Irish Property Market 2020 Part 2

PommieBast

JJJackal wrote: »

If the wage subsidy scheme is maintained, where will the distressed sellers come from who need to sell their properties, which is part of whats required to drive down price

Maybe when the tax bill demands start arriving?

JamesMason

Thierry12 wrote: »

By spring 2021 we will have treatments/vaccines in plentiful supply, a soft landing.

2024 if we are lucky

cubatahavana

quick question, as I do not know much about property markets. I'm looking to trade up from my apartment in the northside to a house (4 bed) in the southside. I'd rather a new build than a second hand house. Do people usually bid on new builds or are they supposed to go for the selling price only?

Looking at Carraig Bui and Auburn green next week. What do you guys think? 4 beds in three levels at around 660-700. Location seems pretty fine.

Cyrus

cubatahavana wrote: »

quick question, as I do not know much about property markets. I'm looking to trade up from my apartment in the northside to a house (4 bed) in the southside. I'd rather a new build than a second hand house. Do people usually bid on new builds or are they supposed to go for the selling price only?

Looking at Carraig Bui and Auburn green next week. What do you guys think? 4 beds in three levels at around 660-700. Location seems pretty fine.

You can absolutely negotiate, you may not be successful but it’s worth a go.

Are you familiar with the location of both of those developments ?

Also be ready for price differentials for the same house depending on aspect, location in the terrace (end or mid ) and garden size

Villa05

Sarn wrote:

However, there are still a lot of properties in good locations in the 400-600k bracket, which would still be affordable to those on good salaries, including FTBs (with or without very good deposits) and would be entry level houses in these good locations. It’s these properties where I would not imagine there to be that much of an impact.

Thierry12 wrote:

That's great news and smart, why people wan't housing market to crash, I don't know?

There is a big difference between wanting a crash and wanting a sustainable market
The state paying 1 billion in private rents and growing is unsustainable
A market where building is "only viable" if you are in the top 20% of earners in the country is not sustainable
Choking supply to maintain/raise prices is unsustainable

Continuation of current policy will guarantee a crash

cubatahavana

Cyrus wrote: »

Are you familiar with the location of both of those developments ?

Not very familiar. My wife lived in stillorgan in the past and knows it a little bit. They seem very decent neighborhoods.

I realized what you were saying regarding location, in some developments the difference can be up to 40k, which to me is madness.

guyfawkes5

schmittel wrote: »

Sunday Times reporting this morning that the wage subsidy scheme will be extended to spring 2021 and "could continue at a scaled down rate until 2022".

I think we can assume that employers are not going to look a gift horse in the mouth so they will avail of this wherever possible.

I wonder what sort of effect it might have on demand?

On the one hand it will cushion the shock and maintain some level of consumer confidence in the overall economy.

But on the other hand, if the banks stick to their guns, there will be a large cohort of buyers unable to get a mortgage until late 2022.

For employers to currently get this subsidy, they have to prove a significant drop in revenue to the government. While you're probably correct that this would have knock on effects for house buyers, the alternative is probably that a significant cohort of these people wouldn't have employment at all. I don't think there's any easy solution out of that.

It's kind of impressive how effective the subsidy has been at restoring confidence given the amount of posters on here whose mortgages have been held up by the subsidy seeing it as some kind of inconsequential accounting trick as opposed to something that very likely prevented large amounts of lay offs at their company. I completely sympathise with them as it's so tough to save and look for a house and then this is just one more unfair thing to throw on the pile, but it is something that is protecting them from something far worse and the banks are rightfully worried about it (as they should be).

Bass Reeves

schmittel wrote: »

Personally I don't think distressed sellers will have a big impact no matter what happens.

i.e people will sell if they want to or need to, but there are unlikely to be too many who are forced to.

I think this is the biggest difference between the two trains of taught on what will happen over the next few years. On one side you have a group of posters thinking we will enter a meltdown in house prices with a drop of 20+% and even hitting 50% drop in prices. Some even think this meltdown has started and will happen very fast

The second group thinks that because of lending curbs over the last few years that the market never entered bubble territory. Because of this any fall in prices will be sub 10%. These posters think that if the market falls much below this point that builders will stop building and supply will tighten.

landofthetree

Thierry12 wrote: »

That's great news and smart, why people wan't housing market to crash, I don't know?

