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Irish Property Market 2020 Part 2
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Well that's enough of boards for a while. I made my prediction that prices will drop at least 10% by Oct 2021 and have a reminder on my phone, i'll log back in then and feast on the crash deniers tears.
I wish everyone the best in their property hunting endeavors.
HDL signing out.0 -
Apartment rentals are taking a huge hit worldwide and it's pretty predictable their prices would fall, but the reason for all that is people have realised how awful living in a small apartment really is and they want out of that and into houses with room; and out of cities alltogether in many cases.
This exodus is sustaining prices of houses, and leading to increases if anything, due to supply constraints.
Buyers market for apartments and sellers market for houses.
I think this makes sense. But with rental prices falling doesn’t that also present an opportunity for people in house shares to go for 1 beds etc? Thai gives them more space than a house/apt meant share?0 -
HotDudeLife wrote: »Well that's enough of boards for a while. I made my prediction that prices will drop at least 10% by Oct 2021 and have a reminder on my phone, i'll log back in then and feast on the crash deniers tears.
I wish everyone the best in their property hunting endeavors.
HDL signing out.
I know that you're gone an' all'n anyways.... If property has risen in some areas by almost 10% in the past few months... And you predict a 10% drop by exactly October 2021... We'll, isn't that just stagnation?
I'm not predicting anything, I couldn't give a ****, but my observation is that new buyers want prices to drop, and home owner want them to rise... Neither has any clue what will happen. Even the best paid economists don't have a clue.0 -
Green Mile wrote: »I wouldn’t be that certain of a drop in price. This recession isn’t a banking crises like the last one. Negative interest rates means banks want to lend, it’s cheaper than holding money and there’s more people who are not affected by covid in terms of their finances compared to those who are.
Yes true current house price increases have slowed down, they may even drop like you say but to 20% or more?
I don't know where this illusion of less people have been affected this time around comes from....this is so much worse than 08 and we are nowhere near it from being over (8 months already) where as 08 lasted 18months....
In 08 the big hits on jobs were mainly in construction (one sector). All my mates in banks and finance were grand. This time, nobody is escaping it. Large MNC seem to be doing ok but that money isn't staying here or at least the normal joe soap aren't really seeing it anyway, In fact in 08 nearly everyone i knew was working.....this time around it's not as pretty.
that's my observation anyway.0 -
thefridge2006 wrote: »I don't know where this illusion of less people have been affected this time around comes from....this is so much worse than 08 and we are nowhere near it from being over (8 months already) where as 08 lasted 18months....
In 08 the big hits on jobs were mainly in construction (one sector). All my mates in banks and finance were grand. This time, nobody is escaping it. Large MNC seem to be doing ok but that money isn't staying here or at least the normal joe soap aren't really seeing it anyway, In fact in 08 nearly everyone i knew was working.....this time around it's not as pretty.
that's my observation anyway.
The difference is in property ownership, leveraged lending and equity.
The property landscape is very different now compared with 2008.0 -
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The difference is in property ownership, leveraged lending and equity.
The property landscape is very different now compared with 2008.
Not really,most need credit to buy, just like 08... that's drying up as the days go by. just this week another 200000 people are back on PUP.
unless your job is extremely safe I wouldn't be encouraging buying in a million years. nobody knows what's coming down the tracks for this country and that's not evening thinking of brexit.
all the happy people signing up for the "dream home" at near peak of the market, then bang, no job, no sign of a job and no sign of Covid going away........ what do you do then?0 -
thefridge2006 wrote: »I don't know where this illusion of less people have been affected this time around comes from....this is so much worse than 08 and we are nowhere near it from being over (8 months already) where as 08 lasted 18months....
In 08 the big hits on jobs were mainly in construction (one sector). All my mates in banks and finance were grand. This time, nobody is escaping it. Large MNC seem to be doing ok but that money isn't staying here or at least the normal joe soap aren't really seeing it anyway, In fact in 08 nearly everyone i knew was working.....this time around it's not as pretty.
that's my observation anyway.
