Irish Property Market 2020 Part 2

jesus_thats_gre

Billythekid19 wrote: »

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

First time posting on this topic. And posting as a FTB that is majorly conflicted between purchasing now (and accepting what I feel are inevitable price drops) or waiting (on the basis that those price drops may be significant). At risk of being accused of sitting on the fence, I missed out on a property last week to a cash buyer (matched my offer - which was the highest, but was paying in cash and able to leverage that position).

In terms of where we are now. There appears to be a cohort of individuals who haven't been impacted overly by Covid. I am going to suggest that they were ready to buy, or certainly well into the planning process, when Covid hit. Covid has probably solidified their desire to purchase a property - whether it be to escape the rental market, to get a bigger place that better suits home working or whatever else.

There are countless examples on this thread of properties selling 5-15% above asking. My own personal experience is closer to 15% so I have no reason to dispute those assertions. There also appears to be a lot of evidence that house sales, mortgage approval, and mortgage drawdowns are way down in terms of volumes. We can also see from posts in this forum that people are being materially impacted by the Covid payment.

Referring back the article (headline more than anything) posted by the OP. House prices remaining unchanged in the environment I have just described doesn't feel like a reason to be joyful about in terms of the future market. You can't help but feel that the cohort of people that are ready to buy will start to dry up soon enough. The properties which they are buying at 5-15% above asking are probably skewing the statistics on sales values upwards too - the volume of sales has fallen significantly after all. That puts that article into context somewhat for me.

Given all of that, it feels inevitable that prices will start to tail off. I will spare you of my guess on by how much they will fall.

Villa05

JJJackal wrote:

Why do you think this is easy? I would love examples of countries where you think housing is not an issue at all

The state controls or has greater access to the key inputs required to deliver housing

To Rob one of your points on tourism - low density population. The state has control over what gets built and where. Has ownership of land in Key areas where housing shortage exists
Has access to long term finance at near negative rates

Had a large demographic of construction workers looking for work in the last recession, this will be the case again in the coming recession with a fall off in commercial development expected

I never said that housing is not problematic rater that we have many positive aspects that make it easily resolvable

Take for instance Holland which is one of the most densely populated countries in Europe and they can deliver affordable housing in an environment where they have to create the land for building.
That gives us a significant advantage over them yet our performance in delivering affordable housing has been miserable in comparison to them

IAmTheReign

Billythekid19 wrote: »

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

The article hardly paints a rosy picture of the market though. Over a quarter of EAs reporting that house prices are down, 10% of sales with renegotiated prices, new mortgage approvals and drawdowns down?

The logical thing to assume is that the people buying now are the ones who were ready to buy pre COVID and who's situations haven't changed. Once those sales dry up it could be very different. Or, it might not! Nothing particularly logical about the Irish housing market after all. I wouldn't be in a hurry to buy though from that report.

The_Conductor

beauf wrote: »

"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.

Correct on both counts. Most public sector employees are on NET pay akin to 2005-2006 levels- some restoration did take place- the proposals are to put all further restoration on hold, completely ban recruitment, overtime, promotions etc etc (other than in exceptional circumstances which will have to be sanctioned by DPER on a case-by-case basis).

With respect of public projects- the number of high profile projects that have gone stratospherically over-budget just isn't funny. Look at the Children's Hospital. An appallingly sited hospital with what is going to be the most expensive cost per bed of any hospital in the whole world. Its going to cost north of 2 billion before its finished- and it had an original price tag of 300m - remember Brendan Howlin crowing about how selling the National Lottery was going to be enough to pay for it, and return a balance to the exchequer for investment in the schools building programme? Its laughable how far out of kilter that particular project went.

But- we have all manner of other projects- including PPP projects (look at all the toll roads) that are hemorrhaging cash- as traffic volumes have fallen. You couldn't make it up- if not enough people use the M50 or the other toll roads- the government subvents the companies running the franchises. In the era of a roll-out of WFH - such blatant subsidies run entirely counter to public health guidance etc etc

The one thing that can be assured- is a lack of anyone willing to put their hands up and accept responsibility for their errors- and say mea culpa. They always have a scapegoat lined up in the wings- whether its the evil landlords- to explain away the bill for HAP and other schemes, teachers emigrating- to explain our class sizes, the cost of construction projects- to explain the childrens hospital- etc etc etc There is always some excuse that will get trotted out.

beauf

IAmTheReign wrote: »

The article hardly paints a rosy picture of the market though. Over a quarter of EAs reporting that house prices are down, 10% of sales with renegotiated prices, new mortgage approvals and drawdowns down?

The logical thing to assume is that the people buying now are the ones who were ready to buy pre COVID and who's situations haven't changed. Once those sales dry up it could be very different. Or, it might not! Nothing particularly logical about the Irish housing market after all. I wouldn't be in a hurry to buy though from that report.

