Property Market 2019

The_Conductor

As is now becoming a custom- we'll start a new thread to discuss all topics as they pertain to the property market in general, alongside people's predictions and experiences- for the year 2019.

Its going to be an interesting year- with Brexit, if it comes to pass, at the end of March- and to misquote Donald Rumsfeld - the unknown unknowns that are likely to jump out at us, when we least expect them to.

2018 thread is now closed.

GGTrek

It looks like houses are being built in the wrong places for owner occupiers:
https://www.independent.ie/irish-news/new-housing-crisis-on-horizon-as-supply-comes-on-stream-in-wrong-areas-37666390.html


https://www.independent.ie/business/personal-finance/property-mortgages/property-ireland-2018-house-price-rises-slow-dramatically-in-dublin-but-other-cities-continue-to-soar-37665341.html


So supply is finally coming albeit not close to where the jobs are.


The main problem is that the rental market has diverged from the sale market (probably due to continuous absurd interference from the legislators), Tom Lyons:
However, while there may be hope of relief for buyers, there is no indication that the rental market price rises are set to ease off.
"2018 was the year that sales and rental segments detached."


Conor Skehan:
Mr Skehan predicts the over-supply of the wrong type of housing, the lack of convenient rental properties, and increasing rents will lead to the emergence of what he calls a "new urban politics". "Whether it will be new political parties or new politics by existing parties will depend on how the next 12 months is handled," he says.



There is no hope for renters and landlords in Ireland in my opinion.

Pussyhands

Prediction for 2019

- prices to continue to rise before falling in H2 and then will drop due to impending recession in late 2019/20

hmmm

The market is like a river with multiple streams feeding into it - I don't think you can talk about a single property market.

One stream is high end property, which seems to be calming down considerably. Buyers here may be waiting until Brexit sorts itself out. Despite several predictions of imminent worldwide recession, there are plenty of mainstream commentators who are saying that economic fundamentals look quite strong - and we may even see a resolution to Trump/Brexit uncertainty in 2019 which would help confidence.

The next stream is property for sale to your typical "middle class". Supply here seems to be increasing, and prices are bouncing off the Central Bank limits. Property is there to be bought if you want it, but you might have to compromise on location or size of property. This market will find a stable equilibrium over the next few years as no builder is going to build unless they can make a profit. Attempts to increase the % of social housing in new build estates could lead unintentionally to a large drop in building activity. I can't see anything other than a catastrophic Brexit as a short term threat, and the changes of that is quite minimal.

Affordable housing for workers on lower wages remains a problem. There is property available, but the government affordability schemes (like all government schemes) are overly bureaucratic and not delivering. There is a bit of an expectation problem with lower paid workers expecting to be able to own a house close to Dublin city centre on a lower wage, which is never going to be realistic. The other problem is the cost of building - if a builder can only build houses for 200k at a minimum, that's the floor for new builds and no amount of protesting will fix it. Something radical needs to change here before this market changes - perhaps lower build standards.

The "homeless"/social housing market. Hard to know with this one, there seems to be a few genuine cases and a lot of people trying to game the system. It generates a lot of noise, but I don't see any celebrities offering to build social housing in their large back gardens. Putting a small amount of social housing into private estates is already testing purchasers patience, and there seems to be considerable opposition to building large social housing estates. Not easy to see an answer to this one.

The rental market appears to be screwed in the near term. Attempts to "fix" rents have largely backfired (as predicted), and small landlords are leaving the market. We have seen corporate landlords come in, and this can only be a good thing in terms of supply (and quality), but only if you can afford it. The demise of the bedsit/small apartment leaves a massive gap for cheaper rental accomodation for the lower paid. I think without some sort of radical change (e.g. allowing micro apartments New York style) there is no quick fix. This will generate a lot of noise from multinationals, as their foreign employees cannot source rental accommodation - maybe we'll see a return to the days when employers built housing for employees.

handlemaster

Brexit brexit and brexit is going to place the market under pressure. The real test will be 2020 on as recession seems to be on the cards from 2020 on as pointed to by some analysts

masterboy123

I feel Brexit will cause an immediate short term spike in prices of properties. I know few people planning to move to Ireland from UK as their companies are moving to Ireland. That way many professionals will be living and working in Ireland.

handlemaster wrote: »

Brexit brexit and brexit is going to place the market under pressure. The real test will be 2020 on as recession seems to be on the cards from 2020 on as pointed to by some analysts

airportgirl83

masterboy123 wrote: »

I feel Brexit will cause an immediate short term spike in prices of properties. I know few people planning to move to Ireland from UK as their companies are moving to Ireland. That way many professionals will be living and working in Ireland.

