Will house prices decline?

gregie

We all know the situation in 2008/2009 where the economic collapse caused a fall in the house prices.

I dislike the policy after that. Very little supply in housing drove up the price again to about the same level as 2008. The only difference is that less fortunate people are all on the street or in Hotels. This costs an absolute fortune and that money could be spent much better. The money could all be spend on improving the housing market and to pay off debt.

Now we got 2 problems. The trade war and Brexit.

When house prices would fall, we are in a far worse situation. Lots of homeless people and more bad mortgages. It will be absolutely awful with lots of suffer.

I think it would have been much better if the supply of houses would have been normal. The prices would not have risen that much and there would not be another bubble. Houses would be affordable for normal people. The money we spend now to put people in Hotels, could be invested in paying of bad debts.

In other words: The debt in 2008 should have been cared for instead of creating another huge bubble.

Let me know if you agree or disagree.

14dMoney

gregie wrote: »

We all know the situation in 2008/2009 where the economic collapse caused a fall in the house prices.

I dislike the policy after that. Very little supply in housing drove up the price again to about the same level as 2008. The only difference is that less fortunate people are all on the street or in Hotels. This costs an absolute fortune and that money could be spent much better. The money could all be spend on improving the housing market and to pay off debt.

Now we got 2 problems. The trade war and Brexit.

When house prices would fall, we are in a far worse situation. Lots of homeless people and more bad mortgages. It will be absolutely awful with lots of suffer.

I think it would have been much better if the supply of houses would have been normal. The prices would not have risen that much and there would not be another bubble. Houses would be affordable for normal people. The money we spend now to put people in Hotels, could be invested in paying of bad debts.

In other words: The debt in 2008 should have been cared for instead of creating another huge bubble.

Let me know if you agree or disagree.

I wouldn't say I agree or disagree. However we recently got approval in principal, but are deciding to sit tight to see how everything pans out.

Sarn

I don’t believe we are in a bubble, the bank mortgage limits are keeping things in check. This is the one thing that was done right.

House prices are high but that is purely down to supply and demand. No doubt there will be some drops, but these are likely to be relatively small and not to the same level as seen previously.

Getting rid of bedsits without having alternatives in place kicked things off on the rental side increases.

Wesser

Nobody knows. someone posts this question in a new thread about once a month in this forum. People then comment with amazing levels of confidence. answer is... no one knows for sure.

listermint

Yes they are all going down 25% this Monday.


Watch this space

0gac3yjefb5sv7

Most likely yes in the short term. But maybe not by much. Long term, good area? Increasing.

average_runner

Remember, if they fall and a crash happens, banks won't lend out as much money, so you might not get the loan you want!

If its a house for life then I woulldn't wait, if for investment then your playing the game

godtabh

The marker has hit maximum affordability. The rate at house price increase is slowing but prices are going up. This is the direct result of the Central Banks borrowing policy.

Prices maybe affected by Brexit. If thats the case so will lending.

adocholiday

We bought our house 1 year ago. We were in the same boat thinking that prices had peaked and would fall but decided to kick off the mortgage approval process anyway. The right house came up and was within budget so we went for it rather than holding out. Had we continued renting we'd be almost €15k worse off now in terms of rent paid and no better off in terms of house price because houses are selling in the area at the same price as last year. The price of the house is just one thing, but the other costs of holding out have to be weighed against any drops that may or may not happen.

godtabh

adocholiday wrote: »

We bought our house 1 year ago. We were in the same boat thinking that prices had peaked and would fall but decided to kick off the mortgage approval process anyway. The right house came up and was within budget so we went for it rather than holding out. Had we continued renting we'd be almost €15k worse off now in terms of rent paid and no better off in terms of house price because houses are selling in the area at the same price as last year. The price of the house is just one thing, but the other costs of holding out have to be weighed against any drops that may or may not happen.

We bough 18 months ago. Recently had it revalued and after doing some work (c. €60k) the value increased by €125k.

When we moved in a neighbor mentioned that there was a few builder bidding on houses local. Doing them up and selling them on.

Another houses is on the estate for sale. Asking is about €30k more than what we paid for ours and in a similar condition.

jimwallace197

If a deal for Brexit comes through and I'm confident that it will, prices will be on the rise again no doubt and those that had the opportunity over the last few months to purchase will more than likely miss out imo

malandrini

average_runner wrote: »

Remember, if they fall and a crash happens, banks won't lend out as much money, so you might not get the loan you want!