Just seems to reflect past experience. Those areas with short supply and prime desirable locations will buck the trend. Those in not prime locations will be the last to appreciate, and the first to depreciate.

MacronvFrugals

10% of property sales renegotiated with small reduction - SCSI

https://www.rte.ie/news/business/2020/0824/1160873-10-of-property-sales-renegotiated-with-small-reduction/

cnocbui

IAmTheReign wrote: »

The article hardly paints a rosy picture of the market though. Over a quarter of EAs reporting that house prices are down, 10% of sales with renegotiated prices, new mortgage approvals and drawdowns down?

The logical thing to assume is that the people buying now are the ones who were ready to buy pre COVID and who's situations haven't changed. Once those sales dry up it could be very different. Or, it might not! Nothing particularly logical about the Irish housing market after all. I wouldn't be in a hurry to buy though from that report.

So 3/4 of EA's not reporting a decline in prices and 90% of sales at asking or above. :rolleyes:

ngunners

cnocbui wrote: »

So 3/4 of EA's not reporting a decline in prices and 90% of sales at asking or above. :rolleyes:

10 % of sales renegotiated doesn’t mean 90% of sales went for asking or above. It means 90% went for the agreed price which could be below, above or at asking.

cnocbui

ngunners wrote: »

10 % of sales renegotiated doesn’t mean 90% of sales went for asking or above. It means 90% went for the agreed price which could be below, above or at asking.

Not at below.

PommieBast

The_Conductor wrote: »

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.

Wasn't that precisely what caused one Green TD to resign and another reprimanded?

Hawthorn Tree

jesus_thats_gre wrote: »

First time posting on this topic. And posting as a FTB that is majorly conflicted between purchasing now (and accepting what I feel are inevitable price drops) or waiting (on the basis that those price drops may be significant).

Wait for a couple of years to make the decision. Don't buy now.

Vikings

jesus_thats_gre wrote: »

First time posting on this topic. And posting as a FTB that is majorly conflicted between purchasing now (and accepting what I feel are inevitable price drops) or waiting (on the basis that those price drops may be significant). At risk of being accused of sitting on the fence, I missed out on a property last week to a cash buyer (matched my offer - which was the highest, but was paying in cash and able to leverage that position).

I've just paid a booking deposit on a new house and accepted offer on my own so that's the position my advice is coming from.

Keep looking. If you find a house you want to live in and can secure it within your budget - that your are comfortable repaying - then why wait.

You could find yourself indefinitely on the fence. Why wait 12 months when 24 months could result in cheaper prices. Why not 48 months.

Supply is at a 15 year low. Quality houses are being snapped up quickly and usually over asking as a result of this. When more buyers enter the market following vivid subsidies coming off their payslips what will happen then - especially if supply continues to drop at the rate it currently is.

I've paid a booking deposit today on a property which will increase my borrowing approx. 150k. I accept that it is likely market prices will drop somewhat. I don't believe it will be as significant as many in here would like. I never intend to move again.

GreeBo

Hawthorn Tree wrote: »

Wait for a couple of years to make the decision. Don't buy now.

What insight will the future bring?

What's the criteria for buying if you advise not buying now?

Taylor365

GreeBo wrote: »

What insight will the future bring?

What's the criteria for buying if you advise not buying now?

I advise buying sometime in 2029, when we're expecting a close fly by/possible impact of Apophis.

Pelezico

Vikings wrote: »

I've just paid a booking deposit on a new house and accepted offer on my own so that's the position my advice is coming from.

Keep looking. If you find a house you want to live in and can secure it within your budget - that your are comfortable repaying - then why wait.

You could find yourself indefinitely on the fence. Why wait 12 months when 24 months could result in cheaper prices. Why not 48 months.

Supply is at a 15 year low. Quality houses are being snapped up quickly and usually over asking as a result of this. When more buyers enter the market following vivid subsidies coming off their payslips what will happen then - especially if supply continues to drop at the rate it currently is.

I've paid a booking deposit today on a property which will increase my borrowing approx. 150k. I accept that it is likely market prices will drop somewhat. I don't believe it will be as significant as many in here would like. I never intend to move again.

We are heading into a savage recession.. increased taxes fewer jobs. I guess that is one reason to wait.

Vikings

Pelezico wrote: »

We are heading into a savage recession.. increased taxes fewer jobs. I guess that is one reason to wait.

Can you use that crystal ball to tell me how long that will last so I can cancel my house sale and purchase and buy at precisely the correct moment in time instead of providing a home for life for my family and kids now, at an age where it disrupts them as little as possible and allows me a full term mortgage?

Pelezico

Vikings wrote: »

Can you use that crystal ball to tell me how long that will last so I can cancel my house sale and purchase and buy at precisely the correct moment in time instead of providing a home for life for my family and kids now, at an age where it disrupts them as little as possible and allows me a full term mortgage?

