Property Market 2020

Ozark707

BillyBiggs wrote: »

Just took a look at rental properties on Daft in both Cork and Dublin. Sweet Jesus, reality hasn’t hit the rental market at all. Who do they think is going to rent these places for such extortionate rents? Do letting agents not watch the news, or read newspapers?

Well anyone who is looking now should be treating these prices as aspirational and trying to secure a reduction. Up until a few months ago that would not have been possible but now asking prices for 1 or 2 bed apts in Dublin are back at levels last seen 2 years ago, and given 2 years ago you would have been highly unlikely to secure somewhere under asking now you probably can so in effect prices are probably back to levels of 2.5/3 years ago.

hometruths

Bass Reeves wrote: »

It's interesting to see the amount of people cheering on looking for a rehash of 2008-2014. They consider that it will be an opportunity. However in Chinese opportunity and danger are the same word. I remember lads pre 2008 waiting for it to happen, sort the men out from the boys, show who wearing no clothes.

Recession's have to be survived. I have seen two really bad one's in my life. If a third happens I imagine I will get through it as well. But many will not.

Be careful what you wish for. If what some here expect to happen actually takes place, this could turn out like the great depression. I am not sure if what they perceive as an opportunity will not turn out to be very dangerous for them.

I'm far from convinced that the bearish posters on here are gleefully hoping for a rehash of 2008-14 as an opportunity. Far from it indeed.

Personally, as I stated earlier in the thread, a price collapse will financially cost me a considerable sum, albeit I am not in danger of negative equity.

The reason I am worried about a rehash of 08-14 is precisely because I hear the same bullish arguments as we heard in 07:

- Rent is dead money
- Sure falling values are only a problem if you have to sell the house
- Prices always go up in the long term

There is a poster in another thread saying that his friends with current mortgage approval, emboldened by logic such as the above, are keen to crack on and purchase now, because they realise they might lose their job in the next 12 months and then won't be able to get a mortgage!

People have very short memories - many of those who felt prices always go up in the long term in 07 were saying in 2012 that prices would never recover.

Many of those who said in 07 rent is dead money and falling values don't matter unless you have to sell were complaining about the reckless lending of the banks in 2010 - "Sure it wasn't my fault, the bank should not have given me the money."

We have all been paying for the fallout from through higher taxes and higher interest rates.

Whilst I can suck up higher taxes and austerity to pay for the costs of coping with a pandemic and preventing/treating the illness, I have no desire to see it compounded by paying for the mistakes of those who were foolhardy now.

I certainly do not see what is coming down the track as an opportunity.

I suspect many of the bears on here will be relieved if hindsight proves them wrong. I will.

I doubt many of the bullish will feel a sense of relief if it turns out they were wrong.

fliball123

BillyBiggs wrote: »

Just took a look at rental properties on Daft in both Cork and Dublin. Sweet Jesus, reality hasn’t hit the rental market at all. Who do they think is going to rent these places for such extortionate rents? Do letting agents not watch the news, or read newspapers?

People still need somewhere to live

hometruths

GreeBo wrote: »

2008

Were you an FTBer in 08?

GreeBo

schmittel wrote: »

I'm far from convinced that the bearish posters on here are gleefully hoping for a rehash of 2008-14 as an opportunity. Far from it indeed.

Personally, as I stated earlier in the thread, a price collapse will financially cost me a considerable sum, albeit I am not in danger of negative equity.

The reason I am worried about a rehash of 08-14 is precisely because I hear the same bullish arguments as we heard in 07:

- Rent is dead money
- Sure falling values are only a problem if you have to sell the house
- Prices always go up in the long term

Unless your rent is *significantly* lower than mortgage repayments would be on the same house, then it is dead money. Also, how many people who are renting are planning to rent for their entire lives? How many are planning from a financial point of view to *always* have rent to pay until they die, including 20+ years after they have stopped working?

Falling values are only a problem if you have to sell. Sure, you could have secured a lower interest rate with a better LTV, but if you were happy to pay the repayments at the time of purchase, then you should be just as happy now. Being envious of others with a lower rate is kinda meaningless.

If you buy a desirable house then prices do go up. If you buy an expensive house in a less desirable area, then you only have yourself to blame if you want/need to sell and cant recoup your investment costs. People blaming banks for giving them 110% mortgages need to go and take a look in the mirror.

There is a poster in another thread saying that his friends with current mortgage approval, emboldened by logic such as the above, are keen to crack on and purchase now, because they realise they might lose their job in the next 12 months and then won't be able to get a mortgage!

People have very short memories - many of those who felt prices always go up in the long term in 07 were saying in 2012 that prices would never recover.

Many of those who said in 07 rent is dead money and falling values don't matter unless you have to sell were complaining about the reckless lending of the banks in 2010 - "Sure it wasn't my fault, the bank should not have given me the money."

