Property Market 2020

Assetbacked

Springy Turf wrote: »

https://www.daft.ie/report/2020-june-housingmarket-daftreport.pdf

It's good to also re-post this handy data chart for asking rents in Dublin with the Daft report that is circulated in this forum. I'm just posting about rent here, I'm still not touching the housing market as I believe it won't be until next year we see the impact in data of the pandemic.

https://bl.ocks.org/pinsterdev/raw/234b4a5310a14a32e080/

Due to procrastination levels in work being high this morning, I was looking at the median asking rents from the chart this morning and taking some back-of-the-envelope calculations, from the November/December 2019 highs for rents in Dublin;

• 1 bedroom apartment - €1625 -> €1550 = 5% approx.
  
• 2 bedroom apartment - €2200 -> €2000 = 10% approx. (presumably housemates from big tech companies going home to WFH or else €1100 for a bedroom as median rent is totally unaffordable).
  
• 2 bedroom house - €2000 = no change.
  
• 3 bedroom house - €2750 -> €2500 = 9% approx.

Taking some observations on the Daft.ie housing report;

• Rents down 0.1% month to month in Dublin (May to June).
• Rents up 0.2% month to month nationally (May to June).
• Rents up 0.5% year on year in Dublin.
• Rents up 0.2% year on year nationally.
• Supply of rentals is up 63% year on year in Dublin.
• Supply of rentals is up 21% year on year nationally.

It looks like the rental market has stabilised in terms of year on year growth, but more promisingly, this year's trends are for drops from 0 - 10% in Dublin, which is quite significant and appears to have happened fairly swiftly, which maybe is unsurprising considering how high the median rents are.

One to watch is how the sheer volume of rental properties now available will play out. With WFH still seemingly a thing until the end of the summer for a lot of places and even to the end of the year for other companies, I think we could be seeing another 0-10% drop in rents before the end of the year across those properties.

c.p.w.g.w

Taking a look around i'd be very wary of closing a sale of a house right now...

Covid19 is still in full swing in the states & Central/Southern America, also seeing resurgence in Spain & UK

Many hospitality business' are going to be in real trouble with reduced numbers travelling into the country for myriad of reasons...Locals are less likely to staycation due to fears of covid19 & weather(and the sure we'll wait till next year and go to Spain for 3 weeks instead 2 etc)

Many medical device companies are struggling due to elective procedures being suspended in many parts of the states, and we don't know long that will last for, i know of at least 2 that have undergone major cost cutting as a result of CoVid19

The impending recession which is likely to lead to serious amounts of unemployment...

ANd the folks who say their jobs is secure, while being on the Wage Subsidy Scheme is scary...If your on the Scheme, your job isn't safe its precarious depending on which sector you operate in...

House prices will not likely reflect this for another 6 months, due to the CoVid19 payments which is injecting money into the economy, but when those supports stops...its not going to be fun

Billythekid19

c.p.w.g.w wrote: »

Taking a look around i'd be very wary of closing a sale of a house right now...

Covid19 is still in full swing in the states & Central/Southern America, also seeing resurgence in Spain & UK

Many hospitality business' are going to be in real trouble with reduced numbers travelling into the country for myriad of reasons...Locals are less likely to staycation due to fears of covid19 & weather(and the sure we'll wait till next year and go to Spain for 3 weeks instead 2 etc)

Many medical device companies are struggling due to elective procedures being suspended in many parts of the states, and we don't know long that will last for, i know of at least 2 that have undergone major cost cutting as a result of CoVid19

The impending recession which is likely to lead to serious amounts of unemployment...

ANd the folks who say their jobs is secure, while being on the Wage Subsidy Scheme is scary...If your on the Scheme, your job isn't safe its precarious depending on which sector you operate in...

House prices will not likely reflect this for another 6 months, due to the CoVid19 payments which is injecting money into the economy, but when those supports stops...its not going to be fun

I think it 100% depends on your situation in life when to buy. Id advise someone flexible and with few responsibilities to definitely hold off till next year to purchase a house. However if I had a young family and kids and was in a solid financial position I would 100% proceed and close a sale. With the inevitable second wave coming in the winter you could be talking at least another 6 months of being stuck in a rent trap paying typically 2k+ a month. By saving say 5% on a purchase price by holding off till next year you wouldve pissed away that amount on rent and potentially endured a miserable quality of life. So the best time to buy really is down to individual situations.