https://m.independent.ie/business/personal-finance/property-mortgages/house-prices-2019-property-owners-warned-no-deal-brexit-will-take-ireland-into-the-unknown-37668643.html

riclad

Theres the high end market , house,s over 500k, in city area,s ,upper class area,s
the rural market , the lower end of the market , council house,s etc
I think 2 factors that will effect the market in 2019 is brexit and the stock market.
The economy will be effected in 2019,
why should new companys move to ireland when theres a major rental crisis .There will be some pushback from voters due to high rents,s
,people are spending some much on rent from their salarys .
The stock market had a large decline in december .
i think the strict rules on lending simply place limits on how much prices can rise even in dublin .

beaz2018

5% increase for 2019 coming according to Davy and myhome. Id imagine this will be mainly outside Dublin as there seems to be scope for people to borrow more as a % of their salary. Dublin is maxed out in that regard, apparently.

Bob24

airportgirl83 wrote: »

https://m.independent.ie/business/personal-finance/property-mortgages/house-prices-2019-property-owners-warned-no-deal-brexit-will-take-ireland-into-the-unknown-37668643.html

To be honest no one knows for sure what the actual impact of Brexit will be. The only unbiased comment one can make is that there is a lot of uncertainty (what Bexit even means is not clear yet, and might not be for a while - even after the March deadline) . Someone saying that Brexit will push prices one way or another is making a lot of assumptions to deliver actual predictions out of that uncertainty. And given the large number of assumptions, how huge the impact would be if even one of them is wrong, and the relatively low level of certainty for each of them - I personally don’t give too much credit to any Brexit related prediction.

padd b1975

beaz2018 wrote: »

5% increase for 2019 coming according to Davy and myhome. Id imagine this will be mainly outside Dublin as there seems to be scope for people to borrow more as a % of their salary. Dublin is maxed out in that regard, apparently.

Average wages are still rising which should translate into single figure growth at the middle/lower end of the market.

Franz Von Peppercorn

beaz2018 wrote: »

5% increase for 2019 coming according to Davy and myhome. Id imagine this will be mainly outside Dublin as there seems to be scope for people to borrow more as a % of their salary. Dublin is maxed out in that regard, apparently.

Expect some loosening of credit if that happens.

beaz2018

Franz Von Peppercorn wrote: »

Expect some loosening of credit if that happens.

There will be no loosening of credit, Philip Lane has been adamant about that.

Mickiemcfist

beaz2018 wrote: »

There will be no loosening of credit, Philip Lane has been adamant about that.

Have to say, I'm a huge fan of his. A rare voice of reason in an Irish state body.

Moonjet

I think the actual process and legal changes involved in implementing Brexit will be long, messy, complicated and drawn out, certainly not something that will happen overnight on March 29th. As a result, any meaningful impact on the Irish property market will probably not be felt for at least 3-5 years.

Beheretomorrow

beaz2018 wrote: »

5% increase for 2019 coming according to Davy and myhome. Id imagine this will be mainly outside Dublin as there seems to be scope for people to borrow more as a % of their salary. Dublin is maxed out in that regard, apparently.

I read this article too and my first thought was that these guys are bankers and have a vested interest to protect their industry. I'd be surprised if we see single digit growth this year. Housing in Hong Kong has fallen (-20%), so has Sydney (-10%) and the Bay Area has stagnated. Apple cut it sales outlook last night. We're in for a rocky ride in 2019 in my opinion.

Franz Von Peppercorn

About 7.5k properties for sale in Dublin. Seems like a lot. Twice as many as a few years ago.

Zenify

Franz Von Peppercorn wrote: »

About 7.5k properties for sale in Dublin. Seems like a lot. Twice as many as a few years ago.

40% increase for properties for sale in Dublin compared to this time last year according to draft report.

beaz2018

Zenify wrote: »

40% increase for properties for sale in Dublin compared to this time last year according to draft report.

How does this compare to other cities as a % of population, does anyone know?

Villa05

Moonjet wrote:

I think the actual process and legal changes involved in implementing Brexit will be long, messy, complicated and drawn out, certainly not something that will happen overnight on March 29th. As a result, any meaningful impact on the Irish property market will probably not be felt for at least 3-5 years.

That would indicate a sudden shock untill the legal issues are sorted out

Beheretomorrow

Manhattan home sales fell 14 percent last year, the industry's steepest drop since 2009, according to new data.

In the fourth quarter, the median price for an apartment in New York City fell below $1 million for the first time in three years.

