Irish Property Market 2020 Part 2

cannotlogin

Is the housing market not just doing exactly what it did in 2007?

All signs of an upcoming recessions but too early to see any sustainable economic damage at the time (Even now many people are talking about the economic situation being temporary and a return to normality post covid despite that the unemployment rate is 20% & there are less options regarding moving country or sector than they were then).

The market hasn't alternated significantly since covid and people are still buying for a number of reasons:-

1. They can afford to now & are concerned about mortgage approval difficulties, job losses, etc in the future

2. Concern about reducing housing stock in the future

3. Still think the recession won't affect them & maybe it won't

We won't even begin to see the true damage until next year.

Banks will continue to lend - they need to for profitably, they may be more selective & have less expections but if I was in a stable recession proof job I would be waiting.

The stock of housing won't necessarily shrink that much, I.e. student accommodation & air b&B are no longer attractive, inherited properties most likely to be put on the market as the beneficiaries are probably under more pressure than pre covid19, cannot afford to wait for things to recover, a move out of larger cities as working from home becomes more possible. This will balance out over time.

Nobody knows what will happen but it really feels like early 2007 again - I don't think the fall in property prices will be as significant as back then as there have been 2 main changes, central bank borrowing caps & also back then a lot more people thought they were property developers/investors but I do expect them too.

JJJackal

cannotlogin wrote: »

Is the housing market not just doing exactly what it did in 2007?

All signs of an upcoming recessions but too early to see any sustainable economic damage at the time (Even now many people are talking about the economic situation being temporary and a return to normality post covid despite that the unemployment rate is 20% & there are less options regarding moving country or sector than they were then).

The market hasn't alternated significantly since covid and people are still buying for a number of reasons:-

1. They can afford to now & are concerned about mortgage approval difficulties, job losses, etc in the future

2. Concern about reducing housing stock in the future

3. Still think the recession won't affect them & maybe it won't

We won't even begin to see the true damage until next year.

Banks will continue to lend - they need to for profitably, they may be more selective & have less expections but if I was in a stable recession proof job I would be waiting.

The stock of housing won't necessarily shrink that much, I.e. student accommodation & air b&B are no longer attractive, inherited properties most likely to be put on the market as the beneficiaries are probably under more pressure th a pre covid19, cannot afford to recover, a move out of larger cities as working from home becomes more possible. This is balance out over time.

Nobody knows what will happen but it really feels likevearly 2007 again.

There are many differences but most importantly all first time buyers have 10% deposit and could only borrow 3.5 times salary, 2nd time buyers 20%. Thus negative equity less likely and loan more likely to be affordable.

Also fundamentally economic imprudence did not drive this recession - consequently one would expect that when/if COVID is under control we should get growth. Growth if there is a vaccine is likely to be at a scale not previously seen - as the dip will be reversed (UK has drop of 20% GDP, probable that they could get a rise of >5% after COVID - previously unheard of which will restore confidence in the markets)

Likely banks will print money like its going out of fashion - does not guarantee inflation but it could support inflation. Inflation will link to rising salaries etc. Leading to bigger mortgages etc

JJJackal

At present everyones salary is propped up by the Gov too...

landofthetree

JJJackal wrote: »

There are many differences but most importantly all first time buyers have 10% deposit and could only borrow 3.5 times salary, 2nd time buyers 20%. Thus negative equity less likely and loan more likely to be affordable.

Also fundamentally economic imprudence did not drive this recession - consequently one would expect that when/if COVID is under control we should get growth. Growth if there is a vaccine is likely to be at a scale not previously seen - as the dip will be reversed (UK has drop of 20% GDP, probable that they could get a rise of >5% after COVID - previously unheard of which will restore confidence in the markets)

Likely banks will print money like its going out of fashion - does not guarantee inflation but it could support inflation. Inflation will link to rising salaries etc. Leading to bigger mortgages etc

Income tax will rise plus other taxes.

