Property Market 2020

Donald Trump

awec wrote: »

Even if the WFH thing really does materialise, and people can live anywhere, it will take a long time for it to actually happen.

The supply just does not exist "down the country" for there to be a sudden surge in people looking to buy there. We've spent a significant time the last decade building our housing stock in our major towns and cities, and surrounding commuter towns. The trend for people moving has been overwhelmingly toward urbanisation.

Housing supply down the country is low because there's been very low demand. It will take years for the trends to reverse. If there's a shift in the pattern of demand, then prices and rents in rural Ireland will go through the roof until such a time that supply can catch up, and people will simply be priced out of any such move.

It is also unlikely that people are going to go to fully WFH 5 days a week. It is more likely, if any shift occurs, for businesses to employ a hot desking strategy, where people can work from home but do come to the office regularly. The office might have capacity for 50% of the workforce at any one time. This means that in the scenario where this occurs the most likely outcome is just a broadening of the commuter belt to slightly further afield.

There are people who could work from home in an existing house.
Particularly younger people. They might prefer to stay at home and save some money.

Previously, living at home might mean long commutes to Dublin every day for work. So you have to choose between getting up at 6am and home at 8pm every day or getting a house share in Dublin and commuting into the city centre for a half an each way. You'll save money staying at home but not much social life. So maybe you'll pay a good chunk of your income on that rent.

Now you can work from home. No daily commute. You might decide to postpone taking that house share for a while. Some of your old friends have also moved home so you can socialise with them at home too.

That obviously wouldn't suit everyone, but anything that reduces demand will alleviate pressure. You don't need a new build for every single person who might work from home from down the country.

Villa05

awec wrote:

People shopping for 4 bed houses do not go looking at apartments instead, this is pure rubbish. Different people shop in different segments of the market. Nobody is weighing up an apartment in Smithfield vs a 4 bed gaff in Wexford. That is such an extreme difference that it just doesn't exist in reality.

The apartment was was selected in my argument as a representation of value or lack thereof rather than an individuals shopping list

awec wrote:

What happens in the real world is people weigh up a 3 bed house in Dublin with a small garden vs a 4 bed house in a commuter town with a slightly bigger garden.

In the real world most people can't afford a 3 bed house in Dublin

awec wrote:

There are not "plenty" of houses for sale in rural houses. There was enough houses for sale to cope with the demand of the past decade, which was a relatively small demand. If the demand that drove prices up in Dublin, Kildare, Meath and Wicklow, which led to construction booms in these counties suddenly shifts to other rural counties then it doesn't take a genius to work out what the effect on property prices in those rural counties will be, and given our experiences of the last decade, how long it will take for supply to catch up.

The construction boom in the counties outside those mentioned occurred in the noughties and yes there is an oversupply as you can still buy in many areas for less than the cost of construction

awec wrote:

In reality this is a moot discussion because this mass exodus of offices in Dublin to WFH isn't going to happen and is nothing more than wishful thinking by some. The overwhelming majority will be back at their desk in their office as soon as this is all over.

I agree this won't be mass exodus, you only need this to be practiced at a low to moderate rate to impact the property market, that's why banks have been reluctant to repossess because the extra supply will negatively impact price and consequently their balance sheet


Multinationals have been lobbying the Government for some time to address the lack of accommodation/affordability in Dublin. WFH may be a solution to Government failure

If WFH works for both the employer in terms of productivity, cost reduction and the employee in terms of quality of life. Do you think it will be abandoned or encouraged?

WFH would allow business to recruit from a larger pool of talent

Villa05

awec wrote:

In reality this is a moot discussion because this mass exodus of offices in Dublin to WFH isn't going to happen and is nothing more than wishful thinking by some. The overwhelming majority will be back at their desk in their office as soon as this is all over.

In addition, did you notice how quick Google were in instructing All there staff to work from home. I believe we had only 1 or 2 cases of Corona virus when they tested their systems. Could it be something they were planning for some time before covid

awec

Villa05 wrote: »

In addition, did you notice how quick Google were in instructing All there staff to work from home. I believe we had only 1 or 2 cases of Corona virus when they tested their systems. Could it be something they were planning for some time before covid

Google were on the hunt for 200,000 square feet of office space before Christmas. They, like many other MNCs, have spent tens of millions of euro fitting out new buildings, some have even spent multiples of that building entire buildings or completely gutting others.

I don’t think it is something they are planning.

If anyone is likely to do it it’s going to be the small companies who hire a floor here or there in office buildings with modest fit outs. The bog standard offices.

What you could see is more hot desking in future, where companies don’t keep space for every single employee.

Donald Trump

awec wrote: »

Google were on the hunt for 200,000 square feet of office space before Christmas. They, like many other MNCs, have spent tens of millions of euro fitting out new buildings, some have even spent multiples of that building entire buildings or completely gutting others.

