Property Market 2018

drunkmonkey

Did you here the lady on Ciara Kelly today, were about 10yrs away from the Garda and Nurse affording a house in the city but it will happen.
They also noted people are driving up prices in commuter areas such as nass and out as far as Carlow when there's no need as the places they actually want to buy aren't rising and some have actually dropped a bit.

Either way some people going to be upset when things normalise buying at today's prices and nobody to blame but themselves as there causing the prices rises with all the fomo.

TSQ

Has anyone published a properly researched study comparing affordability of homes over the past 50 years (e.g. percentage of take home pay required to fund monthly housing costs 1970's, multiple of pay required to fund the deposit, etc). Anecdotally, friends who bought in the 70's tell me they had to go through all sorts of hoops to qualify for a mortgage: they had to establish a good savings history to show they had actually saved all or most of the 20% deposit (not 5% or 10%), to prove they could afford the repayments, and then the interest rate fluctuated - generally 7% or 8% but up to 15% at one stage. I just question whether, apart from the mad credit boom of the noughties, buying a house really was easier for previous generations. I would love to see some figures to make the case either way.

Henbabani

Happy4all wrote: »

Henbabani wrote: »

Finally some good news.
It's a bit too late but still good starting

Still think they will start rising next Spring. Supply still not enough.

Really don't know where this negative came from.
I'm living in Carrickmines, there's so many builds next to me, clay farm and at least 3 other projects that going on sale still in 2018, and a lot of things are about to begin soon. If with this lack of supply prices are flatline, so what's going on when thousands of homes and apartments that built right now will go on sale?

Pussyhands

TSQ wrote: »

Has anyone published a properly researched study comparing affordability of homes over the past 50 years (e.g. percentage of take home pay required to fund monthly housing costs 1970's, multiple of pay required to fund the deposit, etc). Anecdotally, friends who bought in the 70's tell me they had to go through all sorts of hoops to qualify for a mortgage: they had to establish a good savings history to show they had actually saved all or most of the 20% deposit (not 5% or 10%), to prove they could afford the repayments, and then the interest rate fluctuated - generally 7% or 8% but up to 15% at one stage. I just question whether, apart from the mad credit boom of the noughties, buying a house really was easier for previous generations. I would love to see some figures to make the case either way.

Millenials like to think they're the worst off ever and look for pity all the time.

Fact is it's about the same for everyone bar this insane situation we've had for the last 6 years.

30 years ago there was no luas, m50, airport to cheap destinations on your doorstep, multinational well paid jobs, famous musicians and professional sports there every week...houses are better built and more energy efficient etc.

oceanman

TSQ wrote: »

Has anyone published a properly researched study comparing affordability of homes over the past 50 years (e.g. percentage of take home pay required to fund monthly housing costs 1970's, multiple of pay required to fund the deposit, etc). Anecdotally, friends who bought in the 70's tell me they had to go through all sorts of hoops to qualify for a mortgage: they had to establish a good savings history to show they had actually saved all or most of the 20% deposit (not 5% or 10%), to prove they could afford the repayments, and then the interest rate fluctuated - generally 7% or 8% but up to 15% at one stage. I just question whether, apart from the mad credit boom of the noughties, buying a house really was easier for previous generations. I would love to see some figures to make the case either way.

I think the big difference most people will tell you was that in the 70s and 80s there was usually only one income, so the builders and banks priced there products accordingly but as soon wemen started joining the workforce in large number there was suddenly two incomes and the builders and banks were quick to take advantage and jack up their prices, I thing the saying at the time was "greed is good" so now if a couple haven't got two good incomes they don't stand a chance.

Shedite27

drunkmonkey wrote: »

Did you here the lady on Ciara Kelly today, were about 10yrs away from the Garda and Nurse affording a house in the city but it will happen.

So either:
a) Nurses/Gardai are getting a big pay rise
b) House prices are gonna come downwards leaving people in negative equity again
c) Nurses/Gardai still won't be able to afford a house

Blowfish

Pussyhands wrote: »

Millenials like to think they're the worst off ever and look for pity all the time.

Fact is it's about the same for everyone bar this insane situation we've had for the last 6 years.

That's not even close to being true. From the research here for Dublin.

