Do you believe Irish property prices will cool off soon?

DevLit

http://bit.ly/2JZsupx

According the the central bank governor, Irish property prices will cool off soon. So you believe this?

I do. The fact that I have a noticed a of properties around North Dublin are not selling, I think this is a sign that the asking prices of reached a ceiling due to the limits mortgages. There isn't a credit bubble this time.

martyoo

DevLit wrote: »

http://bit.ly/2JZsupx

According the the central bank governor, Irish property prices will cool off soon. So you believe this?

I do. The fact that I have a noticed a of properties around North Dublin are not selling, I think this is a sign that the asking prices of reached a ceiling due to the limits mortgages. There isn't a credit bubble this time.

Not a chance. In the long term yes but can't see it happening anytime soon. Wait until they start relaxing the lending rules!

Conservatory

When high rise apartments start going up in the city the outer suburbs - leixlip commuter town types will either level off and further on they will drop I reckon.

They still arnt building (even though the figures say they are) I drove by a fire today lucky for Leo Varadkar it was in a big empty field that he built 300 pretend social houses in. Just beside Kilmore there off the M1.

Donutz

DevLit wrote:

According the the central bank governor, Irish property prices will cool off soon. So you believe this?

While there is a shortage of supply versus demand, property prices will continue to rise. Not until the homeless crisis has been solved will property prices begin to plateau.

Samuel T. Cogley

DevLit wrote: »

http://bit.ly/2JZsupx

According the the central bank governor, Irish property prices will cool off soon. So you believe this?

I do. The fact that I have a noticed a of properties around North Dublin are not selling, I think this is a sign that the asking prices of reached a ceiling due to the limits mortgages. There isn't a credit bubble this time.

Upper end might be experiencing a slowdown but the middle and lower end certainly aren't.

That article points out it'll happen 'over time' as supply comes on stream. We're three years away from that as a minimum I'd say.

Samuel T. Cogley

Donutz wrote: »

While there is a shortage of supply versus demand, property prices will continue to rise. Not until the homeless crisis has been solved will property prices begin to plateau.

Most people who are homeless won't be impacting property prices. We could easily see the housing slow down and homelessness remain a problem. Social housing needs to be built to alleviate that issue.

The_Conductor

martyoo wrote: »

Not a chance. In the long term yes but can't see it happening anytime soon. Wait until they start relaxing the lending rules!

The Central Bank are suggesting they are going to increase banks capital holding ratios- in order to mitigate against the 'First Time Buyers Grant' and any other mayhem the government decide to impose/continue to impose on the market. Its not that lending rules are going to change- its that capital gearing ratios in the banks themselves- are going to get tighter........... Its a case of more than one way to skin a cat- same desired outcome- however, without having to deal with the fallout of whatever spin the government decide to put on it.

M.Cribben

The way I see it, the 2 main criteria analysts are predicting will cool the market down are 1) a rise in ECB base interest rates and 2) an increase in supply.

Regarding 1) , recently they have announced no change to the base rate until at least summer 2019. ( https://www.ft.com/content/453ca6bc-753e-11e8-b6ad-3823e4384287 )

Jens Weidmann, the Bundesbank’s president, reiterated in Paris on Thursday morning that’s the ECB would keep interest rates at their current record lows “at least through the summer of 2019”

Even then it looks like increases will be slow and gradual to avoid shocking the Eurozone:

“We will remain patient in determining the timing of the first rate rise and will take a gradual approach to adjusting policy thereafter,” the ECB president said in a speech in Sintra, Portugal.

Regarding 2) , with the government fudging the figures on actual completions ( https://www.independent.ie/irish-news/house-hunters-will-now-find-it-even-harder-to-get-a-mortgage-warns-esri-37025688.html ) the ESRI is predicting < 19,000 completions this year of the 35,000 we need annually to meet demand. This figure should increase year on year for the coming years but most analysts think it will be 2021/2022 before we hit 35,000 completions.

So based on above, my prediction is that prices in urban areas where demand is highest will continue rising for at least 3 years. Maybe not at the double-digit % rates they have been, but they will continue to rise. I also predict it's going to take longer to sell properties as affordability impacts the market because of these increases. I think I read 70% of properties in Dublin sell in under 4 months. This will likely increase to 6-7 months.