So no, I don’t think it is something they are planning.

There are some companies that work worldwide with almost 100% WFH model. They tend to be newer companies, but some are actually quite big in terms of global workforce.

They tend to pay benchmarked your salary against your country/regions/city to residence

Cyrus

fifth wrote: »

I reckon that's tough luck for managers then. Anyone interested in, or any business owners who are concerned about staff that work from home I recommend reading this book:

Remote: Office not required

The book will bust a lot of the myths that people at home are less productive (in fact can be more productive as they do not know where to draw the line between home and work life, or to obey the 'clock out' times..which is a whole other issue in and of itself). Being in the view of a manager can affect their perception of your performance. "Out of sight, out of mind" The morning 'hello!' with a smile. The "i'll grab you a coffee" all contribute to the perception of a 'better' employee, it's human nature. When your staff work from home you have none of that. So the work you actually deliver is the only visible metric and therefore those who don't pull their weight get found out when they work from home. Productive employees excel here.

Also, I work from home full time and always have. I'm planning to buy a nice house down the country. But working remotely from other countries is not always permitted due to some tax issues - I know this is the case in my own place. Certain countries are available for remote workers to work from, some are not.

I hope this cuts down on business travel, a lot of the time it's just not necessary. You can achieve 98% effectiveness from a zoom call compared to a face to face meeting. Is all that expense and carbon emission worth the extra 2% in every case? No. Have we been able to survive without business travel the last month? Absolutely yes.

We've survived without the large office too, I hope businesses will reconsider and people won't rush back to the office, but I feel like they will. Offices offer social interaction (outside of work related interaction), often better chairs/desks and free food in some cases etc etc.

Really all depends on what you do, certain jobs lend themselves well to wfh especially big data type roles which also tend to attract a larger proportion of people who are suited and prefer to work alone .

It doesn’t work for everything and I disagree that a zoom call is nearly as effective as meeting with people, to really get a project moving or something specific done it’s generally better to be face to face

hometruths

Villa05 wrote: »

In addition, did you notice how quick Google were in instructing All there staff to work from home. I believe we had only 1 or 2 cases of Corona virus when they tested their systems. Could it be something they were planning for some time before covid

Possibly Google were ahead of the curve in being able to see what was coming down the tracks thanks to sheer volume and quality of their global insights. Spoke to a chap in Facebook Dublin who said the company was monitoring this in early Feb for similiar reasons.

Hubertj

Villa05 wrote: »

In addition, did you notice how quick Google were in instructing All there staff to work from home. I believe we had only 1 or 2 cases of Corona virus when they tested their systems. Could it be something they were planning for some time before covid

It’s part of their business continuity and disaster recovery panning. They do this annually with different buildings and/or departments in the event of something preventing employees from making it or their office. Many MMCs do this.
Why would they be buying up so much office space if they were going to move to wfh?

Villa05

awec wrote:

Google were on the hunt for 200,000 square feet of office space before Christmas. They, like many other MNCs, have spent tens of millions of euro fitting out new buildings, some have even spent multiples of that building entire buildings or completely gutting others.

I'd imagine a companies like Google would have contingency plans, they were amongst the most voiceferus in relation to affordability and availability of accommodation for their staff

Sunny Disposition

As I mentioned earlier I sold some properties in Dublin shortly before Covid 19.
I think the increase of working from home is going to take some of the sting out of the city market and that’s a good thing for the vast majority of people. Office work was increasingly being done remotely anyway, but Covid 19 is bound to accelerate the change.
Until the 90s the premium for living in Dublin over other areas wasn’t nearly as big as it is now, it’s just mad expensive now.
Technology has changed many aspects of life, not always for the better, but it’s now set to at least slow the intensity of urbanisation we have seen all over the western world.
Dublin won’t be hollowed out, at least not for many years to come, but the runaway property market is likely to be brought back to heel over the next decade after 6/7 very buoyant years.

dor843088

I think it's safe to say the only people getting a haircut in the near future are recent property purchasers.

na1

Reversal wrote: »

Clearly, unemployment will soar - but if government steps in to guarantee incomes and prevent evictions, then there may be far less change in the rental market than on the sales side."

If government steps in to prevent evictions, good luck to you to find an accommodation. Even now the prices are high due to high risk of loosing money& property damage from bad tenants.
In other countries where the landlords are more protected, and the tenants can easily be evicted the rents are much more reasonable compare to average family income.
Another factor is inflation: it is almost guaranteed that the ECB WILL start printing Euros in this situation. And the only way of protecting the savings for many family will be property investment. Not to say about the prices of the building materials and the land.

na1

dor843088 wrote: »

I think it's safe to say the only people getting a haircut in the near future are recent property purchasers.