Historically, the Median Multiple has been remarkably similar among six surveyed nations, with median house prices from 2.0 to 3.0 times median household incomes (Australia, Canada, Ireland, New Zealand, the United Kingdom and the United States). Housing affordability remained generally within this range until the late 1980s or late 1990s in each of these nations (Figure 2).15 In recent decades, house prices have escalated far above household incomes in many parts of the world. In some metropolitan markets house prices have doubled, tripled or even quadrupled relative to household incomes. Typically, the housing markets rated "severely unaffordable" have more restrictive land use policy, usually "urban containment".

For the fifth year in a row, the United States has the most affordable housing among major housing markets, a moderately unaffordable Median Multiple of 3.8. Japan has an Average Multiple of 4.2, Canada (4.3) the United Kingdom (4.5), Singapore (4.8) and Ireland (4.8) have seriously unaffordable housing.

Bear in mind that's median household income multiples it's talking about, so despite the extra income from more women in the workforce, houses are still much less affordable than they were historically.

Pussyhands

Shedite27 wrote: »

So either:
a) Nurses/Gardai are getting a big pay rise
b) House prices are gonna come downwards leaving people in negative equity again
c) Nurses/Gardai still won't be able to afford a house

I'm hoping it's b.

If you buy and are in negative equity then that's your problem. Sure as long as you're not looking to move you shouldn't care too much anyways.

Mickiemcfist

Pussyhands wrote: »

Millenials like to think they're the worst off ever and look for pity all the time.

Fact is it's about the same for everyone bar this insane situation we've had for the last 6 years.

Soooo....they are the worst off then?

TSQ

Blowfish wrote: »

That's not even close to being true. From the research here for Dublin.




Bear in mind that's median household income multiples it's talking about, so despite the extra income from more women in the workforce, houses are still much less affordable than they were historically.

Yes, but I'm not asking about house prices as a multiple of income, what is more relevant is what you have to pay back every month, i.e. real housing costs - so interest rates would be very significant here. Plus the deposit you had to put down, which was higher in the 50's, 60's 70's and not sure about the 80's. Also, a single woman had no hope of getting a mortgage on her own back then, whatever her income.

Carlos Orange

Blowfish wrote: »

Bear in mind that's median household income multiples it's talking about, so despite the extra income from more women in the workforce, houses are still much less affordable than they were historically.

Economies are funny things but would you ever expect working women to bring down the multiple? 50 years ago I would have been competing to buy a house against people with a single income. Now I'm competing against some people with 1 income and some people with 2. As a single bloke I'm bound to be worse off.

Bob24

oceanman wrote: »

I think the big difference most people will tell you was that in the 70s and 80s there was usually only one income, so the builders and banks priced there products accordingly but as soon wemen started joining the workforce in large number there was suddenly two incomes

This (except I wouldn’t say builder and banks priced accordingly, the market simply priced accordingly and adjusted when household budgets increased).

It means it’s hard to do a like for like affordability comparison between then and now.

It would also actually be a good question to ask if it was really a progress for society as a whole to move from a model whereby a single income was enough to buy a home and support a family towards a model whereby 2 incomes are almost mandatory. I of course understand financial independence is good for women individually and not saying it should be taken away, but would anyone argue that it is better for society as a whole to require both parents to be busy and tired with work rather than having one of them available for their kids? Anyway, probably a discussion for another thread.

keane2097

Bob24 wrote: »

This (except I wouldn’t say builder and banks priced accordingly, the market simply priced accordingly and adjusted when household budgets increased).

It means it’s hard to do a like for like affordability comparison between them and now.

It would also actually be a good question to ask if it was really a progress for society as a whole to move from a model whereby a single income was enough to buy a home and support a family towards a model whereby 2 incomes are almost mandatory. I of course understand financial independence is good for women individually and not saying it should be taken away, but would anyone argue that it is better for society as a whole to require both parents to be busy and tired with work rather than having one of them available for their kids? Anyway, probably a discussion for another topic.

And are any of us financially independent if we need someone to go halves with us on shelter?

TSQ

Bob24 wrote: »

This (except I wouldn’t say builder and banks priced accordingly, the market simply priced accordingly and adjusted when household budgets increased).

It means it’s hard to do a like for like affordability comparison between them and now.