We have all been paying for the fallout from through higher taxes and higher interest rates.

Whilst I can suck up higher taxes and austerity to pay for the costs of coping with a pandemic and preventing/treating the illness, I have no desire to see it compounded by paying for the mistakes of those who were foolhardy now.

I certainly do not see what is coming down the track as an opportunity.

I suspect many of the bears on here will be relieved if hindsight proves them wrong. I will.

I doubt many of the bullish will feel a sense of relief if it turns out they were wrong.

Making a poor decision is always a poor decision, you cant blame the markets for not bailing you out of it.

Eric Cartman

Blueshoe wrote: »

I'm a waiting 90% cash buyer for a small apartment in the Midlands. I can tell you that the available stock and suitable choices are few and far between.
There is very little on the market

Poor availability and over priced properties.

Apartments outside of the main cities aren't as commonly built and just aren't an attractive prospect to most. if you've 90% on an apartment, could you go 50% LTV on a house and come away far better ?

Julissa Bitter Jeep wrote: »

Few friends of mine who are mortgage approved and still have their jobs are now very keen to get into the market before they lose their jobs etc. Wonder if there is many in this boat, could lead to one final market pump in the short term?

A lot of people are trying to get through the door before it shuts as in Ireland, reposessing a house, no matter what happens is hard to do. Its a terrible attitude to have but our broken system allowed this.

Assetbacked

Rent should cost significantly less than a mortgage and given the long term focus of the FG government wihh respect to the rental market, hopefully this will come eventually. This is effectively why the younger generations vote for the populism of the looney left but it will only get worse if something doesn't change. No one should feel forced to buy and shackle themselves with massive debt to own a house due to rent being almost equivalent or even more expensive than a mortgage. It is ludicrous by any barometer.

GreeBo

schmittel wrote: »

Were you an FTBer in 08?

Yes

OttoPilot

fliball123 wrote: »

People still need somewhere to live

Do they? Record homelessness. Record levels of late 20s early 30s living at home. Foreign students sharing a house between 14 or 15

Eric Cartman

Assetbacked wrote: »

Rent should cost significantly less than a mortgage and given the long term focus of the FG government wihh respect to the rental market, hopefully this will come eventually. This is effectively why the younger generations vote for the populism of the looney left but it will only get worse if something doesn't change. No one should feel forced to buy and shackle themselves with massive debt to own a house due to rent being almost equivalent or even more expensive than a mortgage. It is ludicrous by any barometer.

but it shouldn't.

you have no commitment to risk
the property is fully managed
you have no credit checks or liabilities against your credit score
it has to be a profitable investment to attract investors.
There is no way , bar state property ownership, that rent is cheaper than a mortgage.

Eric Cartman

OttoPilot wrote: »

Do they? Record homelessness. Record levels of late 20s early 30s living at home. Foreign students sharing a house between 14 or 15

to be fair they choose that to send money home to Brazil. I don't think theres a single landlord in Dublin who has set up one of those, normally they're horrified when they find out that the 'students' from South America have converted their 2/3 bed into a slum for 10+

GreeBo

OttoPilot wrote: »

Do they? Record homelessness. Record levels of late 20s early 30s living at home. Foreign students sharing a house between 14 or 15

Yes they do.
"Record" homelessness would imply that even more people need somewhere to live?

hometruths

GreeBo wrote: »

I gave my own example where it was a sound investment. But you cant use only the poor decisions to make a judgement.

I was clearly referring to the fact that those properties that were in negative equity could obviously not be considered a sound investment.

Obviously if yours was not in NE a decade later then it is irrelevant to my point.

But aside from that, something doesn't add up.

schmittel wrote: »

Let me guess, you bought your property 2004 or earlier?

GreeBo wrote: »

2008

schmittel wrote: »

Were you an FTBer in 08?

GreeBo wrote: »

Yes

From the archives - How much is your Mortgage Repayment? (2005)

fliball123

OttoPilot wrote: »

Do they? Record homelessness. Record levels of late 20s early 30s living at home. Foreign students sharing a house between 14 or 15

And do they all not need somewhere to live??

OttoPilot

fliball123 wrote: »

And do they all not need somewhere to live??

Then why aren't they buying?

GreeBo

schmittel wrote: »

I was clearly referring to the fact that those properties that were in negative equity could obviously not be considered a sound investment.

Obviously if yours was not in NE a decade later then it is irrelevant to my point.

Right, but you seemed to be saying that anyone who bought back then was stuck with a bad purchase.
I'm simply saying that its not the case.

But aside from that, something doesn't add up.



From the archives - How much is your Mortgage Repayment? (2005)

Oh no!!! youve found my terrible secret.
I got a date from 15 years ago wrong by 3 years :eek:

fliball123

OttoPilot wrote: »

Then why aren't they buying?

