Irish Property Market 2020 Part 2

hometruths

beauf wrote: »

A buyers market generally means there are few buyers able to buy anything, regardless of price.

That sounds like complete and utter nonsense to me

Or maybe that's an Irish buyer's market where there's nothing to buy?!

Hubertj

A buyers market would also mean the buyer having better/more choice And affordability not being the sole determining factor?

beauf

schmittel wrote: »

That sounds like complete and utter nonsense to me

Or maybe that's an Irish buyer's market where there's nothing to buy?!

I didn't say there was nothing to buy. I said there less people able to buy.

Hubertj wrote: »

A buyers market would also mean the buyer having better/more choice And affordability not being the sole determining factor?

If you're able to buy. In a recession building output generally reduces, as less people are able to buy.

There was no one snapping up those Ghost estates.

hometruths

Hubertj wrote: »

A buyers market would also mean the buyer having better/more choice And affordability not being the sole determining factor?

In a buyers market there is less competition from other buyers and affordability is unlikely to be the most significant factor.

That would not necessarily translate into better choice. If by better you mean condition/location etc.

beauf

If there are less buyers, what is the most significant factor if not affordability.

hometruths

beauf wrote: »

If there are less buyers, what is the most significant factor if not affordability.

Perceived value I would think.

beauf

Its certainly worth trying that argument on a mortgage application.

brisan

beauf wrote: »

Why do you think there is no credit.

One of the issue is banks have changed their lending criteria, then are re-assessing people. But they are backlogged. So it has stopped people drawing down and even getting approval in the first place. The solicitors and valuers and assessors and even EA are not all working, or on holidays at the moment. So viewings stopped, building stopped, competitions stopped.

Not there won't be a recession there obviously will be. But is there enough demand for the supply that is available. That is a more nuanced question. I know people who have gone mortgage approved recently, and the thread here people were delayed in drawing down.

Lots of facets to this.

There was a Government report issued over the weekend which forecast the effect the pandemic would have on all major players in the Irish economy.
With one or two exceptions it forecast that they will all take a major hit and lose employment.
Even the food sector was hit ( which surprised me as that's the sector I work in and we are busier than normal )
So I would assume the banks have read these reports and have their own economists and data to crunch the numbers with.
They know whats coming and I cannot see mortgage approvals and draw downs getting to anywhere last years figures till at least 2022.
Weather supply dries up to match is anybody's guess

brisan

schmittel wrote: »

I don't have any stats to hand but I don't need them to consider the point I am trying to get at;

• FTBs are a critical demand component of the market.
• People believe that FTB demand is drawn from approx 50% of the adult population.
• The reality is that FTB demand is drawn from only 30% of the population.

Thus it is possible that if people are overestimating the size of the current potential pool of buyers then maybe people are overestimating the current levels of demand.

Developers rising levels of unsold stock would also suggest so.

https://www.bpfi.ie/wp-content/uploads/2020/07/BPFI-Mortgage-Approvals-Report-Jun-2020-for-web.pdf

Figures are here for 2020 so far
I reckon roughly 50% of all new mortgages are FTB
You have to add cash buyers to the equation.

Cyrus

Pelezico wrote: »

Now where did you get number of sales of 43k between Jan and May 2020? More like 17k

https://www.google.co.uk/amp/s/www.irishtimes.com/business/economy/property-price-growth-slows-in-may-as-transactions-plunge-1.4305091%3fmode=amp

Pelezico

Cyrus wrote: »

https://www.google.co.uk/amp/s/www.irishtimes.com/business/economy/property-price-growth-slows-in-may-as-transactions-plunge-1.4305091%3fmode=amp

Ddont believe what you read in the paper. It is wrong. The residential property register has the right numbers.

Bass Reeves

schmittel wrote: »

In a buyers market there is less competition from other buyers and affordability is unlikely to be the most significant factor.

That would not necessarily translate into better choice. If by better you mean condition/location etc.

I think many fail to understand this. Even if it becomes a buyer's market choice will be a big issue. Last time many of the properties that fell the most were ex rentals, apartments and repossessions. None of these were turnkey.

Builders stopped building and as they went bankrupt banks repossessed the sites and houses whatever stage of completion. Nama took these over and it was a 4-5 years process before selling started.

Some here are suggesting anecdotally that building may have started to slow down as developers are ceasing groundworks. I imagine commercial buildings has stopped or slowed considerably.

