Irish Property Market 2020 Part 2

c.p.w.g.w

thomas 123 wrote: »

House prices have gone up due to more demand.

Wages have stayed the same for the most part, in fact id say they have gone down in value with rising costs everywhere else.

Not so long ago one person went to work while one stayed home and people got by just fine.

On top of this the 3.5x rule limits a lot of us, so saving for a deposit is not even the only issue.

There is an issue, just because you see some people with a phone or shoes doesn’t mean there is not a horrible problem right now with housing.

In Dublin yes, but plenty of value to be had in other areas of the country...but there seems to be an issue for renters, where banks don't seem to deem rent payments as evidence of ability to repay a mortgage...I was a renter before I bought, my mortgage is 57% of what my rent was.

A old school friend left his job in Dublin for the same role in Clare, took a hair cut on pay but is now in a lovely house and mortgage is modest for his income...

But going back to the phones and shows...Balenciaga retail for €800 and phones €1,000...that's €1800 on just 2 items...that is all my bills(incl mortgage) covered for 3 months with some left over for a meal for 2 in a restaurant

thomas 123

c.p.w.g.w wrote: »

In Dublin yes, but plenty of value to be had in other areas of the country...but there seems to be an issue for renters, where banks don't seem to deem rent payments as evidence of ability to repay a mortgage...I was a renter before I bought, my mortgage is 57% of what my rent was.

A old school friend left his job in Dublin for the same role in Clare, took a hair cut on pay but is now in a lovely house and mortgage is modest for his income...

But going back to the phones and shows...Balenciaga retail for €800 and phones €1,000...that's €1800 on just 2 items...that is all my bills(incl mortgage) covered for 3 months with some left over for a meal for 2 in a restaurant

Totally true the problem with the old “there’s value to be had elsewhere” I keep hearing is nobody thinks about planning permission, sure there is loop holes but the reality is if you want to self build your not going to get PP in most counties.

Queue the Celtic tiger home buyers with “sure everyone can’t live in the country”.

Pelezico

This baby is overpriced

https://www.myhome.ie/residential/brochure/9-brookfield-road-kilmainham-dublin-8/3675895

thomas 123

c.p.w.g.w wrote: »

But going back to the phones and shows...Balenciaga retail for €800 and phones €1,000...that's €1800 on just 2 items...that is all my bills(incl mortgage) covered for 3 months with some left over for a meal for 2 in a restaurant

Yeah the designer stuff is a bit much tbf, maybe he has given up though. I feel a lot of my age group 25-35 has thrown in the towel. I have certainly felt like giving up many times.

PropQueries

Sign of things to come in Dublin? https://www.forbes.com/sites/lisachamoff/2020/08/03/manhattan-developer-deeply-discounts-unsold-units-in-ultra-luxury-peter-marino-building-on-the-high-line/#2e95d2de1ec3

“We could have cut the prices by 20%,” Korolik said. “We just want to move forward.”

Graham

PropQueries wrote: »

Sign of things to come in Dublin? https://www.forbes.com/sites/lisachamoff/2020/08/03/manhattan-developer-deeply-discounts-unsold-units-in-ultra-luxury-peter-marino-building-on-the-high-line/#2e95d2de1ec3

“We could have cut the prices by 20%,” Korolik said. “We just want to move forward.”

Do we have many $20 - $30 million dollar apartments in Ireland?

PropQueries

Graham wrote: »

Do we have many $20 - $30 million dollar apartments in Ireland?

Well for a small country like Ireland, we have kind of a similar problem. There were hundreds of luxury apartments back in January lying emlty in Dublin City Centre: https://www.businesspost.ie/ireland/the-luxury-gap-hundreds-of-high-end-apartments-lying-empty-across-dublin-ac7da06c

MacronvFrugals

Genuine question why would luxury apartments down in Spencer Dock be empty, is it the cost or ?

https://www.businesspost.ie/ireland/the-luxury-gap-hundreds-of-high-end-apartments-lying-empty-across-dublin-ac7da06c

Graham

I don't know where you've been in Dublin docklands, I definitely haven't seen any apartments that would compare with a $20 - $30 million dollar penthouse in Manhattan.