As they cant afford to buy a place where they would like to live but there plenty of properties in the country they might be able to afford and sure why would you bother when you have a chance at mr tax payer paying for a place for you in a town or city you want to be in

hometruths

GreeBo wrote: »

Oh no!!! youve found my terrible secret.
I got a date from 15 years ago wrong by 3 years :eek:

Certainly not accusing you of having a terrible secret!

Just that in the context of your points about wise investments in property the dates here would seem to be fairly significant!

i.e the whole point of the discussion!!

lets just leave it there!

OttoPilot

fliball123 wrote: »

As they cant afford to buy a place where they would like to live but there plenty of properties in the country they might be able to afford and sure why would you bother when you have a chance at mr tax payer paying for a place for you in a town or city you want to be in

So your argument is that house prices wont fall much because "people need somewhere to live" but in the same instance you concede that a lot of the need is coming from people who wont/cant buy. Hmmmm, dont see how that will hold up house prices which are already at the upper limit of 3.5 to 4.5 times income.

OttoPilot

fliball123 wrote: »

As they cant afford to buy a place where they would like to live but there plenty of properties in the country they might be able to afford and sure why would you bother when you have a chance at mr tax payer paying for a place for you in a town or city you want to be in

So your argument is that house prices wont fall much because "people need somewhere to live" but in the same instance you concede that a lot of the need is coming from people who wont/cant buy. Hmmmm, dont see how that will hold up house prices which are already at the upper limit of 3.5 to 4.5 times income.

GreeBo

schmittel wrote: »

Certainly not accusing you of having a terrible secret!

Just that in the context of your points about wise investments in property the dates here would seem to be fairly significant!

i.e the whole point of the discussion!!

lets just leave it there!

Does 2005 versus 2008 change anything I said though?

hometruths

GreeBo wrote: »

Does 2005 versus 2008 change anything I said though?

Yes in my opinion it changes absolutely everything and completely undermines your entire argument.

GreeBo

schmittel wrote: »

Yes in my opinion it changes absolutely everything and completely undermines your entire argument.

Even if you add in the 9% stamp duty that I had to pay?

cunnifferous

GreeBo wrote: »

Does 2005 versus 2008 change anything I said though?

It certainly makes you seem disingenuous

hometruths

GreeBo wrote: »

Even if you add in the 9% stamp duty that I had to pay?

Yes

fliball123

OttoPilot wrote: »

So your argument is that house prices wont fall much because "people need somewhere to live" but in the same instance you concede that a lot of the need is coming from people who wont/cant buy. Hmmmm, dont see how that will hold up house prices which are already at the upper limit of 3.5 to 4.5 times income.

No I never made that the point of my argument. I have stated many times the factors leading into the supply and demand sides of which make up a market price, will I go through them again. OK one more time just for you but just the 2 main reasons on both supply side and the demand side why I dont think prices will go down too much (5/10%) and that will not be for another 12 months and then prices will bounce back up, but I wouldn't advise anyone on here to buy or sell that is too reckless.


Demand
There is a chronic under supply of housing, you only have to look at how well the shinners done on the back of building houses. Also this will be significantly worse due to the restrictions I know they are going to be lifted shortly but builders still have to adhere to social distancing I believe so it is going to slow the process up. Then when the builders look at anywhere up to 10% drop in price for a new build why the hell would they build when their margins for profit where already tight?

The emigration release valve is not available to people as corona is everywhere as will the recession. Also Ireland's high welfare rates will trap people to stay here.

Supply side
People have the knowledge that banks are toothless for repossessions and know they can stay years in their house not paying a mortgage, why would you sell. The option to rent for BTLs is still currently looking attractive. It will be interesting to see if rents come down significantly over the next 2 years or so if it does we may see some of the BTLs coming on stream.

Some people have the means to decide I will just take my property off until the market bounces back. As can be seen on myhome and daft currently, people on here can say what they want about you cant view a house blah blah blah, but forgot to mention that it is currently free to advertise your house on myhome or daft you would have nothing to lose by having ad for your house on there, I know if I was selling that is the least I would be doing.

eagle eye

I always thought Campbell's owned that building? I remember major renovations in it in the 90's. Did Campbell's own it and sell it or own it and sell Bewleys?

Claw Hammer

What you are ignoring on the demand side is that tourists and students and young hospitality workers will either go home or won't come in the fist place.

fliball123

Claw Hammer wrote: »

What you are ignoring on the demand side is that tourists and students and young hospitality workers will either go home or won't come in the fist place.

Same goes with our tourists and students and young hospitality workers its only in the last decade that we have had more people emigrating into the country than out of it. So its a zero sum game not much of a plus or minus for demand

GreeBo

cunnifferous wrote: »

It certainly makes you seem disingenuous

It was a simple mistake to be honest, but it you want to assume the worst, fire ahead.