Property Market 2017

Graham

Samuel T. Cogley wrote: »

I just can't workout how it's no profitable to build in certain areas at the moment.

Because costs + profit are greater than market value.

Supply is not going increase significantly until one or both of the following happens:

costs are reduced
market value increases

I suspect one of the most significant costs at the moment is financing new developments. Not something the government are keen to address because it leaves them open to accusations of lining the developers pockets.

helimachoptor

there's a guy i spoke to on the proeprty pin, he'd bough a house in an estate that i was looking at.

120K profit in 2 years, didnt make any internal improvements.
New owners are now gutting and renovating it

Samuel T. Cogley

Graham wrote: »

Because costs + profit are greater than market value.

Supply is not going increase significantly until one or both of the following happens:

costs are reduced
market value increases

I suspect one of the most significant costs at the moment is financing new developments. Not something the government are keen to address because it leaves them open to accusations of lining the developers pockets.

I appreciate the reply, but I'm really looking for some more detail on this. The financing angle is definitely one I hadn't considered.

It seems to me though that even smaller developments in more affluent areas aren't underway, or am I wrong there (very possible I am!).

Is the only solution to this, 100sqm terraced houses in D5 costing 450K?

Graham

Samuel T. Cogley wrote: »

Is the only solution to this, 100sqm terraced houses in D5 costing 450K?

The more sustainable solution is to drive down costs rather than pushing prices ever higher.

I know that's easier said than done but methods could include:

modern construction techniques
larger developments (economies of scale)
development financing incentives
increased densities (heights)
relaxed minimum requirements (specifically in CBD areas with a young, mobile population) e.g. silicon docks.
Incentivise B2L only projects.
reduced direct/indirect taxation for development projects
reduced LA contribution in high-need areas
Reduced the minimum holding period for land acquired under tax-breaks with minimum holding periods.

Taylor365

So how will this 'crash' everyone's harping on about happen?

Banks aren't putting themselves in precarious positions.
Supply won't meet demand anytime soon.
No incentives to live outside of cities (infrastructure/comms).


Only way i see is up, or some stablisation when the horse has bolted.

mathie

Taylor365 wrote: »

So how will this 'crash' everyone's harping on about happen?

Banks aren't putting themselves in precarious positions.
Supply won't meet demand anytime soon.
No incentives to live outside of cities (infrastructure/comms).


Only way i see is up, or some stablisation when the horse has bolted.

Yes they are.

There's a good article here ...

http://www.broadsheet.ie/2017/04/03/im-forever-blowing-bubbles/

In late 2016, the Central Bank Briefing Report confirmed nearly 20% of Mortgages were not in line with their Rules. Not only were they not compliant, many of these were 100% Loan to Value Mortgages.

Look at the warning above. Dublin has gone from Moderately Unaffordable 3.3, to a Seriously Unaffordable 4.7, in less than 5 years.

Alter_Ego

mathie wrote: »

Yes they are.

There's a good article here ...

http://www.broadsheet.ie/2017/04/03/im-forever-blowing-bubbles/

I wouldn't call this a good article where if you read the comments section there is convincing evidence that contradicts the statements in the article. There were no 100% loans issued in 2016.

Cuddlesworth

Taylor365 wrote: »

So how will this 'crash' everyone's harping on about happen?

Banks aren't putting themselves in precarious positions.
Supply won't meet demand anytime soon.
No incentives to live outside of cities (infrastructure/comms).


Only way i see is up, or some stablisation when the horse has bolted.

When the investors(cash right now it seems) loose confidence in the market. Nobody drops 100k+ if they think the value will be wiped in a few months. Same thing for London or any other boom market. Its been the same for every crash in history.

And I believe there has been a huge uptake in Irish investment funds over the last few months(from a source of mine). There certainly has been a huge increase in Advertising.

Whats interesting will be how the banks handle a huge downturn in the market mid year when they use up all their exceptions in the beginning based on a projection.

Taylor365

mathie wrote: »

Yes they are.

There's a good article here ...

http://www.broadsheet.ie/2017/04/03/im-forever-blowing-bubbles/

Look at the warning above. Dublin has gone from Moderately Unaffordable 3.3, to a Seriously Unaffordable 4.7, in less than 5 years.

Go back 5 years, there were plenty of bargains to be had from the market recovering. To claim recovery as a warning sign.....

trobbin

Taylor365 wrote: »

Go back 5 years, there were plenty of bargains to be had from the market recovering. To claim recovery as a warning sign.....

You can call them "bargains" in comparison to today's prices, but that doesn't exactly mean it's true.

There where still overpriced properties in the downturn. Plus the average working class Irish couple weren't exactly buying houses for small change, they still had to take on 20/25/30yrs of a mortgage for these "bargains".

The article that was posted talked of house repayments in relation to household incomes. I personally believe this gives us the most real value of houses (considering the super rich aren't interested in buying what we are, and the very poor are relying on social housing) because the average wage earner is the average buyer.

