Property Market 2018

Zenify

Zenify wrote: »

A lot of housing markets in big cities around the world are slowing and some are declining. Does anyone think this could have a knock on effect in Ireland?

It's already happening in Dublin, from what I can see.
I'm looking at houses from 350k upwards.

OwlsZat

Property owners baulk at the idea of property prices being reduced. As a result government won't intervene much. The market will edge on sideways until interest rates rise and it will cause another collapse. 

How long will Euro zone inflation stay at 2%? What is the impact of America increasing their own interest rate. Does that mean Europe will follow suit to prevent money leaving?

awec

alwald wrote: »

Do you have figures or data to support your statement?
Because I can say that over 280k maybe, below that no chance.

500k is the magic number I think.

Above and below this is almost like two different markets entirely. If you're in a position to spend 600k on a house the process is going to be much less stressful for you. There are very few first time buyers in this segment.

Sub-500 is where all the action is. Still more people wanting to buy than there are houses available, and this is where the majority of first time buyers are. Prices here aren't going to change with any significance until supply can meet demand.

q85dw7osi4lebg

alwald wrote: »

Do you have figures or data to support your statement?
Because I can say that over 280k maybe, below that no chance.

Not at all, only my opinion (I work in the industry too).

M.Cribben

OwlsZat wrote: »

Property owners baulk at the idea of property prices being reduced. As a result government won't intervene much. The market will edge on sideways until interest rates rise and it will cause another collapse.

How long will Euro zone inflation stay at 2%? What is the impact of America increasing their own interest rate. Does that mean Europe will follow suit to prevent money leaving?

I don't think interest rates will impact as much as you think because, there is almost equal amount of money on deposit by Irish households (€100bn - https://www.irishtimes.com/business/economy/household-deposits-hit-100bn-despite-zero-rate-of-return-1.3275039) as there is outstanding mortgage/household debt. (€116bn - https://www.cso.ie/indicators/default.aspx?id=4CBM01A)


Any rise in interest rates will pump billions into the economy, by basically transferring wealth from the debtors to the depositors - although there's probably a huge crossover between those 2 groups.

phunkadelic

M.Cribben wrote: »

I don't think interest rates will impact as much as you think because, there is almost equal amount of money on deposit by Irish households (€100bn - https://www.irishtimes.com/business/economy/household-deposits-hit-100bn-despite-zero-rate-of-return-1.3275039) as there is outstanding mortgage/household debt. (€116bn - https://www.cso.ie/indicators/default.aspx?id=4CBM01A)


Any rise in interest rates will pump billions into the economy, by basically transferring wealth from the debtors to the depositors - although there's probably a huge crossover between those 2 groups.

There's probably an inverse relationship between the amount a person has in savings and the amount they have in debt. If they had savings they would pay off the debt with them.
So increase in interest rate will affect those with the larger debt and the lesser savings.
The ones with the most savings are the oldest and wealthiest that have the mortage already paid off.

M.Cribben

phunkadelic wrote: »

There's probably an inverse relationship between the amount a person has in savings and the amount they have in debt. If they had savings they would pay off the debt with them.
So increase in interest rate will affect those with the larger debt and the lesser savings.
The ones with the most savings are the oldest and wealthiest that have the mortage already paid off.

I think it's difficult to quantify but are you saying the average mortgage holder has zero savings? I know some of my children's generation (Milennials) who like to have savings in the bank as a safety net against job losses, medical emergencies, unexpected car/house repairs, college fees and so on. The wealthiest in society generally don't store their wealth in deposit accounts where it's depreciating in value due to inflation/low interest rates. They understand money hence why they're wealthy and typically have that wealth spread across several asset classes (index / mutual funds, property, shares, bonds, etc).

Bob24

M.Cribben wrote: »

I think it's difficult to quantify but are you saying the average mortgage holder has zero savings? I know some of my children's generation (Milennials) who like to have savings in the bank as a safety net against job losses, medical emergencies, unexpected car/house repairs, college fees and so on. The wealthiest in society generally don't store their wealth in deposit accounts where it's depreciating in value due to inflation/low interest rates. They understand money hence why they're wealthy and typically have that wealth spread across several asset classes (index / mutual funds, property, shares, bonds, etc).

Agree on the safety net part, so I’d be with you in questioning that the average mortgage holder has no savings.

Having said that the argument that it might be better to invest money you have and don’t need in various asset classes instead of using them to repay a mortgage is not that obvious to me.

A good mortgage interest rate nowadays would be around 3%, meaning any early repayment will give you a yearly saving of 3% of that amount, with no associated risk. So to better use your money compared to putting it into the mortgage, you would have to invest it in very safe way and so that the yearly interests you get are over 3% after tax. Or in a not so safe way but with after tax interests well above those 3%. Not that easy to find.

whatever76

https://www.irishtimes.com/sponsored/ulster-bank/quality-of-life-cheaper-housing-and-jobs-puts-cork-firmly-on-first-time-buyer-s-map-1.3671728 - interesting article regarding Cork housing market

heebusjeebus

whatever76 wrote: »

https://www.irishtimes.com/sponsored/ulster-bank/quality-of-life-cheaper-housing-and-jobs-puts-cork-firmly-on-first-time-buyer-s-map-1.3671728 - interesting article regarding Cork housing market

Can't read the article but the URL indicates it's a sponsored article from Ulster bank.

Zenify

Anyone think these new Air B&B laws will affect the market? Will they add properties to the rental market or will these landlords sell?