Of course I cant and neither can you.

I am suggesting that on the balance of probabilities, we are going to have a very tricky few years with higher taxes, higher unemployment, few emigration prospects and a weakened social welfare system.

Renting may become a lot cheaper too.

Mic 1972

MacronvFrugals wrote: »

10% of property sales renegotiated with small reduction - SCSI

https://www.rte.ie/news/business/2020/0824/1160873-10-of-property-sales-renegotiated-with-small-reduction/

basically very little impact on the market so far

enricoh

Mic 1972 wrote: »

basically very little impact on the market so far

A mate of mine delivers concrete in the greater Dublin area n was saying a few sites are letting the groundworkers go. He was mental busy since lockdown lifted but the supply tap is getting turned off now apparently.

Mic 1972

enricoh wrote: »

A mate of mine delivers concrete in the greater Dublin area n was saying a few sites are letting the groundworkers go. He was mental busy since lockdown lifted but the supply tap is getting turned off now apparently.

That's scary. They are building everywhere around D15 at the moment, they are still going ahead but i dont know if this will be the last bunch of estates before a halt

PommieBast

Mic 1972 wrote: »

basically very little impact on the market so far

10% is the rip-off factor I factored into my pricing decisions based on the opaque way the bidding system works, so I certainly don't consider it a major drop.

IAmTheReign

cnocbui wrote: »

So 3/4 of EA's not reporting a decline in prices and 90% of sales at asking or above. :rolleyes:

It does not say 90% of sales went for asking or above. It says that 10% of sales where a price had already been agreed were renegotiated downwards.

And a quarter of EAs admitting the value of property has declined is significant, whether you want to acknowledge or not. It indicates there is a downward trend in property prices.

Bubbaclaus

IAmTheReign wrote: »

It does not say 90% of sales went for asking or above. It says that 10% of sales where a price had already been agreed were renegotiated downwards.

And a quarter of EAs admitting the value of property has declined is significant, whether you want to acknowledge or not. It indicates there is a downward trend in property prices.

What do the other 75% say though?

Villa05

Bubbaclaus wrote:

What do the other 75% say though?

They prefer whiskas

IAmTheReign

Bubbaclaus wrote: »

What do the other 75% say though?

The survey found that most estate agents reported that the level of enquiries had increased, while two-thirds of agents said prices were unchanged. Nonetheless, over a quarter of the survey said values had declined, while 6% said that prices had risen.

So 94% are reporting prices are either stagnant or decreasing. This is despite the pent up demand that existed at the start of the market reopening. Mortgage approvals and drawdowns are way down and we have yet to see the effect of this on prices.

Bass Reeves

IAmTheReign wrote: »

So 94% are reporting prices are either stagnant or decreasing. This is despite the pent up demand that existed at the start of the market reopening. Mortgage approvals and drawdowns are way down and we have yet to see the effect of this on prices.

It amazing the way lads with twist or cannot read a report.

66% report prices as stagnant
6%report priced increasing
28%report prices falling
Separately to that they report that during the COVID lockdown that some managed to secure a discount of on average 3%

I could just as easily twist it that over 70% report prices increasing or holding there value

JimmyVik

IAmTheReign wrote: »

It does not say 90% of sales went for asking or above. It says that 10% of sales where a price had already been agreed were renegotiated downwards.

And a quarter of EAs admitting the value of property has declined is significant, whether you want to acknowledge or not. It indicates there is a downward trend in property prices.

so 90% of sale prices were not renegotiated downwards

hometruths

Interesting article in the Irish Times - Irish people have a distorted view of the realities of their country

According to the 708 people whose views were sought for the poll, just 49 per cent of Irish adults are home-owners, while a similar number are renters and consequently more vulnerable to the housing crisis.

Meanwhile, people believe almost 46 per cent of 25- to 34-year-olds still live with their parents, presumably trapped by sky-rocketing rents and a chronic accommodation shortage.

However, official figures show that 70 per cent of Irish adults are home-owners, while 30 per cent rent, and just one in five of those aged between 25 and 34 lives at home.

Loscher is anxious not to downplay the impact the housing crisis has on many thousands of people and the difficulties many have in putting a roof over their heads, but he stresses that while things may be bad, they are not perhaps quite as bad as many people think they are.

Are people overestimating the levels of demand in the property market?

Cyrus

schmittel wrote: »

Interesting article in the Irish Times - Irish people have a distorted view of the realities of their country



Are people overestimating the levels of demand in the property market?

I’d say it’s more likely people are listening too much to the nonsense Sinn Fein puts out

beauf

schmittel wrote: »

Interesting article in the Irish Times - ...

Are people overestimating the levels of demand in the property market?

What you quoted has very little to do with your assertion.

How do people estimate demand?