If this is true what will it mean. First we will see no glut of completed it semi completed houses this time. Because of this supply will reduce. Building costs may reduce but this only effects direct building costs and site costs. Leavies, fees, professional costs, finance costs will remain the same. However this may take 12-24 months to translate into costs on the ground. As well other costs may increase. Suppliers and contractors may insist on faster payment to avoid risk if default. Thus in turn may increase cist or slowdown completions further.

For instance if ground work is slowing down is it developers ceasing or having to cease as credit lines tighten.

Vikings

Pelezico wrote: »

Ddont believe what you read in the paper. It is wrong. The residential property register has the right numbers.

You have been proven wrong on this very point before. Very recently.

PropQueries

Given that AirBnB has been effectively banned in Dublin and that few appear to have applied for planning permission to continue, I was wondering what people believe rents and house prices in Co. Dublin would be today if AirBnB (or similar) never existed.

I suppose I'm trying to figure out what the real impact of AirBnB has been on both rents and house prices in Dublin and what it's ban really means for both of these going forward by working backwards.

beauf

Its from the CSO.

https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexjune2020/additionalindicators/

Pelezico wrote: »

Ddont believe what you read in the paper. It is wrong. The residential property register has the right numbers.

Also from the CSO

Because the RPPI is based on Revenue stamp duty returns, which have a 44 day submission deadline. To account for this fact and also for late filings, the RPPI for the latest three months is provisional and subject to revision. ....

beauf

schmittel wrote: »

OK fine, what do you think is the strongest driver of current demand? For example personally I think it is starter homes for FTBs.

More info on the CSO about that.

In the year to May, 43,127 household dwelling purchases were filed with Revenue. Of these, 13,991 (32.4%) were purchases by first time buyer owner-occupiers, while former owner-occupiers purchased 22,842 (53.0%). The balance of 6,294 (14.6%) were acquired by non-occupiers (see Figure 2.2).

Revenue data shows that there were 612 first-time buyer purchases in May 2020, a decrease of 48.0% on the 1,177 recorded in May 2019. These purchases were made up of 119 new dwellings and 493 existing dwellings.

There's a pretty chart too...

https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexmay2020/additionalindicators/

MacronvFrugals

Staggering unemployment levels for Q2 - 23%

https://www.irishtimes.com/business/economy/unemployment-exceeded-23-in-second-quarter-cso-figures-show-1.4338390

beauf

Bass Reeves wrote: »

I think many fail to understand this. Even if it becomes a buyer's market choice will be a big issue. Last time many of the properties that fell the most were ex rentals, apartments and repossessions. None of these were turnkey.

Builders stopped building and as they went bankrupt banks repossessed the sites and houses whatever stage of completion. Nama took these over and it was a 4-5 years process before selling started.

Some here are suggesting anecdotally that building may have started to slow down as developers are ceasing groundworks. I imagine commercial buildings has stopped or slowed considerably.

If this is true what will it mean. First we will see no glut of completed it semi completed houses this time. Because of this supply will reduce. Building costs may reduce but this only effects direct building costs and site costs. Leavies, fees, professional costs, finance costs will remain the same. However this may take 12-24 months to translate into costs on the ground. As well other costs may increase. Suppliers and contractors may insist on faster payment to avoid risk if default. Thus in turn may increase cist or slowdown completions further.

For instance if ground work is slowing down is it developers ceasing or having to cease as credit lines tighten.

This time, they also stopped because they weren't allowed on site during the lockdown. Then have gone back with social distancing. Groundworks are less effected by that. Even where they've gone back the suppliers may not have gone back and may have reduced output for some time.

beauf

MacronvFrugals wrote: »

Staggering unemployment levels for Q2 - 23%

https://www.irishtimes.com/business/economy/unemployment-exceeded-23-in-second-quarter-cso-figures-show-1.4338390

You'd have to see how much of is temporary. How much will crystallize into long term.

Greyian

beauf wrote: »

Its from the CSO.

https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexjune2020/additionalindicators/



Also from the CSO

It's quite funny that your own source discredits you.

You said there were "From Jan to May 2020 there were 43,127 property purchases"

The figures from the CSO source you've linked show total sales between January 2020 and May 2020 of 14560 units

Month|Existing|New|Total
Jan|2923|768|3691
Feb|2519|464|2983
Mar|2940|658|3598
Apr|1914|437|2351
May|1701|236|1937
Jan -> May|11997|2563|14560


There is a figure of 42004 mentioned on that page, but it is for the 12 months between July 2019 and June 2020, which is quite different that January 2020 to May 2020

Greyian

beauf wrote: »

More info on the CSO about that.



