place but at the same time, being ready to move quickly when it comes can be as important as budget, often times it's the speed at which the more desirable houses go sale agreed that differentiates them from the rest rather than any outright difference in price.
Patience got us a house in a nicer, more settled and mature estate than most places we'd have been realistically in the market for. That and seeing beyond the condition, the house we bought had been rented out for a decade and was superficially rough, but that's no more expensive to put right than something done to somebody else's 'individual' taste. There simply are no family homes for sale in Dublin that are in what I'd consider 'walk in' condition, if you don't have an eye for what's possible on a budget, find someone who does that you can bring to viewings. If you are looking for someone to do work for you, put the feelers out on your personal networks, you'll probably find people that are appreciative of the opportunity and more flexible and reliable.
Banks are lending but are rigorous in assessing your ability to repay. I'd argue that people on this thread suggesting that large sums are being handed over by parents are ill informed because the banks want to know where your deposit / savings came from and if someone else has a financial interest in the house, because they don't like it if you can't amass your own deposit and they really don't like someone else's skin in the game. They want you to show them for a period of 6 months plus that you can save the amount equivalent to the stress tested monthly repayment, less any rent you're currently paying. The amount they're willing to lend is based on your net income, less the cost of servicing existing debt and takes account of their estimate of regular living expenses for your family unit. There are no grey areas or fudges like there may have been in the past to get an extra few quid.
Some estate agents are assholes, but it's worth while chatting with all of them because if you do wish to follow up with another viewing or make an offer, the process works more smoothly if you can identify yourself to them as somebody they've been talking to before.
Finally, I'd be reluctant to recommend anyone buy somewhere unless they can see themselves living there until at least the year 2030, or ideally for life. Trading up is far more difficult than simply buying.

Shedite27

alias no.9 wrote: »

Just to share some first hand experience...

We bought this year after nearly 2 years looking for a long term family home. It'll come as no surprise that supply is extremely limited, mostly executor sales with an occasional divorce settlement sale or BTL repo. There is very little difference in the quality or condition of the stock over the 2 years just more people looking and becoming aware of how few desirable houses are out there. Taking the time to find the right place but at the same time, being ready to move quickly when it comes can be as important as budget, often times it's the speed at which the more desirable houses go sale agreed that differentiates them from the rest rather than any outright difference in price.
Patience got us a house in a nicer, more settled and mature estate than most places we'd have been realistically in the market for. That and seeing beyond the condition, the house we bought had been rented out for a decade and was superficially rough, but that's no more expensive to put right than something done to somebody else's 'individual' taste. There simply are no family homes for sale in Dublin that are in what I'd consider 'walk in' condition, if you don't have an eye for what's possible on a budget, find someone who does that you can bring to viewings. If you are looking for someone to do work for you, put the feelers out on your personal networks, you'll probably find people that are appreciative of the opportunity and more flexible and reliable.
Banks are lending but are rigorous in assessing your ability to repay. I'd argue that people on this thread suggesting that large sums are being handed over by parents are ill informed because the banks want to know where your deposit / savings came from and if someone else has a financial interest in the house, because they don't like it if you can't amass your own deposit and they really don't like someone else's skin in the game. They want you to show them for a period of 6 months plus that you can save the amount equivalent to the stress tested monthly repayment, less any rent you're currently paying. The amount they're willing to lend is based on your net income, less the cost of servicing existing debt and takes account of their estimate of regular living expenses for your family unit. There are no grey areas or fudges like there may have been in the past to get an extra few quid.
Some estate agents are assholes, but it's worth while chatting with all of them because if you do wish to follow up with another viewing or make an offer, the process works more smoothly if you can identify yourself to them as somebody they've been talking to before.
Finally, I'd be reluctant to recommend anyone buy somewhere unless they can see themselves living there until at least the year 2030, or ideally for life. Trading up is far more difficult than simply buying.

I'd agree completely with this

murphaph

My contention is that parents are buying outright, possibly in their own name and then the kids are "renting" from their folks. I personally know a family in Berlin doing this and given how tight lending is in Ireland feel that this is likely happening in Ireland too.

The Spider

murphaph wrote: »

My contention is that parents are buying outright, possibly in their own name and then the kids are "renting" from their folks. I personally know a family in Berlin doing this and given how tight lending is in Ireland feel that this is likely happening in Ireland too.

Nonsense, the banks are lending to people with decent jobs and a proven ability to save, be it with the banks or company schemes. People want to know where the money is coming from? I work in a large tech company and was given shares, theres also the employee share save which everyone us entitled to in the company, those shares have increased in price fivefold in the past five years.

All big companies offer this, and it gives a huge return to employees, these are some of the people with cash deposits, god knows I had I didn't buy in SCD got better value outside, however I do see the appeal to families, it really is the only safe area in Dublin, you can mention Northside areas like Clontarf Sutton etc (for the record I prefer both areas to almost all of SCD) but the fact is they're pretty close to some dodgy areas, portmarnock beach being overrun last summer etc.

SCD is boring but it's safe and a good place to bring up kids while having easy access to the city and people will pay a premium for it, as for where the cash us coming from? See above.

alias no.9

murphaph wrote: »

My contention is that parents are buying outright, possibly in their own name and then the kids are "renting" from their folks. I personally know a family in Berlin doing this and given how tight lending is in Ireland feel that this is likely happening in Ireland too.

There may be instances of that happening but you're deluded if you think it's happening frequently enough to be driving the market. Given the myopic view of investment in Ireland, this cash/credit would be going into property, progeny or not. Even if it's widespread, it's the kind of thing that regular punters have never and will never be able to compete with.

lima

delthedriver wrote: »

Why is everyone trying to get into the Southside?

What is wrong with Clontarf, Raheny, Sutton, Howth,Castleknock ??????

It's all country folk and snobs like a certain person on here who blocked me as he lost an argument who are obsessed with the southside. They don't even understand that bad areas are also in 'scd'. The Northside is fine in certain areas, and perhaps even better than the southside as there are parks, beaches and the airport closeby. A lot cheaper right now too..