Property Market 2020

Sleepy

Or more pertinently, why should we pay to allow you the privilege of not living beside us? Perhaps an annual "rural living levy" that adequately covers the premium on providing rural dwellers with services could be applied once the planners are satisfied that the proposed one-off isn't a blight on the landscape.

Assetbacked

Graham wrote: »

Let me introduce you to Bob.

Bob is a property developer.

Bob has just been told houses in his new development are unaffordable for some people.

Bob has no problem selling everything he can build at current prices.

Why is Bob is going to reduce the price of his houses?

Good for Bob as he is having no issue selling his properties as they are at market price. This example is perpetually correct and is hypothetical. Bob is a developer. However, FTBs also purchase second hand homes and second time buyers also purchase homes (and sell homes) but are still limited with how much they can borrow. The KBC report commented on in the IT talks about house prices generally and their affordability, your example with Bob would be a disagreement with houses being unafforable?

lcwill wrote: »

Indeed, taking the bottom of the deepest house price crash ever experienced by a developed country as a reference point might not be the best approach.

The best approach for what? Assessing affordability? Why? The median salary is approximately €36k in Ireland, this is similar to what it was in 2012. Let's say a couple are looking to buy with €80k combined salaries, they can borrow €280k. This does not just apply to FTBs of course.

The current house price increase is somewhat artificial as it is based on supply being muted for close to a decade combined with the vast majority of any new builds being made unavailable to FTBs.

Graham

Assetbacked wrote: »

your example with Bob would be a disagreement with houses being unafforable?

And yet there appear to be quite a lot of 'Bobs' who are selling houses quite successfully which would suggest their houses are 'affordable' at least to a certain subset of the population.

Assetbacked wrote: »

The current house price increase is somewhat artificial as it is based on supply being muted

Supply less than demand? Sounds like basic economics.

Assetbacked

Graham wrote: »

And yet there appear to be quite a lot of 'Bobs' who are selling houses quite successfully which would suggest their houses are 'affordable' at least to a certain subset of the population.



Supply less than demand.

That explains how we are at the point we are at today, but it does not appear we will continue on this path the next few years.

fliball123

Assetbacked wrote: »

That explains how we are at the point we are at today, but it does not appear we will continue on this path the next few years.

Really.

so the lets look a the current trends to see this path your talking about

current net migration of people coming into Ireland and increasing (which has rarely been the case in our history, our biggest export was always our people)
https://www.cso.ie/en/releasesandpublications/er/pme/populationandmigrationestimatesapril2019/

Ireland has the current hightest birth rate and lowest death rate in the EU
https://www.irishtimes.com/news/ireland/irish-news/ireland-has-highest-birth-rate-and-lowest-death-rate-in-eu-1.3952983

Ireland looking to build more houses means we need to import more builders and workers with those skills.

Add in the vulture funds snapping up a high % of new builds as well and over 100k on the housing list some on there over a decade and more likely to join do to the birth rate.

where are all of these people going to live??

Who are going to build these houses at a loss in order to indulge people looking for prices to come down??

Even if building had been at a sustained level over the last decade and a half we would still be short on housing

christy G

OEP wrote: »

I don't know where, I don't know any countries that allow this? Unless you own a farm, and then you still have to build beside the farm buildings / original farm house. You can get a plot of land next to an existing house, doesn't have to be an estate and you can have your own garden.

Why should our countryside be ruined by your house?

Why is it your countryside, do we have to leave our land we own empty so it looks nice for you when you drive by?
If we want to build a house on a part of it we will simple as that.

Graham

Mod Note

folks, please take the town/country debate to another thread.

Assetbacked

fliball123 wrote: »

Really.

so the lets look a the current trends to see this path your talking about

current net migration of people coming into Ireland and increasing (which has rarely been the case in our history, our biggest export was always our people)
https://www.cso.ie/en/releasesandpublications/er/pme/populationandmigrationestimatesapril2019/

Ireland has the current hightest birth rate and lowest death rate in the EU
https://www.irishtimes.com/news/ireland/irish-news/ireland-has-highest-birth-rate-and-lowest-death-rate-in-eu-1.3952983

Ireland looking to build more houses means we need to import more builders and workers with those skills.

Add in the vulture funds snapping up a high % of new builds as well and over 100k on the housing list some on there over a decade and more likely to join do to the birth rate.

where are all of these people going to live??

Who are going to build these houses at a loss in order to indulge people looking for prices to come down??