There's a pretty chart too...

https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexmay2020/additionalindicators/

See, again, "year to May" doesn't mean January to May, it means June last year to May this year.

Greyian

brisan wrote: »

https://www.bpfi.ie/wp-content/uploads/2020/07/BPFI-Mortgage-Approvals-Report-Jun-2020-for-web.pdf

Figures are here for 2020 so far
I reckon roughly 50% of all new mortgages are FTB
You have to add cash buyers to the equation.

The figure of 43127 is a misrepresentation in that article.
That figure is for the 12 months from June 2019 to May 2020, not for the first five months of the year, as per the CSO.

PropQueries

Wouldn't first-time buyers be the only true real source of demand for additional new built stock?

I'd assume most second time buyers are trading up and if they make a purchase, their old home would then re-enter the market either through renting or selling. Cash buyer investors would have a similar impact on supply.

I'd also assume many first time buyers were renting prior to making a purchase so if they do buy, that means the property they were previously renting also re-enters the market.

Same with many on the council housing lists i.e. most are renting a home already so if the council does provide a new built home for them, that frees up their previously rented property to add to the rental market.

So, what's the true real demand for additional new built housing units?

beauf

Greyian wrote: »

It's quite funny that your own source discredits you.

You said there were "From Jan to May 2020 there were 43,127 property purchases"

The figures from the CSO source you've linked show total sales between January 2020 and May 2020 of 14560 units

Month|Existing|New|Total
Jan|2923|768|3691
Feb|2519|464|2983
Mar|2940|658|3598
Apr|1914|437|2351
May|1701|236|1937
Jan -> May|11997|2563|14560


There is a figure of 42004 mentioned on that page, but it is for the 12 months between July 2019 and June 2020, which is quite different that January 2020 to May 2020

I didn't get the 43k from that, I only found that link this morning. I can't remember what paper it was, but it was not the IT as it behind a paywall for me.

Besides my point was that the market almost never actually stops. This was also in the context dismissing stats in general, when I asked for them, and that there still is some demand. It didn't disappear. Its also quite funny because I was the person bothered about looking up the actual source. Proves the point about not trusting what you read etc.

Greyian

beauf wrote: »

I didn't get the 43k from that, I only found that link this morning. I can't remember what paper it was, but it was not the IT as it behind a paywall for me.

Whatever paper it was, they got it wrong if they said there were 43k residential property purchases in the five months from January 2020 to May 2020.

Bubbaclaus

MacronvFrugals wrote: »

Staggering unemployment levels for Q2 - 23%

https://www.irishtimes.com/business/economy/unemployment-exceeded-23-in-second-quarter-cso-figures-show-1.4338390

Employment grew in Q2 for people with tertiary education, which would be where the vast majority of the demand in the housing market is.

cnocbui

beauf wrote: »

If there are less buyers, what is the most significant factor if not affordability.

Need.

Pelezico

Imagine quoting a newspaper for any statement of authority. January to May sales less than 16k.

MacronvFrugals

Pelezico wrote: »

Imagine quoting a newspaper for any statement of authority. January to May sales less than 16k.

The IT have proven many times to be unreliable when speaking about the property market.

1) They own myhome.ie

2) They regularly have Brian Lucey on who was peddling how healthy the sub prime market was back in 2005 - https://www.irishtimes.com/news/tcd-professor-admits-being-wrong-about-housing-bubble-1.794449

Vested interests between the Irish media and property market are blatantly apparent.

beauf

Pelezico wrote: »

Imagine quoting a newspaper for any statement of authority. January to May sales less than 16k.

Digging around CSO I get this. Maybe someone else can check?


Month Volume

Jan-18 3,583
Feb-18 3,102
Mar-18 3,157
Apr-18 3,170
May-18 3,543

16,555

Jan-19 3,599
Feb-19 3,007
Mar-19 3,195
Apr-19 3,306
May-19 3,598

16,705

Jan-20 3,691
Feb-20 2,983
Mar-20 3,598
Apr-20 2,351
May-20 1,937

14,560

I'm sure someone will point out the mistakes I've made this time.