The decline in sales in the fourth quarter was the fifth-straight quarterly drop.

From CNBC

snotboogie

Beheretomorrow wrote: »

Manhattan home sales fell 14 percent last year, the industry's steepest drop since 2009, according to new data.

In the fourth quarter, the median price for an apartment in New York City fell below $1 million for the first time in three years.

The decline in sales in the fourth quarter was the fifth-straight quarterly drop.

From CNBC

I wonder if the trade restrictions and tightening of regulation in China is stopping Chinese investors from dumping capital into foreign property markets. London, New York, Sydney and to a lesser extent San Francisco have all been heavily affected by this investment.

smurgen

U.S manufacturing at it's slowest growth in 2 years and futures all down.it's happening!

zl1whqvjs75cdy

The abject glee that some seem to be displaying when talking about a recession is really strange. Why would you possibly want a downturn or the economy to do worse? This won't only result in lower property prices. People will lose their jobs etc. Banks won't lend. Companies won't invest. It's not a good thing.

smurgen

donkeyoaty0099 wrote: »

The abject glee that some seem to be displaying when talking about a recession is really strange. Why would you possibly want a downturn or the economy to do worse? This won't only result in lower property prices. People will lose their jobs etc. Banks won't lend. Companies won't invest. It's not a good thing.

Don't be so emotive.it's just nice to see the "property prices can only go up brigade" facing a wave of reality in the short to medium term future. The arrogance and certainty that those in the previous thread spoke with was unfortunate.

titan18

Peter Muscular Quirk wrote:

The abject glee that some seem to be displaying when talking about a recession is really strange. Why would you possibly want a downturn or the economy to do worse? This won't only result in lower property prices. People will lose their jobs etc. Banks won't lend. Companies won't invest. It's not a good thing.

I wouldnt react with glee to a recession but I wouldn't mind one. Probably the best chance I have to buy a house as I'd have close to 20% deposit at current house prices, never mind if they went down.

Course, could lose job or banks won't lend, and things could get worse in the country but I have hope it might shake things up politically and we might get some parties move more to the right economically.

zl1whqvjs75cdy

smurgen wrote: »

Don't be so emotive.it's just nice to see the "property prices can only go up brigade" facing a wave of reality in the short to medium term future. The arrogance and certainty that those in the previous thread spoke with was unfortunate.

Emotive? You're easily agitated if you'd class my last post as emotive. Classifying people as arrogant for having an opinion on how property prices will progress in the near future is a bit strange. Demand is still much higher than supply and quoting syndney house prices as some kind of tracker for Irish prices is a bizzare argument to be making in my opinion. Not saying that was you btw, just that prices are as likely to go up as they are to go down on the next 3 to 5 years.

Franz Von Peppercorn

titan18 wrote: »

I wouldnt react with glee to a recession but I wouldn't mind one. Probably the best chance I have to buy a house as I'd have close to 20% deposit at current house prices, never mind if they went down.

Course, could lose job or banks won't lend, and things could get worse in the country but I have hope it might shake things up politically and we might get some parties move more to the right economically.

Banks didn’t lend last time. Cash buyers bought most of the property for 2-3 years. Good luck.

q85dw7osi4lebg

donkeyoaty0099 wrote: »

The abject glee that some seem to be displaying when talking about a recession is really strange. Why would you possibly want a downturn or the economy to do worse? This won't only result in lower property prices. People will lose their jobs etc. Banks won't lend. Companies won't invest. It's not a good thing.

It depends on your position really. If you already have a house, a stable long term job that won't be directly affected by a US recession, then said recession provides many opportunities, primarily in the stock market.

If you don't have a house and you work for a US multinational in Ireland then yes that's a very different story.

Villa05

Peter Muscular Quirk wrote:

The abject glee that some seem to be displaying when talking about a recession is really strange. Why would you possibly want a downturn or the economy to do worse? This won't only result in lower property prices. People will lose their jobs etc. Banks won't lend. Companies won't invest. It's not a good thing.

The whole point of many posts here is that if we had a mature attitude to the property market we would avoid the worst of the damage caused by recessions. The property market operates in a boom bust cycle by choice and government policy.
It is quiet simple to avoid these cycles and have a functioning property market

Pussyhands

I saw prices rose by 12k last year.

Does anyone know how much this is caused by new builds?

A new build will obviously mean higher price. With more new builds, means higher price.

Pussyhands

donkeyoaty0099 wrote: »

The abject glee that some seem to be displaying when talking about a recession is really strange. Why would you possibly want a downturn or the economy to do worse? This won't only result in lower property prices. People will lose their jobs etc. Banks won't lend. Companies won't invest. It's not a good thing.