If its a house for life then I woulldn't wait, if for investment then your playing the game

Every coin has two sides, if there is a crash, it is true the banks wont give you money initially, but they will be desperate to sell you the home of that guy/woman/couple who was not paying the mortage for several months.... and then, if you are reliable, they will give you money.

malandrini

jimwallace197 wrote: »

If a deal for Brexit comes through and I'm confident that it will, prices will be on the rise again no doubt and those that had the opportunity over the last few months to purchase will more than likely miss out imo

Houses will probably fall down, ireland market has huge dependency on UK market, not able to trade with them will hit massively the business in Ireland. Add to the equation that everyone is living on credit, and/or saving the month based on the payroll, in other words, no savings.
So, that man in the corner is hit by the brexit and trading limitations with uk, his business starts to fall down, the bills are there and the debts too.. not too much money, he stops going out, no pubs, no dinners, reducing expenses... oh wait.. the owner at the pub who has nothing to do with the brexit starts to be hit because his clients dont have as much money as before, they are the men with the business in the corner trading with UK... domino effect.

UK people demanding houses in Ireland increasing the prices? that is something to be observed yet, which people and which profiles would like to move from an UK house to an Irish house which its quality is.. I prefer not to comment.
On top of that, reached the brexit, what about GBPEUR value? mmm I doubt the pound will have enough value to afford a house in ireland.

Ash.J.Williams

gregie wrote: »

We all know the situation in 2008/2009 where the economic collapse caused a fall in the house prices.

I dislike the policy after that. Very little supply in housing drove up the price again to about the same level as 2008. The only difference is that less fortunate people are all on the street or in Hotels. This costs an absolute fortune and that money could be spent much better. The money could all be spend on improving the housing market and to pay off debt.

Now we got 2 problems. The trade war and Brexit.

When house prices would fall, we are in a far worse situation. Lots of homeless people and more bad mortgages. It will be absolutely awful with lots of suffer.

I think it would have been much better if the supply of houses would have been normal. The prices would not have risen that much and there would not be another bubble. Houses would be affordable for normal people. The money we spend now to put people in Hotels, could be invested in paying of bad debts.

In other words: The debt in 2008 should have been cared for instead of creating another huge bubble.

Let me know if you agree or disagree.

the impending global catastrophe that seems to be approaching will feck us up bigtime

https://www.youtube.com/watch?v=xiiHjrewXNI

malandrini

Ash.J.Williams wrote: »

the impending global catastrophe that seems to be approaching will feck us up bigtime

https://www.youtube.com/watch?v=xiiHjrewXNI

Everytime the yield curve gets inverted it takes 18/22 months to reach you.
Said that ETA for crisis is June 2020, but, it might be faster as this one has extra toppings, as brexit, USA-China War, US Debt aaaaand no financial weapons in the central banks (ECB/FED), not to mention Lagarde (not a banker) leading the ECB... The same person whow gave 50bn$ to argentina while was leading the IMF, who now has a debt of 100bn% and the same person how is probably to forgive Argentina debt, as it is not going to be payed... so... she is good a financial decisions... get ready.

In the same way...

UE countries in the continent facing red numbers on the spreedsheets in their economy? it takes 3 to 6 months to reach Ireland.

Some indicators are interesting to check as the loan repayment for students in US.. not good as far as I am aware, and some numbers in heavy industry as cars... see sales numbers, declining in spain 1% or 2% per month or quarter? I cant remember
First cars, then houses.

Sierra Oscar

Ash.J.Williams wrote: »

the impending global catastrophe that seems to be approaching will feck us up bigtime

https://www.youtube.com/watch?v=xiiHjrewXNI

Yes, a recession in the global economy is probably on the horizon as predicted by the inverted yield curve. We’re well overdue one. There have been six global recessions since 1970 alone after all.

I wouldn’t necessarily just assume the next one will mirror the previous financial crisis though when you consider it’s extremity was very much an outlier. Yes, house prices will fall if there is a global recession and yes banks will probably tighten up on their lending making it harder to buy anyway. I wouldn’t bank on house prices falling by 50% though as was the case during the financial crisis. The mortgage lending rules have restricted people from taking on serious amounts of unsustainable debt and there’s already a serious undersupply of housing as our home buying population grows fairly rapidly.

You’d never know though, Brexit is a serious risk and it’s unclear where the international trade wars are going. I just don’t buy into the sentiment that a recession automatically equals a crash in our domestic housing market.

The biggest risk we face from a prolonged global recession coupled with intensifying trade wars and a hard Brexit is the possibility of foreign direct investment drying up. That will have a dampening effect on the demand for housing, but we won’t be heading into such a scenario with families massively over leveraged with mortgage debt as during the last financial crisis. There could be serious issues in the business / office letting sector though.

