Property .. calling the top!

celtic_oz

See this old thread in 2011

where would you say we are now ?

I'm thinking Optimistic ( WRT property prices )...

horse7

celtic_oz wrote: »

See this old thread in 2011

where would you say we are now ?

I'm thinking Optimistic ( WRT property prices )...

Mississauga is too expensive now ,try Hamilton or st.catherines.

nuac

Property is doing well, front page news, silly prices being paid, banks keen to lend. We are close to euphoria, imho

4068ac1elhodqr

Plenty of folks think the major stock markets are overpriced, up 15-20% in 12months with low PE ratios.
May be some property correlation if it all drops, or alternatively a safe haven? Can't go wrong with bars of gold all the same.

dRNk SAnTA

I am sale agreed on a house at present.

The spike in prices this year was entirely predictable. The relaxation of deposit requirements has multiplied the amount of prospective buyers in the 200k - 500k range.

This range has seen major price increases, as people fight over a small amount of stock.

Conversely, 600k+ market is still relatively calm. I personally know someone looking to sell at 850k and found things to be very slow. The money will start moving up the chain over the next 2 years, as the first time buyers who purchased in 2013-2015 move on to second homes holding very good equity, and so on.

I don't think house prices are overly inflated. You can purchase a 500k home for a mortgage equivalent to rent for 2 bed apartment.

Interest rates have been coming down (now at 3.1% fixed down from 4.5% two years ago), and although ECB will increase, there are massive margins currentlu being earned by banks and they could absorb increases if necessary (particularly if competition between banks drives on).

Don't forget, mortgage lending is still locked to salary. They say 3.5x but we got 4.2x. Still, it's a long way from Celtic Tiger style lending.

Roonbox

dRNk SAnTA wrote: »

I 

I don't think house prices are overly inflated. You can purchase a 500k home for a mortgage equivalent to rent for 2 bed apartment.

I think this shows that the rental market is bonkers more than it shows that the property market is not.

ginger_hammer

Prices will keep on creeping over the next 5 years at least in my opinion. Certainly in Dublin the amount of new commercial building underway compared to the residential will only increase demand on housing. Then post brexit jobs coming over the water, and we are still way off boom time prices.

optogirl

dRNk SAnTA wrote: »

You can purchase a 500k home for a mortgage equivalent to rent for 2 bed apartment.

If you can manage to save a 50k deposit whilst paying 1.5-2k in rent

dubrov

dRNk SAnTA wrote: »

I am sale agreed on a house at present.

Interest rates have been coming down (now at 3.1% fixed down from 4.5% two years ago), and although ECB will increase, there are massive margins currentlu being earned by banks and they could absorb increases if necessary (particularly if competition between banks drives on).

Don't forget, mortgage lending is still locked to salary. They say 3.5x but we got 4.2x. Still, it's a long way from Celtic Tiger style lending.

The current "massive margins" have done little to stimulate competition. The banks are still trying to recover from massive losses as I don't see them as being likely to reduce their margins anytime soon. Add to that that they still have a massive amount of delinquent mortgages for which they seem to have no real recourse to recover the property against which the mortgage was secured.

It is the locking of salary to mortgage that will trigger the downturn. Prices go up to affordable levels and transactions fall off a cliff. Once people don't see prices rising every year, sentiment will turn quickly leading to a drop.

dubrov

Of course, that is until the government start interfering in the market again

daheff

Prices will rise until rates start moving. First sign of ECB rate rise in nearly 10 years will spook buyers & investors. Buyers will run & investors will try dump properties.

I reckon end summer 2018 is where we'll start seeing the rates move.

The Cuban

daheff wrote: »

Prices will rise until rates start moving. First sign of ECB rate rise in nearly 10 years will spook buyers & investors. Buyers will run & investors will try dump properties.

I reckon end summer 2018 is where we'll start seeing the rates move.

Rates don`t make much difference to the Irish, its all about the availability of money. As long as the Banks keep forking out the money then the Irish will continue to buy.
Think of it like a smoker, the smoker doesn't care how much the price of the box of cigarettes cost just as long as they don't get scarce.
The whole housing market in Ireland is caused by poor governance.

• Too much property speculation
• Poor planning -> Much larger family city apartments needed
• Lack of Government intervention
• Planning process needs to be sped up

Brussels Sprout

Given that this rise in prices is not fueled by easy credit then I think any comparisons with what went on 10-15 years ago are misleading. That's not to say that I don't think that prices are getting really high but given that most of them are being purchased by either cash buyers or people who're abiding by the Central Bank rules then I don't think a bubble can form in the same way since there isn't the same volume of potential buyers out there.

Roonbox

I think we are ending the period of lower central bank interest rates after nearly a decade, ECB and Fed have spoken about increasing rates and the fed started over a years ago. It takes time for this to trickle down, and the tiny margin the rates have increased so far in basically inconsequential. But its the shift in policy that's the main point. 
Central bank easing is finally coming to an end. It caused one bubble and is in the middle of causing another.

I bet by 2020 property will be lower than it is now.

We don't have easy credit currently, we don't have a building boom and we have massive undersupply in areas where people want to live.