Mickiemcfist

Zenify wrote: »

Anyone think these new Air B&B laws will affect the market? Will they add properties to the rental market or will these landlords sell?

It can only be a good thing, however I don't think we've as many full time airbnbs in Dublin as people are suggesting. So my guess is the effect won't be particularly noticable. Step in the right direction though.

phunkadelic

It could mean less prospective investors though. They would be less inclined to invest in a new property if the yields are not as good.
So that would mean less competition for houses and keep prices down a bit.

Samuel T. Cogley

It might, and I stress might, decrease the rate of price increases for apartments for a couple of months. Beyond that it's agoing to so SFA to rents or house prices.

Bob24

While I see that change as a good thing, I also doubt it would have much of an impact on prices.

the butcher

https://news.goldcore.com/us/gold-blog/dublin-housing-boom-set-to-bust/

Feels like 2007 again to me. Top end of the market is usually the canary in the mine.

In Dublin, there are already signs the prime market is faltering.

In the upmarket areas of Dublin 4 and Dublin 6, high-priced homes are struggling to sell. A report by property portal MyHome.ie shows that 68 per cent of prime properties in Dublin 4 — the most expensive area in the country with an average price of €775,973 — and Dublin 6 have cut their prices.

“For quite a few properties that are on the market for more than €1m, the asking prices are being pushed down,” says Stephen Day, residential director at Lisney estate agents.Day has recently reduced a five-bedroom property in Ranelagh from €2.25m to €1.995m.

“To be blunt,” he says, “agents are putting houses on for too high a price, and so they have been sitting on the market.”

MayoSalmon

the butcher wrote: »

https://news.goldcore.com/us/gold-blog/dublin-housing-boom-set-to-bust/

Feels like 2007 again to me. Top end of the market is usually the canary in the mine.

Houses are being overpriced by sellers and agents and credit is not abundant therefore the overpriced houses are not selling. Seems like the market is working pretty well in this scenario.

Am I missing something here that is so worrying?

Cyrus

EA's will always try and be ahead of the market, once prices are starting to stagnate they will always be ahead so price cuts are inevitable, but i dont think its evidence of a crash

Samuel T. Cogley

MayoSalmon wrote: »

Am I missing something here that is so worrying?

Interest rate rises and Brexit.

draiochtanois

This post has been deleted.

Bob24

Samuel T. Cogley wrote: »

Interest rate rises and Brexit.

I think the question was in the context of explaining why stock on the top end of the market is not moving as fast as the low end.

Marius34

draiochtanois wrote: »

This post has been deleted.

To add positive for house price increase:
Wage increase. this is very possible scenario or next few years.
Insufficient new property supply. Residential construction is still very low, comparing with population increase.
Reduction of Non-Performing loans. Once it reaches 5% (this may happen in 2 years), no big pressure from EU central bank, and that may lead to LTI increase for over current 3.5 times. In addition this may drive down the interest rate closer to EU level.

To add to negative for house price increase, which is more of speculation, rather then current issue:
Uncertainty with EU and US policies. This is worry for Corporates as "tax heaven" country.
New crises

alwald

There has been few discussions in the last few weeks about affordability, how much most well payed couples can spend on a property, at what price level house bidding becomes less and less a common occurrence and what price range is more affected by price stabilisation than others.

I compiled the 2018 data from the property price register, some prices are VAT inclusive others are not. For the sake of simplicity, I just used the prices provided in the website to understand how many houses were sold this year in county Dublin by price range.

It's fair to say from the figures that the most sold properties are priced between 200K and 400K, in fact, if we look at prices from 100K to over 1M, the price range between 100K to 400K represents 62% of the properties sold.

I found the figures intriguing so I decided to compare them to the 2017 figures. It's clear to me that the percentages of properties sold by price bracket didn't change much between both years.

JustLen

What is the significance of the figures?

lawred2

draiochtanois wrote: »

Positives for housing market/prices
Falling unemployment
Net immigration
Tax and USC cuts
Brexit job gains
Competition between banks bringing down interest rates

Negatives for housing market/prices
Brexit uncertainty
ECB interest rate increases likely
some pent up demand has been met

Tax and USC cuts?

Lol a few quid a week

sunnyday1234

Samuel T. Cogley wrote: »

MayoSalmon wrote: »

Am I missing something here that is so worrying?

Interest rate rises and Brexit.

no chance of interest rate rises any time soon

Pussyhands

sunnyday1234 wrote: »

no chance of interest rate rises any time soon

It's badly needed tbh.

Wanderer78

sunnyday1234 wrote:

no chance of interest rate rises any time soon

Pussyhands wrote:

It's badly needed tbh.

Famous last words, since our economies are doing resonably well, why wouldn't rates rise?

Pussyhands

Wanderer78 wrote: »

Famous last words, since our economies are doing resonably well, why wouldn't rates rise?

I'm saying we need the rise badly. Economy is doing amazing but if it goes tits up there's nothing that can be done to breathe life into the economy.

China and Saudi Arabia situations are precarious.

Stock market in the US in October was the most volatile month in something like 60 years.

Wanderer78

Pussyhands wrote:

I'm saying we need the rise badly. Economy is doing amazing but if it goes tits up there's nothing that can be done to breathe life into the economy.

Yea I understand the thinking, but i also think theres an element of truth in what some commentators are saying, rises now might actually cause downturns, it's a difficult one, many economies are still in a fairly precarious position