Those apartments are a complete outlier even in the US.

PropQueries

MacronvFrugals wrote: »

Genuine question why would luxury apartments down in Spencer Dock be empty, is it the cost or ?

https://www.businesspost.ie/ireland/the-luxury-gap-hundreds-of-high-end-apartments-lying-empty-across-dublin-ac7da06c

In my opinion we're not London or New York. Is there really much demand for such units. Our "IT" jobs are mostly in sales etc. The real work in done in the United States, London or some other EU country. I think everyone believes we're the silicon valley of Europe but the truth and the wages are much different from the reality.

Graham

MacronvFrugals wrote: »

Genuine question why would luxury apartments down in Spencer Dock be empty, is it the cost or ?

https://www.businesspost.ie/ireland/the-luxury-gap-hundreds-of-high-end-apartments-lying-empty-across-dublin-ac7da06c

It appears to be limited to a few specific developments.

As they haven't shown and signs of dropping the rents I'd have to assume there are other commercial reasons at play. Chances are we'll never know what they are.

MacronvFrugals

PropQueries wrote: »

In my opinion we're not London or New York. Is there really much demand for such units. Our "IT" jobs are mostly in sales etc. The real work in done in the United States, London or some other EU country. I think everyone believes we're the silicon valley of Europe but the truth and the wages are much different from the reality.

This is very true, just because companies say an algorithm was developed in Ireland to take advantage of the knowledge box tax loophole means nothing when it originated in the states but that sweet 0.005% rate blinds us into believing we're in the same league as Silicon Valley.

I work as a programmer for a US multinational and for the same role/experience my colleagues in the sates can earn over double, i know it cant be compared because we have a half decent society payed for through taxation but your correct the wages are way different

PropQueries

Graham wrote: »

It appears to be limited to a few specific developments.

As they haven't shown and signs of dropping the rents I'd have to assume there are other commercial reasons at play. Chances are we'll never know what they are.

All investment properties are valued at their rental yield, real or perceived. Basically, if they have 100 apartments and only one in rented out at €10,000 a month and the rest are empty, they can value the whole development at the rental yield achieved on that one unit even though they're pulling in literally no money and are actually making a loss. That one unit is normally a related party. It's basically an accounting trick to encourage investors to invest further, but it eventually unravel to a devastating impact...

MacronvFrugals

PropQueries wrote: »

All investment properties are valued at their rental yield, real or perceived. Basically, if they have 100 apartments and only one in rented out at €10,000 a month and the rest are empty, they can value the whole development at the rental yield achieved on that one unit even though they're pulling in literally no money and are actually making a loss. That one unit is normally a related party. It's basically an accounting trick to encourage investors to invest further, but it eventually unravel to a devastating impact...

Very interesting, thanks folks.

Graham

That could well be the case. We might never know, or we might see an announcement at some point that assets have been written down in value.

PropQueries

Graham wrote: »

That could well be the case. We might never know, or we might see an announcement at some point that assets have been written down in value.

In New York, one developer has already basically written down the value of his apartments by 50%: https://www.forbes.com/sites/lisachamoff/2020/08/03/manhattan-developer-deeply-discounts-unsold-units-in-ultra-luxury-peter-marino-building-on-the-high-line/#12404de11ec3

Graham

Yes, apartments in the 20 - 30 million price bracket.

It might be a sign we'll see the same sort of drops in Irish properties currently listed in the $20 - $30 million price bracket. :pac:

smurgen

Cyrus wrote: »

without getting too obtuse thats a notional saving, it will get eroded by inflation.

What inflation? We're about to enter a deflationary period.another advantage to the delayed purchased is the new lower mortgage rates e.g ptsb doing 2 5% soon and Avant Money going to come in with 2%.

awec

smurgen wrote: »

What inflation? We're about to enter a deflationary period.another advantage to the delayed purchased is the new lower mortgage rates e.g ptsb doing 2 5% soon and Avant Money going to come in with 2%.

2.5 is not low, you can already get better than that as a FTB in the worst LTV categories. Anyone not fixed can switch to that 2% rate whenever they want, it’s not unique to new buyers. Even those fixed can switch, could still end up saving depending on circumstances.

