Price Reductions during Covid19

davedub2015

Just wondering if anyone has been successful during this pandemic reducing the price of asking prices of houses or off the agreed price on the sale of a house? Havent heard many so thought I would add a post

Hubertj

davedub2015 wrote: »

Just wondering if anyone has been successful during this pandemic reducing the price of asking prices of houses or off the agreed price on the sale of a house? Havent heard many so thought I would add a post

Queue the tall stories about how the market has already crashed.

davedub2015

Hubertj wrote: »

Queue the tall stories about how the market has already crashed.

Hahah this is why I asked. Hopefully get some true stories back!

Zenify

Hubertj wrote: »

Queue the tall stories about how the market has already crashed.

?

Would you not except that stoires could be exaggerated either way?

Poor OP just asked a simple question.

Maitguel

I asked on the other thread for those who claimed to be hounded by EA with properties that have been heavily discounted to post links but heard nothing...

hometruths

Hubertj wrote: »

Queue the tall stories about how the market has already crashed.

Whether or not the tales of vendors agreeing to 15% drops to close a sale do you believe that purchasers are asking for a discount in order to complete?

davedub2015

schmittel wrote: »

Whether or not the tales of vendors agreeing to 15% drops to close a sale do you believe that purchasers are asking for a discount in order to complete?

Most definitly purchasers are asking. Why wouldnt they? Just wondering are people successful

Hubertj

schmittel wrote: »

Whether or not the tales of vendors agreeing to 15% drops to close a sale do you believe that purchasers are asking for a discount in order to complete?

I have no doubt people are. I would ask if I was buying. My point is that on a thread the other day there was a couple of lads saying estate agents were calling and offering them HUGE discounts. Others were saying how their wife’s mates sisters friends brothers aunt got a bargain.

hometruths

Like you guys am skeptical if the tales are true but I do believe the fact that everybody agrees people who are sale agreed are asking for discounts to close speaks volumes about the likely direction of the market.

I.e if buyers who are sale agreed think the property might be worth less now it would follow that those who are bidding over the next 6 months are likely to make lower bids than those who were bidding over the last six months.

This will inevitably drive prices downwards.

Ozark707

schmittel wrote: »

I.e if buyers who are sale agreed think the property might be worth less now it would follow that those who are bidding over the next 6 months are likely to make lower bids than those who were bidding over the last six months.

This will inevitably drive prices downwards.

I haven’t heard of explicit examples of people securing reductions (though I have no doubt they are been given) but I know of people who have either pulled bids or have decided not to bid in the current climate. That in itself will lead to downward pressure.

TheSheriff

Hi OP

We have successfully negotiated ~20k off the price of a house. The house was ~390k mark.

It was a drawn out process over 3 weeks.

We had bid on the house before all this lockdown, when it hit we pulled our bid. The EA followed up with us after presumably other bidders pulled out.

We put in a revised bit and stuck to it.

I think the only reason we got it is we were prepared to walk away from the deal.

Sale agreed now, but thinking of pulling out to be honest. A family member who is far more experienced than us and makes a living in property has advised us to withdraw and sit tight fit a few months.

Ozark707

TheSheriff wrote: »

Hi OP

We have successfully negotiated ~20k off the price of a house. The house was ~390k mark.

It was a drawn out process over 3 weeks.

We had bid on the house before all this lockdown, when it hit we pulled our bid. The EA followed up with us after presumably other bidders pulled out.

We put in a revised bit and stuck to it.

I think the only reason we got it is we were prepared to walk away from the deal.

Sale agreed now, but thinking of pulling out to be honest. A family member who is far more experienced than us and makes a living in property has advised us to withdraw and sit tight fit a few months.

If they came back with a further haircut of the same order would you go through or are you thinking of looking for maybe a better house for the same original amount. Someone I know who pulled a bid is deciding on the latter (they are in secure employment etc).

TheSheriff

Ozark707 wrote: »

If they came back with a further haircut of the same order would you go through or are you thinking of looking for maybe a better house for the same original amount. Someone I know who pulled a bid is deciding on the latter (they are in secure employment etc).

To be honest, our head has been wrecked about buying. We have gone back and forward on it all weekends pros and cons etc.

