Irish Property Market 2020 Part 2

Smouse156

fliball123 wrote: »

yeah but the last recession didnt have a steep upward curve before dropping. We are now 4/5 months into the corona virus and prices seem to be going up

The market as a whole is definitely not going up! Some places have low asking prices that create a lot of interest. Some are way overpriced and haven’t had offers for years. But as a whole it’s going down

mojesius

Based on our house hunting the past year (South Dublin/Wicklow), properties that are ready to go are selling like hot cakes. Properties that need a lot of work AND are of a similar price (give or take 50k) to recently renovated/newer builds aren't shifting. It seems that a lot aren't willing to drop prices either.

brisan

Mic 1972 wrote: »

Prices started to drop in 2008, are you saying that recession started 4 years earlier?


I remember things started to go downhill in 2007, not earlier than that

Crash in 2008 took 4 years for house prices to hit bottom

Bass Reeves

Assetbacked wrote: »

I'm not talking about the average worker, let's even take 60k as a salary, the price of renting a room is 34% of your after tax salary - I wouldn't consider 60k as a good salary in Dublin consequently. But the main point I had on this was the discrepancy between being able to buy your own 1 bed apartment in the docklands for the same price you rent a room in a shared apartment in the area.

60K salary is 806 take home nearly 42K annually. Spending 14250 to rent a room per year. Yes maybe a one bed apartment where he is competing with couples. I am from outside Dublin and most single lads sharing a house are paying around 600-700/room or 7.5-8K/year.

Ya if he wants his own place it costs extra. Biggest issue with purchasing and renting is that rents are as high as mortgages, however for most of my life it was like that. Maybe the restrictive tax and tenancy rules on smaller LL forces costs up. Reits are caught with higher costs. Smaller LL will either do a lot of repairs himself or will have more bargaining power with tradespeople. This has forced some LL to exit.

On affordability if this worker could access a 300K mortgage his repayments over 30 Years 2Y fixed is 1155/month, 5Y fixed is 1185/ month. 20 years carries it to over 1500 month which may be a bit steep.

But looking at a couple earning 45K each will be at 68.5k in take home income. Borrowing 420K for a 480K house will be paying a mortgage of 1600/month for a 30 year and 1850/month over 25 years which is 19.2K and 22.2K/year respectively. This is 28 and 33% of take home pay respectively. For a couple who in there career expect there wages to rise 4-5% over the next ten years it only a matter of trying to buy a decent house in a decent area.

Marius34

brisan wrote: »

Crash in 2008 took 4 years for house prices to hit bottom

In 2008 Ireland entered recession same time of the year as in 2020.
By this time (Q3) in 2008 properties were already selling 10% lower or so, including new builds.

brisan

Marius34 wrote: »

In 2008 Ireland entered recession same time of the year as in 2020.
By this time (Q3) in 2008 properties were already selling 10% lower or so, including new builds.

In 2008 the Government had not placed the economy on life support in Q3 plus there was an abundance of property on the market

Marius34

brisan wrote: »

In 2008 the Government had not placed the economy on life support in Q3 plus there was an abundance of property on the market

Yes, sure, that's why there are no much relation of 2008 crisis with current cirsis in the matter of property market. So last 4 years fall in property price, tells nothing to what will happen now.

brisan

Marius34 wrote: »

Yes, sure, that's why there are no much relation of 2008 crisis with current cirsis in the matter of property market. So last 4 years fall in property price, tells nothing to what will happen now.

Each recession is different correct.
i reckon the major factor in this recession regarding property will be the availibility of lack of credit.
The BPFI report on mortgage approvals over the next 3-6 months will be a telling factor

Marius34

brisan wrote: »

Each recession is different correct.
i reckon the major factor in this recession regarding property will be the availibility of lack of credit.
The BPFI report on mortgage approvals over the next 3-6 months will be a telling factor

Yes, BPFI mortgage approvals is an important factor. I do expect gradual increase in approvals from May low point, but not reaching the level of 2019. Although I don't see major issue on lack of credits for Residential property mortgage anytime soon.

brisan

Marius34 wrote: »

Yes, BPFI mortgage approvals is an important factor. I do expect gradual increase in approvals from May low point, but not reaching the level of 2019. Although I don't see major issue on lack of credits for Residential property mortgage anytime soon.