Sarn

IAmTheReign wrote: »

According to the Examiner the Daft report for June has house prices nationally down 3.3% on last year, with Dublin down 3.8% The Munster area has the biggest drop, falling 4.9%

https://www.irishexaminer.com/breakingnews/ireland/munster-sees-biggest-fall-in-property-prices-in-past-year-1009876.html

It shows what way sentiment is going. However, it should really be made clear that it is asking prices that are down. It is only later in the Daft report that it clarifies what it is referring to.

Given the reports of asking prices being exceeded, it’ll be interesting to see what the PPR reports later in the year.

awec

Sarn wrote: »

It shows what way sentiment is going. However, it should really be made clear that it is asking prices that are down. It is only later in the Daft report that it clarifies what it is referring to.

Given the reports of asking prices being exceeded, it’ll be interesting to see what the PPR reports later in the year.

I think Daft reports are always asking prices, since that's the data they have available to them?

19233974

Assetbacked wrote: »

One to watch is how the sheer volume of rental properties now available will play out. With WFH still seemingly a thing until the end of the summer for a lot of places and even to the end of the year for other companies, I think we could be seeing another 0-10% drop in rents before the end of the year across those properties.

Wait until winter rolls around and we have all the usual viral illnesses which mimic covid symptoms thrown into the mix, so WFH is going to be a thing well into the new year.

Ush1

Bass Reeves wrote: »

When people have confidence in buying in Tallaght

Tallaghts a big place with some properties more desirable than others. My brother viewed a house at the weekend in Tallaght, first day of viewings and already bid at 360k, 10k over asking.

Springy Turf

Depending on what end of the market you are in, the case for waiting is very different.

A 10 percent drop at 300k is only 30k. If you are renting that 30k disappears fairly quickly.

A 10 percent drop at 600k could mean 24k spent on rent for an extra year, and 36k saved.

JamesMason

awec wrote: »

I think Daft reports are always asking prices, since that's the data they have available to them?

Anyone who puts their house on the market now, with a pre-CoVid asking price, must be either dumb or desperate. The economy, and our collective financial confidence is about to take a catastrophic hit. If one needs to sell, they need to get realistic and sharpish. How many bigger fools are there?

Reps4jesus

Have been viewing/ bidding on a couple of two bed houses/ apartments around the 400k mark and in my experience all are going for far in excess of the asking price. Sometimes 20% or more above. In some instances it appeared to me the asking price was set very low, probably to try garner some interest and bidding but im still quite surprised at the levels some are going for. Im not desperate to buy at the moment so I think I will hold off for a while and see if prices dip a little later in the year.

GreeBo

JamesMason wrote: »

Anyone who puts their house on the market now, with a pre-CoVid asking price, must be either dumb or desperate. The economy, and our collective financial confidence is about to take a catastrophic hit. If one needs to sell, they need to get realistic and sharpish. How many bigger fools are there?

Yet people are buying these houses.
Anyone who puts their house on the market now with a significant price reduction "is dumb" since they are leaving money on the table.

JamesMason

GreeBo wrote: »

Yet people are buying these houses.
Anyone who puts their house on the market now with a significant price reduction "is dumb" since they are leaving money on the table.

Price reductions were rare pre CoVid. Anyone who believes that 2019 prices are attainable now are chancing their arm to be frank. There's always a bigger fool though.

GreeBo

JamesMason wrote: »

There's always a bigger fool though.

So then the seller is not being a fool and is just doing what every seller always does, tries to get the best price?

What am I missing here? Whats different now exactly?

Iceman29

JamesMason wrote: »

Anyone who puts their house on the market now, with a pre-CoVid asking price, must be either dumb or desperate. The economy, and our collective financial confidence is about to take a catastrophic hit. If one needs to sell, they need to get realistic and sharpish. How many bigger fools are there?

