Property Market 2020

awec

WeeCuppaCha wrote: »

Realistically, how much have people managed to save in 3 months that would explain price rises? From reading other threads here, most certainly have not managed to save enough to negate their need for exemptions. It’s not possible that anyone has saved half their annual salary/0.5 LTI for obvious reasons. Even to save 0.25 would mean zero spend over the previous 3 months.

It has the feel of a false market right now. Like the EAs are chancing their arms and raising asking prices in anticipation of low offers. I’ll certainly be keeping a close watch on the PPR to compare asking and selling prices.

People don't have to have saved anything extra to see prices rise, or even remain static. All it takes is for demand to stay roughly the same relative to supply, so while demand is dropping due to no more exemptions etc, supply is also dropping as people don't want to sell.

On the supply side:

- People don't want the hassle and stress of moving during a pandemic
- Anyone on covid payment, or unemployed is not going to be selling their house
- Most people with an uncertain financial outlook are not going to be selling their house

On the demand side:

- People with solid employment and solid incomes may be keen to buy as they are concerned that getting finance in x months time may be difficult even if their own personal financial circumstances remain unchanged
- People looking for houses in specific areas, or even specific houses themselves may be keen to buy as they are concerned about supply in that area drying up
- There is a backlog of people who wanted to buy in March, April and May, and who still want to buy

Combined these factors will limit the rate of any price drops. Nobody knows for how long.

WeeCuppaCha

Pointing out how increased savings over the past 3 months are unlikely to be the cause of increasing prices was more in response to Henbani’s post than any credence in it being a factor.

Villa05

It may be worth noting that during the lock down, there were a high number of transactions in the upper end of the market 1 million+ as reported in the Irish Times either last week or this week.

Would make sense I suppose for EA to focus on this area where a limited amount of business could be done

TheSheriff

justfortherecor wrote: »

Think a broad plateau or a famous "soft landing" for prices is a reasonable assumption to make at the moment.

Wall of money from QE will surely support asset prices and continue their decoupling from the real economy but, on the flip side, I just can't see any meaningful price progression where we have unemployment increasing here to low teens for remainder of 2020/21.

Subsidies have done exactly what they were designed to do in supporting incomes and spending (and general confidence in the market, including housing to a large degree).

All bets are off if we have a brutal second wave.

I think price stability is a good thing to be honest; I doubt many people buying a property to live in want to see massive gains in their valuations, equally they don't want to see a huge drop.

It would be nice to just have an asset that gives you security to live in, rather than the boom-bust model we currently have.

Mic 1972

TheSheriff wrote: »

I think price stability is a good thing to be honest; I doubt many people buying a property to live in want to see massive gains in their valuations, equally they don't want to see a huge drop.

It would be nice to just have an asset that gives you security to live in, rather than the boom-bust model we currently have.

are you sure about that?

TheSheriff

Mic 1972 wrote: »

are you sure about that?

Definitely people in my group of friends anyway; we are the generation condemned to rent since the last recession.

Most people just want a roof over there head to get on with their lives; a desire for massive gains there is not (small sample size admittedly).

GreeBo

manniot2 wrote: »

This seems a very naive logic - racing to buy an asset that is going to fall in value in 6 months time.

What about the cost of not buying?
And the opportunity lost by not buying?

lomb

Negative interest rates seem to imply deflation ie houses will be worth the exact same today as they will be in 10years. House prices are linked to incomes and credit availability. A teacher today makes less than a teacher on the old contract. I put alot into property 14 years ago and in real terms my investment is worth half what I paid for it. Ie deflation.
I bought a house a few weeks ago for 460, the vendors paid 650+50k stamp+50k improvements=750k in 2004. Inflation adjusted thats 900+ and I paid 460+5k stamp.
With increasing automation and economic change , rising government debts,cornonavirus and taxation with less free income I personally cannot see house inflation over the next 10 years. I dont think banks will increase lending multiples either in this generation. It will take around 20 years for the lessons of the boom to be forgotten for that to happen

