Property Market 2016

I Am The Law

Having read the CB Governors interview I think its fair to say that CB rules are here to stay and any changes will only be minor.

“So the Central Bank will be receiving from the mortgage banks the details of how these rules have been implemented. So I would expect in the second half of 2016 for the Central Bank to release its analysis of what we are seeing in the market. So that’s what I think you can expect to see. And I think it’s an important responsibility of the bank – having introduced these rules – to be as rigorous as possible in interpreting the impact of these rules.

The second point to make is that this framework is essentially structural in nature. In other words, it was not introduced in response to a short term problem in the market. It was introduced as a permanent feature, that there would be rules in place, so the fact of having rules there I would envisage to be a permanent feature in place. The fact of having rules I would envisage to be a permanent feature of the world."

OfflerCrocGod

Sono wrote: »

Currently in the market for a house in Dublin and this thread has me more confused than I was before I read it!

Don't expect a large drop in house prices in Ireland this year unless there is some significant external crisis. There is a possibility of a small drop but it's not worth waiting for. We are more likely to have very low, to minor negative price growth for the next few years as the market recovers and supply comes on stream. A collapse in prices won't be allowed happen, the CB controls credit and if there was a sign of a collapse I'm sure they would change the rules to supply more credit. Something from outside would have to cause a collapse. Of course this is all guesswork on my part but this isn't 2008, we are in a gradual recovery phase now.

Santy2015

Always go by the property price register. It's what I plan on doing so enough.

OfflerCrocGod

This is a real bubble https://www.youtube.com/watch?v=SBjXUBMkkE8

wenbo

I got my house last summer 2k below the asking price (325k). Recently another house in the estate with same asking price was sold for 367K. The house went to sale agreed within 3 weeks. Very high demand in Galway.

RupertsHabit

Noticed the demand in certain parts of Galway alright.

OfflerCrocGod

Villa05 wrote: »

From that report, prices stalled in the final quarter everywhere. Going to be an interesting 2016

Good point, very weak end to the year. I was counting on wage increases to be fully consumed by the property market in 2016 hence my ~5% (anything from 0 to 5) price increase guess. Supply is still sluggish, new supply will be more expensive to build compared to most of the current stock (higher standards), rents are still high, economy is still improving etc. That the year ended so weak though gives me pause, we could have a negative year in 2016, maybe the CB rules still haven't shown their full effect, either which way though I would say the price move will be slight (up or down).

Villa05

OfflerCrocGod wrote:

That the year ended so weak though gives me pause, we could have a negative year in 2016, maybe the CB rules still haven't shown their full effect, either which way though I would say the price move will be slight (up or down).

The CB rules would have 2 big effects on the market. 1 is not discussed much here which is that it's introduction brought forward demand much like the 100% mortgages.
Those that could buy or were very close to buying did so before the new rules came in. This increased demand in late 2014, early 2015 and pushed prices up considerably. Demand in 2016 should consquently be lower

Barely Hedged

Villa05 wrote: »

This increased demand in late 2014, early 2015 and pushed prices up considerably.

Demand in late 2014 (monthly percentage change):

Oct +2.9%
Nov +0.5%
Dec +0.4%

http://www.cso.ie/en/releasesandpublications/er/rppi/residentialpropertypriceindexdecember2014/

Demand in early 2015 (monthly percentage change):

Oct -1.4%
Nov -0.4%
Dec 0.9%

http://www.cso.ie/en/releasesandpublications/er/rppi/residentialpropertypriceindexmarch2015/

Villa05 wrote: »

Demand in 2016 should consquently be lower

Confirmation bias?

Villa05

Barely Hedged wrote:

Confirmation bias?

The daft report is forward looking ie peoples/estate agent price expectation based on current current trends

Barely Hedged

Villa05 wrote: »

The daft report is forward looking ie peoples/estate agent price expectation based on current current trends

Daft report?