I disagree.... if i was on the fence id be selling tomorrow to take advantage of an inflated price. if they wait they'll lose a fortune as i agree that things are going to take a catastrophic hit.

JamesMason

Iceman29 wrote: »

I disagree.... if i was on the fence id be selling tomorrow to take advantage of an inflated price. if they wait they'll lose a fortune as i agree that things are going to take a catastrophic hit.

Poor choice of words...mea culpa. Optimistic would be more appropriate I guess

Ozark707

Assetbacked wrote: »

[*]Rents down 0.1% month to month in Dublin (May to June).
[/LIST]

I am finding it hard to reconcile the daft figures against what this chart is indicating (I know this link below is a snapshot in time and I don't know the methodology employed by daft).

Basically across all individual categories it appears that the average rent was down ~2% between May and June, far outstripping the 0.1% in the daft report.

As an aside it appears that there was the same sort of decrease between June and July

https://bl.ocks.org/pinsterdev/raw/234b4a5310a14a32e080/

JamesMason

GreeBo wrote: »

So then the seller is not being a fool and is just doing what every seller always does, tries to get the best price?

What am I missing here? Whats different now exactly?

Confidence

awec

JamesMason wrote: »

Price reductions were rare pre CoVid. Anyone who believes that 2019 prices are attainable now are chancing their arm to be frank. There's always a bigger fool though.

We won't know until the reports come out that deal with actual sale figures rather than asking prices. All we have today is daft's asking prices reports and anecdotal talk on here.

JimmyVik

Reps4jesus wrote: »

Have been viewing/ bidding on a couple of two bed houses/ apartments around the 400k mark and in my experience all are going for far in excess of the asking price. Sometimes 20% or more above. In some instances it appeared to me the asking price was set very low, probably to try garner some interest and bidding but im still quite surprised at the levels some are going for. Im not desperate to buy at the moment so I think I will hold off for a while and see if prices dip a little later in the year.

Thats the big problem I have with Daft reports.
Asking prices are not actual prices. They could be higher or lower.
The Daft report is pure marketing.

GreeBo

JamesMason wrote: »

Confidence

Housing are selling right now above asking, why wouldnt I be confident as a seller putting my house on the market today?

In fact I would be far more confident selling today than I would be tomorrow.

lastusername

We're sale agreed but wondering if the vendor is going to pull it and sale prices are going up in the area, and probably throughout the country due to pent-up demand and ongoing lack of supply.


But if they do, maybe it will be a good thing as seems nobody knows what the market will be like towards the end of the year. I feel prices will remain fairly static but who knows, there could be a big drop either!

Villa05

Billythekid19 wrote:

I think it 100% depends on your situation in life when to buy. Id advise someone flexible and with few responsibilities to definitely hold off till next year to purchase a house. However if I had a young family and kids and was in a solid financial position I would 100% proceed and close a sale. With the inevitable second wave coming in the winter you could be talking at least another 6 months of being stuck in a rent trap paying typically 2k+ a month. By saving say 5% on a purchase price by holding off till next year you wouldve pissed away that amount on rent and potentially endured a miserable quality of life. So the best time to buy really is down to individual situations.

Russian roulette options there and for that very reason I would advise anyone contemplating buying to wait and see.

If my financial position is solid, my buying capacity versus alot of the competition will improve over time while prices most likely will fall

If a 2nd wave is inevitable as is predicted, the damage to economies could be enormous and take years if not decades to recover

If you are stuck in a rental trap and can WFH, consider a low cost location with good rail link to to the city/town of your employment and wait it out.

GreeBo

Villa05 wrote: »

Russian roulette options there and for that very reason I would advise anyone contemplating buying to wait and see.

If my financial position is solid, my buying capacity versus alot of the competition will improve over time while prices most likely will fall

If a 2nd wave is inevitable as is predicted, the damage to economies could be enormous and take years if not decades to recover

If you are stuck in a rental trap and can WFH, consider a low cost location with good rail link to to the city/town of your employment and wait it out.

/Alternative view
If your financial position is solid, buy the house you want at the price you were happy to pay before you thought there might be some huge drop and move on with your life.