neutral guy

Hi guys,I am new here,if I will wrong I hope mods will show me the way.I am forner,16 years in Ireland and I looking for buy house on 50/50 cash/loan basis.Sorry about my english.
The stories about house prices will never go down I remember from 2008 recession,same story here.
Number of my friends lost jobs in building industry due with slow down after Covid,they gonna go home to Eastern Europe because no HAP ( they has property in own country ),sky high rents ( doll will not cover it ),they has property at home,own/parents places,salaries in Eastern Europe nearly the same if if we taking rent of in Ireland .The situation in Eastern Europe for many of them will not better than in Ireland but at home they will survive easier than in Ireland.
I have one great mate,he is irish man, the guy who buying houses and renting them to my friends from Eastern Europe.One rent cover mortgage of another,rent from another cover mortgage from third one.What gonna happen ?
When people will lose jobs in tourism sector ( mainly forners ) what gonna happen on rent market ? As I said before ,rents are historically high.There is mainly low paid jobs.
Some of my mates already asked for smaller rent to landlords.It is OK for now,because its mortgage holiday.Some of my mates does not have jobs.
What gonna happen with drivers from companies who supply linen ? What gona happen with workers ( mainly forners ) from there ?
What gonna happen with supply chain when shops are closing ?
The guy who work with spare parts business for transport companies already got his wage reduced and couple of his work mates already lost jobs.
Mortgage brokers in banks came back to preCovid level ? I gonna take loan at the moment because I have job and the only chance I can get loan because I have job.I dont care what gonna happen after,but I will have extra cash for buying house at lower price ( I hope)
I do some extra cash at second hand market and I could tell that market are boiling kettle what I did not see for years,I am there from 2012.People looking for extra cash what they did not do before,many with 0 feedbacks.
And dont forget guys,we are still on mortgage holidays and on Covid payments.The doll of 180 euros will a lot smaller than 350 Covid payment at the moment.

lomb

GreeBo wrote: »

What about the cost of not buying?
And the opportunity lost by not buying?

The problem with not buying is you still have to live somewhere . If you rent then your paying a middleman, a bank wanting twice the interest rate and also a greedy government wanting tax on the profit. This is obviously a total waste of money. You also dont have security.
Even with mildly declining house prices over the next 10 years its still much much better to own imo.

cnocbui

GreeBo wrote: »

What about the cost of not buying?
And the opportunity lost by not buying?

I wouldn't buy property in this country again. I would buy it in either Australia or NZ.

Should I manage to sell my property here, I will seriously look into investing the capital and using the returns to offset rent.

Villa05

Revealing interview with the head of the Land Development agency



He reckons the country need 100,000 affordable homes for workers who don't qualify for social housing and don't earn enough to afford the private market

Villa05

How can Ireland move jobs and people out of Dublin?


An option for people finding Dublin unaffordable in one of Ireland's most underrated cities, A Budget Galway

cnocbui

My impression is that Galway is pretty expensive. Limerick and it's many satellite towns and villages is cheaper. Traffic in Galway is bad.

c.p.w.g.w

cnocbui wrote: »

My impression is that Galway is pretty expensive. Limerick and it's many satellite towns and villages is cheaper. Traffic in Galway is bad.

He was talking about Waterford I believe... Galway is a complete mess

Hubertj

cnocbui wrote: »

I wouldn't buy property in this country again. I would buy it in either Australia or NZ.

Should I manage to sell my property here, I will seriously look into investing the capital and using the returns to offset rent.

How does Aus and NZ compare with Ireland in terms of housing stock? I presume tax and regulations around rental income are more stable compared to Ireland?

lcwill

c.p.w.g.w wrote: »

He was talking about Waterford I believe... Galway is a complete mess

All these coastal towns and cities are going to be underwater, or at least seriously affected by flooding by the end of the century, and this will start getting reflected in prices and long term plans over the next couple of decades. Ireland needs to move towards the midlands.

Kamili

cnocbui wrote: »

I wouldn't buy property in this country again. I would buy it in either Australia or NZ.

Should I manage to sell my property here, I will seriously look into investing the capital and using the returns to offset rent.

Unless you are a native or a resident, you will not be able to purchase in New Zealand - these are new rules due to what they were calling runaway property prices.

https://www.cnbc.com/2018/08/16/new-zealand-bans-most-foreigners-from-buying-homes.html

brisan

JimmyVik wrote: »

Yeah i'll be extremly surprised.
Where is the money going to come from?
Nothing the government have tried to do in housing in Ireland has ever made things better. Ever.
They have made it worse by orders of magnitude though, many times over.

I guess you were not around in the late 60s and early 70s so

brisan

SozBbz wrote: »

My advice would be to avoid turnkey properties if you've the stomach for it. Thats where most people will lose their heads.

I'm not saying to sacrifice on the fundamentals of what you want, but keep in mind what can be changed and what cannot.

When we bought our current home, we wanted it for the site, the location, and the fact its detached and has good wide side access.

It has some flaws (layout, 70's extension, we needed to do the roof and kitchen almost straight away) but fundamentally we felt it was a sound proposition and that we'll get it the way we want it in time.