By spring 2021 we will have treatments/vaccines in plentiful supply, a soft landing.

This may last for years or could be over by early 2021.

In the old thread I was mocked for saying it wouldn't end by Sep

hometruths

Bass Reeves wrote: »

I think this is the biggest difference between the two trains of taught on what will happen over the next few years. On one side you have a group of posters thinking we will enter a meltdown in house prices with a drop of 20+% and even hitting 50% drop in prices. Some even think this meltdown has started and will happen very fast

The second group thinks that because of lending curbs over the last few years that the market never entered bubble territory. Because of this any fall in prices will be sub 10%. These posters think that if the market falls much below this point that builders will stop building and supply will tighten.

I think the elephant in the room is what happens to Airbnb properties. On one of my first posts in the thread I said I thought if they are prevented from returning to STL market business as usual that would be the catalyst for market reactions that would lead to 20% drops.

To be honest I thought the new minister would go after these hard given his comments in opposition, but the early signs are that this was fighting talk, and he’s likely to do very little.

Ozark707

schmittel wrote: »

I think the elephant in the room is what happens to Airbnb properties. On one of my first posts in the thread I said I thought if they are prevented from returning to STL market business as usual that would be the catalyst for market reactions that would lead to 20% drops.

To be honest I thought the new minister would go after these hard given his comments in opposition, but the early signs are that this was fighting talk, and he’s likely to do very little.

Wasn't he quoted last week as saying he would be looking to buy up ex Airbnb's?

hometruths

Ozark707 wrote: »

Wasn't he quoted last week as saying he would be looking to buy up ex Airbnb's?

There was some talk of that - sounds like a disastrous plan fraught with problems. To be honest I think that any such scheme is because government fears enforcing a policy that will cause house price falls,

Bass Reeves

schmittel wrote: »

I think the elephant in the room is what happens to Airbnb properties. On one of my first posts in the thread I said I thought if they are prevented from returning to STL market business as usual that would be the catalyst for market reactions that would lead to 20% drops.

To be honest I thought the new minister would go after these hard given his comments in opposition, but the early signs are that this was fighting talk, and he’s likely to do very little.

I never take any notice of what politicians say in opposition. It easy to be against everything power limits options

Marius34

schmittel wrote: »

I think the elephant in the room is what happens to Airbnb properties. On one of my first posts in the thread I said I thought if they are prevented from returning to STL market business as usual that would be the catalyst for market reactions that would lead to 20% drops.

To be honest I thought the new minister would go after these hard given his comments in opposition, but the early signs are that this was fighting talk, and he’s likely to do very little.

Even in case of prevention of AirBnb business, what numbers could be expected to go for sale out of it. Any idea? And I would think not all of them would go on sale in one year, but instead over few years range, would it increase so much supplies annually to cause a major fall?

As well it may cause other issue on rentals in the future, for example Ireland has many contractors/freelancers who coming here for 6month/1year rolling contracts, and staying here for few days a week, normally choosing between Hotels/AirBnB/Long term rentals. In a year or two, they might start to travel again here, this may cause another issue on rentals, as there would be less options to choose from.

hometruths

Marius34 wrote: »

Even in case of prevention of AirBnb business, what numbers could be expected to go for sale out of it. Any idea? And I would think not all of them would go on sale in one year, but instead over few years range, would it increase so much supplies annually to cause a major fall?

As well it may cause other issue on rentals in the future, for example Ireland has many contractors/freelancers who coming here for 6month/1year rolling contracts, and staying here for few days a week, normally choosing between Hotels/AirBnB/Long term rentals. In a year or two, they might start to travel again here, this may cause another issue on rentals, as there would be less options to choose from.

No idea how many would come for sale. From memory there was something like 7000 entire unit airbnbs precovid in DUblin.

If airbnb was effectively outlawed you would imagine that most of them would gravitate towards either rental or sale market in reasonably quick time.

I believe there would be enough that hit the rental market in the near term to cause rents to fall meaningfully, which would precipitate sales prices falls.

