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: »

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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

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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.

Hitman3000

draiochtanois wrote:

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You believe it won't again? Really. How many recessions in the last 100 years?

lawred2

optogirl wrote: »

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

yeah and then the bank won't lend to you anyway unless you've got 50% cash

crashes do little for anybody but the cash rich..

draiochtanois

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Hitman3000

draiochtanois wrote:

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The end result is usually the same.

draiochtanois wrote:

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She could be flush with cash, I don't know and don't expect to be told.

Hitman3000

Hitman3000 wrote: »

The end result is usually the same...............

Indeed, most people who couldn't buy precrash can't buy during it either.

The_B_Man

If there is another crash relatively soon, it wont be as bad, as a lot of people have been saving their money since the last crash.
So if/when it happens, a lot of people will have their deposits ready to go, which will halt, or mitigate, the affects of the crash.

The_B_Man

The_B_Man wrote: »

If there is another crash relatively soon, it wont be as bad, as a lot of people have been saving their money since the last crash.
So if/when it happens, a lot of people will have their deposits ready to go, which will halt, or mitigate, the affects of the crash.

I'd imagine (purely opinion) many of them bought in 2011 to 2014 period.
I'd agree the next crash if soon won't be as bad as we have huge demand for properties..... government spending heaps on housing homeless people in emergency accommodation and we don't have a lot of stuff for sale or halfway through being built. Also prices aren't yet near the 2007 peaks either.

q85dw7osi4lebg

The_B_Man wrote: »

If there is another crash relatively soon, it wont be as bad, as a lot of people have been saving their money since the last crash.
So if/when it happens, a lot of people will have their deposits ready to go, which will halt, or mitigate, the affects of the crash.

But will banks not cut lending if there is another crash?

Stephanie Magnificent Puck

Stephanie Magnificent Puck wrote: »

But will banks not cut lending if there is another crash?

Yup, but if you are employed with something like a 50% deposit and looking to buy a property to live in than you'll get a mortgage of one of them without issue

optogirl

The_B_Man wrote: »

If there is another crash relatively soon, it wont be as bad, as a lot of people have been saving their money since the last crash.
So if/when it happens, a lot of people will have their deposits ready to go, which will halt, or mitigate, the affects of the crash.

Yep - that's what I'm hoping

Idbatterim

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.

http://www.irishtimes.com/business/commercial-property/crane-watch-69-cranes-over-the-centre-of-dublin-on-july-1st-1.3150785?mode=sample&auth-failed=1&pw-origin=http%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Fcommercial-property%2Fcrane-watch-69-cranes-over-the-centre-of-dublin-on-july-1st-1.3150785

Idbatterim

Idbatterim wrote: »

http://www.irishtimes.com/business/commercial-property/crane-watch-69-cranes-over-the-centre-of-dublin-on-july-1st-1.3150785?mode=sample&auth-failed=1&pw-origin=http%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Fcommercial-property%2Fcrane-watch-69-cranes-over-the-centre-of-dublin-on-july-1st-1.3150785

So you reckon we have a building boom?
How many cranes above whatever's normal do we have now ?

PMBC

draiochtanois wrote: »

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Why, if ther are more people employed - and I'm not saying that isn't so - are income tax receipts down, for the last few months?

draiochtanois

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Idbatterim

there is a lot of commercial property being built. in the city centre, that is what most of them are building. There is still a huge shortage of housing being built... there are a large amount of reasons for this... The quickest thing they could do is get empty housing back on the market...

The_B_Man

optogirl wrote: »

Yep - that's what I'm hoping

I meant the opposite! Prices won't dip as low as there'll be a line of people ready to pounce, with their life savings, who will outbid each other, driving prices straight back up! It won't be as bad for anyone that does decide to sell in that period. Although why would you?? The good deals were had the last time coz there was a load of houses being built and people were caught by surprise. Nobody is building housing estates anymore!

I'm in a 1 bed apartment, and just had a kid, so my time there is finite. I'm gonna have to just bite the bullet and pay way over the odds next summer, when the kid is 1, as we'll have outgrown it. So my logic is this; My parents bought their house in the early 70s for about £5k and at the height of the boom, with an extension and improvements, was valued towards €500k. So I'll use that same logic to justify paying €350k on a house (that a friend bought a similar one for a few years back for €150k!!) that in 2050 will be worth 35 million!! :P:P

Sure then who cares about 200k!!

ste

Conversations have been happening forever about Irish property; when is the next peak, crash, are we at bottom, when will we top etc. A few posters here are probably thinking about this for the first time in their lives. Read conversations on thepropertypin and askaboutmoney if you want to see conversations from, during and after our last boom/bust.

Lesson, you can generally justify whatever view/bias you have (even if you don't believe you have a bias).

As a property owner what's my biased opinion?
There's still enough cash out there to fuel price growth for few years.
A few things will happen a few years later;
- more houses will be built
- the stock market will crash
- the bank of mummy & daddy, largely fueled by house price equity & DB pensions which (with some exceptions) will soon be exhausted
- house values will revert more towards being a function of wages;
- the above for me means the middle will hold but Toppy areas & values will decline (in real value terms).

€40k odd is AVG full time wage. Generally Dublin homes will have 2 earners. Dublin wages are higher generally. 3.5 or 4.0 as multiple of borrowings wth 10-30% deposit. I think €400-500k in today's money will buy a 3bed semi-d in decent Dublin burbs.

So where we are today is sustainable. We'll have frothiness for few years. We'll revert largely to wage-linked values in a decade (whatever that means eh!!!).

Idbatterim

as the poster above says, where do you even start and end on this "debate" generally you can call the top or bottom precisely, it only becomes apparent months or many months afterwards.

I don't THINK that we would have anything as severe as the last crash for several reasons, I think having seen how it panned out this time, how resilient the irish economy is, how good our fundamentals are, that people wouldnt all act in the "sky is going to fall in" manner that happened last time...

If a nama scenario were repeated, I don't think there a chance in hell that politically they could get away with selling a lot of the good stuff to "vulture funds" at absolute steal prices...

ixus

It's a mistake to say easy credit is not available. It is difficult to purchase multiple properties as a BTL landlord but, a FTB had access to very cheap credit.

A FTB can borrow at ~3% which is historically low here.
A FTB can get up to 20k tax back from the govt.
BOI are offering 3% cash back PLUS have a 2k reward on offer if you save with them for 6 months.

In theory, a FTB could purchase a 400k house with as little as 10k in savings.
20k from govt, 8k at 2%. BOI Cash plus the 2k savings account. With additional 1% if stuck with BOI for 5yrs.

A FTB can essentially borrow at 10k/400k = 97.5%

The BTL landlord has been replaced by foreign money buying for cash and purchasing in large transactions in a search for central bank driven yield. Should foreign cash pull out for whatever reason, the tide will go out fast.

draiochtanois

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