Melanchthon

I would imagine even with only a small slowdown some developments will loose a lot of value, cramped new builds with middling to prestigious addresses that are actually beside areas with serious problems being marketed for more than larger places in working class areas that still have issues but for the most part are actually ok but have a historic reputation.

jimwallace197

malandrini wrote: »

Houses will probably fall down, ireland market has huge dependency on UK market, not able to trade with them will hit massively the business in Ireland. Add to the equation that everyone is living on credit, and/or saving the month based on the payroll, in other words, no savings.
So, that man in the corner is hit by the brexit and trading limitations with uk, his business starts to fall down, the bills are there and the debts too.. not too much money, he stops going out, no pubs, no dinners, reducing expenses... oh wait.. the owner at the pub who has nothing to do with the brexit starts to be hit because his clients dont have as much money as before, they are the men with the business in the corner trading with UK... domino effect.

UK people demanding houses in Ireland increasing the prices? that is something to be observed yet, which people and which profiles would like to move from an UK house to an Irish house which its quality is.. I prefer not to comment.
On top of that, reached the brexit, what about GBPEUR value? mmm I doubt the pound will have enough value to afford a house in ireland.

You misunderstood what I was saying, I'm confident that their will a deal one way or the other and property prices will continue to grow as a result of it.

Of course if there is no deal and a hard brexit is the outcome, it will be a different outcome.

lawred2

If you need a house and can afford it - you should buy. Prices will peak and trough but you'll still need somewhere to live.

malandrini

jimwallace197 wrote: »

You misunderstood what I was saying, I'm confident that their will a deal one way or the other and property prices will continue to grow as a result of it.

Of course if there is no deal and a hard brexit is the outcome, it will be a different outcome.

"one way or the other and property prices will continue to grow as a result of it" can you develop that? becuase I can see a deal signed between EU/UK, while UK can buy products and services from China/US. Even if they dont have a trade agreement.
And I dont see how that would be ok for irish economy, where its best client is UK, neither how it is going to be good for the house market.

If right now the ratio of no-payments in ireland is +-20% on mortages/loans (continent I think it was around 4%)... you just need to shake a little bit the economy and the job market and you will see how that % goes up badly.
Everyone is living on credit or counting with the payroll at the end of the month, no savings, no plan B. There is no margin.

jimwallace197

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Rant over.

malandrini

Mod edit

Quoted post removed.

hmmm

Developers won't build if prices fall, which will reduce supply. We might see house price drops, but supply seems to be meeting demand and that will help moderate any major falls (or rises). I think we'll all benefit if house prices rise/fall by no more than a few % every year, and we get away from the wild swings.

malandrini

Mod edit

Quoted post removed.

gihj

lawred2 wrote: »

If you need a house and can afford it - you should buy. Prices will peak and trough but you'll still need somewhere to live.

Nonsense. Would it not be better to buy at the bottom of the curve rather than the peak regardless???
Are you seriously saying that it makes no difference and you should just buy anyway??
Honestly?

thomasdylan

gihj wrote: »

Nonsense. Would it not be better to buy at the bottom of the curve rather than the peak regardless???
Are you seriously saying that it makes no difference and you should just buy anyway??
Honestly?

If you're renting in Dublin and can afford it you could well be better off buying. Paying 1500e a month in rent by however many months it takes for a drop in prices may be a worse deal than buying unless there's a significant and fairly rapid drop. If you're in a secure job, a mortgage in Dublin is going to be less in rent and if you've kids or are thinking of starting a family it could make sense to buy.

gregie

Sarn wrote: »

this is the one thing that was done right.
.

Agree. Nice comment.

gregie

Thanks to everyone for sharing your thoughts. I see different opinions.

Overall I think people are not too afraid, which is also a good thing.

Only the future will teach us.


Personally I think the situation is very very very wrong and I think there is a bubble created by simply cutting supply. I could be wrong of course (let's hope so).

I agree with the comments: If you need a house, you should buy. It is true.

gihj

thomasdylan wrote: »

If you're renting in Dublin and can afford it you could well be better off buying. Paying 1500e a month in rent by however many months it takes for a drop in prices may be a worse deal than buying unless there's a significant and fairly rapid drop. If you're in a secure job, a mortgage in Dublin is going to be less in rent and if you've kids or are thinking of starting a family it could make sense to buy.

That's not what you said.
What if I'm living with mammy for free in Longford???
Would you give me the same advice???
Or is it a one fits all approach you live by?