A lot sweeping generalisations there. Just because afew buddies in banking didn’t lose their jobs in 08 doesnt mean that banking was massively hit. There were literally 10s of thousands of people left jobless in banking alone in 08. Ask anyone workin Anglo, National Irish and huge number of people who had to redundancy in AIB or BOI that banking wasn’t impacted.
You say no one is escaping losing jobs hit now ? There are hundreds of thousands people working continuously all through this pandemic many of whom actually saving more than ever working from home. I don’t know a single person working in a multi-national or a bank that has lost their job this year but that’s not to say people in other industries are having It very rough.
Cork market is extremely competitive here so clear a lot of people don’t share the doom and gloom don’t buy sentiment.0 -
Until demand dies nothing is going to change ! Right now demand is what is keeping the market stable....Supply is never going to improve !
How can demand decrease ?
1) Job lossed and mass emigration like 2010 - Dont know where people will go as covid is a different ball game
2) Worldwide depression resulting in ppl losing jobs etc - We are possibly in one, but until gov keep giving out doles bailouts etc nothing is going to change
A big trigger can only change things in next one year ! Until then i dont see any major drops in prices !0 -
thefridge2006 wrote: »I don't know where this illusion of less people have been affected this time around comes from....this is so much worse than 08 and we are nowhere near it from being over (8 months already) where as 08 lasted 18months....
In 08 the big hits on jobs were mainly in construction (one sector). All my mates in banks and finance were grand. This time, nobody is escaping it. Large MNC seem to be doing ok but that money isn't staying here or at least the normal joe soap aren't really seeing it anyway, In fact in 08 nearly everyone i knew was working.....this time around it's not as pretty.
that's my observation anyway.
World wide credit crunch- tightening in 2008 , no such issue this time, plenty of liquidity0 -
HotDudeLife wrote: »Well that's enough of boards for a while. I made my prediction that prices will drop at least 10% by Oct 2021 and have a reminder on my phone, i'll log back in then and feast on the crash deniers tears.
I wish everyone the best in their property hunting endeavors.
HDL signing out.
1) The chances that property price will fall more than 10% in a year are Low.
2) The chances that HotDudeLife will NOT log back to remind about his forecast are High.0 -
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thefridge2006 wrote: »I don't know where this illusion of less people have been affected this time around comes from....this is so much worse than 08 and we are nowhere near it from being over (8 months already) where as 08 lasted 18months....
In 08 the big hits on jobs were mainly in construction (one sector). All my mates in banks and finance were grand. This time, nobody is escaping it. Large MNC seem to be doing ok but that money isn't staying here or at least the normal joe soap aren't really seeing it anyway, In fact in 08 nearly everyone i knew was working.....this time around it's not as pretty.
that's my observation anyway.
You are either badly informed or just scare mongering.
I'm not sure where the illusion that everyone is affected is coming from.
Literally nobody in my own socio economic circle has been impacted (luckily). They are still working away, just without the commute. They have more money in the bank nowadays. Some, in sectors like pharma have successfully changed jobs during all this with a pay rise.
Very close friends of ours have successfully applied for a mortgage, gone sale agreed and are at closing stage all since April, when we were in the absolute 'the property market is going to crash' phase of this.
I'm hanging around this forum now nearly two years and you start to notice the projections for a crash just get further and further away, back then it was Brexit, now it's covid.
As another poster said, housing is now more important than ever.
This is a different type of recession to 08.
What it'll mean for house prices I'm unsure, I would have expected 5-10% drop by now, and I predicted that back in Feb. Now, I'm not so sure anymore. All I can see are price increases, or properties we bid on six months ago appearing above asking on the register. I suspect this trend will continue for the foreseeable.0 -
World wide credit crunch- tightening in 2008 , no such issue this time, plenty of liquidity
Don't be so sure. Interesting article on CNBC today: 'Banks may have to brace for heavy losses as commercial property prices plunge'
"Could the coronavirus crisis lead, via the commercial property sector, to long-term problems for the banking and financial systems? … we think it is a genuine concern,” Slater wrote."