In the end, we've deferred to a family member who has steered us right through the whole process of buying (areas, what to look for, what to avoid). So I think we are just going to likely take their advice and pull out.

I don't think the seller would reduce any more to be honest.

We're likely just to wait it out another few months and see what it's like when the dust settles. Secure employment etc....

lawrencesummers

The biggest savings might be in picking up a new house, that’s soon to be finished where the builder has to get the show on the Road post lockdown. Their asking price might be subject to a low bid.

Ozark707

TheSheriff wrote: »

To be honest, our head has been wrecked about buying. We have gone back and forward on it all weekends pros and cons etc.

In the end, we've deferred to a family member who has steered us right through the whole process of buying (areas, what to look for, what to avoid). So I think we are just going to likely take their advice and pull out.

I don't think the seller would reduce any more to be honest.

We're likely just to wait it out another few months and see what it's like when the dust settles. Secure employment etc....

Seems a sensible approach, I would agree that the downside risks outweigh any potential uptick in prices.

kowloonkev

I had a bit of a chuckle at the thread title imagining businesses having 'Covid 19 SALE on now - Limited Time Only'.

I don't think I'd risk it at the moment. The market hasn't reacted yet because it's effectively on lockdown as well. The small amount you might save now isn't worth what you might save in six months or a year from now. Definitely a time to sit tight.

TheSheriff

Ozark707 wrote: »

Seems a sensible approach, I would agree that the downside risks outweigh and potential uptick in prices.

This is our thinking.

Weve a good few friends all looking to buy too and they've all pulled out of the game. Some have unfortunately lost their jobs so they are likely out for months, but it's certainly a striking change in sentiment.

Ozark707

TheSheriff wrote: »

Weve a good few friends all looking to buy too and they've all pulled out of the game. Some have unfortunately lost their jobs so they are likely out for months, but it's certainly a striking change in sentiment.

I have a friend who was gung-ho on trading up pre Covid. He has similarly decided to wait it out (though in large part I think the penny has dropped that he will have to cut the price of his current place quite a bit in order to get a sale).

hometruths

Ozark707 wrote: »

I have a friend who was gung-ho on trading up pre Covid. He has similarly decided to wait it out (though in large part I think the penny has dropped that he will have to cut the price of his current place quite a bit in order to get a sale).

Surely in this scenario the only figure that matters is difference between his sales price and purchase price?

If he is trading up he might find that his purchase price drops more than his sale price.

wyndham

I had thought the PRAI offices are closed, effectively halting any property transactions?

Ozark707

schmittel wrote: »

Surely in this scenario the only figure that matters is difference between his sales price and purchase price?

If he is trading up he might find that his purchase price drops more than his sale price.

Preaching to the converted here but for some reason he thinks that after sitting on the market for 6 months that miraculously a buyer will materialise. Anyway he can see his target market coming under pressure so is happy to wait it out.

Snow Garden

Re trading up - If you can sell for a decent price now then do so quickly but you'd be crazy to buy a house at the start of one of the greatest recessions in modern times. The fallout from this will put massive strain on the whole financial system nevermind the Irish economy.

davedub2015

TheSheriff wrote: »

To be honest, our head has been wrecked about buying. We have gone back and forward on it all weekends pros and cons etc.

In the end, we've deferred to a family member who has steered us right through the whole process of buying (areas, what to look for, what to avoid). So I think we are just going to likely take their advice and pull out.

I don't think the seller would reduce any more to be honest.

We're likely just to wait it out another few months and see what it's like when the dust settles. Secure employment etc....

Where was the property??

lawrencesummers

Snow Garden wrote: »

Re trading up - If you can sell for a decent price now then do so quickly but you'd be crazy to buy a house at the start of one of the greatest recessions in modern times. The fallout from this will put massive strain on the whole financial system nevermind the Irish economy.

I love the way everybody has turned into an economist of late.

Edgware

Every sale is different. If you have a seller under pressure to sell, a family selling as part of an executors deal and divvy out the proceeds etc then they will be open to a deal.
You will then have others who have their minds made up on what price they want and they wont reduce or someone who wants a property in a definite area and are prepared to pay the asking price. Supply and Demand sorts it all.

