Property Market 2020

l5auim2pjnt8qx

Assetbacked wrote: »

This is exactly the risk to Ireland - we are more aligned with the US (which is experiencing economic growth) than Europe (Germany and Italy being close to, if not already in, recession). The US economy is $23 trillion in debt, $15 trillion higher than in 2008. US corporate debt is higher than it was in 2007. The entire US economy is a house of cards at the moment, delicately balanced but ultimately not very secure. Unfortunately, given the nature of debt, small triggers can snowball and crash the entire system with many analysts feeling like the ripples are starting to show and the inevitable slowdown/crash is overdue.

I understand that, at the peak, the markets can move based on mood rather than calculated data; which means that investors have FOMO when it comes to gains (e.g. with the S&P 500 gains) but then start to panic when they see some negative events, such as the US/China trade war, news articles talking of a downturn being inevitable, FAANG earnings missing their projections, fund liquidity issues (such as Woodford), the number of IPOs reducing (or even pulled as with WeWork), OECD tax alignment proposals and more regulation of big tech multinationals. All of these things can create a change in optimisim and outlook which results in those who own the debt being less confident in being repaid and it also creates a lack of appetite for new debt issues. Suddenly a big name falters and the herd want their money back which sparks panic ending up in a crash ultimately.

I can remember back in year 2000 talking to a co -worker about property prices in Ireland , he informed back the that the American economy just like you have said was a stack of cards owing so many trillions - we couldn't even visualise what 1 thrillion would look like and that they would never be able to pay back that and a crash was enevitable.I disagreed that property prices would keep going up for the few years.Both of us were correct ,property prices increased for the next 6 years and yes he was correct .2006 the largest crash came about in 80 years the world has ever seen, The only difference was the timing....Meaning at the time year 2000 it was Hypothetical.

Yes brexit gave some companies cold feet and some jumped,, thinking the top of the market was end of 2018 early 2019, since then many companies have taken there place in the last several months more American Hedge fund companies than any other country are jumping into Ireland, also London Loss is Dublin's gain and many Large World Banks are looking to set up bass here.Throw in world;s population growth and climate change makes Ireland attractive long term, people still need to live somewhere regardless of a HYpothetical crash.

Facts are Property prices in Dublin Cork and Galway are increasing after a lull last quarter 2019, how much we won;t know for another few months, rental prices are increasing at an alarming rate ,faster than in 2018 or 2019, Fact : Corporate Property is not bound by 4% rpz and any supposedly tax implications are in the horizon will be very subtle,( you know what they say when one tax loop closes another 1 or 2 or 3 opens.)

Facts : Dublin is turning into a Corporate City and there is no signs of it slowing down yet regardless of Doomsday Scenarios.

JamesMason

Memphis Happy Coyote wrote: »

I can remember back in year 2000 talking to a co -worker about property prices in Ireland , he informed back the that the American economy just like you have said was a stack of cards owing so many trillions - we couldn't even visualise what 1 thrillion would look like and that they would never be able to pay back that and a crash was enevitable.I disagreed that property prices would keep going up for the few years.Both of us were correct ,property prices increased for the next 6 years and yes he was correct .2006 the largest crash came about in 80 years the world has ever seen, The only difference was the timing....Meaning at the time year 2000 it was Hypothetical.

Yes brexit gave some companies cold feet and some jumped,, thinking the top of the market was end of 2018 early 2019, since then many companies have taken there place in the last several months more American Hedge fund companies than any other country are jumping into Ireland, also London Loss is Dublin's gain and many Large World Banks are looking to set up bass here.Throw in world;s population growth and climate change makes Ireland attractive long term, people still need to live somewhere regardless of a HYpothetical crash.

Facts are Property prices in Dublin Cork and Galway are increasing after a lull last quarter 2019, how much we won;t know for another few months, rental prices are increasing at an alarming rate ,faster than in 2018 or 2019, Fact : Corporate Property is not bound by 4% rpz and any supposedly tax implications are in the horizon will be very subtle,( you know what they say when one tax loop closes another 1 or 2 or 3 opens.)

Facts : Dublin is turning into a Corporate City and there is no signs of it slowing down yet regardless of Doomsday Scenarios.

Facts: Property prices can go down as well as up. So can interest rates.

The_Conductor

Ush1 wrote: »

Where are you seeing this?

