Property Market 2020

TheSheriff

Queasy Tadpole wrote: »

EXACTLY. I know what my property is worth. It's probably overvalued at the minute by maybe 10-15%. I'm not gonna sell less than what it's worth. I can hold out longer than a buyer can paying rent. Wishful thinking from people who think they're gonna get absolute bargains. The market is the way it is due to lack of quality supply in good locations and that's not gonna change for decades now in my view.

But what you think your property is worth and the buyer thinks its worth are two completely different things. Its the latter which will determine the value of your home, not your own thoughts.

One house in particular springs to mind when I read your post; it was a property in Coolmine ("Castleknock" as per the EA) up for sale at 450k; it was on the market around 6 months when we first viewed it (which is now nearly 6 months ago, so 12 months total). It was ok, nothing amazing.

It had an offer of 380k on it from a bidder which the seller rejected. We offered 385k after viewing as the location somewhat suited, also rejected. One year later the property is still for sale. No other bids on it were made (as the EA rang us a month back asking were we interesting in revising our offer).

A classic example of what the vendor "thinks" their house is worth - this is meaningless. Its the price someone who walks in the door is willing to pay which matters.

That house may sell, it'll likely be lower than our bid now.

Queasy Tadpole

TheSheriff wrote: »

But what you think your property is worth and the buyer thinks its worth are two completely different things. Its the latter which will determine the value of your home, not your own thoughts.

One house in particular springs to mind when I read your post; it was a property in Coolmine ("Castleknock" as per the EA) up for sale at 450k; it was on the market around 6 months when we first viewed it (which is now nearly 6 months ago, so 12 months total). It was ok, nothing amazing.

It had an offer of 380k on it from a bidder which the seller rejected. We offered 385k after viewing as the location somewhat suited, also rejected. One year later the property is still for sale. No other bids on it were made (as the EA rang us a month back asking were we interesting in revising our offer).

A classic example of what the vendor "thinks" their house is worth - this is meaningless. Its the price someone who walks in the door is willing to pay which matters.

That house may sell, it'll likely be lower than our bid now.

Oh I understand completely and I'm not being delusional or anything. I have family who are both in construction and in the estate agent game.


Yes most people overvalue their homes. I'm coming at it from a practical, logical and informed place. Yet it doesn't really matter does it? If John and Mary think their house is worth €500k and realistically it's work €400k on the judgement of a surveyor and multiple estate agents.


Frank and Sarah come in with an offer of €410k... John and Mary are not gonna budge unless they really need to which more than likely they do not. So no sale goes through. I'm in a position to wait for years if it's required without any detriment to myself or my financial position.


Can the same be said for Frank and Sarah who are paying €1k+ in rent while trying to gather up a mortgage and move into their permanent home?

fergus1001

beauf wrote:

Makes no sense. It was the peak of the market. If they haven't built on it by now, it was because it didn't make financial sense.

or they were sitting on it waiting for 2006/2007 land prices

Graham

TheSheriff wrote: »

A classic example of what the vendor "thinks" their house is worth - this is meaningless. Its the price someone who walks in the door is willing to pay which matters.

It takes buyers and sellers to establish a market.

Somebody saying "I'm not willing to pay more than X" hasn't set a market value.

TheSheriff

Graham wrote: »

It takes buyers and sellers to establish a market.

Somebody saying "I'm not willing to pay more than X" hasn't set a market value.

Absolutely , I agree; it takes both realistic buyers and realistic sellers, both responding to the current market i.e. making bids in line with the current market and accepting bids in line with the current market.

If neither of these happen, or one is unreasonable, the market stalls until someone caves.

Villa05

Maitguel wrote:

I get that after the crash there were a lot of forced sales either bank or consensual sales of distressed borrowers and this was the reason why some many properties were sold for next to nothing but I just do t see that happen this time. If that does happen again like before it will not be FTBs benefiting from this but cash buyers scooping up these bargains.

It was auction houses that found the bottom after the last crash mostly executor sales. There were very few forced sales due to Nama and the bank bailout.

Maitguel wrote:

Beside Armageddon what do other people see as the reasons why owners will start to sell their properties at a discount?