There will be a percentage of the 800,000 who are on PUP or TWSS who are looking to get a mortgage
If the banks continue with their current policies then those people will be unable to draw down a mortgage even if they get AIP

Bass Reeves

brisan wrote: »

There will be a percentage of the 800,000 who are on PUP or TWSS who are looking to get a mortgage
If the banks continue with their current policies then those people will be unable to draw down a mortgage even if they get AIP

Revenue are expecting that PUP/TWSS will be greatly reduced by December. They expect to claw back a substantial amount of it. Already business's that are not effected are starting to pay it back or remove themselves from the system. Ya if you work in Ryanair or in a hotel, Pub or Resturant it will be hard to get a mortgage but a large amount of workers will be off the system by year end

Cantstandsya

Suppose it depends on whether you believe the economy is on life support or simply on pause.

Not sure what information revenue have about the future course of the pandemic. Seems like a projection based on nothing to me.

Bass Reeves wrote: »

Revenue are expecting that PUP/TWSS will be greatly reduced by December. They expect to claw back a substantial amount of it. Already business's that are not effected are starting to pay it back or remove themselves from the system. Ya if you work in Ryanair or in a hotel, Pub or Resturant it will be hard to get a mortgage but a large amount of workers will be off the system by year end

Cyrus

Cantstandsya wrote: »

Suppose it depends on whether you believe the economy is on life support or simply on pause.

Not sure what information revenue have about the future course of the pandemic. Seems like a projection based on nothing to me.

same as anyone else you would assume but they have to make some stab at what it will be like,

our 'relationship manager' from revenue called me a while back to get a feel for what prelim corporation tax we will be paying etc, they are trying to gather as much info as they can.

Cantstandsya

Of course they have to make a stab at it because they are obliged to produce their reports at certain intervals.

Doesn't mean there is any value in the contents of those reports. They haven't a clue where the pandemic will be in December and so, accordingly, haven't a clue where the economy will be either.

Even if the pandemic were gone by December (which no serious person believes) what do people honestly think will happen to the economy then? If a doctor pulls the plug on a patient's life support do they just hop out of the bed and return to life as normal?

Cyrus wrote: »

same as anyone else you would assume but they have to make some stab at what it will be like,

our 'relationship manager' from revenue called me a while back to get a feel for what prelim corporation tax we will be paying etc, they are trying to gather as much info as they can.

SozBbz

Cantstandsya wrote: »

Suppose it depends on whether you believe the economy is on life support or simply on pause.

Not sure what information revenue have about the future course of the pandemic. Seems like a projection based on nothing to me.

Personally, while I'll happily admit that this is worse than I originally thought (worse than many thought I'd venture), I still am cautiously optimistic.

I think while we have to live alongside this virus, it does seem like that have been some small wins in terms of doctors better understanding how to treat the illness and reduce time spent in ICU for the most critical cases, and ultimately reducing the death rate. At the start, we knew nothing and were therefore getting hit extremely hard, but if we can keep it to a level that hospitals can cope with, just for a few more months, then we'll be able to operate more normally.

In tandem, the likes of Professor Luke O'Neill seems cautiously optimistic about the progress in the race for a vaccine. Once its proven, it will be rolled out to the most at risk, health workers, those working with the public etc and as there are gradually fewer and fewer potential hosts for the virus in the population, it will start to be stamped out. I've heard that they hope to know whether the Oxford vaccine works and is safe (I think they already know this) by the end of the year and then the challenge becomes rolling it out as widely as needed quickly enough.

I think the world will never be exactly the same, for example we will continue to see more remote work, but equally I don't think all our preferences will have changed - I know personally I can't wait to go on holiday once its safe to do so, so I do think there will be demand for hospitality jobs again in time.

Cyrus

Cantstandsya wrote: »

If a doctor pulls the plug on a patient's life support do they just hop out of the bed and return to life as normal?

that would be a miracle, you would assume that patient would die

Cantstandsya

I'd love to be able to go for a drink with friends after work, go to the cinema and watch a new release or go to a bookshop and casually browse without knowing what I'm looking for. I have family and friends abroad who I was hoping to see this year who I now can't.

The thing is though, I know a lot of people who are genuinely terrified of doing any of those things and wouldn't even consider doing them, even though some form of a couple of them are now permitted.

The only thing that might return people to normal is a vaccine that everyone has taken. How long before we have that? Does anyone seriously think December? I'll be stunned if a vaccine is found and tested by December and it would be an absolute miracle if it were found, tested, produced and distributed by December.

I honestly haven't a clue what the economy is going to do going forward but I think it's reasonable to assume it's not going to be good.