I think its safe to say that the inflation is on the way.
There is no other way the EU countries will provide people with the source of "guaranteed income".

tastyt

Adelyn Late Sportsmanship wrote: »

Who would want an hour commute everyday each way for a small garden. Apartment is a much better choice but little will agree.

An hour commute really isn’t that far away unfortunately, can take an hour from blanch , Tallaght , swords, in rush hour

Ohmeha

Sunny Disposition wrote: »

As I mentioned earlier I sold some properties in Dublin shortly before Covid 19.
I think the increase of working from home is going to take some of the sting out of the city market and that’s a good thing for the vast majority of people. Office work was increasingly being done remotely anyway, but Covid 19 is bound to accelerate the change.
Until the 90s the premium for living in Dublin over other areas wasn’t nearly as big as it is now, it’s just mad expensive now.
Technology has changed many aspects of life, not always for the better, but it’s now set to at least slow the intensity of urbanisation we have seen all over the western world.
Dublin won’t be hollowed out, at least not for many years to come, but the runaway property market is likely to be brought back to heel over the next decade after 6/7 very buoyant years.

Further on this my company had already before this crisis had been shrinking size in Dublin City Centre and opening up small hub locations around commuterbelt areas like Wicklow/Kildare/Louth for local staff to drop in on a hotdesking basis to either work from the usual desktops or come in with their laptops

Villa05

na1 wrote:

Another factor is inflation: it is almost guaranteed that the ECB WILL start printing Euros in this situation. And the only way of protecting the savings for many family will be property investment. Not to say about the prices of the building materials and the land.

What the ecb is doing is printing money but loaning it out at - 0.75%. Its up to the banks to lend out as they see fit. Source David McWilliams podcast

I just wonder if this is separate from the base ecb rate. If it is the banks will be mopping up this money to make their tracker mortgage book that little bit profitable again. If this is the case the money will be for the banks bottom line, no one else will see much benefit from it

Inflation is a long way off with the level of debt in developed economies
Why do you think property will protect you from inflation is there not much better assets out there that protect you from inflation

OwlsZat

I wonder will this round of price collapses make property owners less thirsty for future price increases. I cant think of a single good reason for having disproportionately high property prices. They suit nobody and simply fuel the boom bust cycle.

Sunny Disposition

Ohmeha wrote: »

Further on this my company had already before this crisis had been shrinking size in Dublin City Centre and opening up small hub locations around commuterbelt areas like Wicklow/Kildare/Louth for local staff to drop in on a hotdesking basis to either work from the usual desktops or come in with their laptops

If 20% of people who were working in an office two years ago are working remotely in 2022 then you have a huge change. The implications are massive, much better for spatial policy, housing, the environment and family life.
What it is disastrous for is landlords in urban areas. But it is societal progress.

James 007

Sunny Disposition wrote: »

If 20% of people who were working in an office two years ago are working remotely in 2022 then you have a huge change. The implications are massive, much better for spatial policy, housing, the environment and family life.
What it is disastrous for is landlords in urban areas. But it is societal progress.

Worth repeating a third time, can you repeat it again:D

na1

Villa05 wrote: »

What the ecb is doing is printing money but loaning it out at - 0.75%. Its up to the banks to lend out as they see fit. Source David McWilliams podcast

I just wonder if this is separate from the base ecb rate. If it is the banks will be mopping up this money to make their tracker mortgage book that little bit profitable again. If this is the case the money will be for the banks bottom line, no one else will see much benefit from it

Inflation is a long way off with the level of debt in developed economies
Why do you think property will protect you from inflation is there not much better assets out there that protect you from inflation

Regardless of who was given the money, the more money is circulating (without growing of the real production & services) the more money it cost to buy anything. The property & land is one of the limited assets that will be always in demand. You can't produce land (don't look at Dubai))) and there won't be construction boom in a near future.

Hubertj

OwlsZat wrote: »

I wonder will this round of price collapses make property owners less thirsty for future price increases. I cant think of a single good reason for having disproportionately high property prices. They suit nobody and simply fuel the boom bust cycle.

Would increased supply in the areas where it is needed not sort this out in the medium to long term? Also a stable regulatory environment for the landlord / tenant relationship - length of leases, security for both parties, swift dispute resolution etc etc?

Villa05

Alot of tired phrases from 2007 there, Land is the one resource that is in plentiful supply. We are one of the most underdeveloped nations in Europe.

What would happen if the state decided to solve the supply demand imbalance in our major cities with the cheap printed money and abundance of state land, generating significant income for the state and affordable accommodation for key workers and dramatically increasing our competitiveness leading to increased productive investment

na1

Villa05 wrote: »

Alot of tired phrases from 2007 there, Land is the one resource that is in plentiful supply. We are one of the most underdeveloped nations in Europe.