Villa05

Barely Hedged wrote: »

Daft report?

http://www.daft.ie/report/q4-2015-houseprice-report-daft.pdf

The fianl quareter is negative in many Counties,

Leinster:
Kildare, Wicklow and Meath are all negative for the final quarter despite double digit growth for the full year

8 of the 11 counties outside Dublin were neagative in the final Quarter

Cities:

Galway City
Qtr-on-qtr change:
0.4%
Year-on-year change:
19.7%

Cork City
Qtr-on-qtr change:
0.8%
Year-on-year change:
20.7%

Limerck City
Qtr-on-qtr change:
0.9%
Year-on-year change:
22.3%

Waterford City
Qtr-on-qtr change:
2.1%
Year-on-year change:
18.6%

johnp001

Villa05 wrote: »

The CB rules would have 2 big effects on the market. 1 is not discussed much here which is that it's introduction brought forward demand much like the 100% mortgages.
Those that could buy or were very close to buying did so before the new rules came in. This increased demand in late 2014, early 2015 and pushed prices up considerably. Demand in 2016 should consquently be lower

As regards "brought forward demand" the transaction volumes as recorded on the PPR which were significantly higher (YoY) in the first half of the year and appear to have fallen back (YoY relative) after that.

http://www.thepropertypin.com/viewtopic.php?p=859737#p859737

Comparing January, February and March 2015 (3432) to the same period in 2014 (2165) there is a 59% increase.
April to June is 3978 (compared to 2878) a 38% increase on last year .
July to September is 3712 (compared to 3801). A 1% decrease on last year.

October so far is 1237 (compared to 1807 (2014), 1042 (2013)). 48% down on last year - probably complete at this stage
November so far is 1134 (compared to 1149 (2014), 1035 (2013)). I think this has a good chance of topping last years figure
December so far is 858 (compared to 2277 (2014), 1764 (2013)).

Dr Strange

House prices predicted to rise by 5% in 2016:

Irish Times wrote:

House prices in Ireland are expected to rise by up to 5 per cent this year, according to the latest house price survey from property website myhome.ie.

The report, compiled in association with stockbroker Davy, predicts rising incomes and the ongoing economic recovery will lead to a single-digit gain in prices for the next 12 months.

Asking prices on new instructions – which provide the best leading indicator for transaction prices – fell by 0.8 per cent nationally in the fourth quarter of last year but were up 7.4 per cent on the year, myhome said. ...

Link: http://www.irishtimes.com/business/economy/house-prices-predicted-to-rise-by-up-to-5-in-2016-1.2491451

Fairly sure Davy were going for 9-10% rises in 2015. How did that go? I know not all the data is in yet but the annual change as of November was +6.5% and was on the way down. Could well be 6% when all the numbers are in. A far cry from 10%, making these predictions roughly as good any stab-in-the-dark guesstimate we might make here.

They would probably argue that the Central Bank rules had an impact but those rules were first flagged in Sept/Oct 2014, even though they didn't come in for another few months and didn't have a real impact for a while after that.

sozbox

Was hoping for a slow down after the central bank rules kicked in. Property I was looking at just closed for €60k above the asking. Similar trends on others I'm interested in that haven't closed yet. Might leave the market for now.

Kai123

Hey,

I've re-wrote this a few times now, trying to ask the question the right way.

2016 looks to be a fun year and there might be a big crash soon. I am not market literate so not sure how a potential crash will effect property prices. The 2008 crash was due to a property bubble, but a crash from low cost of oil is beyond me.

Can anyone shed light on this? My job is fairly stable and was looking to buy fairly soon. Would be good to know if its worth waiting or not.

Kai.

newacc2015

Oil will have zero impact on property prices here. We aren't North Dakota or Alberta that is hugely reliant on oil for jobs. If anything cheap oil for a few years will push up property prices futher as it will keep the eurozone inflation lower than expected. Which will keep ECB rates low. Meaning borrowing will be cheaper. Cheap oil will allow Irish consumers to save more as heating will be cheaper for some and petrol will be cheaper at the pumps. This will allow consumers to save more to get larger mortgages.

Diarmuid

Low oil prices are good for pretty much good for anyone who isn't in the oil production industry. I don't know why the market would crash on the back of low energy or raw material prices

Villa05

newacc2015 wrote:

Cheap oil will allow Irish consumers to save more as heating will be cheaper for some and petrol will be cheaper at the pumps. This will allow consumers to save more to get larger mortgages.

Pretty much spot on. Property is a Dyson for disposable income in Ireland. If you work harder and for longer, take a 2nd job or get an unexpected bonus, you personally do not enjoy the benefits of it. What happens is that you end up paying more for the same thing through accomadation costs and taxation.

Banks exposure to oil companies and other commodities are a cause for concern.
In Ireland Banks loans to farmers to increase milk production are a cause for concern. The banks never counted on the increased production resulting in a sharp fall in milk prices. Nobody could have predicted it apparently.