Anyway he was talking long term, but I think you knew this.

Taylor365

Seems most properties i'm looking at are selling as normal (1 or 2 bed apartments, 200-250k). Most gone within 2-3 months of being up.

Will revisit in 6 months and see where we're at. Either corona hell, or business as usual.

Cyrus

smurgen wrote: »

What inflation? We're about to enter a deflationary period.another advantage to the delayed purchased is the new lower mortgage rates e.g ptsb doing 2 5% soon and Avant Money going to come in with 2%.

I fixed at 2.5 percent 2 years ago champ

Keep up

smurgen

Cyrus wrote: »

I fixed at 2.5 percent 2 years ago champ

Keep up

What ya want a medal? Would it have been better to repay at their average higher rates of the last few years or the newer lower rates down the line?

smurgen

awec wrote: »

2.5 is not low, you can already get better than that as a FTB in the worst LTV categories. Anyone not fixed can switch to that 2% rate whenever they want, it’s not unique to new buyers. Even those fixed can switch, could still end up saving depending on circumstances.

Anyway he was talking long term, but I think you knew this.

Doesn't matter. They would have been paying higher rates for years. According to some here buying now is always the best option. This is simply not the case for everyone. There is definitely better times to buy.

Ninap

We put our place In Dublin on the market in late Jan. Got bids of just below asking prior to Covid striking. Now sale agreed at about 3.5% below what we had been offered. So, just one straw in the wind, but the whole Covid thing doesn’t seem to have had a huge impact. And similarly for the places we are looking to buy. No big reductions in price.

Thierry12

Ninap wrote: »

We put our place In Dublin on the market in late Jan. Got bids of just below asking prior to Covid striking. Now sale agreed at about 3.5% below what we had been offered. So, just one straw in the wind, but the whole Covid thing doesn’t seem to have had a huge impact. And similarly for the places we are looking to buy. No big reductions in price.

Your only sale agreed though

Getting that cash is a different story

Would love to see drawdown figures right now, going by social media and word of mouth its very slow

awec

smurgen wrote: »

Doesn't matter. They would have been paying higher rates for years. According to some here buying now is always the best option. This is simply not the case for everyone. There is definitely better times to buy.

Yea I agree that there are better times to buy when looking at it purely financially, but the overwhelming majority do not have the luxury of picking when they can buy.

PropQueries

Graham wrote: »

Yes, apartments in the 20 - 30 million price bracket.

It might be a sign we'll see the same sort of drops in Irish properties currently listed in the $20 - $30 million price bracket. :pac:

Maybe the Sunday Business Post is wrong but here is the article pre-covid in February: https://www.businesspost.ie/ireland/the-luxury-gap-hundreds-of-high-end-apartments-lying-empty-across-dublin-ac7da06c

Hubertj

PropQueries wrote: »

In my opinion we're not London or New York. Is there really much demand for such units. Our "IT" jobs are mostly in sales etc. The real work in done in the United States, London or some other EU country. I think everyone believes we're the silicon valley of Europe but the truth and the wages are much different from the reality.

This statement is incorrect - not the forum to discuss it but your wrong.

PropQueries

Hubertj wrote: »

This statement is incorrect - not the forum to discuss it but your wrong.

It matters in the sense that multinational employees are regarded as a significant driver of demand for housing in Dublin City. Also, why has Google an office in London for over 4,000 employees and in Zurich for 5,000 employees: https://www.theguardian.com/technology/2020/apr/07/google-uk-staff-earned-average-of-234000-in-2019 and https://www.businessinsider.com/google-zurich-headquarters-tour-2018-1?r=US&IR=T

awec

PropQueries wrote: »

It matters in the sense that multinational employees are regarded as a significant driver of demand for housing in Dublin City. Also, why has Google an office in London for over 4,000 employees and in Zurich for 5,000 employees: https://www.theguardian.com/technology/2020/apr/07/google-uk-staff-earned-average-of-234000-in-2019 and https://www.businessinsider.com/google-zurich-headquarters-tour-2018-1?r=US&IR=T

He is saying that your assertion that MNC tech jobs in Ireland are sales is completely incorrect.