30 billion deficit for 2020.

It could be even more next year if no vaccine which is highly like.

The_Conductor

landofthetree wrote: »

Income tax will rise plus other taxes.

30 billion deficit for 2020.

It could be even more next year if no vaccine which is highly like.

I'd argue that its more likely that investment and expenditure, both capital and day-to-day expenditure, will fall off a cliff.

Already we have a fresh public sector recruitment ban and a ban on the use of contractors, a ban on increments and promotions and a ban on mobility- all on the table. That is pencilled to save 4 billion.

Its going to be exceptionally hard to justify 'Covid payments' greater than unemployment benefit to recipients- and its going to be exceptionally difficult not to cut social welfare and superannuation- to make a contribution towards bringing the books a small bit closer towards where they need to be.

The EU has formally dropped budget balancing requirements and suspended the rules governing government borrowing for the time being- however, how long will that suspension last?

Ireland could very well have a public sovereign debt of 250 billion by the end of the year- and this could easily be 265-270 billion by the end of 2021.

A certain cohort of people seem to imagine we can simply print money- and refuse to listen to any narrative that involves repaying money that is borrowed, ever.........

Back in the 80s- this might have made sense- when we had rampant inflation and the nominal value of debts fell by 15-20% per annum. We have no such method of inflating away our obligations this time round.

We are in for a tough time- and the sacred cows will get hit this time round- along with everyone else. Anyone who imagines that any category of state expenditure is safe- is going to be in for a shock.

Bubbaclaus

JJJackal wrote: »

At present everyones salary is propped up by the Gov too...

Everyones?

JJJackal

Bubbaclaus wrote: »

Everyones?

Obviously everyone was a bit dramatic. But essentially most

1) Unemployment benefit
2) COVID payments
3) Public sector and semi-state are essentially paid by Government
4) Without 1,2,3 the rest of the economy would not function as there would be a massive shortage of money to buy stuff which helps to pay everyone else

sanfranbest

sanfranbest wrote: »

That shoe box cottage has been on the market for ages, it showed a bid of 485k for weeks, now suddenly they have a bid for 525k,
plus they still have a viewing next Saturday 29th Aug,,,, are they looking for more than 525k,,,,,,,,,

Who in their right mind would pay over a half a million for this cottage is beyond my comprehension,,,,,,,,,,,,,,,,

https://www.auctioneera.ie/property/47-gulistan-cottages-rathmines-dublin-d06-e6c9

Looking forward to seeing the actual selling price on the PPR

It was listed at 450k in 2017 and sold for 520k
here is the Irish Independent article about it

https://www.independent.ie/life/home-garden/homes/inside-this-renovated-cottage-in-rathmines-the-dream-gaff-for-city-dwellers-35902974.html

Its cute and in a great location,,,,But I still cannot see the value in this cottage,,,

sanfranbest

Greedy or clever?

Looks like there was only one cottage on this site,
Developer demolished the cottage and built two cottages on the site,

They are both 80sq m , but with bad natural light and not a great design,

They were first listed for 645k a few months ago, then with no buyers, they dropped the price to 627,500

Should the developer have gone with a really nice bigger house and not tried to squeeze two smaller cottages onto the site???

https://www.myhome.ie/residential/brochure/20-arbutus-place-2-bed-study-portobello-dublin-8/4409698

Your Thoughts???

Donald Trump

Pelezico wrote: »

Why would anyone holiday in Ireland?

No sun, overpriced food, accommodation and eating out is extortionate.

Give me Spain ...even with covid.

If you are implying that people are thick to come to Ireland for a week of their lives for a holiday because it is a shit destination, imagine how thick you must think the people who live in Ireland are!




Have you ever visited Ireland yourself? I'd imagine you aren't one of the thick ones who live there? What with all the other better European options you could freely move to at any stage as an Irish citizen.

