House prices to continue rising in 2019

M.Cribben

New report from Standard and Poors agency estimates another 8% rise next year before the market shows any signs of cooling down. Makes sense given completions are still falling way short of meeting demand.



https://www.independent.ie/business/personal-finance/property-mortgages/a-soft-landing-again-predicted-house-prices-to-rise-rapidly-through-2019-before-easing-sp-37277168.html

The report states that even if house completions were to continue to grow at their “extraordinarily strong current rates” it will still be 2021 before supply meets demand, which is estimated at around 35,000 units needed a year.

The year 2021 for catching up with demand seems to tally with reports from Davy stockbrokers and AIB.


https://www.irishtimes.com/business/construction/state-may-need-to-build-50-000-homes-per-year-says-davy-1.3211214

Deub

It means nothing. Standard & Poors gave A+ ratings up the Lehmans collapse in 2008. They are paid by the companies they are evaluating so they are not neutral.

If nothing happens (crash, war, etc) maybe it will keep rising until 2021. But it is one scenario from a countless list of other scenarii.

theboringfox

Another factor here is how they will maintain this level of building. Even if they can find the people they are going to see costs of construction go up which will driver higher prices. I can't see outside of Dublin how prices will fall. Dublin funnier market as seems people are leveraging up more there to compete with investors.

The_Conductor

theboringfox wrote: »

Another factor here is how they will maintain this level of building. Even if they can find the people they are going to see costs of construction go up which will driver higher prices. I can't see outside of Dublin how prices will fall. Dublin funnier market as seems people are leveraging up more there to compete with investors.

I'm not sure about Dublin people leveraging up to compete with investors. Honestly- other than REITs (and their ilk)- investors are abandoning the residential property market- its simply not worth their while. Even the REITs are investing in hotel and office space in Dublin- rather than further investing in residential property. Some people are talking about the possibility of a scheme for converting offices from business use to residential property- and some sort of a favourable planning treatment for such developments- as particularly in light of the much reduced residential property sizes- and the perceived coming glut in office space- it makes space to start refitting/repurposing now- rather than waiting until the writing is on the wall............

One way or the other- the Dublin (and general environs) have well and truly divorced themselves from the residential property market evident in the rest of the country. The driver of property price growth in the capital- is now in the apartment sector, which sounds counter intuitive- however, apartment property prices have not recovered to the same extent as have other property prices (and availability is higher- so we actually are getting volume transactions- which isn't happening elsewhere).

I don't know- the 35k units they are suggesting we need on an annual basis- doesn't ring true- many commentators are saying 24-25k- to include social housing- is more what we need- and the suggestions are that we are toying with 19k completions for 2018 on current trends.............

One way or the other- salaries are not increasing, for anyone, at the pace that property prices are increasing- affordability is a bigger brake on prices- than lack of availability is driving up prices. You can't buy or sell a house- if you simply can't afford it............ The Central bank rules- seem to be working in this respect- however, the one size fits all approach- means that while Dublin may have cooled down to a certain extent- the rest of the country is continuing to roar ahead..........

the_syco

The report states that even if house completions were to continue to grow at their “extraordinarily strong current rates” it will still be 2021 before supply meets demand, which is estimated at around 35,000 units needed a year.

IMO, that 35,000 units will need to be somehow built within the M50, or they won't be used.

Nika Bolokov

The Fianna Fail proposal to give large tax breaks to small landlords in this year's budget , given the rents being achieved , would drive certain parts of the market sky high

Fol20

Nika Bolokov wrote: »

The Fianna Fail proposal to give large tax breaks to small landlords in this year's budget , given the rents being achieved , would drive certain parts of the market sky high

Tax breaks don’t cause prices to be sky high. High rent is cause by lack of supply with a declining supply. What tax break may do is stop a declining supply and or lure more ll to the market. In the short term I don’t think it will have any bearing for rent to decrease as supply is still at an all time low. However long term they need to do something as too many ll are getting out

Nika Bolokov

Fol20 wrote: »

Tax breaks don’t cause prices to be sky high. High rent is cause by lack of supply with a declining supply. What tax break may do is stop a declining supply and or lure more ll to the market. In the short term I don’t think it will have any bearing for rent to decrease as supply is still at an all time low. However long term they need to do something as too many ll are getting out

Well it would change investors net profit calculation and thus how much they would he willing to pay to buy a particular yield. Of course tax is a factor