Iceman29

lastusername wrote: »

We're sale agreed but wondering if the vendor is going to pull it and sale prices are going up in the area, and probably throughout the country due to pent-up demand and ongoing lack of supply.


But if they do, maybe it will be a good thing as seems nobody knows what the market will be like towards the end of the year. I feel prices will remain fairly static but who knows, there could be a big drop either!

My opinion, he'd be doing you a massive favour

JamesMason

Villa05 wrote: »

If a 2nd wave is inevitable as is predicted, the damage to economies could be enormous and take years if not decades to recover

If you are stuck in a rental trap and can WFH, consider a low cost location with good rail link to to the city/town of your employment and wait it out.

The damage from this current, 1st wave is already enormous and will feel more real in the coming months. WFH is without doubt a great option, if possible.
A second wave is not worth thinking about now. Let's get over the summer first.

JimmyVik

Just to show the futility of trying to predict prices, I looked up property threads from 2011/2012 to see what people are giving advice now were advising then.


Im the same myself. Havent a clue where prices are going.



From July 2020:

Villa05 wrote: »

Russian roulette options there and for that very reason I would advise anyone contemplating buying to wait and see.

If my financial position is solid, my buying capacity versus alot of the competition will improve over time while prices most likely will fall

If a 2nd wave is inevitable as is predicted, the damage to economies could be enormous and take years if not decades to recover

If you are stuck in a rental trap and can WFH, consider a low cost location with good rail link to to the city/town of your employment and wait it out.

From Dec 2011:

Villa05 wrote: »

To anyone considering buying. I would be very wary of a euro breakup. Were Ireland to leave (kicked out of) the euro and revert to the punt.

The punt would most likely devalue by 50% against the euro, this in effect would double your debt which would remain in euro's.

Be very careful and keep your powder dry

Villa05

JimmyVik wrote:

Thats the big problem I have with Daft reports. Asking prices are not actual prices. They could be higher or lower. The Daft report is pure marketing.

GreeBo wrote:

/Alternative view If your financial position is solid, buy the house you want at the price you were happy to pay before you thought there might be some huge drop and move on with your life.

Another way of saying
Don't ask questions, hand over your hard earned cash plus 30 years of debt and get lost.

Given the history of our property market and the professions involved in it, it would be prudent to give the biggest purchase of your life a bit more thought

GreeBo

Villa05 wrote: »

Another way of saying
Don't ask questions, hand over your hard earned cash plus 30 years of debt and get lost.

Not at all. What questions do you think I am not asking?

Given the history of our property market and the professions involved in it, it would be prudent to give the biggest purchase of your life a bit more thought

Has there ever been a time when you advised someone to buy? looking at the history it seems you are always advising against it.
Perhaps you are a landlord?

JamesMason

JimmyVik wrote: »

Just to show the futility of trying to predict prices, I looked up property threads from 2011/2012 to see what people are giving advice now were advising then.


Im the same myself. Havent a clue where prices are going.



From July 2020:








From Dec 2011:

2008 was a financial crisis.
2020 is a healthcare, travel, cultural, lifestyle, political and financial crisis.

hmmm

JamesMason wrote: »

2008 was a financial crisis.
2020 is a healthcare, travel, cultural, lifestyle, political and financial crisis.

Agreed on the first 4, but 2020 is not a financial crisis like 2008.

In 2008 there was the risk of banks collapsing. The Central Banks have come out early during the current crisis and flooded the system with money - the banks have also been heavily capitalised to prevent a repeat of 2008.

It's a financial crisis for individuals and affected businesses, but as long as the Central Banks keep pushing out 0% loans to banks it won't become a crisis for the financial system itself.

That's what's underpinning the stock market currently - the belief that the financial system is sound, and that there will be losers but also winners. I don't necessarily agree they will balance out, but Ireland is in a better place than others to get more of the winners - we have a lot of tech companies who will end up winners in a remote-working environment with huge technology changes over a short period, and we have a large pharma sector.

We'll be operating an 80% economy for the rest of this year and hopefully a vaccine makes an appearance during 2021, but it's difficult to call what happens after that.