TheSheriff

Edgware wrote: »

Every sale is different. If you have a seller under pressure to sell, a family selling as part of an executors deal and divvy out the proceeds etc then they will be open to a deal.
You will then have others who have their minds made up on what price they want and they wont reduce or someone who wants a property in a definite area and are prepared to pay the asking price. Supply and Demand sorts it all.

Agreed, in our case I think the seller wants to get out. There was absolutely no chance of a discount before we went fully into lockdown, now they are at least being realistic offering a small reduction.

I don't think we'll see the massive drops mentioned on other threads here, but I do think a 5-10% reduction might be on the cards. I think buyers would be wise to ask for this and similarly sellers would be wise to accept.

duffman13

The fear seems everything is going to be slow following this pandemic. Mortgages are going to take longer for approval, people will require extensions who are approved etc. I dont see floods of people who are looking to trade up making that move in the short term which may see a reduction in supply for FTB. You might see some reductions in the higher price points as there will be less people trading up. All entirely anecdotal based on my own opinion but generally there will be a reduction of around 10% IMO. If this drags on past the summer, everyone in the economy is in trouble along with house prices.

TheSheriff

duffman13 wrote: »

The fear seems everything is going to be slow following this pandemic. Mortgages are going to take longer for approval, people will require extensions who are approved etc. I dont see floods of people who are looking to trade up making that move in the short term which may see a reduction in supply for FTB. You might see some reductions in the higher price points as there will be less people trading up. All entirely anecdotal based on my own opinion but generally there will be a reduction of around 10% IMO. If this drags on past the summer, everyone in the economy is in trouble along with house prices.

Totally agree, I think up to 10% is both realistic for the buyer and the seller. I don't see massive swings to -20-30% as some on other threads have been touting.

Melanchthon

lawrencesummers wrote: »

I love the way everybody has turned into an economist of late.

No but when actual economists are saying the German economy could loose 10% of GDP
The British chancellor has told ministers that it could be a 30% loss of GDP this quarter.
French government saying 6% loss or GDP (seems optimistic).
The Spanish Greeks and Italian having similar blows and then loosing tourism which for Spain at least is 10%+ GDP.

For Europe things don't look great and Goldman Sachs are saying USA could contract 34% this quarter.

The people saying everything is going to be fine are the ones not listening to experts not those that are warning about hard times ahead.

Snow Garden

TheSheriff wrote: »

Totally agree, I think up to 10% is both realistic for the buyer and the seller. I don't see massive swings to -20-30% as some on other threads have been touting.

I would envisage more than 30% reductions. I expect the damage to be worse than 2008. Our largest trading partners will have major recessions too. Just taking one simple factor, tourism - we got 11.2m tourists last year. Will we even get a quarter of that in 2020? Unemployment in that sector alone will be scary.

lawrencesummers

Melanchthon wrote: »

No but when actual economists are saying the German economy could loose 10% of GDP
The British chancellor has told ministers that it could be a 30% loss of GDP this quarter.
French government saying 6% loss or GDP (seems optimistic).
The Spanish Greeks and Italian having similar blows and then loosing tourism which for Spain at least is 1
For Europe things don't look great and Goldman Sachs are saying USA could contract 34% this quarter.

The people saying everything is going to be fine are the ones not listening to experts not those that are warning about hard times ahead.

The British will try and blame as much as possible on this to take away from the harm Brexit is doing to their economy.

There is no doubt that there will be an impact, but that impact is not necessarily going to have a big impact on the housing market in Ireland, a market that is Chronically under supplied and Subject of massive demand. The level by which demand would have to decrease in order for supply to be met is considerable.

the_syco

lawrencesummers wrote: »

The biggest savings might be in picking up a new house, that’s soon to be finished where the builder has to get the show on the Road post lockdown. Their asking price might be subject to a low bid.