People always need to sell. It is worth remembering from the last crash that larger more expensive houses fell by more than starter homes. In this scenario anyone selling to get a larger house would be much better off

Much of the sales over the past 5 years were to Reits. How leveraged were these Reits and with mass selling of shares in Reits will they be forced to sell.

cute geoge wrote:

imo the big unknown is will all the big U.S. multinational company's stay put in this country .Trump will do his best to force them to return jobs back home .Looking back there was a big slump in house prices after 9/11 ,this was at the beginning of the celtic tiger and was short lived .

This is a big issue if Trump is handing out a 2 trillion bailout, I'm sure he will have a much stronger hand in getting a dividend of bringing jobs back to USA

He seemed especially animated on the issue with regard to american pharmaceutical and medical device companies based abroad. This may move to the top of his priority list given the Corona virus and the large bill and unemployment associated with it

An Ri rua

Empty_Space wrote: »

Im conflicted, I want prices to plummet because it will my favour me as a buyer.

But I know people who bought recently and would hate to see them suffer.

How will they suffer??

Paper loss? Just pay the mortgage and be glad they can. If they can't, there's a stopgap in place for now.

Suffer.....ffs

OwlsZat

Queasy Tadpole wrote: »

Frank and Sarah come in with an offer of €410k... John and Mary are not gonna budge unless they really need to which more than likely they do not. So no sale goes through. I'm in a position to wait for years if it's required without any detriment to myself or my financial position.


Can the same be said for Frank and Sarah who are paying €1k+ in rent while trying to gather up a mortgage and move into their permanent home?

John and Mary could have both lost jobs and are million miles from being able to pay a mortgage. 500k job losses predicted last i read. Some will sell to to avoid negative equity. Some will ride the storm stay put as you say, but certainly others won't. Once sentiment changes as it will with all the hopeless stock earnings announcements, it could become a narrow gate with lots trying to get out through it. Feer and greed. Emotions are everything. Stick or twist. How low could the market go?

awec

OwlsZat wrote: »

John and Mary could have both lost jobs and are million miles from being able to pay a mortgage. 500k job losses predicted last i read. Some will sell to to avoid negative equity. Some will ride the storm stay put as you say, but certainly others won't. Once sentiment changes as it will with all the hopeless stock earnings announcements, it could become a narrow gate with lots trying to get out through it. Feer and greed. Emotions are everything. Stick or twist. How low could the market go?

If John and Mary both lose their jobs why on earth would they sell their home? You think they're going to go from no income, to no income and no home?

They'd go into mortgage arrears but keep their house.

ittakestwo

Queasy Tadpole wrote: »

Oh I understand completely and I'm not being delusional or anything. I have family who are both in construction and in the estate agent game.


Yes most people overvalue their homes. I'm coming at it from a practical, logical and informed place. Yet it doesn't really matter does it? If John and Mary think their house is worth €500k and realistically it's work €400k on the judgement of a surveyor and multiple estate agents.


Frank and Sarah come in with an offer of €410k... John and Mary are not gonna budge unless they really need to which more than likely they do not. So no sale goes through. I'm in a position to wait for years if it's required without any detriment to myself or my financial position.


Can the same be said for Frank and Sarah who are paying €1k+ in rent while trying to gather up a mortgage and move into their permanent home?

If you want to sell your house at a certain time you accept the market at that time. Your house is not worth some arbitrary price in your head.

In your example the house was worth 400k when they first went to market. They were asking €500k or 25% above the market price and it did not sell. The only reason it sold after would be because the market went up 25% in some timeframe after they went to market.

In your example the John and Mary who put thier house on for sale here in 2007 at above market price that they would not budge on are still waiting to sell 13 years later with a price tag 25% above the 2020 market.

But a lot of sellers sell because they want to move somewhere on. If you want to move in 2020 what is the point in putting your house up for sale at a price that wont sell in 2020.

OwlsZat

awec wrote: »

If John and Mary both lose their jobs why on earth would they sell their home? You think they're going to go from no income, to no income and no home?

There will be plenty of recent buyers willing to sell out of a new investment if it's going to save them financially. Do you really think everyone is firming going to hold through a downturn? Seriously delusional.