The top hasn't been reached yet IMO in Dublin or surrounding areas.

I actually reckon we might see a new crop of individuals doing the buy to let thing. I know quite a few young professionals who think (wrongly IMO) that buying for €200k and renting out for €1200/month seems a great idea. Older folk with a few quid too I reckon might get sucked in as interest rates on savings are very poor.

Owning property is still very much a national obsession and folks have very short memories. No one would borrow to buy shares of course but borrowing to "invest" in property is very much accepted as being someway savvy.

Apartments in the likes of Naas are in short supply, 13 for sale on daft.ie and 13 for rent too.

The Cuban

Augeo wrote: »

We don't have easy credit currently, we don't have a building boom and we have massive undersupply in areas where people want to live.

The top hasn't been reached yet IMO in Dublin or surrounding areas.

I think your watching too much RTE

The Cuban

The Cuban wrote: »

I think your watching too much RTE

I don't actually watch RTE

Do we have easy credit currently?
Do we have a building boom?
Do we have a massive undersupply in areas where people want to live?

No, no and yes IMO so I don't think we've reached the top of the market.
Now that doesn't mean I reckon there isn't another bubble etc etc etc.

Roonbox

Augeo wrote: »

The Cuban wrote: »

I think your watching too much RTE

I don't actually watch RTE

Do we have easy credit currently?
Do we have a building boom?
Do we have a massive undersupply in areas where people want to live?

No, no and yes IMO so I don't think we've reached the top of the market.
Now that doesn't mean I reckon there isn't another bubble etc etc etc.

I think there is a building boom no?
Somebody told me he counted 40 cranes from one spot in Dublin city centre recently.

Roonbox

Roonbox wrote: »

I think there is a building boom no?
Somebody told me he counted 40 cranes from one spot in Dublin city centre recently.

Not at all IMO, few hotels and office blocks being done in city centre, some factories in D15.

Now, over the coming years there's 12m square feet of office space to be built.
Building apartments in the city is still deemed to be largely unviable due to the aspect rules etc.

I think it's accepted that we are building 20% ish of what's deemed needed for residential use. A building boom in commercial space would increase demand for living accomodation

All considered, Dublin residential property not at top yet IMO.

optogirl

Augeo wrote: »

Not at all IMO, few hotels and office blocks being done in city centre, some factories in D15.

Now, over the coming years there's 12m square feet of office space to be built.
Building apartments in the city is still deemed to be largely unviable due to the aspect rules etc.

I think it's accepted that we are building 20% ish of what's deemed needed for residential use. A building boom in commercial space would increase demand for living accomodation

All considered, Dublin residential property not at top yet IMO.

Just so depressing. My only hope for owning my own home is a crash.

draiochtanois

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optogirl

optogirl wrote: »

Just so depressing. My only hope for owning my own home is a crash.

We just had one .............. a few short years ago.

optogirl

Augeo wrote: »

We just had one .............. a few short years ago.

Oh did we? I was a student then so not in the market

draiochtanois

draiochtanois wrote: »

This post has been deleted.

I reckon Dublin will heat up quite a bit over the next few years. Lots of builders to build the offices, lots of workers to staff the offices......

optogirl

optogirl wrote: »

Oh did we? I was a student then so not in the market

Yup, problem in that crash was that banks were very very tight with lending. Still quite a few folk got great value buying in that period. Properties going for 1/3 of 2007 peak prices in places within 20/30 miles of Dublin.

draiochtanois

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sword1

optogirl wrote: »

Just so depressing. My only hope for owning my own home is a crash.

Don't worry there will be a crash, probably brought on by something outside the control of anyone in this country. A big war, the break up of the eu etc. Brexit is going to be a funny one. From what I can see they would be happy with the same agreements as Norway. The eu can't give them that as they wouldn't be punished enough for leaving. They can't justify not giving it to them either. Every time I see a big trade agreement like with Japan lately I think sounds good but are you not taking away the advantage of being a member. Sooner rather than later there will be another exit, probably Scandinavian. Then we could be looking at close relations with the UK again. How will it affect housing, panic and uncertainty about currency value will cause a bust. It could also be that the euro will devalue so much that the price would stay up but hard to know.

ct5amr2ig1nfhp

A house in an estate beside ours listed at 675k recently, asked around and it was about right with the amount of work required to bring it up to living standard. It sold for 750k within two weeks of going on sale. 75k above asking. The few houses around the area in the 500-750 mark appear to have sold very quickly also. Wouldn't be surprised if we see another 4-5 years of 10% increases in property prices.

Hitman3000

optogirl wrote:

Just so depressing. My only hope for owning my own home is a crash.

Your patience will be rewarded. It appears no lessons were learned.

draiochtanois

This post has been deleted.

Hitman3000

Hitman3000 wrote: »

Your patience will be rewarded. It appears no lessons were learned.

A crash may sound like an attractive proposition if you can't afford to buy now but the amount of property transactions in a recession are quite small. Many won't sell unless they have to and those who want to buy are often unable to in many cases due to the crash and associated issues (employment, extra taxation, lending constraints).

Booms and crashes don't benefit us as a collective.