It would also actually be a good question to ask if it was really a progress for society as a whole to move from a model whereby a single income was enough to buy a home and support a family towards a model whereby 2 incomes are almost mandatory. I of course understand financial independence is good for women individually and not saying it should be taken away, but would anyone argue that it is better for society as a whole to require both parents to be busy and tired with work rather than having one of them available for their kids? Anyway, probably a discussion for another topic.

Well, I'm still looking for proper comparisons based on real data, rather than my own vague recollections of how tough it was in the 70's for my friends (I was 40 before I could afford my own place): both to raise a deposit and then make the monthly repayments (no morning lattes on the way to work, packed lunch made at home and eaten at the desk, no foreign holidays for several years, etc). And initially both partners had to save together for the deposit on two incomes, although I cede the point that only one wage (the man's) was taken into account for the actual mortgage amount. But I don't want to base my view on my 40 year old recollections, I would like some hard facts and am willing to be proved wrong in my view that today's retirees who started out on average incomes 40 years ago found it just as tough as young people today. Won't bore you with anecdotes, as it is facts and not individual hard luck stories that interest me. So, are there facts and figures out there at all?

Bob24

TSQ wrote: »

Well, I'm still looking for proper comparisons based on real data, rather than my own vague recollections of how tough it was in the 70's for my friends (I was 40 before I could afford my own place): both to raise a deposit and then make the monthly repayments (no morning lattes on the way to work, packed lunch made at home and eaten at the desk, no foreign holidays for several years, etc). And initially both partners had to save together for the deposit on two incomes, although I cede the point that only one wage (the man's) was taken into account for the actual mortgage amount. But I don't want to base my view on my 40 year old recollections, I would like some hard facts and am willing to be proved wrong in my view that today's retirees who started out on average incomes 40 years ago found it just as tough as young people today. Won't bore you with anecdotes, as it is facts and not individual hard luck stories that interest me. So, are there facts and figures out there at all?

I unfortunately can't find it on Google, but I once was at a Ronan Lyons talk and he showed a chart plotting the ratio of house prices in Dublin related to the median income for the past century, and that chart did show the ratio significantly rising in the past few decades (with the 2007 crash only making a minor dent towards bringing it back in line with the long term trend). But again it's probably not a like for like comparison as our model of society has changed.

Mickiemcfist

Bob24 wrote: »

I unfortunately can't find it on Google, but I once was at a Ronan Lyons talk and he showed a chart plotting the ratio of house prices in Dublin related to the median income for the past century, and that chart did show the ratio significantly rising in the past few decades (with the 2007 crash only making a minor dent towards bringing it back in line with the long term trend). But again it's probably not a like for like comparison as our model of society has changed.

Yea even charting median mortgage repayment/house prices vs median salaries over time doesn't paint the whole picture. Particularly when you look at the below:

Two stats I've just googled -
Median rent in Dublin = €1875 per month
Median income = 45k per year (€2832 per month)

Saving a deposit of any kind when the average rent is 66% of an average wage is nuts. *I know there's usually two earners per house, but numbers like that have never been seen before.

keane2097

People really do get intense about other people's coffee though don't they

M.Cribben

Henbabani wrote: »

Really don't know where this negative came from.
I'm living in Carrickmines, there's so many builds next to me, clay farm and at least 3 other projects that going on sale still in 2018, and a lot of things are about to begin soon. If with this lack of supply prices are flatline, so what's going on when thousands of homes and apartments that built right now will go on sale?

Prices have reached a point where they're beyond the affordability of average earners. This is an effect of the CB LTI and deposit rules, coupled with salaries not rising at the same rate as property prices over the last 5 years. That's why they're flat lining. It's not for lack of demand.

The reason all that building is going on is because at current prices, developers can make a profit. If prices start falling you can expect any private development to dry up, constricting supply (again) and driving prices back up.

drunkmonkey

Shedite27 wrote: »

So either:
a) Nurses/Gardai are getting a big pay rise
b) House prices are gonna come downwards leaving people in negative equity again
c) Nurses/Gardai still won't be able to afford a house

B. Hopefully people have the cop on this time to not buy starter houses and buy one that will do them for the life of the mortgage. Looking at 1 bed apartment prices you already know the writings on the wall.

seamus

Pussyhands wrote: »

I'm hoping it's b.