Queasy Tadpole

OwlsZat wrote: »

John and Mary could have both lost jobs and are million miles from being able to pay a mortgage. 500k job losses predicted last i read. Some will sell to to avoid negative equity. Some will ride the storm stay put as you say, but certainly others won't. Once sentiment changes as it will with all the hopeless stock earnings announcements, it could become a narrow gate with lots trying to get out through it. Feer and greed. Emotions are everything. Stick or twist. How low could the market go?

You're 100% right. Sorry I'm looking at this from the view of mortgage free. I own the property outright. Will be interesting times for sure. I'm a seller but I'm also a buyer so I'm looking at every inch of the market. I'm just have the luxury of not being in a rush or under too much pressure. I can wait out any downturns without a huge financial hit. Myself and the wife live frugally and while we wish to move we're not going to take a huge financial hit to do so as I imagine most are similar.

awec

OwlsZat wrote: »

There will be plenty of recent buyers willing to sell out of a new investment if it's going to save them financially. Do you really think everyone is firming going to hold through a downturn? Seriously delusional.

No, but it’s also delusional to think that people who fall on hard times are suddenly going to be in a big rush to take steps that will make their immediate situation worse.

Go back 4,5,6 years in this forum, you will find endless people complaining about how people weren’t selling up when they couldn’t pay the mortgage. The immense difficulty banks have reclaiming property from non payers was a big factor in the issue of supply (and interest rates).

Yea, some may sell up, but most will do what they’ve always done, wait it out, going into arrears. They need somewhere to live.

Abbey127

Planning to build on my family land in kildare in a couple of months , will be cheaper now I think, also have an apartment in Dublin rented out I dont think i will be bringing the price down on it that much people will have to pay or move on and someone else will take there place.

Zenify

Abbey127 wrote: »

I dont think i will be bringing the price down on it that much people will have to pay or move on and someone else will take there place.

I dont think you grasp the current situation. There wont be someone else to take the place. The market has changed. It will be changed for a lot longer than you are thinking.

enricoh

Abbey127 wrote: »

Planning to build on my family land in kildare in a couple of months , will be cheaper now I think, also have an apartment in Dublin rented out I dont think i will be bringing the price down on it that much people will have to pay or move on and someone else will take there place.

Should be a good bit cheaper to go building this year than last. You couldn't even get quotes off builders last year! A lot of fixed cost red tape costs now though.
2 of my siblings built houses around the farm -one during the Celtic tiger and 1 after. Direct labour and I was organising trades and materials for them. Labour was vastly cheaper on the second house n a lot easier to get!

Villa05

awec wrote:

They'd go into mortgage arrears but keep their house.

awec wrote:

Go back 4,5,6 years in this forum, you will find endless people complaining about how people weren’t selling up when they couldn’t pay the mortgage. The immense difficulty banks have reclaiming property from non payers was a big factor in the issue of supply (and interest rates).

The Irish property market, the definition of sustainability!!

Can you not see that the market is nuts damaging to the national economy in so many ways

Who will pay for the mess this time as many future generations remain on the hook for the last bust

Will the banks be bailed out again or do we accept consequences for poor decisions?

Reversal

Plenty of people looking to trade up will jump while prices are low. The gap in prices between their old and new house will be less. The idea than nobody will sell is a construct of the imagination to keep some people in denial.

If you're in a position to ride this out and take the house off the market until prices return to where you want, if they will, then you didn't really want or need to sell in the first place. That's not representative of most sellers.

Graham

I'm sure lots of sales are based on wants rather than needs.

i.e. they are discretionary so are unlikely to be brought to a distressed market.

voluntary

Lads, apart from some occasional questions, few posts with new info or merit, this thread is moving in circles. Move back 50 or 100 pages, doesn't matter you find the same names repeating themselves over and over again like a broken record.

And it's mostly like:
"I'm right"
"No, I'm right"
"You're wrong"

like a bunch crying babies

beauf

Reversal wrote: »

Plenty of people looking to trade up will jump while prices are low. The gap in prices between their old and new house will be less. The idea than nobody will sell is a construct of the imagination to keep some people in denial.

If you're in a position to ride this out and take the house off the market until prices return to where you want, if they will, then you didn't really want or need to sell in the first place. That's not representative of most sellers.

