Irish Property Market 2020 Part 2

Aron722

Property prices wont fall, Stats show 1 in 5 in Ireland are minimum pay workers. That is very high for a EU country. This means also tax for the government wasn't hit that hard. The main loss is tourism Most people don't understand the property market. Psychologically everyone waiting for a price drop but how can it drop when the demand is high. People can't wait forever so they all out getting their mortgage approvals now thinking that price will fall. Will not happen anything under 500k.

MacronvFrugals

https://www.thejournal.ie/brown-thomas-arnotts-job-cuts-covid-19-5175162-Aug2020/

Remember i said about a guy i knew who borrowed off his parents an extra 20k to secure a deal on a house him and his partner were looking at to get it through quickly while mortgage approval was available, well he got notice yesterday that those rumored job loses will include him in the next month or so but the mortgage is sealed and they got the keys recently.

ebayissues

MacronvFrugals wrote: »

https://www.thejournal.ie/brown-thomas-arnotts-job-cuts-covid-19-5175162-Aug2020/

Remember i said about a guy i knew who borrowed off his parents an extra 20k to secure a deal on a house him and his partner were looking at to get it through quickly while mortgage approval was available, well he got notice yesterday that those rumored job loses will include him in the next month or so but the mortgage is sealed and they got the keys recently.

As I've been told over and over on this thread, it's better to be jobless in your own house than being jobless whilst renting.

enricoh

Aron722 wrote: »

Property prices wont fall, Stats show 1 in 5 in Ireland are minimum pay workers. That is very high for a EU country. This means also tax for the government wasn't hit that hard. The main loss is tourism Most people don't understand the property market. Psychologically everyone waiting for a price drop but how can it drop when the demand is high. People can't wait forever so they all out getting their mortgage approvals now thinking that price will fall. Will not happen anything under 500k.

Jaysus demand was high in 2007 too. I dunno but a lot of people are only in work coz the government is paying their wages to their employer. When that winds down a lot of jobs will vanish imo.
Tourism, hospitality and retail will be hairy.
I reckon a lot of landlords are going to pull the plug too, Fianna fail won't be left behind in the populism stakes with the big bad landlords.

MacronvFrugals

ebayissues wrote: »

As I've been told over and over on this thread, it's better to be jobless in your own house than being jobless whilst renting.

Thats his thinking better to pay 1100 than 1950/month, the GF's job is pretty safe so they're not to badly off.

Normally this would panic people but thy seem relieved and quite happy.

Pelezico

MacronvFrugals wrote: »

Thats his thinking better to pay 1100 than 1950/month, the GF's job is pretty safe so they're not to badly off.

Normally this would panic people but thy seem relieved and quite happy.

Of course....they wont have to pay their mortgage...they can always just defer...and the rest of the borrowers will pay.

What is not to like?

hometruths

fliball123 wrote: »

The solution is and always has been to build in the more desirable, more populated and the centers that have the most jobs and best infrastructure and work outward from these. So Dublin, Cork, Galway, Limerick, Waterford should of had a shed load of high rises erected in and around their city centers and in all developments in the burbs and not just the 3/4 beds that we see..But that didnt happen. I mean something must be wrong with the supply line as we are now 6 months in and prices have not dropped I appreciate that property lags behind but if there was a drop coming I thought it would of been kicking in by now

So take the current demand for all this new housing in Dublin, Cork, Galway, Limerick and Waterford.

To satisfy the majority of this demand what do you think will be built? High rises or 3/4 bed family units?

I'm not asking what you think should be built, just what you think will be built to satisfy the current strong demand?

fliball123

enricoh wrote: »

Jaysus demand was high in 2007 too. I dunno but a lot of people are only in work coz the government is paying their wages to their employer. When that winds down a lot of jobs will vanish imo.
Tourism, hospitality and retail will be hairy.
I reckon a lot of landlords are going to pull the plug too, Fianna fail won't be left behind in the populism stakes with the big bad landlords.

yes but supply was higher

fliball123

schmittel wrote: »

So take the current demand for all this new housing in Dublin, Cork, Galway, Limerick and Waterford.

To satisfy the majority of this demand what do you think will be built? High rises or 3/4 bed family units?

I'm not asking what you think should be built, just what you think will be built to satisfy the current strong demand?

High rises with 3/4 family units should be part of the mix going forward no matter what is built

MacronvFrugals

Pelezico wrote: »

Of course....they wont have to pay their mortgage...they can always just defer...and the rest of the borrowers will pay.