And what if you're saving say 3 grand a month net of the 1500 rent and prices dropped by 25% in a couple of years????
Nonsense

thomasdylan

gihj wrote: »

That's not what you said.
What if I'm living with mammy for free in Longford???
Would you give me the same advice???
Or is it a one fits all approach you live by?

And what if you're saving say 3 grand a month net of the 1500 rent and prices dropped by 25% in a couple of years????
Nonsense

I wrote about what I thought about Dublin not Longford and the situation in which it could be better to buy.

I think you may have thought my post and another post were from the same person. If not, I don't really understand your post and why you're talking about Longford and living rent free given what i wrote.

nak

thomasdylan wrote: »

If you're renting in Dublin and can afford it you could well be better off buying. Paying 1500e a month in rent by however many months it takes for a drop in prices may be a worse deal than buying unless there's a significant and fairly rapid drop. If you're in a secure job, a mortgage in Dublin is going to be less in rent and if you've kids or are thinking of starting a family it could make sense to buy.

In the process of buying in Dublin as rent is now 1744/month for a 2 bed apartment. Finally saved enough money - renting since I started uni. House is a long term home, mortgage on a 3 bed house will be a few hundred per month less and we won't have to worry about rent increases or the landlord selling up.

dor843088

nak wrote: »

In the process of buying in Dublin as rent is now 1744/month for a 2 bed apartment. Finally saved enough money - renting since I started uni. House is a long term home, mortgage on a 3 bed house will be a few hundred per month less and we won't have to worry about rent increases or the landlord selling up.

You'll only have to worry about boiler breakdowns property taxes going up house insurance going up interest rates going up and all the other costs and maintenance of your property that people dont factor in when comparing rent vs own. Not saying renting is great but a mortgage is certainly not the only cost associated with owning a home.

Edgware

dor843088 wrote: »

You'll only have to worry about boiler breakdowns property taxes going up house insurance going up interest rates going up and all the other costs and maintenance of your property that people dont factor in when comparing rent vs own. Not saying renting is great but a mortgage is certainly not the only cost associated with owning a home.

He never said it was. Being an owner means you have control. Why should house insurance go up outside basic rises? There are several schemes where you get low cost boiler service as part of your utility bill. A lot of house maintenance can be done by the owner. Painting, gardening etc are not complicated and there is plenty advice available from DIY sites

JohnnyChimpo

dor843088 wrote: »

You'll only have to worry about boiler breakdowns property taxes going up house insurance going up interest rates going up and all the other costs and maintenance of your property that people dont factor in when comparing rent vs own. Not saying renting is great but a mortgage is certainly not the only cost associated with owning a home.

I don't think you can equate getting your boiler repaired with the existential prospect of getting turfed on to the street because your LL pulled the rug from under you and there's minimal supply in the rental market. Please try to engage with the reality of what's happening in Dublin at the moment.

nak

JohnnyChimpo wrote: »

I don't think you can equate getting your boiler repaired with the existential prospect of getting turfed on to the street because your LL pulled the rug from under you and there's minimal supply in the rental market. Please try to engage with the reality of what's happening in Dublin at the moment.

Yeah, had a stressful period where a previous landlord gave us notice and we couldn't find anywhere to rent for 3 months. I also have friends in full time employment who were effectively homeless for 2 weeks recently between homes, no one should have to go through that.

I am not a child and well aware of the additional costs of maintaining a property, have had home insurance as a tenant. Our last boiler service was free, property tax is way less than the council tax we paid in the UK plus our previous LL wasn't great at fixing things or gardening (they lived in house before us) so we did most of the maintenance on the property ourselves.

Glenbhoy

malandrini wrote: »

Every coin has two sides, if there is a crash, it is true the banks wont give you money initially, but they will be desperate to sell you the home of that guy/woman/couple who was not paying the mortage for several months.... and then, if you are reliable, they will give you money.

Theoretically sound, however, the option of replacing the person not paying with someone who will/can pay isn't really an option open to Irish banks, at least not a short to medium term option.

padd b1975

godtabh wrote: »

We bough 18 months ago. Recently had it revalued and after doing some work (c. €60k) the value increased by €125k.

When we moved in a neighbor mentioned that there was a few builder bidding on houses local. Doing them up and selling them on.

Another houses is on the estate for sale. Asking is about €30k more than what we paid for ours and in a similar condition.

Symptoms of a bubble?

gregie

How do people look at this in relation to the covid shutdown?

The economy is now collapsing... is it now a bigger issue since another 'bigger' housing bubble was created after 2008? How would the situation be if we used tax money to pay off bad debts instead of spending it on homeless hotel rooms?