Link to CNBC article here: https://www.cnbc.com/2020/10/26/commercial-property-prices-are-a-risk-for-banks-and-bond-investors.html
While all the experts believe that our banks are better caitalised this time, remember, they didn't spot the last recession either. Plus, there is a lot that they don't know e.g. the shadow banks/investment funds. But the regulated banking sector is most likely exposed to these shadow banks by the back door.
On example in Ireland is Colony Capital. They were the successful joint bidders for the development of the Glass Bottle site from NAMA but have pulled out as they have quietly put most of their investments in Ireland up for sale.
Examples of their investments are the the new Salesforce and Facebook developments. Colony’s most significant assets include a 75 per cent stake in the Burlington Plaza office complex on Burlington Road and a 72 per cent share in the headquarters of Three Ireland on Sir John Rogerson’s Quay. Colony’s Irish portfolio also includes shares in a number of Dublin office buildings with U+I. Located mainly in Dublin 4, these include Donnybrook House, 23 Shelbourne Road and Carrisbrook House.
That's just one investor. The Sorting Office in Dublin also has to now find a new tenant after Google pulled out last month. That building alone could accommodate 2,000 workers. And these are only the big sellers we know about. There are probably many many others quietly looking for a way out at the moment.0 -
PropQueries wrote: »On example in Ireland is Colony Capital. They were the successful joint bidders for the development of the Glass Bottle site from NAMA but have pulled out as they have quietly put most of their investments in Ireland up for sale.
In May this year Colony Capital defaulted on $3.2 billion of debt in the US.
It's reasonable to think this is the main factor in the decision to divest Irish properties.0 -
People in here dont seem very rational. If we are heading into the biggest economic shock in modern history what makes people think that property will be the only unaffected market ? All markets are bubbles right now. Nothing makes sense including the property market.0
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In May this year Colony Capital defaulted on $3.2 billion of debt in the US.
It's reasonable to think this is the main factor in the decision to divest Irish properties.
But isn't that the definition of a 'forced sale' that many here have being saying is different this time i.e. prices can't drop much as there will be little forced sales to force a drop in values?
Another group selling are the pension funds e.g. Aviva and Zurich in Ireland blocked redemptions from their commercial property funds back in January (pre-covid) and are now selling several office buildings in Dublin in order to meet these redemption requests. These are only a few we know about.
So, the big investors are selling. The pension funds are selling. Who will buy them?0 -
Again, it's all conjecture. I don't have the answers, but:PropQueries wrote: »Don't be so sure. Interesting article on CNBC today: 'Banks may have to brace for heavy losses as commercial property prices plunge'
"Could the coronavirus crisis lead, via the commercial property sector, to long-term problems for the banking and financial systems? … we think it is a genuine concern,” Slater wrote."
Link to CNBC article here: https://www.cnbc.com/2020/10/26/commercial-property-prices-are-a-risk-for-banks-and-bond-investors.html
While all the experts believe that our banks are better caitalised this time, remember, they didn't spot the last recession either. Plus, there is a lot that they don't know e.g. the shadow banks/investment funds. But the regulated banking sector is most likely exposed to these shadow banks by the back door.
On example in Ireland is Colony Capital. They were the successful joint bidders for the development of the Glass Bottle site from NAMA but have pulled out as they have quietly put most of their investments in Ireland up for sale.
Examples of their investments are the the new Salesforce and Facebook developments. Colony’s most significant assets include a 75 per cent stake in the Burlington Plaza office complex on Burlington Road and a 72 per cent share in the headquarters of Three Ireland on Sir John Rogerson’s Quay. Colony’s Irish portfolio also includes shares in a number of Dublin office buildings with U+I. Located mainly in Dublin 4, these include Donnybrook House, 23 Shelbourne Road and Carrisbrook House.
That's just one investor. The Sorting Office in Dublin also has to now find a new tenant after Google pulled out last month. That building alone could accommodate 2,000 workers. And these are only the big sellers we know about. There are probably many many others quietly looking for a way out at the moment.
If large investors are getting out & have put large housing projects on hold... Then there is further constraint on the already under serviced housing market... What does that do to house prices?