Recent American Chamber of Commerce/IBEC breakfast briefing.

Mr Hindley

Just to add to the (purely anecdotal) evidence that after the drops of the last few months, the property market is starting to pick up again, I'm lining up my first viewings after a few months of watching the market, and at least half of the properties I've enquired about, most of which were only listed recently, have just gone sale agreed or have offers above asking price. Something seems to have triggered a sudden surge of confidence among buyers.

Whether it's an unfounded flash in the pan - meaning it's better to wait a little for it to go back to being a buyer's market when confidence drops again - or the start of a fresh surge, meaning to better to buy asap - is the million-euro question...

It feels like there's more bad news than good in terms of global / financial news, so I'm not sure why buyers are suddenly rushing back into the market now, except maybe being Brexit being 'done'? Which of course it isn't...

car_radio19834

Assetbacked wrote: »

The golden question is "when" it crashes and no one can predict this. That is a certainty.

Property prices shouldn't crash though as demand far outweighs supply and even in a severe economic downturn demand would still be healthy compared to the supply.

Prices are a function of current demand.

A recession leads to job losses which leads to less spending power.

megabomberman

Dolbhad wrote: »

It is - it seemed to have been built in someone’s front garden though?

Blarney/Tower as a some good new build estates being built. But it can also say it’s in the city now due to boundary change.

Ya it's a very unusual house, they must have been totally restricted by planning when fully refurbishing the original old house. Cramped up against sheds too, I'd be surprised if it's picked off the market quickly.

Assetbacked

car_radio19834 wrote: »

Prices are a function of current demand.

A recession leads to job losses which leads to less spending power.

There is less spending power for renters the longer this crisis goes on as they are paying more on rent than salaries can increase. The current economic situation is not a recession yet spending power is getting lower. This throws traditional economics out the window.

Dolbhad

megabomberman wrote: »

Ya it's a very unusual house, they must have been totally restricted by planning when fully refurbishing the original old house. Cramped up against sheds too, I'd be surprised if it's picked off the market quickly.

Glad it wasn’t just me thinking that! Also think your right about the bathrooms - but hardly 14k work done there

0gac3yjefb5sv7

Place I looked at had gone sale agreed above asking. It was back for sale recently and they dropped the price by 10k. I'd say prices are stabilising at best. Not going up.

TheSheriff

Also have seen some price drops lately, we got a phone call today about a property we recently bid on and were told our offer was "too low"...... the EA informed us they are dropping the asking by 25k, and did we want first bid dibs...... still not worth it in our opinion, so we'll wait and see if it goes.

pearcider

Mr Hindley wrote: »

Just to add to the (purely anecdotal) evidence that after the drops of the last few months, the property market is starting to pick up again, I'm lining up my first viewings after a few months of watching the market, and at least half of the properties I've enquired about, most of which were only listed recently, have just gone sale agreed or have offers above asking price. Something seems to have triggered a sudden surge of confidence among buyers.

Whether it's an unfounded flash in the pan - meaning it's better to wait a little for it to go back to being a buyer's market when confidence drops again - or the start of a fresh surge, meaning to better to buy asap - is the million-euro question...

It feels like there's more bad news than good in terms of global / financial news, so I'm not sure why buyers are suddenly rushing back into the market now, except maybe being Brexit being 'done'? Which of course it isn't...

It’s better to wait if you can. The economic expansion is long in the tooth and has been funded by record corporate and sovereign debt. Central banks can’t keep interest rates at zero forever nor can they continue quantitive easing indefinitely.

Buyers are not rushing back into the market. The freeze on redemptions from the Aviva property fund suggests the exact opposite and that the institutional investors are trying to get their cash out now.

enricoh

The_Conductor wrote: »

Recent American Chamber of Commerce/IBEC breakfast briefing.

Not good news but not surprised either. It'll be some craic if Sinn Fein get in n increase taxes on them!

Assetbacked

JamesMason wrote: »

What...like this?

On Tesla;

How we know that Tesla is a bubble that is going to pop: https://on.mktw.net/2S11DQt

what_traffic

pearcider wrote: »

It’s better to wait if you can. The economic expansion is long in the tooth and has been funded by record corporate and sovereign debt. Central banks can’t keep interest rates at zero forever nor can they continue quantitive easing indefinitely.