The_Conductor

Just for the record- the theoretical 35k unit completions- is to clear 'pent-up-demand'- its not a consistent need- and the country as a whole would be destroyed if we did manage to ramp up production to 35k units- as we'd not ramp back down again- we'd go on another party like we did last time round.

Most commentators are a lot more comfortable with a figure in the region of 24-25k units- and even that would have to be cyclical- its not a consistent demand level. If we have 19k completions in 2018- actual completions- its not what we need- but its heading towards where we need to be.

alwald

I agree with the last 2 posts in this thread and I would like just to add that prices will start falling from the 1 of January 2020, indeed this is the date in which the stupid first time buyer grant will finish.

I hope the government won't introduce any other stupid grant, that the ECB lending rules will remain the same if not a little bit stricter and why not a small rise in the interest rate to reduce the current prices...add to it a 25K units built every year and we're good...now back to my beer!

zl1whqvjs75cdy

I still think no. Supply is short in major urban centres. Though how short is up for debate. The population is expected to grow by 1 million in the next 30 years. These people have to live somewhere. Just because a lot of people on here want a crash doesn't mean there will be.

As an anecdote (which this forum seems to love over actual stats), I attended a launch of the first phase of new builds in my area. I was 16th in the queue with 12 houses available. The first 8 houses sold before people even saw them. It is mental out there.

Donutz

Samuel T. Cogley wrote:

Most people who are homeless won't be impacting property prices. We could easily see the housing slow down and homelessness remain a problem. Social housing needs to be built to alleviate that issue.

I agree that homeless people won't be getting mortgages and buying houses but if the government and local authorities continue to fail in the building of new social housing units, homeless charities and local authorities will continue to purchase properties that are for sale.

Surely that has some impact on property prices.

Samuel T. Cogley

Donutz wrote: »

I agree that homeless people won't be getting mortgages and buying houses but if the government and local authorities continue to fail in the building of new social housing units, homeless charities and local authorities will continue to purchase properties that are for sale.

Surely that has some impact on property prices.

A tiny impact maybe, but the homelessness issue will not be solved by buying up units, they just don't have the funds to buy enough units.

awec

alwald wrote: »

I agree with the last 2 posts in this thread and I would like just to add that prices will start falling from the 1 of January 2020, indeed this is the date in which the stupid first time buyer grant will finish.

I hope the government won't introduce any other stupid grant, that the ECB lending rules will remain the same if not a little bit stricter and why not a small rise in the interest rate to reduce the current prices...add to it a 25K units built every year and we're good...now back to my beer!

I am willing to bet the first time buyer grant will make absolutely no difference whatsoever to prices when (if) it goes away.

Not sure I buy into this notion that it drove prices up. They were going up regardless, it's basic supply and demand.

zl1whqvjs75cdy

awec wrote: »

I am willing to bet the first time buyer grant will make absolutely no difference whatsoever to prices when (if) it goes away.

Not sure I buy into this notion that it drove prices up. They were going up regardless, it's basic supply and demand.

They may have driven prices up, but absolutely no hope prices drop by 20 k on the 1st of Jan 2020. Developers have that built into their margins for the foreseeable so cheers fg for ****ing us all on that one. Clowns.

alwald

awec wrote: »

I am willing to bet the first time buyer grant will make absolutely no difference whatsoever to prices when (if) it goes away.

Not sure I buy into this notion that it drove prices up. They were going up regardless, it's basic supply and demand.

They were going up indeed, however, prices went up very quickly as soon as this scheme went live.
In fact a number of new estates raised their prices immediately after this scheme was announced which had a knock on effect on the second hand market.

On top of that this scheme helped a lot of first time buyers, who didn't have the deposit, to enter the market for a new build/house which drove demand up at a time when supply was very low - this factor also contributed to the current high prices.

awec

alwald wrote: »

They were going up indeed, however, prices went up very quickly as soon as this scheme went live.
In fact a number of new estates raised their prices immediately after this scheme was announced which had a knock on effect on the second hand market.

On top of that this scheme helped a lot of first time buyers, who didn't have the deposit, to enter the market for a new build/house which drove demand up at a time when supply was very low - this factor also contributed to the current high prices.