I don't care what tripe people say about some inflated bubble in 2007, property in Ireland is unaffordable. People are spending far too much of their salaries on mortgage repayments. This type of thing isn't an accident! Honestly I know people who've nice homes, decent cars, high repayments, but very very poor standards of living. They've no health insurance, and they literally have to budget all their food shopping, mostly eating very cheap food. That's a sad environment.

We need cheaper houses for everyone.

Browney7

What will be interesting is the effect the ending of the seven year holding period in order to benefit from no CGT on gains on purchases between 2012 and 2014 has in 2019. Bit away yet though.

You'd reckon most sellers would have been cash buyers at the time so may wish to sell

Ayuntamiento

trobbin wrote: »

Taylor365 wrote: »

Go back 5 years, there were plenty of bargains to be had from the market recovering. To claim recovery as a warning sign.....

You can call them "bargains" in comparison to today's prices, but that doesn't exactly mean it's true.

There where still overpriced properties in the downturn. Plus the average working class Irish couple weren't exactly buying houses for small change, they still had to take on 20/25/30yrs of a mortgage for these "bargains".

The article that was posted talked of house repayments in relation to household incomes. I personally believe this gives us the most real value of houses (considering the super rich aren't interested in buying what we are, and the very poor are relying on social housing) because the average wage earner is the average buyer.

I don't care what tripe people say about some inflated bubble in 2007, property in Ireland is unaffordable. People are spending far too much of their salaries on mortgage repayments. This type of thing isn't an accident! Honestly I know people who've nice homes, decent cars, high repayments, but very very poor standards of living. They've no health insurance, and they literally have to budget all their food shopping, mostly eating very cheap food. That's a sad environment.

We need cheaper houses for everyone.

So these people have prioritised a nice home and a nice car over eating fancy food and it's society's problem that they can't have everything....?

Ayuntamiento

trobbin wrote: »

Taylor365 wrote: »

Go back 5 years, there were plenty of bargains to be had from the market recovering. To claim recovery as a warning sign.....

You can call them "bargains" in comparison to today's prices, but that doesn't exactly mean it's true.

There where still overpriced properties in the downturn. Plus the average working class Irish couple weren't exactly buying houses for small change, they still had to take on 20/25/30yrs of a mortgage for these "bargains".

The article that was posted talked of house repayments in relation to household incomes. I personally believe this gives us the most real value of houses (considering the super rich aren't interested in buying what we are, and the very poor are relying on social housing) because the average wage earner is the average buyer.

I don't care what tripe people say about some inflated bubble in 2007, property in Ireland is unaffordable. People are spending far too much of their salaries on mortgage repayments. This type of thing isn't an accident! Honestly I know people who've nice homes, decent cars, high repayments, but very very poor standards of living. They've no health insurance, and they literally have to budget all their food shopping, mostly eating very cheap food. That's a sad environment.

We need cheaper houses for everyone.

So these people have prioritised a nice home and a nice car over eating fancy food and it's society's problem that they can't have everything....?

Yourself isit

Ayuntamiento wrote: »

So these people have prioritised a nice home and a nice car over eating fancy food and it's society's problem that they can't have everything....?

No they've prioritised buying a mediocre house in an common or garden estate over living well.

That's society's issue.

trobbin

Ayuntamiento wrote: »

So these people have prioritised a nice home and a nice car over eating fancy food and it's society's problem that they can't have everything....?

I'm not fully getting your point so a more detailed response would be better.

Listen I couldn't care less what they eat, I was just making a point of fact. You say "fancy food", I wasn't talking about fine dining, I'm saying they buy the cheapest of food in the cheapest stores, because all their disposable income goes on repaying high mortgage costs. I'm saying these same people are very vulnerable, sitting in A&E when a serious health issue arrives or left on a waiting list, as they've no health insurance. I'm talking about people paying higher purchase on a car and the same people have no pension, but they've a 30/35 yr mortgage.

I'm not blaming "society" you said that. I'm clearly blaming the individuals. Another thing, I don't have sympathy for these people, in fact, I don't care at all. I just stated the situation many find themselves in when paying high home prices, in comparison to income.

But I will say again, prices are way too high in relation to incomes. Median prices/incomes

Taylor365

The Woodies ad were the guy narrating says "when 3/4 of your income goes towards paying the mortgage" makes me shiver every time....

Sleepy

I'm not the only one!

ThisRegard

<deleted quote snipped>

I still think it's only nuts for houses within the reach of first time buyers, as that's where the demand is.

We were trading up last year and a lot of the houses we looked at at the time are still on the market. A couple in fact looked like they had a bit of internal work done to them to make them more appealing based on the newly updated ads.

youcancallmeal

Taylor365 wrote: »

The Woodies ad were the guy narrating says "when 3/4 of your income goes towards paying the mortgage" makes me shiver every time....