Buyers are not rushing back into the market. The freeze on redemptions from the Aviva property fund suggests the exact opposite and that the institutional investors are trying to get their cash out now.

Good post. Could be a Canary in the Coal mine moment when looking at the market.

PommieBast

Pheonix10 wrote: »

This thread has a lot of great info but you'd never buy a house it you took everyone's opinion on when everything will crash etc.

"The market stays irrational longer than you stay solvent"

19233974

im not too up to date on quantitive easing etc. But the fundamental difference this time is that there are no bad loans being given to people, most people are stressed to a ridiculous level on their loans, coupled with the monumental shortage of housing that will take an absolute minimum of 5-10 years to fix. I just cant see how there will be a crash??

Could someone more economically enlightened clarify that?

Zenify

Did I hear something on the radio this morning about rents falling in last quarter of 2019?

odyssey06

19233974 wrote: »

im not too up to date on quantitive easing etc. But the fundamental difference this time is that there are no bad loans being given to people, most people are stressed to a ridiculous level on their loans, coupled with the monumental shortage of housing that will take an absolute minimum of 5-10 years to fix. I just cant see how there will be a crash??
Could someone more economically enlightened clarify that?

It wouldn't be a property led crash this time, just a good old fashioned recession which puts people out of work.

19233974

odyssey06 wrote: »

It wouldn't be a property led crash this time, just a good old fashioned recession which puts people out of work.

but how much of an effect would this have when there is such an overwhelming housing shortage

The_Conductor

Zenify wrote: »

Did I hear something on the radio this morning about rents falling in last quarter of 2019?

Small national fall- masking slight increases in Dublin and Galway (of below 4%) but falls elsewhere. They interviewed Ronan Lyons- who didn't sound very convinced (despite the stats being his own...….)

odyssey06

19233974 wrote: »

but how much of an effect would this have when there is such an overwhelming housing shortage

Let's say if unemployment goes up by 3-5%... that would have a multiplier effect on that % of the population in the property market (as opposed to retirees).

Less people looking for mortgages.
Those that do may be down in salary, or have one income instead of two.
Possibly less people selling, especially people stuck in static or negative equity, or falling into payments arrears.
Banks less willing to lend.

But also, one would expect some of the people who lose their jobs to leave Ireland (both Irish and people who came here for work), so less demand.

nerrad01

odyssey06 wrote: »

Let's say if unemployment goes up by 3-5%... that would have a multiplier effect on that % of the population in the property market (as opposed to retirees).

Less people looking for mortgages.
Those that do may be down in salary, or have one income instead of two.
Possibly less people selling, especially people stuck in static or negative equity, or falling into payments arrears.
Banks less willing to lend.

But also, one would expect some of the people who lose their jobs to leave Ireland (both Irish and people who came here for work), so less demand.

we had one of the worst recessions in the last 100 years back in 2009-2011 and still within 10 years the house prices had recovered. This time around even if a recession comes there will still be a huge huge housing shortage so im not sure a recession, if it comes will have such a massive impact on housing prices.

and also as people have said if you are going to be in the house for 10 years + it eventually balances out.

It will be interesting to see if SF get into power and tackle the big institutional landlords and get more of these previous build to let units up for sale, as well as majorly ramping up social/ affordable housing.

as mentioned we have our 20k completions yearly already, but id imagine less than 5000 of these actually went for sale on the open market. Would be interesting to see figures.

Dwarf.Shortage

pearcider wrote: »

It’s better to wait if you can. The economic expansion is long in the tooth and has been funded by record corporate and sovereign debt. Central banks can’t keep interest rates at zero forever nor can they continue quantitive easing indefinitely.

Buyers are not rushing back into the market. The freeze on redemptions from the Aviva property fund suggests the exact opposite and that the institutional investors are trying to get their cash out now.

Assuming the Aviva fund holds corporate property assets the relevance of it being gated is minimal when looking at residential property. The two markets are more different than they are similar.

JamesMason

Dwarf.Shortage wrote: »

Assuming the Aviva fund holds corporate property assets the relevance of it being gated is minimal when looking at residential property. The two markets are more different than they are similar.

Many corporate funds hold residential assets on their books. And they can get nervous too...
https://www.irishtimes.com/business/commercial-property/fitch-warns-of-contagion-among-property-investment-funds-1.4162910?mode=amp

pearcider

Dwarf.Shortage wrote: »

Assuming the Aviva fund holds corporate property assets the relevance of it being gated is minimal when looking at residential property. The two markets are more different than they are similar.