But would they have went up very quickly regardless? Probably.

alwald

awec wrote: »

But would they have went up very quickly regardless? Probably.

Absolutely not, I was monitoring some new estates and prices went up as soon as this ridiculous scheme was announced - It was madness.
I strongly believe that without this scheme we would have early/mid 2017 prices now instead of the current prices.

Marius34

alwald wrote: »

I agree with the last 2 posts in this thread and I would like just to add that prices will start falling from the 1 of January 2020, indeed this is the date in which the stupid first time buyer grant will finish.

I hope the government won't introduce any other stupid grant, that the ECB lending rules will remain the same if not a little bit stricter and why not a small rise in the interest rate to reduce the current prices...add to it a 25K units built every year and we're good...now back to my beer!

I do expect slowdown myself, but by meaning slowdown I mean price increase will go below 10% a year. But saying that it will fall?  With a so much growing demands of living space in places like Dublin area it really can't happen without major economy crisis.

Regarding Grants for FTB, it maybe extended, or otherwise new schema's introduced.. Anyway this is not the biggest driver. Biggest one is LTI constrain. 3.5 LTI is extremely tight. If the property price stabilize, central banks can go easily  to 4.0 or so to increase demands. Even 4.0 LTI is tight. 

Now 25K unit build a year, in Ireland? I believe that's way to little to solve the property crises. 25K would be probably enough only for Dublin and commuting area to solve its crisis. Just by looking at demographics, we can expect big growth of students leaving their parents home.. Many heading to the cities, and other more student concentrated areas.. Adding more pressure on the rentals, meanwhile this will attract big investors for BTL, leaving even less supplies for FTB.

http://worldpopulationreview.com/countries/ireland-population/

The_Conductor

awec wrote: »

But would they have went up very quickly regardless? Probably.

RTE surveyed numerous developments around the country. The 20k was incremented onto the asking prices overnight in most cases. It was a pure sop to developers- but sold as a 'help' to first-time-buyers. The real help for first-time-buyers- was the lower deposit requirement (compared to other buyers)- not the 20k that was incremented onto asking prices...........

awec

The_Conductor wrote: »

RTE surveyed numerous developments around the country. The 20k was incremented onto the asking prices overnight in most cases. It was a pure sop to developers- but sold as a 'help' to first-time-buyers. The real help for first-time-buyers- was the lower deposit requirement (compared to other buyers)- not the 20k that was incremented onto asking prices...........

Well speaking as a first time buyer I have to say you are wrong.

We bought a house this year. Without HTB it would absolutely not have happened for another year or two.

Rothmans

awec wrote: »

Well speaking as a first time buyer I have to say you are wrong.

We bought a house this year. Without HTB it would absolutely not have happened for another year or two.

Is that not exactly the point that The Conductor and the previous poster was making? Without the HTB you would not have had the deposit and would thus have been one less household causing immediate upward pressure in the market.

foxatron

Not sure the central bank can be considered reliable yet. Especially when they have just released that statement. Housing policy still very short sighted. Id like to say im waiting for the next housing buble to go pop before i buy but cant see any cooling in the next 3 to 4 years unless a hard brexit has any impact, unlikely.

honeybear

Yes

Sleeper12

DevLit wrote:

I do. The fact that I have a noticed a of properties around North Dublin are not selling, I think this is a sign that the asking prices of reached a ceiling due to the limits mortgages. There isn't a credit bubble this time.

What do you mean by not selling?

Many properties north & south are getting above asking price. You could see a for sale sign on a property for months but it doesn't mean that it's not selling

awec

Rothmans wrote: »

Is that not exactly the point that The Conductor and the previous poster was making? Without the HTB you would not have had the deposit and would thus have been one less household causing immediate upward pressure in the market.

Ok, so I guess if you're looking at it from the point of view of wanting fewer people buying houses and more people stuck in the rental market it's bad.

Easy enough to say when you already own a house I suppose.

hinault

I didn't see price crashing in 2007.

kuntboy

Donutz wrote: »

Not until the homeless crisis has been solved

By "homeless" do you mean people staying in bnbs/hotels paid for by the state (funded by the working man, who has to actually pay for his house) or people sleeping rough?