Barely Hedged

Villa05 wrote: »

http://www.daft.ie/report/q4-2015-houseprice-report-daft.pdf

The fianl quareter is negative in many Counties,

Leinster:
Kildare, Wicklow and Meath are all negative for the final quarter despite double digit growth for the full year

8 of the 11 counties outside Dublin were neagative in the final Quarter

Cities:

Galway City
Qtr-on-qtr change:
0.4%
Year-on-year change:
19.7%

Cork City
Qtr-on-qtr change:
0.8%
Year-on-year change:
20.7%

Limerck City
Qtr-on-qtr change:
0.9%
Year-on-year change:
22.3%

Waterford City
Qtr-on-qtr change:
2.1%
Year-on-year change:
18.6%

Whats this got to do with your original post?

Villa05 wrote: »

The CB rules would have 2 big effects on the market. 1 is not discussed much here which is that it's introduction brought forward demand much like the 100% mortgages.
Those that could buy or were very close to buying did so before the new rules came in. This increased demand in late 2014, early 2015 and pushed prices up considerably. Demand in 2016 should consquently be lower

Barely Hedged

Kai123 wrote: »

Hey,

I've re-wrote this a few times now, trying to ask the question the right way.

2016 looks to be a fun year and there might be a big crash soon. I am not market literate so not sure how a potential crash will effect property prices. The 2008 crash was due to a property bubble, but a crash from low cost of oil is beyond me.

Can anyone shed light on this? My job is fairly stable and was looking to buy fairly soon. Would be good to know if its worth waiting or not.

Kai.

Youre asking all the wrong questions. For a start:

Kai123 wrote: »

2016 looks to be a fun year and there might be a big crash soon. I am not market literate

Thats a statement and a half right there!

If youre in a stable job, can afford the deposit, afford the payments if rates increase by 3% then youre fine.

What else really matters with a long term purchase such as property?

athtrasna

Market crash thread merged as it relates to property market 2016

Mod

handlemaster

http://www.theguardian.com/business/2016/jan/12/sell-everything-ahead-of-stock-market-crash-say-rbs-economists

theres some food for tought in this article. Nothing much about property but if this comes to pass it will have an effect ... what exactly I don't know

gaius c

Diarmuid wrote: »

Low oil prices are good for pretty much good for anyone who isn't in the oil production industry. I don't know why the market would crash on the back of low energy or raw material prices

Because it's symptomatic of low demand and world trade is at a very low ebb. That is something that will affect us.

Michael D Not Higgins

gaius c wrote: »

Because it's symptomatic of low demand and world trade is at a very low ebb. That is something that will affect us.

But it's not low demand it's high supply. OPEC and specifically the Saudis are trying to put shale oil out of business.

field_marshall

Diarmuid wrote: »

Low oil prices are good for pretty much good for anyone who isn't in the oil production industry. I don't know why the market would crash on the back of low energy or raw material prices

the investment banks are incredibly exposed to the energy space , not only did they lend to oil companies , they bought bonds and equity in those companies , a sizeable number of small and medium energy producers will go bankrupt due to the collapse in oil prices

while no irish bank are on the hook for energy company losses , ireland is too small to be immune from the fallout internationally

im not saying the above will result in a crash but the recent sharp falls in equity markets are related to the collapse in oil , it is well known that china has been slowing for more than six months

field_marshall

Michael D Not Higgins wrote: »

But it's not low demand it's high supply. OPEC and specifically the Saudis are trying to put shale oil out of business.

the shale industry in america was started for political reasons , to weaken russia by lowering world energy prices , the americans and saudis are in cahoots on this one

field_marshall

Villa05 wrote: »

Pretty much spot on. Property is a Dyson for disposable income in Ireland. If you work harder and for longer, take a 2nd job or get an unexpected bonus, you personally do not enjoy the benefits of it. What happens is that you end up paying more for the same thing through accomadation costs and taxation.

Banks exposure to oil companies and other commodities are a cause for concern.
In Ireland Banks loans to farmers to increase milk production are a cause for concern. The banks never counted on the increased production resulting in a sharp fall in milk prices. Nobody could have predicted it apparently.

lending to farmers is seen as low risk due to the unusually high price of land in this country , farm land is excellent security for banks , besides , farmers are doing a lot better than they let on

field_marshall

Michael D Not Higgins wrote: »

But it's not low demand it's high supply. OPEC and specifically the Saudis are trying to put shale oil out of business.

china is slowing , china was the only region of the world with growth significant enough to keep things afloat this past fifteen years , the usa is not growing anymore than 3% at best and europe is both not growing and is looking very weak for the future , brazil is in an outright depression , global growth going forward is not looking very hot

how ireland is remaining immune from international factors right now is a complete mystery to me , the uk looks like its slowing too