Even if building had been at a sustained level over the last decade and a half we would still be short on housing

Perhaps, but prices would not have shot up dramatically while wages have not. Again, based on median salaries, house prices are generally not affordable for a lot of people at their current levels and the IT article highlights this. More demand won't make them more affordable; price corrections, higher salaries and/or increased leverage may do so.

fliball123

Assetbacked wrote: »

Perhaps, but prices would not have shot up dramatically while wages have not. Again, based on median salaries, house prices are generally not affordable for a lot of people at their current levels and the IT article highlights this. More demand won't make them more affordable; price corrections, higher salaries and/or increased leverage may do so.

You have to take into consideration the correction that was taken place after the bust. There was always going to be a rapid price rise once the dust settled.

House prices are affordable people just want to live in areas that others also want to live in so increased competition pushes up the prices lots of property for sale in the back arse of Leitrim if people want property. If the banks were told tomorrow they could bypass the lending rules people would be queueing up to get a mortgages out.

So apply your logic to rent , rents are currently higher than a mortgage, you could actually twist what you say and make the following statement. Rent prices are affordable better to buy

lcwill

Assetbacked wrote: »

Perhaps, but prices would not have shot up dramatically while wages have not. Again, based on median salaries, house prices are generally not affordable for a lot of people at their current levels and the IT article highlights this. More demand won't make them more affordable; price corrections, higher salaries and/or increased leverage may do so.

My bet is on increased leverage being the most likely one.

Demand is too strong for a price correction, average salaries will creep up over time but won't outpace house prices, it's just a matter of time before increased leverage is permitted, and that might mean more people have access to mortgages but it will just increase house prices.

Coronavirus and the next government could change this picture though.

Taylor365

fliball123 wrote: »

You have to take into consideration the correction that was taken place after the bust. There was always going to be a rapid price rise once the dust settled.

Because there was effectively feck all houses built in the space of 6 or so years. Industry was wiped out for half a decade.


Only reaping the benefits of that in the last 2 years.

TheSheriff

We've had an offer accepted on a house, no huge excitement, we've been here before and it didn't go through. We've offered over asking in this case as we immediately felt the house was priced lower than usual for the area to get people in the door (~5% over asking).

We are going to push ahead with the sale - can't shake that niggling feeling tough that perhaps the market is turning and things will come down.

breadmonster

TheSheriff wrote: »

We've had an offer accepted on a house, no huge excitement, we've been here before and it didn't go through. We've offered over asking in this case as we immediately felt the house was priced lower than usual for the area to get people in the door (~5% over asking).

We are going to push ahead with the sale - can't shake that niggling feeling tough that perhaps the market is turning and things will come down.

with the speed of sales here you should have time to back out if corona has a big effect

OEP

<SNIP>

pearcider

TheSheriff wrote: »

We've had an offer accepted on a house, no huge excitement, we've been here before and it didn't go through. We've offered over asking in this case as we immediately felt the house was priced lower than usual for the area to get people in the door (~5% over asking).

We are going to push ahead with the sale - can't shake that niggling feeling tough that perhaps the market is turning and things will come down.

Risk is greatly mitigated for chain buyers such as yourself as you have sold a property for the inflated price. For FTB though hold off, stock market tanked again today despite rate cut. Hello bear market. I’m expecting daft rental report to show that the slowing rental market has officially reversed in Q1. I note an awful lot of student accommodation and office buildings nearing completion in Dublin...let’s not forget the Empire State Building was finished in 1931, 18 months after the stock market crashed. Same with the Burj Khalifa in 2010.

fliball123

pearcider wrote: »

Risk is greatly mitigated for chain buyers such as yourself as you have sold a property for the inflated price. For FTB though hold off, stock market tanked again today despite rate cut. Hello bear market. I’m expecting daft rental report to show that the slowing rental market has officially reversed in Q1. I note an awful lot of student accommodation and office buildings nearing completion in Dublin...let’s not forget the Empire State Building was finished in 1931, 18 months after the stock market crashed. Same with the Burj Khalifa in 2010.

Surely the rate cut wont kick in to the stock market stragth away. Give it time. Daft showing asking prices back up in Jan and Feb. Myhhome showing 100 less homes today than it did this day last week. More mortgages been lent in Jan and Feb than this time last year as well.

JamesMason

Graham wrote: »

Let me introduce you to Bob.

Bob is a property developer.

Bob has just been told houses in his new development are unaffordable for some people.

Bob has no problem selling everything he can build at current prices.

Why is Bob is going to reduce the price of his houses?