Pelezico

Donald Trump wrote: »

If you are implying that people are thick to come to Ireland for a week of their lives for a holiday because it is a shit destination, imagine how thick you must think the people who live in Ireland are!




Have you ever visited Ireland yourself? I'd imagine you aren't one of the thick ones who live there? What with all the other better European options you could freely move to at any stage as an Irish citizen.

I am not sure I implied anything. If you want to holiday in Ireland...if you go.

Hubertj

sanfranbest wrote: »

Greedy or clever?

Looks like there was only one cottage on this site,
Developer demolished the cottage and built two cottages on the site,

They are both 80sq m , but with bad natural light and not a great design,

They were first listed for 645k a few months ago, then with no buyers, they dropped the price to 627,500

Should the developer have gone with a really nice bigger house and not tried to squeeze two smaller cottages onto the site???

https://www.myhome.ie/residential/brochure/20-arbutus-place-2-bed-study-portobello-dublin-8/4409698

Your Thoughts???

Sounds like a lot of money for what is basically a biggish 2 bed apartment? Do you know how much they paid for the original cottage? Or the site it was built on? Maybe they paid a high price and thought they needed to make 2 units for a proper return?

Mic 1972

Ok, now that's an interesting price drop for a 1bed apt in Smithfield
Similar apartments in the same area have much higher asking prices.

https://www.myhome.ie/residential/brochure/apartment-155-the-spinnaker-smithfield-dublin-7/4432825

Springy Turf

Mic 1972 wrote: »

Ok, now that's an interesting price drop for a 1bed apt in Smithfield
Similar apartments in the same area have much higher asking prices.

https://www.myhome.ie/residential/brochure/apartment-155-the-spinnaker-smithfield-dublin-7/4432825

500m² in Smithfield for 185k? Wow the market really has tanked.

TheSheriff

sanfranbest wrote: »

Greedy or clever?

Looks like there was only one cottage on this site,
Developer demolished the cottage and built two cottages on the site,

They are both 80sq m , but with bad natural light and not a great design,

They were first listed for 645k a few months ago, then with no buyers, they dropped the price to 627,500

Should the developer have gone with a really nice bigger house and not tried to squeeze two smaller cottages onto the site???

https://www.myhome.ie/residential/brochure/20-arbutus-place-2-bed-study-portobello-dublin-8/4409698

Your Thoughts???

Wow, we used to rent in that area. Its nice.

Im speechless at that price to be honest; they look nice inside, but wow!

Mic 1972

TheSheriff wrote: »

Wow, we used to rent in that area. Its nice.

Im speechless at that price to be honest; they look nice inside, but wow!

i checked the video too, there is something odd about the layout and also the bathroom needs to be redone but for that price it would still be worthy.
Not sure if this is a sign of anything, as anything else in the area is still super expensive

Bass Reeves

sanfranbest wrote: »

Greedy or clever?

Looks like there was only one cottage on this site,
Developer demolished the cottage and built two cottages on the site,

They are both 80sq m , but with bad natural light and not a great design,

They were first listed for 645k a few months ago, then with no buyers, they dropped the price to 627,500

Should the developer have gone with a really nice bigger house and not tried to squeeze two smaller cottages onto the site???

https://www.myhome.ie/residential/brochure/20-arbutus-place-2-bed-study-portobello-dublin-8/4409698

Your Thoughts???

Unless he acquired the original cottage at a rock bottom price he was loopy. This kind of development was common in the noughties where small builders/developers bought a house(often detached or corner site) and knocked it and build again. If that builder needs 600k+ to make a margin.on this development he made a bad development decision. They should be well sub 500k but I am not familiar with portbello prices

Pelezico

Springy Turf wrote: »

500m² in Smithfield for 185k? Wow the market really has tanked.

Not sure about that....at least not yet. One bedroom is a bad investment.

JJJackal

JJJackal wrote: »

At present everyones salary is propped up by the Gov too...