If you buy and are in negative equity then that's your problem. Sure as long as you're not looking to move you shouldn't care too much anyways.

Prices won't drop in actual terms; the demand is still there, it's just hitting a ceiling.

But stagnation over a longer-term means that inflation-adjusted the prices will be dropping. This is the most likely scenario for the next five years or so, excluding any massive economic shocks.

However, people won't be in negative equity. The house won't be worth less than they paid for it, but whatever equity they went into the purchase with, won't be gaining any interest like it would in a savings account.

This should in theory free up some property; if house prices are level, then it's not seen as a good investment, so more of the market is available to residential purchasers.

For the government, this means the end is nigh for the housing crisis.

That is, if they leave the central bank rules TF alone. This is exactly what the rules were supposed to do. They've only really kicked in properly. It would be a monumental mistake to fnck with them now.

amcalester

seamus wrote: »

For the government, this means the end is nigh for the housing crisis.

That is, if they leave the central bank rules TF alone. This is exactly what the rules were supposed to do. They've only really kicked in properly. It would be a monumental mistake to fnck with them now.

Which means only one thing, they're absolutely going to fcuk with them.

Bob24

M.Cribben wrote: »

Prices have reached a point where they're beyond the affordability of average earners. This is an effect of the CB LTI and deposit rules, coupled with salaries not rising at the same rate as property prices over the last 5 years. That's why they're flat lining. It's not for lack of demand.

The reason all that building is going on is because at current prices, developers can make a profit. If prices start falling you can expect any private development to dry up, constricting supply (again) and driving prices back up.

Agreed. IMO the only thing which would lead to price drops is a strong economic crisis (which is not out of the question).

beaz2018

Good to see a stabilisation in prices overall although id be hesitant to read too much into the statistics. Dublin has vastly different areas in terms of supply( and demand), even specific Dublin postcodes have some vastly more sought after areas than others -so prices will continue to rise rapidly in some areas and not so much in others (IMO).

drunkmonkey

Bob24 wrote: »

Agreed. IMO the only thing which would lead to price drops is a strong economic crisis (which is not out of the question).

There's a shed load of land in the city being freed up for housing. You don't need a crisis just a steady supply of houses for a price drop.

Zenify

beaz2018 wrote: »

Good to see a stabilisation in prices overall although id be hesitant to read too much into the statistics. Dublin has vastly different areas in terms of supply( and demand), even specific Dublin postcodes have some vastly more sought after areas than others -so prices will continue to rise rapidly in some areas and not so much in others (IMO).

It's actually the less sought after areas that are leading the way in price increases. Affordability kicked in a while ago with the sought after addresses.

Bob24

drunkmonkey wrote: »

There's a shed load of land in the city being freed up for housing. You don't need a crisis just a steady supply of houses for a price drop.

Currently what is moderating some Dublin prices is affordability ceilings, not a lack of demand.

And at least in Dublin City, IMO there will not be enough supply to dry up current demand anytime soon, even assuming the building industry runs full steam. So I don't see any price drop caused by new supply, from my perspective only a drop in demand could cause it.

drunkmonkey

On a long enough time line demand will drop, supply will increase. It's a good few years out yet though.

Bob24

drunkmonkey wrote: »

On a long enough time line demand will drop, supply will increase. It's a good few years out yet though.

Don't forget that if the economy keeps performing and there is no crisis, the population will also keep rising, especially in an economic hub connected to the global economy like Dublin. I don't see demand dropping in that scenario.

Zenify

Bob24 wrote: »

Don't forget that if the economy keeps performing and there is no crisis, the population will also keep rising, especially in an economic hub connected to the global economy like Dublin. I don't see demand dropping in that scenario.

I don't think anyone is denying that demand is high and will stay high. Lots of people want houses. Very few can afford them.

Bob24

Zenify wrote: »

I don't think anyone is denying that demand is high and will stay high. Lots of people want houses. Very few can afford them.

Well I was replying to a post saying that over time demand will drop even if there is no economic crisis, so while this is also what I think it doesn't seem to be consensual to say demand in Dublin will remain high unless there is a crisis.