Prices may decrease, but there's always a massive hope from new buyers that a crash will happen and they'll get massive bargains... They almost will it to happen.
Even in the last recession, the only people I knew who cashed in were people who had loads of spare cash.
There's lots of hearsay about people who got amazing houses at knockdown prices, but I always ask myself where those houses were located, what the condition was like and whether those people had exceptional financial leverage.0 -
Again, it's all conjecture. I don't have the answers, but:
If large investors are getting out & have put large housing projects on hold... Then there is further constraint on the already under serviced housing market... What does that do to house prices?
Prices may decrease, but there's always a massive hope from new buyers that a crash will happen and they'll get massive bargains... They almost will it to happen.
Even in the last recession, the only people I knew who cashed in were people who had loads of spare cash.
There's lots of hearsay about people who got amazing houses at knockdown prices, but I always ask myself where those houses were located, what the condition was like and whether those people had exceptional financial leverage.
Define 'conjecture' - an opinion or conclusion formed on the basis of incomplete information.
Colony Capital is selling. The pension funds are selling. Google did pull out of the Sorting Office.0 -
PropQueries wrote: »But isn't that the definition of a 'forced sale' that many here have being saying is different this time i.e. prices can't drop much as there will be little forced sales to force a drop in values?
As long as we have property investors, there will always be a subset who are distressed.
There's no sign there is going to be large scale offloading of commercial property this year so the effect on the Irish Property Market 2020 is likely to be negligible.0 -
PropQueries wrote: »Define 'conjecture' - an opinion or conclusion formed on the basis of incomplete information.
Colony Capital is selling. The pension funds are selling. Google did pull out of the Sorting Office.
Oh, okay. Thanks for clarifying...
But your view is still wholly one sided. If I were to speculate, I'd probable say that the market will drop, but that's just speculation...
One thing is for sure though... In the long term, prices will rise. If they don't, then we have more to worry about than the presumed value of a house.0 -
Oh, okay. Thanks for clarifying...
But your view is still wholly one sided. If I were to speculate, I'd probable say that the market will drop, but that's just speculation...
One thing is for sure though... In the long term, prices will rise. If they don't, then we have more to worry about than the presumed value of a house.
Prices have not risen in 15 years. Another 15 or 20 is entirely possible0 -
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As long as we have property investors, there will always be a subset who are distressed.
There's no sign there is going to be large scale offloading of commercial property this year so the effect on the Irish Property Market 2020 is likely to be negligible.
If the amount of office space that colony capital and the pension funds were trying to offload in Dublin was in New York or London, it would make the news given how significant it is. We're a much smaller city so if you believe that's not going to have an impact on commercial real estate values in Dublin, well, everyone is entitled to an opinion but I would disagree.
Another one that doesn't appear to making much news is Blackrock planning to offload the Blanchardstown Shopping Centre due to it no longer making commercial sense.
With all these office/retail space sellers lining up, it must have an impact on values. The investment funds are selling, the pension funds are selling. After the Sorting Office debacle, I though any asian funds will be that interested in our commercial real estate market for the foreseeable future. Many forced sellers with very few potential buyers means scary times ahead IMO.0 -
People in here dont seem very rational. If we are heading into the biggest economic shock in modern history what makes people think that property will be the only unaffected market ? All markets are bubbles right now. Nothing makes sense including the property market.
I see plenty of posters using soundbyes like "biggest shock in history" but we not heading into any recession as we are already in the middle of it now and house prices have stayed incredibly resilient as not all people are equally impacted.
When you have very large proportion of people continuing to work as normal through the pandemic arguably saving more now than before recession working from home. Demand appears to have stayed strong as saving capacity has not been negatively impacted.
With the government increasing the HTB scheme to 30k and developers slowing construction or stopping completely until uncertainty clears then supply remains considerably constrained. Plenty of rational reasons why some people feel prices wont drop anywhere near as some hoped or feared.0 -
PropQueries wrote: »If the amount of office space that colony capital and the pension funds were trying to offload in Dublin was in New York or London, it would make the news given how significant it is. We're a much smaller city so if you believe that's not going to have an impact on commercial real estate values in Dublin, well, everyone is entitled to an opinion but I would disagree.