On your second point there was a perfectly good functioning STL industry for exactly this segment pre airbnb - no reason that cannot be achieved again.

Lia_lia

We are thinking of putting on a deposit down on a new build in Cork. House ticks a lot of boxes for us. Currently renting but rent isn’t too bad. Just concerned that we are making a mistake if prices go down. Are we mad to buy at the moment?

guyfawkes5

Lia_lia wrote: »

We are thinking of putting on a deposit down on a new build in Cork. House ticks a lot of boxes for us. Currently renting but rent isn’t too bad. Just concerned that we are making a mistake if prices go down. Are we mad to buy at the moment?

No one will know for sure.

If prices fall enormously, but you are living and plan to live in the property for the long term, can afford the repayments, and your employment is not threatened by Covid-19, then it won't affect you.

Negative equity will only effect you if you wish to resell and move on in a shorter timeframe (maybe 5 or 10 years), or wish to remortgage your house.

mcsean2163

guyfawkes5 wrote: »

No one will know for sure.

If prices fall enormously, but you are living and plan to live in the property for the long term, can afford the repayments, and your employment is not threatened by Covid-19, then it won't affect you.

Negative equity will only effect you if you wish to resell and move on in a shorter timeframe (maybe 5 or 10 years), or wish to remortgage your house.

Your mortgage repayments will affect you for years to come, if you can save 30-40k on the asking, that's significant. Then again, what's your yearly rent and was the house price?

guyfawkes5

mcsean2163 wrote: »

Your mortgage repayments will affect you for years to come, if you can save 30-40k on the asking, that's significant. Then again, what's your yearly rent and was the house price?

Hypothetical mortgage payment amounts don't prevent you living in a property or your life plans that you set out beforehand, which is what I was talking about. Depending on their plans, they could be satisfied in life and slightly disappointed maybe they could have shaved off some of your monthly mortgage repayment, and the other is having their life plans completely halted for years and decades at a time by negative equity. I'm not saying they should not focus on prices at all, but they should figure out what's important to them and prioritise accordingly.

It is also never straightforward to think of saving tens of thousands on a singular house, as passing on that house (which is more than likely what betting on a big housing price fall this large would involve) means you are taking a big chance that you will not get something similar in the future even if you pay a comparatively better price.

Bass Reeves

mcsean2163 wrote: »

Your mortgage repayments will affect you for years to come, if you can save 30-40k on the asking, that's significant. Then again, what's your yearly rent and was the house price?

Repayments in 40k over 30 years is about 160/ months not insubstantial. However Cork has nowhere near the same level of house prices as Dublin.

Repayments on a 250k mortgage is 1150/ months. TBH with Lia question for to see the difference permutations we can ould have to know what level.of house price and mortgage they were contemplating. As well what rent they were paying now.

As well it's a new build they are buying if pric s fall new builds will slow or stop completely.

brisan

Cyrus wrote: »

Clear evidence of a decrease in asking prices yes but that’s irrelevant, as I’ve said 100 times there is one source of clear evidence , the ppr , until you start seeing double digit drops from that data source they aren’t actually happening .

Does the house in Killiney that sold for 1.2m at auction (200k over the amv) last week indicate prices are increasing 20%?

I think we all know AMV prices at auctions are there to attract bidders looking for a bargain
The more bidders the more likely the price will go above AMV

brisan

Cantstandsya wrote: »

I can't understand this conceit that when this ends (and it won't be soon and we have no idea when) things will just instantly rebound.

Will vanished business just magically reappear?

We are likely not even half way through this yet and a lot of business are on life support and will go under as soon as that is removed.

Of course I'm just a doom and gloom merchant because I think it's unlikely that we will have a vaccine for this disease in less than a year.

2 quotes from yesterday’s Independent
CEO of Datalex the hotel chain
There will be carnage out there

Head man at a MNC
Our landlord was looking to double our rent pre Covid.
I don’t think he will be as cocky now
If these lads can see what’s coming surely the rest of us can.