Have 70k in my pocket, I'll get a mortgage.

I want to look after myself like everyone does.

zl1whqvjs75cdy

Pussyhands wrote: »

Have 70k in my pocket, I'll get a mortgage.

I want to look after myself like everyone does.

Congratulations on the deposit that's good saving. But if you're made unemployed you won't be getting a mortgage.

zl1whqvjs75cdy

Rex Disgusting Tariff wrote: »

It depends on your position really. If you already have a house, a stable long term job that won't be directly affected by a US recession, then said recession provides many opportunities, primarily in the stock market.

If you don't have a house and you work for a US multinational in Ireland then yes that's a very different story.

True. Full disclosure here I work for a large US multinational as does my wife. These companies seem to be banking on the economy continuing to grow though. Facebook, LinkedIn, google, Pfizer, alexion, bms, amgen, zendesk, Amazon all have massive expansion plans under way or nearing completion. They obviously don't see a massive storm on the horizon that some others do.

The_Conductor

Pussyhands wrote: »

I saw prices rose by 12k last year.

Does anyone know how much this is caused by new builds?

A new build will obviously mean higher price. With more new builds, means higher price.

12k?
I take it you mean national prices rose by 11.5% (Dublin was a more modest 4.8%- unless you were in West Dublin- where they actually fell).

I don't see why a new build necessarily means higher prices (than second hand sales) though? In general- you are not comparing like with like. A lot of the new builds are far smaller than second hand units in similar locations- and while they may have far better BER ratings etc- people are not willing ascribe a comparable value to these attributes- with property its all location-location-location- everything else is secondary.

The reason for ongoing price increases- is even now our supply is not in keeping with demand. Even a tin can will rise in price- if there is a scarcity of tins cans. Its simple supply and demand.

smurgen

donkeyoaty0099 wrote: »

Rex Disgusting Tariff wrote: »

It depends on your position really. If you already have a house, a stable long term job that won't be directly affected by a US recession, then said recession provides many opportunities, primarily in the stock market.

If you don't have a house and you work for a US multinational in Ireland then yes that's a very different story.

True. Full disclosure here I work for a large US multinational as does my wife. These companies seem to be banking on the economy continuing to grow though. Facebook, LinkedIn, google, Pfizer, alexion, bms, amgen, zendesk, Amazon all have massive expansion plans under way or nearing completion. They obviously don't see a massive storm on the horizon that some others do.

Facebook and LinkedIn lol, talk about over priced.Some of their staff would be lucky to have jobs in the next year.

BBFAN

smurgen wrote: »

Facebook and LinkedIn lol, talk about over priced.Some of their staff would be lucky to have jobs in the next year.

Facebook definitely is going to be one of those stocks that take a major nosedive in 2019.

smurgen

BBFAN wrote: »

smurgen wrote: »

Facebook and LinkedIn lol, talk about over priced.Some of their staff would be lucky to have jobs in the next year.

Facebook definitely is going to be one of those stocks that take a major nosedive in 2019.

Users leaving both platforms in droves and failure to monetise coupled with rising costs. Two lame ducks.

Franz Von Peppercorn

Apple be down already.

Mad_maxx

BBFAN wrote: »

Facebook definitely is going to be one of those stocks that take a major nosedive in 2019.

Facebook has already nose dived, it's cheap right now

zl1whqvjs75cdy

smurgen wrote: »

Facebook and LinkedIn lol, talk about over priced.Some of their staff would be lucky to have jobs in the next year.

LinkedIn currently owned by Microsoft so safe enough there. Facebook itself is shot agreed, but they own WhatsApp and Instagram, both massive platforms in their own right. Luckily Irish property prices don't really track individual US companies stock prices.

zl1whqvjs75cdy

smurgen wrote: »

Users leaving both platforms in droves and failure to monetise coupled with rising costs. Two lame ducks.

A cursory Google indicates that LinkedIn has grown revenues 37% this year. Seems decent growth to me.

Bob24

smurgen wrote: »

Users leaving both platforms in droves and failure to monetise coupled with rising costs. Two lame ducks.

I don’t know ... when I see the amount of crap Facebook has done with regards to privacy and abusing their market position and the fact that not only almost every person I know is still on it, but they are also all heavily relying on WhatsApp, with many on Instagram, I am not sure people care that much and will leave.

Also the network effect is working very well for them. I refused to register on WhatsApp until recently but I eventually felt forced to do so as I was missing out on some things which were only communicated on WhatsApp groups.