What is not to like?

They'll have no problem servicing 1100/month, she'd pay that on her own without him.

Not sure why you think after getting their first home they'll immediately stop paying the mortgage and eventually be back in the rental market?

MrMusician18

TheSheriff wrote: »

Plenty of my cohort of friends have gotten approval for the first time since Covid started.

They were all renting; they have now realized they want a house for more space and are looking at the Dublin region.

I do find the whole idea that there is a cohort of people absolutely desperate to use their mortgage approval before it runs out a bit misleading. We have no evidence of this. Its all just talk, but anecdotally (as we are talking), I now have more friends looking to buy in Dublin than pre-Covid, primarily because they envisage another lockdown and want space.

These arguments are somewhat circular. The only real data will be the property register.

Plenty as in how many?
Even during normal times I wouldn't know not than two or three couples, tops, house hunting at the same time.

hometruths

fliball123 wrote: »

High rises with 3/4 family units should be part of the mix going forward no matter what is built

so that sounds a lot like what you think should be built and not what you think will be built!

currently it seems to me that the bulk of any increased output will be 3/4 bed homes as that is where the bulk of the current demand is.

and we already have too many of those as it is.

hometruths

MacronvFrugals wrote: »

They'll have no problem servicing 1100/month, she'd pay that on her own without him.

Not sure why you think after getting their first home they'll immediately stop paying the mortgage and eventually be back in the rental market?

Maybe because that's exactly what happened last time unemployment sky rocketed?

At lest the stop paying the mortgage bit, not the back in the rental market bit.

fliball123

schmittel wrote: »

so that sounds a lot like what you think should be built and not what you think will be built!

currently it seems to me that the bulk of any increased output will be 3/4 bed homes as that is where the bulk of the current demand is.

and we already have too many of those as it is.

Its hard to know it all depends on how the government approach it

MacronvFrugals

schmittel wrote: »

Maybe because that's exactly what happened last time unemployment sky rocketed?

At lest the stop paying the mortgage bit, not the back in the rental market bit.

I certainly dont blame them in the dog eat dog world of the Dublin housing market, escaping those rents at any cost has become the #1 goal for a lot of people.

Even if next week they were both on minimum wage, 1100 is easily manageable with no kids and little outgoings.

Not saying i would do it myself but i can certainly empathize, the bigger questions are how have we let it get this bad...

Pelezico

MacronvFrugals wrote: »

I certainly dont blame them in the dog eat dog world of the Dublin housing market, escaping those rents at any cost has become the #1 goal for a lot of people.

Even if next week they were both on minimum wage, 1100 is easily manageable with no kids and little outgoings.

Not saying i would do it myself but i can certainly empathize, the bigger questions are how have we let it get this bad...

They can keep the house and not pay mortgage. Ireland is a great country.

hometruths

MacronvFrugals wrote: »

I certainly dont blame them in the dog eat dog world of the Dublin housing market, escaping those rents at any cost has become the #1 goal for a lot of people.

Even if next week they were both on minimum wage, 1100 is easily manageable with no kids and little outgoings.

Not saying i would do it myself but i can certainly empathize, the bigger questions are how have we let it get this bad...

I'd agree with that all that.

We need to question how have we let it get this bad and try and fix that.

Having let it get this bad it is actually a perfect rational decision for people to say feck it, if you can't beat them join them, we'll take the mortgage, worst case scenario is we'll just stop paying it and sure if we play the game the house will not be repossessed.

And the more people who take this decision the more rational it is for the next person to take it too. And so on and so forth.

If you think about it on the level of society as whole and the property market in it's entirety rather than just that Paddy and Mary are making a rational decision, it's actually a pretty screwed up situation!

Cyrus

Pelezico wrote: »

Good point. These buyers who want to secure a house before approval lapses are walking into a lions den.

Also, banks will not be lending in a few months as their tier1 capital requirements will force their hand.

Bad times ahead.

Banks can’t lend then price drops are neither here nor their because the majority can’t buy .

ebayissues

Cyrus wrote: »

Banks can’t lend then price drops are neither here nor their because the majority can’t buy .

What's there to buy when supply is decreasing massively?

Cyrus

ebayissues wrote: »

What's there to buy when supply is decreasing massively?

Exactly

Wanderer78

Cyrus wrote:

Banks can’t lend then price drops are neither here nor their because the majority can’t buy .