JimmyVik

guyfawkes5 wrote: »

Hypothetical mortgage payment amounts don't prevent you living in a property or your life plans that you set out beforehand, which is what I was talking about. Depending on their plans, they could be satisfied in life and slightly disappointed maybe they could have shaved off some of your monthly mortgage repayment, and the other is having their life plans completely halted for years and decades at a time by negative equity. I'm not saying they should not focus on prices at all, but they should figure out what's important to them and prioritise accordingly.

It is also never straightforward to think of saving tens of thousands on a singular house, as passing on that house (which is more than likely what betting on a big housing price fall this large would involve) means you are taking a big chance that you will not get something similar in the future even if you pay a comparatively better price.

Ive said this before and i'll say it again.
I wish now in 2020 that I had bought a house just before the great crash in 2007. Even if id bought at the peak price, I would be sitting here now with half the mortgage paid off. Instead I rented and I still havent bought a house.

fliball123

Iceman29 wrote: »

I fully get the whole asking price means nothing argument but i have provided facts on houses that have been sold for less than asking price and less than houses on the same road that sold relatively recently.

I really cant get why the usual suspects are having such a hard time seeing what is starting to happen out there. its very strange behaviour really. They must be really open to lose a lot when this really hits or either their estate agents trying to prop it up as best as they can. Either way the fact that they're so tunnel focused is quiet funny.

But Iceman it has been pointed out that if you look you will also see the opposite some houses were at x, then gone up to x + y and sold for x + y + z

JimmyVik

fliball123 wrote: »

But Iceman it has been pointed out that if you look you will also see the opposite some houses were at x, then gone up to x + y and sold for x + y + z

Its amazing how many people dont understand the disconnect between asking prices and actual sale prices. It just does not compute in their brains.

fliball123

JimmyVik wrote: »

Its amazing how many people dont understand the disconnect between asking prices and actual sale prices. It just does not compute in their brains.

Ah I can understand what he is saying there are properties selling for the drop he is saying but he is completely ignoring the fact that some properties are doing the opposite

smurgen

JimmyVik wrote: »

Ive said this before and i'll say it again.
I wish now in 2020 that I had bought a house just before the great crash in 2007. Even if id bought at the peak price, I would be sitting here now with half the mortgage paid off. Instead I rented and I still havent bought a house.

And if you bought in 2009 you'd probably have 3/4 of the mortgage paid off or more.

alias no.9

smurgen wrote: »

And if you bought in 2009 you'd probably have 3/4 of the mortgage paid off or more.

I think that's their whole point, when the goal is to buy a home, even when you time the market as badly as you possibly can, doing nothing can sometimes be even worse.

All a person can do is deal with their own circumstances, look dispassionately at what they can buy and how they can finance it over a reasonably long outlook, once the contract is signed, its all about the monthly payments.

The apparent prescience of people who appear to have timed the market correctly does not reveal itself until after the fact, so it's not prescience at all, it's just luck, despite what they might try and tell you.

The only thing that marks the people who apparently get the market timing right from the rest of the world is that they probably weren't trying to time the market because the bottom can only be determined by looking back and even in 2013/14 people were still talking about dead cat bounces so the smartest guys timing the market were still holding off.

JimmyVik

smurgen wrote: »

And if you bought in 2009 you'd probably have 3/4 of the mortgage paid off or more.

whooosh
tbh if I knew what you knew Id have bought 5 houses in 2009 and have sold them all last January.

Bass Reeves

smurgen wrote: »

And if you bought in 2009 you'd probably have 3/4 of the mortgage paid off or more.

The fall in price between 2008 and 2009 was about 10% mainly as builders held there prices. 10% would have been about it if I remember right. But the issue was banks stopped lending so nobody could get a loan and lending multiples tightened and interest rates mainly trackers increased, as it continued into 2010 jobs disappeared and lending criteria tightened again.

I have a nephew that bought in 2006/7 he got the last of the 0.75% EU trackers. While he suffered a bit from 2009-2012 now he paying less than 0 75% interest on his loan. The difference between that rate and 2.9% on a 250k loan over 25years is over 200/month at present.

As he says he suffered from 2009-12 but since that he has outperformed the fixed and variable rates. Since 2016 the savings have been substantial

At the end of the day he thinks he be not much better or worse off buying in 2006/7 compared to buying in 2011. By 2011 he and his wife were expecting there third child.