Anyway, a discussion for another topic, but to answer another poster, if Irish property prices don’t track stock prices of US multinationals they are still fairly influenced by the presence of multinationals (at least in Dublin, Cork, and possibly Galway).

Bluefoam

Bob24 wrote: »

I don’t know ... when I see the amount of crap Facebook has done with regards to privacy and abusing their market position and the fact that not only almost every person I know is still on it, but they are also all heavily relying on WhatsApp, with many on Instagram, I am not sure people care that much and will leave.

Your superficial knowledge is fascinating, but you knpow little of the actual workings of the business. your cursory view of the people in you direct circle is charming, but the reality is that facebook is growing massively in growing markets and those markets care little for you're mate in the pub. I think this is a direct example of pub economics.

Bob24

Bluefoam wrote: »

Your superficial knowledge is fascinating, but you knpow little of the actual workings of the business. your cursory view of the people in you direct circle is charming, but the reality is that facebook is growing massively in growing markets and those markets care little for you're mate in the pub. I think this is a direct example of pub economics.

Condescending answer which also shows the person who wrote it didn’t actuslly read the post they were replying to.

I am precisely saying that I think it is unlikely for people to leave en masse.

smurgen

Items such as manufacturing output and stock market trends are leading indicators when trying to track recessions.there is a lag between bad stuff happening in the U.S and the impact here in Ireland.

Assetbacked

On the rental crisis, which is what impacts the vast majority of those under the age of 35 I would say, the IT had a "state of the nation" piece from Ronan Lyons, Trinity professor of economics and author of Daft.ie reports https://www.irishtimes.com/business/personal-finance/rental-market-dysfunction-set-to-continue-through-2019-1.3735706



His key points;



- "For Ronan Lyons, assistant professor of economics at Trinity College Dublin and author of the Daft.ie rent reports, the problem is still very much one of a lack of supply." Despite all the bickering and protesting etc., ultimately this is the crux of the problem.



- "While there has been an uptick in planning permissions, he says it will be 2020 at the earliest before we see any significant relief, in terms of additional supply coming on to the market." 2020 at the earliest before rent looks like it will climb down from its 1620euro average in Dublin. The year of a general election which will be interesting to see how the government will fare.



- "And where we do see new developments coming on stream, it’s often at the top end of the market....According to Lyons, the reason so many of these investors are pitching their properties at this market is because of the costs of construction...One bright spot for tenants is that he expects these institutional players to seek to bulk up significantly the volume of apartments they let over time. The only way they can realistically capture a larger market share is by offering properties at lower rental rates."



- The introduction of rent controls in 2016 created a two tier market between tenants already renting and tenants who were new to the market/moving. "Figures from the Residential Tenancies Board (RTB) show that rents for existing tenancies rose by about 5.4 per cent in the year to September – but new tenancies rose by almost 50 per cent more than that."



- On the Airbnb measures "In addition, rules limiting Airbnb lets, other than in people’s main residence, to 90 nights a year, are due to be introduced next June. These could, it is hoped, bring as many as a couple of thousand properties back into the long-term rental sector."

LotharIngum

Wouldn't you think that some of these so called experts would publish some real research into how rent controls have really effected the rental market.

What are they afraid of?

Bluefoam

Bob24 wrote: »

Condescending answer which also shows the person who wrote it didn’t actuslly read the post they were replying to.

I am precisely saying that I think it is unlikely for people to leave en masse.

That really isn't clear from your original post... I've re-read it and your conculsion does not say vaugely that, let alone precisely.

Anyway, in relation to FB, Google at al, and their impact on Irish property prices... While they reside here, the management of the biusiness related to this island is minor, they are interested in big global swings... Their current concentration is emerging markets and they will keep people on this island busy for many years, iresepected of local recession.

Moonjet

donkeyoaty0099 wrote: »

The abject glee that some seem to be displaying when talking about a recession is really strange. Why would you possibly want a downturn or the economy to do worse? This won't only result in lower property prices. People will lose their jobs etc. Banks won't lend. Companies won't invest. It's not a good thing.

It also may not even cause the reduction in property prices everyone is hoping and waiting for.
The input parameters are completely different this time.

Going into 2008 recession we had a chronic oversupply of property, with banks insanely over-leveraged on mortgages.

Going into (potential) 2019/2020 recession we have a chronic undersupply of property with much tighter lending restrictions in place for the last 4 years.


It's not going to play out the same as 2008-2013.

LotharIngum

Wouldn't you think that some of these so called experts would publish some real research into how rent controls have really effected the rental market.

What are they afraid of?..