What would happen if the state decided to solve the supply demand imbalance in our major cities with the cheap printed money and abundance of state land, generating a significant for the state and affordable accommodation for key workers and dramatically increasing our competitiveness leading to increased productive investment

There were no significant inflation in 2007, they've managed to cover everything with tax money. Now there are much more people out of work and getting 350 from a magical money pot. Where do you think they get the money now?

IndieRoar111

Ohmeha wrote: »

Further on this my company had already before this crisis had been shrinking size in Dublin City Centre and opening up small hub locations around commuterbelt areas like Wicklow/Kildare/Louth for local staff to drop in on a hotdesking basis to either work from the usual desktops or come in with their laptops

+1

Husbands department has already been running the numbers and they are guesstimating some departments (the less productive and essential) will not come back in full force, probably looking like 20% of those furloughed will be permanent lay offs.

Looking like most of the tech jobs will be offering full remote with one day in the office per week for "all hands" type meetings etc.

His company is > 2500 in Dublin City Centre

IndieRoar111

awec wrote: »

People shopping for 4 bed houses do not go looking at apartments instead, this is pure rubbish. Different people shop in different segments of the market. Nobody is weighing up an apartment in Smithfield vs a 4 bed gaff in Wexford. That is such an extreme difference that it just doesn't exist in reality.

What happens in the real world is people weigh up a 3 bed house in Dublin with a small garden vs a 4 bed house in a commuter town with a slightly bigger garden.

There are not "plenty" of houses for sale in rural Ireland. There was enough houses for sale to cope with the demand of the past decade, which was a relatively small demand. If the demand that drove prices up in Dublin, Kildare, Meath and Wicklow, which led to construction booms in these counties suddenly shifts to other rural counties then it doesn't take a genius to work out what the effect on property prices in those rural counties will be, and given our experiences of the last decade, how long it will take for supply to catch up.

In reality this is a moot discussion because this mass exodus of offices in Dublin to WFH isn't going to happen and is nothing more than wishful thinking by some. The overwhelming majority will be back at their desk in their office as soon as this is all over.

No offense dude but do you have a mass amount of residential properties and commercial properties in your investment portfolio or something?

All you do on here is try convince people there will be no drop in property prices AND now you are saying companies will absolutely not makes changes to/or introduce WFH policies despite it saving them vast sums and metrics show it increases productivity.

What gives?

Hubertj

IndieRoar111 wrote: »

No offense dude but do you have a mass amount of residential properties and commercial properties in your investment portfolio or something?

All you do on here is try convince people there will be no drop in property prices AND now you are saying companies will absolutely not makes changes to/or introduce WFH policies despite it saving them vast sums and metrics show it increases productivity.

What gives?

All you seem to do on here is make up numbers and stories about the market crashing. What gives?

The Student

IndieRoar111 wrote: »

No offense dude but do you have a mass amount of residential properties and commercial properties in your investment portfolio or something?

All you do on here is try convince people there will be no drop in property prices AND now you are saying companies will absolutely not makes changes to/or introduce WFH policies despite it saving them vast sums and metrics show it increases productivity.

What gives?

WFH is not going to happen anytime soon in the vast numbers you seem to think it is. We don't have the technical infrastructure to do this. Most businesses with people working from home are only doing the business critical tasks to keep the business going.

We also have the cultural mindset to overcome.

We still have a huge demand for properties. Some prices at the high end will decrease, it is unlikely prices are going to change dramatically.

It never ceases to amaze me how people don't comprehend or just ignore the basic economic law of supply and demand.

The Student

The Student wrote: »

We still have a huge demand for properties. Some prices at the high end will decrease, it is unlikely prices are going to change dramatically.

It never ceases to amaze me how people don't comprehend or just ignore the basic economic law of supply and demand.

Right now, we have hardly any demand for properties.
And when the recession comes we will have even less demand.

Hubertj

bubblypop wrote: »

Right now, we have hardly any demand for properties.
And when the recession comes we will have even less demand.

But where will people live? I thought there has been a significant shortage of property for a number of years whether it is to rent or buy? People still need somewhere to rent if their circumstances change and they can’t buy. Emigration won’t be an option. For many immigrants returning to their home country won’t be an option.

I think sales prices and rents will decrease but what is a significant decrease? 15%? Would that take us back to 2017 prices?

The Student

bubblypop wrote: »

Right now, we have hardly any demand for properties.
And when the recession comes we will have even less demand.

So the housing list and housing crisis was made up? People still need somewhere to live.

We are in lockdown at the moment, the demand for property still exists we just have a more important matter to deal with at the moment!