You need to be able to focus in on whats important to you - what can be changed and what cannot. Don't be fooled by a house thats immaculately decorated to sell but falls short in other areas. Lots of people want turnkey properties, so you're well off to distance yourself from that cohort.

However here are two properties in the same estate same basic terraced house
Which one offers better value

https://www.daft.ie/dublin/houses-for-sale/donaghmede/36-newbrook-avenue-donaghmede-donaghmede-dublin-2551376/
https://www.daft.ie/dublin/houses-for-sale/donaghmede/29-carndonagh-drive-donaghmede-dublin-2559919/
I do agree that at times buying a fixer upper can be better and they often say buy the worst house in the best location you can afford because location is the one thing you cannot change ,but sometimes a turnkey property can be a lot better as some areas have a price ceiling

Newbie20

lomb wrote: »

The problem with not buying is you still have to live somewhere . If you rent then your paying a middleman, a bank wanting twice the interest rate and also a greedy government wanting tax on the profit. This is obviously a total waste of money. You also dont have security.
Even with mildly declining house prices over the next 10 years its still much much better to own imo.

This is a good point. Very simple, but some people seem to forget that they are paying rent whilst holding out for a price drop in houses (talking about those that currently have the deposit). I think it comes down to how badly somebody needs a house. If you are at the stage where you have waited for years to buy, I’m not sure I could wait another year or two to see what happens.

If a couple decides not to buy at the moment and continues to rent instead at say for example, €1,400 a month, after 2 years they will have spent €33,600 in rent.

These people could hold out for 2 years and then be delighted about getting a €30,000 drop in the house price but they’d have spent it anyway in the meantime.

Now maybe the house prices will drop massively (who knows) and these people will be proven right in time, but I think it’s worth remembering that you are spending a certain amount of the potential drop anyway while waiting.

Spring Celebrator

lcwill wrote: »

All these coastal towns and cities are going to be underwater, or at least seriously affected by flooding by the end of the century, and this will start getting reflected in prices and long term plans over the next couple of decades. Ireland needs to move towards the midlands.

By 2050.
Looking to buy in Galway and large parts might be underwater by 2050. We already have floods every year in Salthill.

https://coastal.climatecentral.org/map/11/-8.9628/53.2395/?theme=sea_level_rise&map_type=coastal_dem_comparison&contiguous=true&elevation_model=coastal_dem&forecast_year=2050&pathway=rcp45&percentile=p50&return_level=return_level_1&slr_model=kopp_2014

The_Conductor

lcwill wrote: »

Ireland needs to move towards the midlands.

You're kidding- right?
Most of the midlands are on a flood plain- I've photographs of me boating around Athlone as a kid- there were regularly thousands of acres on both sides of the county border under water- all the way up to the Dublin road.

Ireland is a low lying country- with occasional hills. We had better get used to it (flooding), and suggesting that the midlands will somehow be immune to flooding- when historically much of the midlands was periodically (not every year) inundated with flooding- will mean a lot of people will have wholly unrealistic expectations..........

19233974

Newbie20 wrote: »

This is a good point. Very simple, but some people seem to forget that they are paying rent whilst holding out for a price drop in houses (talking about those that currently have the deposit). I think it comes down to how badly somebody needs a house. If you are at the stage where you have waited for years to buy, I’m not sure I could wait another year or two to see what happens.

If a couple decides not to buy at the moment and continues to rent instead at say for example, €1,400 a month, after 2 years they will have spent €33,600 in rent.

These people could hold out for 2 years and then be delighted about getting a €30,000 drop in the house price but they’d have spent it anyway in the meantime.

Now maybe the house prices will drop massively (who knows) and these people will be proven right in time, but I think it’s worth remembering that you are spending a certain amount of the potential drop anyway while waiting.

One of the most frustrating things for me is the lack of housing stock, and whats out there particularly in dublin isnt very good. So we are caught both ways, so its bitterly disappointing to see a FF/FG govt who will do absolutely nothing to fix the ridiculous housing situation.

They have completely failed the people of the country on the housing front. if there was an iota of political will it could be fixed, its not rocket science but would involve putting the citizens of the country ahead of other vested interests.

Browney7

Newbie20 wrote: »

This is a good point. Very simple, but some people seem to forget that they are paying rent whilst holding out for a price drop in houses (talking about those that currently have the deposit). I think it comes down to how badly somebody needs a house. If you are at the stage where you have waited for years to buy, I’m not sure I could wait another year or two to see what happens.

If a couple decides not to buy at the moment and continues to rent instead at say for example, €1,400 a month, after 2 years they will have spent €33,600 in rent.