These funds are looking at rents and nothing else and the worm has clearly turned when it comes to rents confirmed by numerous indices recently. The daft report from q4 2019 has confirmed a trend in rents that was obvious at least 6 months ago. It’s not just Ireland. Half of luxury penthouses built since 2016 in New York are unsold. That’s a lot of capital earning no return which is exactly the bizarre situation negative interest rates leaves us. A huge amount of capital is now trapped in malinvestments with impaired cashflow. Visit Brussels, London, Sydney or Dublin and you see the same thing. Skyscrapers either newly constructed or about to be finished.

The higher end market is where recessions begin as that’s where capital is concentrated. That’s why it’s important to monitor what institutional investors are doing. Everything is connected to everything else.

riclad

The new york market is a special case.A lot of apartments in new york are bought by oligarchs, rich people in russia or other countrys , i have 50 million i need to hide somewhere safe, i,ll setup a shell company ,buy a few apartments in nyc.The apartments are owned by company x, the owner is not know to tax authoritys .
the problem now is trump has increased the property tax in new york city.
buying an apartment as an investment is no longer attractive.
and theres other places like luxembourg or bitcoin to invest money in
if you want to hide your wealth.
the companys who own the apartments are simply not putting them on the market, so as not to cause prices to fall further.
theres, 100,s of empty apartments in nyc.
https://www.nytimes.com/2019/09/13/realestate/new-development-new-york.html

This is nothing to do with the property market in ireland.
theres no rich oligarch buying apartments in ireland
and leaving them empty.
i dont think theres a large amount of expensive apartments unsold in ireland.
We need 20k units per year to be built to meet demand.
builders in dublin don,t built 4 million dollar apartments .
Maybe there were too many apartments built because, the cost of borrowing is so low in america and europe.

JamesMason

riclad wrote: »

The new york market is a special case.A lot of apartments in new york are bought by oligarchs, rich people in russia or other countrys , i have 50 million i need to hide somewhere safe, i,ll setup a shell company ,buy a few apartments in nyc.The apartments are owned by company x, the owner is not know to tax authoritys .
the problem now is trump has increased the property tax in new york city.
buying an apartment as an investment is no longer attractive.
and theres other places like luxembourg or bitcoin to invest money in
if you want to hide your wealth.
the companys who own the apartments are simply not putting them on the market, so as not to cause prices to fall further.
theres, 100,s of empty apartments in nyc.
https://www.nytimes.com/2019/09/13/realestate/new-development-new-york.html

This is nothing to do with the property market in ireland.
theres no rich oligarch buying apartments in ireland
and leaving them empty.
i dont think theres a large amount of expensive apartments unsold in ireland.
We need 20k units per year to be built to meet demand.
builders in dublin don,t built 4 million dollar apartments .
Maybe there were too many apartments built because, the cost of borrowing is so low in america and europe.

There are plenty of unoccupied apartments in Dublin owned by foreign Real Estate Investment Trusts. It is shocking to think of the current social and economic problems related to housing in this country, while the Government let big business take priority.

thomasdylan

Given rents in Dublin, if you have the deposit to buy now there'd need to be a relatively big drop in house prices to make it financially worth holding off. The savings made by holding off for a year if there's only a 3 or 4% drop in house prices would be eclipsed by rent paid in that time(I think).

ittakestwo

JamesMason wrote: »

There are plenty of unoccupied apartments in Dublin owned by foreign Real Estate Investment Trusts. It is shocking to think of the current social and economic problems related to housing in this country, while the Government let big business take priority.

Where are these unoccupied apartments?

Assetbacked

ittakestwo wrote: »

Where are these unoccupied apartments?

Capital Dock, the newly built apartment block was reported this week to have over a hundred vacant since they completed a year ago. Cheapest two bed is €3.5k. Kennedy Wilson own the block.

I understand the Opus apartments have been struggling to let in Grand Canal Dock. Again, presumably the extortionate rent would be the problem. There is a perception that there is a queue of corporate executives to take on short term luxury lets but I don't think it could be as high as the institutionals expected it to be. The pick up in hotel renovations and building wouldn't have helped in that regard as well.