I'm in Leixlip. Two estate nearby getting built. There's a few houses that were not tiled before total lockdown. Heck, just before total lockdown, builders were trying to tile as many houses as possible, social distancing be damned! So, some houses may be okay, but some houses... I'd have your surveyor pay attention to the roof section underneath the tiles. It may be fine, but there'll be a few houses with the untiled roofs open to the elements. Not sure if it'd do any damage. Getting those cheap would probably cost you more in the long run!

duffman13 wrote: »

The fear seems everything is going to be slow following this pandemic.

Would it affect people if they were not employed during the COVID19 time, before giving them a mortgage? As many may be going back to their old job, but going from unemployment back to their old job; would that be considered a new job, or not?

lawrencesummers wrote: »

The British will try and blame as much as possible on this to take away from the harm Brexit is doing to their economy.

The EU will probably assist us. I wonder will the UK be left to flounder?

davedub2015

Have heard of a few people ask cor 20 to 30k of this week and vendors thinking about it. People starting to ask now as time goes on

Ozark707

davedub2015 wrote: »

Have heard of a few people ask cor 20 to 30k of this week and vendors thinking about it. People starting to ask now as time goes on

Is it possible to say what is the value, if it is in the 300-350k range then a 30k reduction is sizeable but if it is for something like 800k then it is nothing really.

lomb

Gdp loss could he 40 percent in 2020 bit demand will return with a vengence come 2021 as long as the system is backstopped by the central banks.

Hubertj

lomb wrote: »

Gdp loss could he 40 percent in 2020 bit demand will return with a vengence come 2021 as long as the system is backstopped by the central banks.

So does that the prices reductions will be a sharp decline this year and then level out in 2021?

In 2008 was the decline not over a longer period of time?

Ozark707

Hubertj wrote: »

So does that the prices reductions will be a sharp decline this year and then level out in 2021?

In 2008 was the decline not over a longer period of time?

Much longer period, approx 07-11. Lots of people lost lots of money by only gradually reducing their price, following the market. Question is whether committed sellers remember this and drop the price quicker this time.

Rainmann

Ozark707 wrote: »

Much longer period, approx 07-11. Lots of people lost lots of money by only gradually reducing their price, following the market. Question is whether committed sellers remember this and drop the price quicker this time.

It's a totally different situation to 2008 though. The speculation was insane and the finance been given to people was insane, anyone with a pulse was getting a mortgage at a high multiple of their income, currently for the majority of people 3.5 times your income in the maximum you can get. Also, in 2008 it was a property/ banking crisis, with banks having to be bailed out/nationalized, NAMA etc. Banks are well capitalized and while they will be cautious, they will continue to lend giving those who are in a position to buy property the ability to buy. Yes, the economy as a whole will take a massive hit and this will obviously affect demand, but with the ECB printing money like crazy, it's very likely that the economy will bounce back relatively quickly. If I had to put money on it, in Dublin, property prices will react and prices will gradually be pushed down over the coming months and will start to rise again this time next year. There is a big undersupply of property in Dublin, I think the rest of the country will lag behind.

Ozark707

Rainmann wrote: »

If I had to put money on it, in Dublin, property prices will react and prices will gradually be pushed down over the coming months and will start to rise again this time next year. There is a big undersupply of property in Dublin, I think the rest of the country will lag behind.

If that was the case then why are prices in part of Dublin back at levels in Dec 17 for example?

https://www.boards.ie/vbulletin/showpost.php?p=113197572&postcount=4635

Prices had dropped pre Covid anyway, Covid is just going to accelerate this. Maybe they will undershoot and then come back somewhat.

Rainmann

Ozark707 wrote: »

If that was the case then why are prices in part of Dublin back at levels in Dec 17 for example?

https://www.boards.ie/vbulletin/showpost.php?p=113197572&postcount=4635

Prices had dropped pre Covid anyway, Covid is just going to accelerate this. Maybe they will undershoot and then come back somewhat.

Dublin property prices had been slowing pre-COVID but nothing significant and it depends on the area, many areas were still increasing. Just because prices were leveling doesn't mean there isn't a significant undersupply, just that fewer people are in a position to buy as the prices continue to rise, meaning a reduction in demand. If you can only borrow 3.5 times your income it puts a limit on what you can afford.