Another one that doesn't appear to making much news is Blackrock planning to offload the Blanchardstown Shopping Centre due to it no longer making commercial sense.
With all these office/retail space sellers lining up, it must have an impact on values. The investment funds are selling, the pension funds are selling. After the Sorting Office debacle, I though any asian funds will be that interested in our commercial real estate market for the foreseeable future. Many forced sellers with very few potential buyers means scary times ahead IMO.
You realise pension funds etc buy and sell property all the time. It is driven by a multitude of factors including but not limited to shareholders, current debt levels, and future opportunities in addition to the potential price drops. You realise shopping centres change hands.0 -
I see plenty of posters using soundbyes like "biggest shock in history" but we not heading into any recession as we are already in the middle of it now and house prices have stayed incredibly resilient as not all people are equally impacted.
When you have very large proportion of people continuing to work as normal through the pandemic arguably saving more now than before recession working from home. Demand appears to have stayed strong as saving capacity has not been negatively impacted.
With the government increasing the HTB scheme to 30k and developers slowing construction or stopping completely until uncertainty clears then supply remains considerably constrained. Plenty of rational reasons why some people feel prices wont drop anywhere near as some hoped or feared.
It's a house of cards. Paying people to sit at home and shut their businesses . This cant go on and it wont. Entire sectors will never recover. Hospitality travel and entertainment employment has been wiped out. Anyone thinking property will remain at boom time prices is delusional. It simply cant happen.0 -
PropQueries wrote: »Don't be so sure. Interesting article on CNBC today: 'Banks may have to brace for heavy losses as commercial property prices plunge'
"Could the coronavirus crisis lead, via the commercial property sector, to long-term problems for the banking and financial systems? … we think it is a genuine concern,” Slater wrote."
Link to CNBC article here: https://www.cnbc.com/2020/10/26/commercial-property-prices-are-a-risk-for-banks-and-bond-investors.html
While all the experts believe that our banks are better caitalised this time, remember, they didn't spot the last recession either. Plus, there is a lot that they don't know e.g. the shadow banks/investment funds. But the regulated banking sector is most likely exposed to these shadow banks by the back door.
On example in Ireland is Colony Capital. They were the successful joint bidders for the development of the Glass Bottle site from NAMA but have pulled out as they have quietly put most of their investments in Ireland up for sale.
Examples of their investments are the the new Salesforce and Facebook developments. Colony’s most significant assets include a 75 per cent stake in the Burlington Plaza office complex on Burlington Road and a 72 per cent share in the headquarters of Three Ireland on Sir John Rogerson’s Quay. Colony’s Irish portfolio also includes shares in a number of Dublin office buildings with U+I. Located mainly in Dublin 4, these include Donnybrook House, 23 Shelbourne Road and Carrisbrook House.
That's just one investor. The Sorting Office in Dublin also has to now find a new tenant after Google pulled out last month. That building alone could accommodate 2,000 workers. And these are only the big sellers we know about. There are probably many many others quietly looking for a way out at the moment.
I'm more referring to central bank policy and approach this time round0 -
It's a house of cards. Paying people to sit at home and shut their businesses . This cant go on and it wont. Entire sectors will never recover. Hospitality travel and entertainment employment has been wiped out. Anyone thinking property will remain at boom time prices is delusional. It simply cant happen.
I reckon you're right, the government is buying over 40% of all the new builds, through various charities, housing associations etc etc.
Huge numbers of people are going to need the government to pay the rent for the foreseeable.
We're the 3rd most indebted developed country in the world iirc.
It won't be long before the lads lending us all the billions for this start charging us more interest imo. Surely that 40% figure will drop like a stone.0 -
You realise pension funds etc buy and sell property all the time. It is driven by a multitude of factors including but not limited to shareholders, current debt levels, and future opportunities in addition to the potential price drops. You realise shopping centres change hands.