Let me introduce you to Jack.

Jack is a property developer

He is building a development of apartments on the outskirts of Dublin.

He hopes to maximise his investment by selling the apartments to FTBs, or wholesale to foreign investors.

But, a sudden shock has occurred to the global economy.

So...why would Jack reduce the price of his apartments?

Graham

JamesMason wrote: »

So...why would Jack reduce the price of his apartments?

Presumably because in your scenario demand has dropped below supply.

That would be a good example of one of those external factors I mentioned in an earlier post.

fliball123

JamesMason wrote: »

Let me introduce you to Jack.

Jack is a property developer

He is building a development of apartments on the outskirts of Dublin.

He hopes to maximise his investment by selling the apartments to FTBs, or wholesale to foreign investors.

But, a sudden shock has occurred to the global economy.

So...why would Jack reduce the price of his apartments?

Jack realises that he can get a good price for renting until the shock is over and prices go back up. Presumably during this shock people still need a place to live? More to the point. Jack also stops building as he knows he wont get a profit on what he built and tells all of his builder friends and they stop aswell. Barry the bank manager tells his staff to stop lending as barry's boss from the central bank tells him to do so. Stalemate only people getting ahead here are cash buyers and only ones to lose are those who are desperate to sell and if the current lack of supply is anything to go by there are not many.

Cuddlesworth

JamesMason wrote: »

Let me introduce you to Jack.

Jack is a property developer

He is building a development of apartments on the outskirts of Dublin.

He hopes to maximise his investment by selling the apartments to FTBs, or wholesale to foreign investors.

But, a sudden shock has occurred to the global economy.

So...why would Jack reduce the price of his apartments?

If the apartments were finished, then 2008 Jack sold some of the apartments off at a reduced price to housing associations, then used the capital to furnish the rest and rented them. Paying off the remaining development loans and chunking a small amount off the capitol. A couple of years later, Jack sold off the remaining apartments.

If they were not finished, 2008 Jack went bankrupt and the development stopped in situ for a few years until external funding became available. The investors wrote off the debt.

0gac3yjefb5sv7

Was looking at an apartment the other week, asking was 275k. Was told current bid was 300k and 3 bidders involved.

Checked this week and another EA said no bids and buyer couldn't get funding. Very fishy. None of the other bidders were interested?

PommieBast

Pheonix10 wrote: »

Was looking at an apartment the other week, asking was 275k. Was told current bid was 300k and 3 bidders involved.

Checked this week and another EA said no bids and buyer couldn't get funding. Very fishy. None of the other bidders were interested?

Not so much fishy as Augean stables. You never know for sure whether those bidders actually ever existed.

0gac3yjefb5sv7

PommieBast wrote: »

Not so much fishy as Augean stables. You never know for sure whether those bidders actually ever existed.

It's ridiculous there is not legal structure for this **** when it's the most expensive thing you'll ever buy.

missmed

Hi,

I need some advice. My buyer and I are verbally sale agreed meaning no contracts have been signed, They’re now really pushing us to sign contacts and form some kind of a deal. I haven’t secured my house yet, there is one that I like but the EA does’t seem keen/optimistic for me to continue bidding as the current highest bidder is a cash buyer.

What should we do? Any advice would be greatly appreciated!

smurgen

missmed wrote: »

Hi,

I need some advice. My buyer and I are verbally sale agreed meaning no contracts have been signed, They’re now really pushing us to sign contacts and form some kind of a deal. I haven’t secured my house yet, there is one that I like but the EA does’t seem keen/optimistic for me to continue bidding as the current highest bidder is a cash buyer.

What should we do? Any advice would be greatly appreciated!

Given the fact the economy could be screwed for the foreseeable future I'd be conservative.

JamesMason

smurgen wrote: »

Given the fact the economy could be screwed for the foreseeable future I'd be conservative.

Should estate agents be cancelling open viewings?

Mic 1972

who wants to invest in property right now honestly?

Summer2020

House I was enquiring about viewing has suddenly been taken off the market. I’d say people don’t want their house on view with the possibility of infected people being in your house.

JamesMason

Mic 1972 wrote: »

who wants to invest in property right now honestly?

Expect REIT values to drop as investors get nervous. What happens to all those vacant high end apartments around Dublin?

q85dw7osi4lebg

Very little on the market in East Meath and South Drogheda area, 3 houses I was watching on Daft gone sale agreed this week alone, had been on market quite a while.

Think less stock is forcing more buyers to choose between fewer properties, some of which had been hanging around.