If you look to previous crashes the number of transactions fell dramatically. There was still buying and selling but at far less volume than before. Places sitting empty or on sale for years was not unusual. It's not been unusual for the past couple of years either.

The idea that people will buy anything when prices are low and the economy is in a recession is a bit weird. Most will say consumers spending will reduce. Trading up isn't any different.

People sitting on a lot of cash, especially investors waiting for crash will buy. Which is how the richer get richer. But they will be few in number that held their nerve to wait to buy after a possible crash.

garhjw

voluntary wrote: »

Lads, apart from some occasional questions, few posts with new info or merit, this thread is moving in circles. Move back 50 or 100 pages, doesn't matter you find the same names repeating themselves over and over again like a broken record.

And it's mostly like:
"I'm right"
"No, I'm right"
"You're wrong"

like a bunch crying babies

“You’re right”

beauf

voluntary wrote: »

Lads, apart from some occasional questions, few posts with new info or merit, this thread is moving in circles. Move back 50 or 100 pages, doesn't matter you find the same names repeating themselves over and over again like a broken record.

And it's mostly like:
"I'm right"
"No, I'm right"
"You're wrong"

like a bunch crying babies

That's because most people aren't listening, they just repeat dogma that's not backed up with anything..

Mr_Muffin

I live in small town, so the choice of properties is always somewhat limited. The existing houses for sale are all well over-priced, in my opinion, which probably explains why they've been on the market for months/years.

Is it possible that the current situation could cause properties to drop in price? During the financial crisis a decade ago I remember people buying up property for next to nothing, with the same houses now selling for 3 times the prices.

BillyBiggs

Mr_Muffin wrote: »

I live in small town, so the choice of properties is always somewhat limited. The existing houses for sale are all well over-priced, in my opinion, which probably explains why they've been on the market for months/years.

Is it possible that the current situation could cause properties to drop in price? During the financial crisis a decade ago I remember people buying up property for next to nothing, with the same houses now selling for 3 times the prices.

It will be very difficult for the self-employed to get a mortgage for the next few years. It’s a prime time for people in state funded jobs to get a property for a knockdown price. As others have said cash buyers will similarly be in a very strong position. It’s a strange time for banks, with many of them about to go through a very rocky few years. Lenders will be slow to give out mortgages in the next year or two, unless your job is bullet proof. Houses will have to be sold by those going bankrupt or unable to make their mortgage repayments.

Wompa1

BillyBiggs wrote: »

It will be very difficult for the self-employed to get a mortgage for the next few years. It’s a prime time for people in state funded jobs to get a property for a knockdown price. As others have said cash buyers will similarly be in a very strong position. It’s a strange time for banks, with many of them about to go through a very rocky few years. Lenders will be slow to give out mortgages in the next year or two, unless your job is bullet proof. Houses will have to be sold by those going bankrupt or unable to make their mortgage repayments.

Have some friends in the US saying interest rates on mortgages have already started to increase there. Seems counter to interests rates for big loans and business over there.

Donald Trump

Queasy Tadpole wrote: »

EXACTLY. I know what my property is worth. It's probably overvalued at the minute by maybe 10-15%. I'm not gonna sell less than what it's worth. I can hold out longer than a buyer can paying rent. Wishful thinking from people who think they're gonna get absolute bargains. The market is the way it is due to lack of quality supply in good locations and that's not gonna change for decades now in my view.

Market value is market value. Worth is subjective. If your house has sentimental value to you or is particularly close to work/schools etc. then it might be worth a lot more to you than anyone else. "Worth" is not an inherent fixed fundamental property of the asset

BillyBiggs

If half of mortgage holders in Ireland take a break of 3-6 months on their mortgage all at once, will that have a negative impact on the banks?

jim-mcdee

BillyBiggs wrote: »

If half of mortgage holders in Ireland take a break of 3-6 months on their mortgage all at once, will that have a negative impact on the banks?

Yes

Claw Hammer

BillyBiggs wrote: »

If half of mortgage holders in Ireland take a break of 3-6 months on their mortgage all at once, will that have a negative impact on the banks?

Yes.