SozBbz wrote: »

Personally, while I'll happily admit that this is worse than I originally thought (worse than many thought I'd venture), I still am cautiously optimistic.

I think while we have to live alongside this virus, it does seem like that have been some small wins in terms of doctors better understanding how to treat the illness and reduce time spent in ICU for the most critical cases, and ultimately reducing the death rate. At the start, we knew nothing and were therefore getting hit extremely hard, but if we can keep it to a level that hospitals can cope with, just for a few more months, then we'll be able to operate more normally.

In tandem, the likes of Professor Luke O'Neill seems cautiously optimistic about the progress in the race for a vaccine. Once its proven, it will be rolled out to the most at risk, health workers, those working with the public etc and as there are gradually fewer and fewer potential hosts for the virus in the population, it will start to be stamped out. I've heard that they hope to know whether the Oxford vaccine works and is safe (I think they already know this) by the end of the year and then the challenge becomes rolling it out as widely as needed quickly enough.

I think the world will never be exactly the same, for example we will continue to see more remote work, but equally I don't think all our preferences will have changed - I know personally I can't wait to go on holiday once its safe to do so, so I do think there will be demand for hospitality jobs again in time.

SozBbz

Cantstandsya wrote: »

I'd love to be able to go for a drink with friends after work, go to the cinema and watch a new release or go to a bookshop and casually browse without knowing what I'm looking for. I have family and friends abroad who I was hoping to see this year who I now can't.

The thing is though, I know a lot of people who are genuinely terrified of doing any of those things and wouldn't even consider doing them, even though some form of a couple of them are now permitted.

The only thing that might return people to normal is a vaccine that everyone has taken. How long before we have that? Does anyone seriously think December? I'll be stunned if a vaccine is found and tested by December and it would be an absolute miracle if it were found, tested, produced and distributed by December.

I honestly haven't a clue what the economy is going to do going forward but I think it's reasonable to assume it's not going to be good.

No, to clarify, they hope to know if its the right vaccine - ie both safe and effective by December best case. They're doing Phase 3 testing currently, which is testing it on tens of thousands of people for efficacy and they're doing this in countries where the virus is circulating widely like Brazil and South Africa. There is no way that it will be mass produced by December.

It will be a gradual process then to mass produce it and roll it out, but Luke O'Neill did say that once the first groups are vaccinated (elderly/vulnerable/healthcare staff) that that will have a real and meaningful impact. In fact, he said, once we get to 50-60% of the population is vaccinated, then the virus will really struggle to circulate and the R rate will drop dramatically.

I'm personally not that afraid of the virus and am trying to return to normal where possible, whilst still being responsible. I've been out for meals etc and would go to the cinema. I'm making a conscious effort to buy things physically in store and from Irish owned businesses where possible rather than online so that my tax is at least going to the irish exchequer and the spend itself supports jobs in Ireland. Hope to go on a bit of a staycation later in August too. I think its important for those of us who are not high risk to try to behave as normally as possible (whilst not acting the gob****e) and support local businesses.

errlloyd

I think the media is resisting reporting job losses right now, probably for the good of the mental health of the nation.

LinkedIn will lay off quite a lot of Irish staff. I know a large multinational engineering firm with a significant Irish operation is about to do the same. I think we're at the beginning of the financial ramifications, not the end.

OwlsZat

Constantin Gurdgiev wrote:

Changing working and consumption patterns will hit commercial property badly, while the lack of purchasing power for first time buyers will dampen the residential market. I have picked my way through the data, and the leading indicators are not good.

Morgage approvals are likely one leading indicator. Probably falling rents, slowing sales volume, growing rental stock. I wonder what else.

awec

errlloyd wrote: »

I think the media is resisting reporting job losses right now, probably for the good of the mental health of the nation.

LinkedIn will lay off quite a lot of Irish staff. I know a large multinational engineering firm with a significant Irish operation is about to do the same. I think we're at the beginning of the financial ramifications, not the end.

Come on errlloyd, you don't really believe this right?

errlloyd

awec wrote: »

Come on errlloyd, you don't really believe this right?

It is probably poorly phrased on my part awec. It sounds like I think there is some strategy team in Belfield who pump propaganda to us, but I don't really. However, I do think the Irish media are less trigger happy reporting job losses than they used to be. I always believed the Irish media's obsession with reporting job losses was borderline voyeuristic. There was a time when the top three bulletins on RTE would all be job losses, usually without much in the way of nuance or analysis.