James 007

Rainmann wrote: »

It's a totally different situation to 2008 though. The speculation was insane and the finance been given to people was insane, anyone with a pulse was getting a mortgage at a high multiple of their income, currently for the majority of people 3.5 times your income in the maximum you can get. Also, in 2008 it was a property/ banking crisis, with banks having to be bailed out/nationalized, NAMA etc. Banks are well capitalized and while they will be cautious, they will continue to lend giving those who are in a position to buy property the ability to buy. Yes, the economy as a whole will take a massive hit and this will obviously affect demand, but with the ECB printing money like crazy, it's very likely that the economy will bounce back relatively quickly. If I had to put money on it, in Dublin, property prices will react and prices will gradually be pushed down over the coming months and will start to rise again this time next year. There is a big undersupply of property in Dublin, I think the rest of the country will lag behind.

You know what I was thinking the same, is a 5% drop at most realistic over the next year or max 10%, whats your own feeling regarding the % drop.

Ozark707

James 007 wrote: »

You know what I was thinking the same, is a 5% drop at most realistic over the next year or max 10%, whats your own feeling regarding the % drop.

Article here stating that banks are reducing valuations by 10% already. This will feed through soon enough.

https://www.independent.ie/business/personal-finance/property-mortgages/house-valuations-are-being-reduced-by-10pc-during-the-mortgage-process-due-to-covid-19-according-to-brokers-39136972.html

Rainmann

James 007 wrote: »

You know what I was thinking the same, is a 5% drop at most realistic over the next year or max 10%, whats your own feeling regarding the % drop.

To be honest, it's a total guessing game. It wouldn't surprise me if we saw a 5-15% drop, but who knows really. The big unknown is how long this lockdown will last and will there be additional lockdown creating a stop-start economy. I think once we can return to some kind of normality at least from an economic point of view, the Dublin economy especially is one that will bounce back quickly.

Rainmann

Ozark707 wrote: »

Article here stating that banks are reducing valuations by 10% already. This will feed through soon enough.

https://www.independent.ie/business/personal-finance/property-mortgages/house-valuations-are-being-reduced-by-10pc-during-the-mortgage-process-due-to-covid-19-according-to-brokers-39136972.html

This makes a lot of sense, I had read something similar in another paper today. From a risk perspective, banks want to avoid a person going into negative equity then losing their job, then maybe the bank is stuck with a property worth less than the loan. I definitely agree that we are in for a drop in prices, I just think given the market conditions, it will be much shorter-lived than the one in 2009.

Zenify

Rainmann wrote: »

given the market conditions, it will be much shorter-lived than the one in 2009.

In Dublin the condition was prices already falling before Covid-19...?

Ozark707

Zenify wrote: »

In Dublin the condition was prices already falling before Covid-19...?

Exactly! Amazing the amount of posters on here who are unaware of that.

Rainmann

Zenify wrote: »

In Dublin the condition was prices already falling before Covid-19...?

Prices were stabilizing, increasing still in many areas of Dublin. A massive shortage of residential property.

Jjohnrockk

Rainmann wrote: »

Prices were stabilizing, increasing still in many areas of Dublin. A massive shortage of residential property.

I have not seen an increase in short run. Please do share an example. Will be interesting.

Jjohnrockk

Ozark707 wrote: »

Exactly! Amazing the amount of posters on here who are unaware of that.

Agree. Also prices are super inflated. People should raise a voice. Strange a city with no metro, poor transport, expensive utilities and highest taxes, rents and houses are so damn expensive.

Snow Garden

Rainmann wrote: »

This makes a lot of sense, I had read something similar in another paper today. From a risk perspective, banks want to avoid a person going into negative equity then losing their job, then maybe the bank is stuck with a property worth less than the loan. I definitely agree that we are in for a drop in prices, I just think given the market conditions, it will be much shorter-lived than the one in 2009.

This economic depression will be way worse than 2008-2012. Way worse. Across the board, across the world. How are people not seeing this? There will be records levels of unemployment for several years.

Jjohnrockk

Snow Garden wrote: »

This economic depression will be way worse than 2008-2012. Way worse. Across the board, across the world. How are people not seeing this? There will be records levels of unemployment for several years.

All agree except for greedy LL. They will still demand 45 D notice.