Rothmans

awec wrote: »

Ok, so I guess if you're looking at it from the point of view of wanting fewer people buying houses and more people stuck in the rental market it's bad.

Easy enough to say when you already own a house I suppose.

I'm currently trying to buy myself, so I understand the difficulties.

The point is that it is better that supply meets demand in a natural graduated fashion, rather than the government suddenly throwing 20 grand at a large cohort of buyers, causing a sudden jump in demand, in a market where supply is the issue.

I don't think anybody here would have a problem with Government interference in the housing market if it actually alleviated some of the pressures. However, every time the Government has interfered, they have made a dog's dinner of it, leaving the public (or at least those of us wanting to buy a home) even worse off than if the Government hadn't tried to 'help' at all!

awec

Rothmans wrote: »

I'm currently trying to buy myself, so I understand the difficulties.

The point is that it is better that supply meets demand in a natural graduated fashion, rather than the government suddenly throwing 20 grand at a large cohort of buyers, causing a sudden jump in demand, in a market where supply is the issue.

I don't think anybody here would have a problem with Government interference in the housing market if it actually alleviated some of the pressures. However, every time the Government has interfered, they have made a dog's dinner of it, leaving the public (or at least those of us wanting to buy a home) even worse off than if the Government hadn't tried to 'help' at all!

Lovely pie in the sky stuff though.

I am sure there are hundreds, maybe thousands of home owners right now who would not be home owners were it not for the HTB grant.

So while it's not perfect, "dogs dinner" is a bit OTT.

Carlos Orange

awec wrote: »

Lovely pie in the sky stuff though.

I am sure there are hundreds, maybe thousands of home owners right now who would not be home owners were it not for the HTB grant.

So while it's not perfect, "dogs dinner" is a bit OTT.

Unless it created housing supply all it did was change who owns houses not add to it.

Sleeper12

kuntboy wrote:

By "homeless" do you mean people staying in bnbs/hotels paid for by the state (funded by the working man, who has to actually pay for his house) or people sleeping rough?

Call it what you want but all of these have to be housed. There's about 10,000 of these. Government were caught lying about numbers built in the last 12 months so another 10,000 homes needed there. We need another 100,000 homes on top of the secision just to meetings pent up demand and another 30,000 every year to meet regular demand.

We are building about 12,000 a year at the moment. So prices aren't going to decrease anytime soon and rents will continue to increase till we build a lot more property

Bubbaclaus

Sleeper12 wrote: »

Call it what you want but all of these have to be housed. There's about 10,000 of these. Government were caught lying about numbers built in the last 12 months so another 10,000 homes needed there. We need another 100,000 homes on top of the secision just to meetings pent up demand and another 30,000 every year to meet regular demand.

We are building about 12,000 a year at the moment. So prices aren't going to decrease anytime soon and rents will continue to increase till we build a lot more property

There was about 15,300 dwellings built in the 12 months to March 2018, and projecting the growth rate forward for the last 3 months we would be over 16,000 currently. So not quite as dire as the 12,000 you mentioned.

I'd say Q1 2020 is when it starts breaking 25k new dwellings and approaching annual demand requirements (of course it will need to go further past this to take care of built up demand).

Claw Hammer

Another issue that arising is that the new student accommodation units are not being properly counted. It appears that in some cases multiple beds are counted as one housing unit.

Bob24

Sisk are saying supply is unlikely to reach the figure required to meet demande by 2021, as opposed to what the ERSI are saying.

https://www.irishexaminer.com/breakingnews/business/sisk-chief-executive-steve-bowcott-housing-crisis-to-last-longer-than-expected-851361.html

Personally I believe that *in Dublin* supply won’t ever pickup with current demand levels in the short to medium term, and the only factors capable of restraining/reversing price increases are aforability limits and then a potential economic cooldown or downturn which would cap or reduce demand.

zl1whqvjs75cdy

I hate where we are at now. I just bought and can well afford my repayment, but I really don't want to see any explosion in house prices. The only thing between us and absolute disaster is the central bank governer. If he let's the money flow we'll be ****ed all over again. Thankfully he seems sensible but it is so fragile. If he decides to got for 4 x as standard ltv (or even higher) prices will jump over night. Scary stuff.