Some of the private sector is pottering away without any props.

brisan

sanfranbest wrote: »

That shoe box cottage has been on the market for ages, it showed a bid of 485k for weeks, now suddenly they have a bid for 525k,
plus they still have a viewing next Saturday 29th Aug,,,, are they looking for more than 525k,,,,,,,,,

Who in their right mind would pay over a half a million for this cottage is beyond my comprehension,,,,,,,,,,,,,,,,

https://www.auctioneera.ie/property/47-gulistan-cottages-rathmines-dublin-d06-e6c9

Looking forward to seeing the actual selling price on the PPR

People seem to think Auctioneera are open and transparent.
I have seen a couple of issues with them and they are EAs at the end of the day.
I would not be sure of those bids

Springy Turf

brisan wrote: »

People seem to think Auctioneera are open and transparent.
I have seen a couple of issues with them and they are EAs at the end of the day.
I would not be sure of those bids

What are the issues you have seen? They do seem to provide more information about the properties up front - and a clear closing deadline is a good think in my view.

Unfortunately Sale Agreed is just as meaningless with them as it is with any other deal, but that's not Auctioneera's fault.

brisan

Springy Turf wrote: »

What are the issues you have seen? They do seem to provide more information about the properties up front - and a clear closing deadline is a good think in my view.

Unfortunately Sale Agreed is just as meaningless with them as it is with any other deal, but that's not Auctioneera's fault.

Dodgy BER
Wrong date of construction ,plus I am not sure all bids are genuine ,but that applies to all EAs

cnocbui

Mic 1972 wrote: »

i checked the video too, there is something odd about the layout and also the bathroom needs to be redone but for that price it would still be worthy.
Not sure if this is a sign of anything, as anything else in the area is still super expensive

Why does the bathroom 'need' to be redone?

Sweet.Science

Im selling mine with auctioneera . I dont seem to be getting any fake bids on my house

JohnnyChimpo

Springy Turf wrote: »

500m² in Smithfield for 185k? Wow the market really has tanked.

Decent price for an apt the size of a Tesco Express :pac:

Mic 1972

cnocbui wrote: »

Why does the bathroom 'need' to be redone?

that bathroom looks nasty, it's probably perfectly functioning but still

Billythekid19

Still waiting on the 10%+ price crash predicted by many on here for this year. 'The prices of many homes are unchanged despite the huge economic uncertainty caused by Covid-19 but a significant number of tenants are struggling to pay their rents, according to a survey of estate agents.' https://www.irishexaminer.com/business/economy/arid-40036574.html

Assetbacked

https://www.irishtimes.com/culture/books/housing-shock-is-a-valuable-book-buy-read-and-share-it-1.4324088

A book to have on the kindle for those autumn, tax-rebated staycations, called "Housing Shock" by Rory Hearne (Maynooth University social policy lecturer). The IT article is a review by Eoin O'Broin. It appears that O'Broin agrees with the author which is why he talks up the book so much, but I don't think anyone would disagree that the housing market needs a dramatic reboot. The book also offers some solutions to the housing crisis apparently.

Villa05

JJJackal wrote:

There are many differences but most importantly all first time buyers have 10% deposit and could only borrow 3.5 times salary, 2nd time buyers 20%. Thus negative equity less likely and loan more likely to be affordable.

All irrelevant if you loose your job, that was the biggest cause of declines from 08 to 12.

JJJackal wrote:

Also fundamentally economic imprudence did not drive this recession

We are after 8 years of economic growth. In that time there has been 0 effort in reducing state debt. This is despite Nama selling of most of their assets. Instead the mantra has been pay restoration and a litany of over spends on state projects multiples of there original budgets

In effect nothing learnt and any gains pi**ed away on poorly managed projects and reccurring spending

Prudence is not something you could associate with Governments of the last 8 years or 30 years for that matter

beauf

"Pay restoration" suggests that indeed some savings were made and are still being made.

Other than that though we do indeed consistently seem to spend vastly more than other countries in delivering similar projects.