I also do think the media in this country is at least "friendly" to the needs of the nation. In the same way the opposition have given the government a fairly easy time during Covid, the media has too. Which I am grateful for. Repeating a consistent message is a huge part of achieving compliance, and compliance with a good message is better than creating confusion by pursuing the "perfect" strategy.

SozBbz

errlloyd wrote: »

I think the media is resisting reporting job losses right now, probably for the good of the mental health of the nation.

LinkedIn will lay off quite a lot of Irish staff. I know a large multinational engineering firm with a significant Irish operation is about to do the same. I think we're at the beginning of the financial ramifications, not the end.

Really? Come off it. The media love to report bad news.

The LinkedIn losses were reported by all the major media outlets.

What about AWS announcing 2000 new jobs for Dublin over the next 2 years?

SozBbz

errlloyd wrote: »

I also do think the media in this country is at least "friendly" to the needs of the nation. In the same way the opposition have given the government a fairly easy time during Covid, the media has too. Which I am grateful for. Repeating a consistent message is a huge part of achieving compliance, and compliance with a good message is better than creating confusion by pursuing the "perfect" strategy.

The caretaker govt got an easy enought time from the media because they were a means to an end and mostly did a good enough job.

The new govt have not had an easy ride. The media were relentless about Barry Cowen. They're now attacking them about payment of super junior ministers and their plans or lack thereof to get schools back in September. And they're in place about 3 weeks so hardly much of a honeymoon period.

Not to mention the Greens are getting a fairly constant bashing, not to mention Michael Martin got a fair bash about how he allocated his ministerial posts in the first instance.

errlloyd

SozBbz wrote: »

The new govt have not had an easy ride. The media were relentless about Barry Cowen. They're now attacking them about payment of super junior ministers and their plans or lack thereof to get schools back in September. And they're in place about 3 weeks so hardly much of a honeymoon period.

We're getting fairly off-topic here. But it is quite different to bash individuals for being moronic and properly question macro strategy decisions. For instance, I think there will be an inquiry about the handling of our managed care homes. We could all point to individual articles about the mishandling, but it probably will end up being a significant scandal, and at the moment it is fairly muted. Now to be fair, the media are being critical of school reopening plans.

It just feels like the overall tone is a little less doom and gloomy than it probably should be.

Cantstandsya

errlloyd wrote: »

We're getting fairly off-topic here. But it is quite different to bash individuals for being moronic and properly question macro strategy decisions. For instance, I think there will be an inquiry about the handling of our managed care homes. We could all point to individual articles about the mishandling, but it probably will end up being a significant scandal, and at the moment it is fairly muted. Now to be fair, the media are being critical of school reopening plans.

It just feels like the overall tone is a little less doom and gloomy than it probably should be.

I think there is a bit of war time mentality, which seems natural to me.

The time to really get the fine toothed combs out will be when we can relax. Right now it's still firefighting.

Re: house prices though, I don't think the media here is a fair observer. The Irish Times is supposedly the paper of record but has direct interest in the property market and I wouldn't wipe my backside with the Independent.

JamesMason

Cantstandsya wrote: »

I think there is a bit of war time mentality, which seems natural to me.

The time to really get the fine toothed combs out will be when we can relax. Right now it's still firefighting.

Re: house prices though, I don't think the media here is a fair observer. The Irish Times is supposedly the paper of record but has direct interest in the property market and I wouldn't wipe my backside with the Independent.

Mortgage approvals fell sharply in May/June. This is a lag indicator for things to come. Once the previously granted approvals expire, and the winter wave of infections hit, the trouble will really begin.

errlloyd

Cantstandsya wrote: »

I think there is a bit of war time mentality, which seems natural to me.

This is the exact phrase I did a poor job of articulating above.

Hubertj

Cantstandsya wrote: »

I think there is a bit of war time mentality, which seems natural to me.

The time to really get the fine toothed combs out will be when we can relax. Right now it's still firefighting.

Re: house prices though, I don't think the media here is a fair observer. The Irish Times is supposedly the paper of record but has direct interest in the property market and I wouldn't wipe my backside with the Independent.

I don’t think anyone is a fair observer when it comes to the property market. Take this thread and all the “experts” as an example!

GreeBo

JamesMason wrote: »

Mortgage approvals fell sharply in May/June. This is a lag indicator for things to come. Once the previously granted approvals expire, and the winter wave of infections hit, the trouble will really begin.

How about mortgage applications?