The availability of credit, or lack of, is one of the main causes of house prices

hometruths

Wanderer78 wrote: »

The availability of credit, or lack of, is one of the main causes of house prices

And it is not just the reduced supply of credit, as in banks reducing lending, historically prices have been effected by the demand for credit too.

When unemployment rises demand for credit drops. Thus less finance in the market bidding for houses.

But there are some on here saying that this time it will make no difference to prices because the supply of available houses will drop.

Not convinced by that myself to be honest.

fliball123

schmittel wrote: »

And it is not just the reduced supply of credit, as in banks reducing lending, historically prices have been effected by the demand for credit too.

When unemployment rises demand for credit drops. Thus less finance in the market bidding for houses.

But there are some on here saying that this time it will make no difference to prices because the supply of available houses will drop.

Not convinced by that myself to be honest.

No they are saying there is evidence that supply side has dropped and on a day to day basis just keep an eye on myhome stock over the next week and you will see it yourself if the trend continues

hometruths

fliball123 wrote: »

No they are saying there is evidence that supply side has dropped and on a day to day basis just keep an eye on myhome stock over the next week and you will see it yourself if the trend continues

I would imagine that trend will continue. But if unemployment is rising house prices will drop irrespective of how many ads there are on myhome.

Unless this time is different.

Hubertj

schmittel wrote: »

And it is not just the reduced supply of credit, as in banks reducing lending, historically prices have been effected by the demand for credit too.

When unemployment rises demand for credit drops. Thus less finance in the market bidding for houses.

But there are some on here saying that this time it will make no difference to prices because the supply of available houses will drop.

Not convinced by that myself to be honest.

There are also some such as yourself who say there is no housing shortage. If so why should there be any construction?
Whatever about demand or availability of credit, there looks to me like a requirement of accommodation. This will have to be provided by the government in some form. There are some idiots that believe the waven pipe spouted out by Sinn Fein.
Irrespective of what policy you have there is a finite number of construction operatives in this country which determines the number of units that can be delivered. You could always increase the number of migrants to work in construction that could magically build the houses they will live in as well as the houses they will build for commercial purposes.
The rest is just noise.
To add, only an idiot would think that prices won’t be adversely affected by current economic issues.

Nijmegen

schmittel wrote: »

I would imagine that trend will continue. But if unemployment is rising house prices will drop irrespective of how many ads there are on myhome.

Unless this time is different.

That depends on who is losing their jobs. The big thing is the robustness of income taxes. So basically lots of lower wage folks lost their jobs / income but mid to higher incomes have kept going. Now there is a spike coming through - Linkedin, Bank of Ireland etc making people redundant who would be on higher wages. But again it's not 2009 in scale, there's a lot more stickiness in the employment market it seems so far and that's keeping everything going.

hometruths

Hubertj wrote: »

There are also some such as yourself who say there is no housing shortage. If so why should there be any construction?
Whatever about demand or availability of credit, there looks to me like a requirement of accommodation. This will have to be provided by the government in some form. There are some idiots that believe the waven pipe spouted out by Sinn Fein.
Irrespective of what policy you have there is a finite number of construction operatives in this country which determines the number of units that can be delivered. You could always increase the number of migrants to work in construction that could magically build the houses they will live in as well as the houses they will build for commercial purposes.
The rest is just noise.

There will always be demand for new build houses in a growing population, hence there will always be construction.

My point is I believe the current discourse is flawed and if it leads to building 35,000+ per annum units, majority of which are 3/4 bed family homes in the suburbs/commuter belts it will lead to a massive oversupply in the relatively near future.

hometruths

Nijmegen wrote: »

That depends on who is losing their jobs. The big thing is the robustness of income taxes. So basically lots of lower wage folks lost their jobs / income but mid to higher incomes have kept going. Now there is a spike coming through - Linkedin, Bank of Ireland etc making people redundant who would be on higher wages. But again it's not 2009 in scale, there's a lot more stickiness in the employment market it seems so far and that's keeping everything going.

Higher income folks don't buy houses in a vacuum.

Nijmegen

schmittel wrote: »

Higher income folks don't buy houses in a vacuum.

They don't - but as long as demand for household formation outstrips the supply of dwellings available for purchase, the prices will not fall dramatically and will tend to go up over time.

fliball123

schmittel wrote: »

I would imagine that trend will continue. But if unemployment is rising house prices will drop irrespective of how many ads there are on myhome.

Unless this time is different.

It wont if the availability of property goes down as well as the numbers that can buy go down the status quo continues supply vs demand = price this has always been and always will be the basis of any price