I know, first time I saw that ad I was convinced I misheard but he really does say 3/4. You wouldn't even be given a mortgage these days were 3/4 of your income!?

pilly

Taylor365 wrote: »

The Woodies ad were the guy narrating says "when 3/4 of your income goes towards paying the mortgage" makes me shiver every time....

Really freaks me out too, what do you live on?

Glen_Quagmire

Went out looking at houses in a new development where I would like to buy but it looks like I will miss the boat in this phase. They are starting another phase which should be complete by the end of the year.

Is it safe to assume the asking price for the next phase will be higher than this phase?

The_Conductor

Glen_Quagmire wrote: »

Went out looking at houses in a new development where I would like to buy but it looks like I will miss the boat in this phase. They are starting another phase which should be complete by the end of the year.

Is it safe to assume the asking price for the next phase will be higher than this phase?

Nationally prices are up just under 11% since the start of January- which equates with just under 1% per week........ It would be a very brave person who would suggest prices wouldn't be higher for subsequent phases in any given development later this year- however, this would very obviously be dependent on location. Some locations that you might not imagine- are not experiencing growth rates akin to other locations- parts of the greater Dublin hinterland (incl. North Kildare) for example- while they are experiencing property price growth- it is lagging the national figures considerably.

So- yes- subsequent phases later this year- will probably be higher- but it'll be location dependent on the one hand, and on the other hand- the effects of the first time buyer incentives will have normalised in house prices.........

Then again- we could very well have a new government by later in the year- who may have a different set of policies which throw the cat among the pigeons.....

valoren

Taylor365 wrote: »

The Woodies ad were the guy narrating says "when 3/4 of your income goes towards paying the mortgage" makes me shiver every time....

It's almost like it's trying to normalise madness.

evolving_doors

pilly wrote: »

Really freaks me out too, what do you live on?

Strawberries and potatoes.

trobbin

http://www.irishtimes.com/business/economy/stress-test-shows-economy-vulnerable-on-interest-rates-1.3048993

Apparently not everyone knows this already

Anyway don't worry lads, it'll be grand. Keep up the outbidding with the borrowed cash

The_Conductor

trobbin wrote: »

http://www.irishtimes.com/business/economy/stress-test-shows-economy-vulnerable-on-interest-rates-1.3048993

Apparently not everyone knows this already

Anyway don't worry lads, it'll be grand. Keep up the outbidding with the borrowed cash

QE is already being phased out by the ECB, and will have finished completely before the end of the year, and inflation figures are already over target for the last 3 months running- the writing is really on the wall- only no-one really wants to call it..........

Its a question of what constitutes 'normal interest rates' not- whether or not they are going to rise, of course they are...........

SunSeeker101

I was thinking of buying this year but now I'm not so sure. I have a very big deposit and will only need a small mortgage. I don't mind renting for another couple of years but was starting to panic that if I didn't buy now the prices would just keep going up and I would end up with a "starter home" that I didn't really want.

I'm starting to think that another crash is on the way, purely due to external events that will be out of the control of Ireland. QE due to end at the end of the year. The stock market in the US is out of control. More people in the UK and USA are buying on credit again and banks are starting to tighten who they lend to (credit crunch 2.0). At this stage, I just don't know what is the best decision to make

Samuel T. Cogley

If you have the cash to buy outright in the next crash then happy days but you have to consider that there will be very little property available, there will be intense competition for it, probably at similar levels to now and it will be in an awful state (generally executor sales). We were in a position to buy during the bottom of the market and there was nothing I'd consider a bargain, catching the market on the upswing on the other hand saw us 'luck out'.

Other than we bought a one bed during the height of the last boom it was not a decision we regretted frankly. In our case we had the perfect storm of a very renatable location, robust (now mad) rental market and a tracker mortgage - even sans tracker now the relief and rents is such that renting out a place can probably just about break even. On top of that we has security of tenure and a 'rent' that was around 50% of what people were paying in the area.

This rambling anecdote is by way of illustrating there is never really a good or bad time to buy, especially if it's going to be a long term thing. Who cares if it's bought at 500K and worth between 200K and 600K during the time you live there. My advice ref interest rates is overpay on the mortgage as much as you can, less a little for emergency savings. If interest rates go up you're still paying the same just over paying less.

I have to say though that if we see a return to double digit interest rates everyone will be fecked, regardless of whether you're renting or not.

Hollister11

There was a house my parents were looking at in 2011. It was a 3 story house in Howth, which was bought by various developers for 800K to 1.2M.

It was up for sale for 325K, and sold for 315K. Now it was on ruin, but with 150K, you had a great house for cheap enough

They didn't end up buying it, and deeply regret it.

Taylor365

Samuel T. Cogley wrote: »

I have to say though that if we see a return to double digit interest rates everyone will be fecked, regardless of whether you're renting or not.

Roll on the double digit saving rates! :pac:


I remember getting 7%