Except that the investors and pension funds now selling in.dublin are forced sellers:
Colony capital: https://www.irishtimes.com/business/commercial-property/colony-capital-seeks-buyer-for-stakes-in-prime-dublin-offices-1.4257498?mode=amp
Pension funds: https://www.irishtimes.com/business/commercial-property/aviva-stops-investors-from-taking-money-out-of-irish-property-funds-1.4157574?mode=amp
Blackrock - Blanchardstown shopping centre: https://m.independent.ie/business/irish/blackstone-and-aib-in-standoff-over-blanchardstown-shopping-centre-debt-39463682.html0 -
PropQueries wrote: »Except that the investors and pension funds now selling in.dublin are forced sellers:
Colony capital: https://www.irishtimes.com/business/commercial-property/colony-capital-seeks-buyer-for-stakes-in-prime-dublin-offices-1.4257498?mode=amp
Pension funds: https://www.irishtimes.com/business/commercial-property/aviva-stops-investors-from-taking-money-out-of-irish-property-funds-1.4157574?mode=amp
Blackrock - Blanchardstown shopping centre: https://m.independent.ie/business/irish/blackstone-and-aib-in-standoff-over-blanchardstown-shopping-centre-debt-39463682.html
Colony - 3.7 billion debt default; it is forced to sell yes. It does not reflect the Irish market. The 3.7 billion of debt is not all in Irish assets - in fact I would say <20% is? Thus selling a nondistressed asset to pay for a distressed one
Pension funds - not selling assets - have a hold on people withdrawing money as is there right to prevent a fire sale of an asset to fund people withdrawing money. This does not reflect Aviva selling assets
Blackrock - looks like a bad investment alright - likely driven by Debenhams going to the wall - which it has been for many years; COVID tipping it over the edge. Businesses go bankrupt in good and bad times. Bad investments are made in good and bad times. Blackrock isnt selling - its defaulting and the banks are likely taking over. So not clear a sale is taking place? I could be wrong
I am unsure what point you are making here0 -
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Colony - 3.7 billion debt default; it is forced to sell yes. It does not reflect the Irish market. The 3.7 billion of debt is not all in Irish assets - in fact I would say <20% is? Thus selling a nondistressed asset to pay for a distressed one
Pension funds - not selling assets - have a hold on people withdrawing money as is there right to prevent a fire sale of an asset to fund people withdrawing money. This does not reflect Aviva selling assets
Blackrock - looks like a bad investment alright - likely driven by Debenhams going to the wall - which it has been for many years; COVID tipping it over the edge. Businesses go bankrupt in good and bad times. Bad investments are made in good and bad times. Blackrock isnt selling - its defaulting and the banks are likely taking over. So not clear a sale is taking place? I could be wrong
I am unsure what point you are making here
Maybe colony capital and blackrock are the only investment funds selling/getting out due to bad investments, possible but not probable.
Here’s some advertised real estate in Dublin that Aviva is selling to meet redemption requests:
Hibernian way: https://www.irishtimes.com/business/commercial-property/aviva-tests-strength-of-market-with-80m-sale-of-royal-hibernian-way-1.4343825?mode=amp
Elm Park : https://www.irishtimes.com/business/commercial-property/aviva-set-to-market-prime-headquarter-office-at-elmpark-green-for-28m-1.4205105?mode=amp
And it’s not just commercial real estate that’s being forced to sell. Many residential developers are also being ‘forced to rent‘ as nobody was buying their properties pre-Covid. Forced to rent is very similar to forced selling and is a temporary measure until they are indeed forced to sell.
Here’s one example pre-Covid: https://www.irishtimes.com/life-and-style/homes-and-property/plan-b-for-d4-boutique-apartments-as-buyers-become-renters-instead-1.4161644?mode=amp
Many other apartments in Dublin that were for sale are now being offered on the rental market and it’s not because renting offers a better return. They’re being forced to rent as there’s very few buyers.
This temporary backstop won’t last long as they’re still empty due to little rental demand. These will be the forced residential market sellers in the next few months.0
This discussion has been closed.
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