These people could hold out for 2 years and then be delighted about getting a €30,000 drop in the house price but they’d have spent it anyway in the meantime.

Now maybe the house prices will drop massively (who knows) and these people will be proven right in time, but I think it’s worth remembering that you are spending a certain amount of the potential drop anyway while waiting.

Not necessarily as bad as you paint it but you do have a point. If they have to pay a mortgage payment and other ownership costs of 1400 per month, equivalent to the rental fee you've quoted, realistically maybe half of that will be going towards repaying capital.
Of the 33k paid to own the property, 15 grand may go to capital repayment (rate and term dependant), 5k to property ownership costs (insurance, repairs, appliances, taxes etc) and 13k in interest.

In this case the 33k paid in rent would have knocked 15k off a mortgage and you'd likely have had a space for 2 years that was bigger and nicer than the place being rented so all comes down to personal choice in the end

TheSheriff

Browney7 wrote: »

Not necessarily as bad as you paint it but you do have a point. If they have to pay a mortgage payment and other ownership costs of 1400 per month, equivalent to the rental fee you've quoted, realistically maybe half of that will be going towards repaying capital.
Of the 33k paid to own the property, 15 grand may go to capital repayment (rate and term dependant), 5k to property ownership costs (insurance, repairs, appliances, taxes etc) and 13k in interest.

In this case the 33k paid in rent would have knocked 15k off a mortgage and you'd likely have had a space for 2 years that was bigger and nicer than the place being rented so all comes down to personal choice in the end

Spoke with a friend this morning I haven't chatted to in nearly a year and mentioned we had been house hunting the past few months. The response was, "oh, we are starting now too, there's gonna be drops over coronavirus" and that they've just got the mortgage AIP. I maintain that when everybody on the street is looking for said bargains it will be even harder to find one.

I think for many who have lost/delayed mortgage approval due to Covid, there is now a whole new wave of people who weren't planning on buying before, but now think there'll be bargains to be had so are jumping on board.

cnocbui

Kamili wrote: »

Unless you are a native or a resident, you will not be able to purchase in New Zealand - these are new rules due to what they were calling runaway property prices.

https://www.cnbc.com/2018/08/16/new-zealand-bans-most-foreigners-from-buying-homes.html

I'm an Australian citizen, so I can. Don't even need a visa.

I have to say, good move by NZ. Australia should have done the same years ago to put a lid on the Chinese buying up property in Sydney and Melbourne. The average house price in Sydney is over a million Australian dollars, and has been for quite a few years now, thanks to a flood of foreign buyers. Dubliners should be exceedingly thankful the Chinese never wanted to buy there.

Villa05

TheSheriff wrote:

I think for many who have lost/delayed mortgage approval due to Covid, there is now a whole new wave of people who weren't planning on buying before, but now think there'll be bargains to be had so are jumping on board.

Fully take your point but, Are we talking about bargain hunters or people who can't afford current price and maybe could were 10 to 20% knocked off the price

Forgive me but bargain and Dublin property market are probably 2 words you should not see in the same sentence

TheSheriff

Villa05 wrote: »

Fully take your point but, Are we talking about bargain hunters or people who can't afford current price and maybe could were 10 to 20% knocked off the price

Forgive me but bargain and Dublin property market are probably 2 words you should not see in the same sentence

Bargains are all relative; what you and I think is a bargain is totally different. I would consider 10-20% off a house in Dublin a bargain, as this is where we choose to live.

Actually in this instance I imagine they could fully afford current prices (more so than myself); one very well paid (I assume) legal professional in the relationship. Not sure why they haven't purchased before, but now it seems Covid has spurred them on.

Again, totally anecdotal and probably no real impact but interesting to see others opinions; where some see an impending doom others see opportunity.

Marius34

19233974 wrote: »

One of the most frustrating things for me is the lack of housing stock, and whats out there particularly in dublin isnt very good. So we are caught both ways, so its bitterly disappointing to see a FF/FG govt who will do absolutely nothing to fix the ridiculous housing situation.

They have completely failed the people of the country on the housing front. if there was an iota of political will it could be fixed, its not rocket science but would involve putting the citizens of the country ahead of other vested interests.

I think there is some progress in the last years, on housing, the construction supplies increasing, including social housing, and rental project, although at the slower phase than it should.
By big part the issue is people itself, most things I see from protesters on housing, is around control on Landlords and AirBnB things, and government did put more control on it. I have said this for the years, this won't solve the issue for long term, where as focus on new construction supply can solve, unfortunately this would not solve much in a year or two.