2021 Irish Property Market chat - *mod warnings post 1*

hometruths

Happy new year to all.

2020 was the year of pent up demand. I think 2021 will be the year the pent up supply comes to market.

I think the pent up supply will exceed the pent up demand and prices will fall. By how much I have no idea!

edit: Mod Warnings

This thread is about the Irish Property Market, it is not about:
* Immigration
* Refugees
* Welfare recipients
* Welfare rates
* General Irish politics beyond its impact on property
* General Irish economy beyond its impact on property
* How wonderful Country X is to buy in

Additionally, the specific issue of Geodirectory vacancy figures has been done to death and is not to be discussed again.

Pelezico

Happy new year to you. I thought mods were the only ones who could start threads.

I think it will be crazy year. Cant see anyone wanting to move...ie buy or sell.

hometruths

Pelezico wrote: »

Happy new year to you. I thought mods were the only ones who could start threads.

I think it will be crazy year. Cant see anyone wanting to move...ie buy or sell.

Full disclosure - hoping to do both. Much more likely to be posting through my pocket this year!

TheSheriff

Predictions for 2021 for Dublin; much the same as 2020, minor prices changes +/- a few percentage points of 2019's price.

Plenty of FTB's out there looking to buy, government eager to prop up prices.

Timing belt

Pelezico wrote: »

Happy new year to you. I thought mods were the only ones who could start threads.

I think it will be crazy year. Cant see anyone wanting to move...ie buy or sell.

It will be a up and down year with credit conditions tightening at the end of Q1 after bank’s report looses and increase in arrears. But will be offset by people looking for a home for their savings once banks start charging negative interest rates on amounts over x as they they try to pass on costs of excess liquidity to customers. Overall I predict a 10-15% by the end of the year.

Pelezico

schmittel wrote: »

Full disclosure - hoping to do both. Much more likely to be posting through my pocket this year!

I think the likes of daft and myhome will start to suffer with fewer properties on the market.

We will be in a very grim place until late spring. So one half of thebuying/selling year gone.

hometruths

Timing belt wrote: »

It will be a up and down year with credit conditions tightening at the end of Q1 after bank’s report looses and increase in arrears. But will be offset by people looking for a home for their savings once banks start charging negative interest rates on amounts over x as they they try to pass on costs of excess liquidity to customers. Overall I predict a 10-15% by the end of the year.

Rise or fall?!

Timing belt

schmittel wrote: »

Rise or fall?!

Rise as money will flow out of deposits in banks and into property

hometruths

Pelezico wrote: »

I think the likes of daft and myhome will start to suffer with fewer properties on the market.

We will be in a very grim place until late spring. So one half of thebuying/selling year gone.

Agree the covid/economy outlook appears bleak for the next few months.

Planning to put our house on market in the spring. Hopeful if we are looking at effective vaccination programme getting on top of covid by early summer, will see supply increase in summer/autumn.

ongarite

Can't see anything but rises in new builds in Dublin and surrounding counties.
HTB & people sitting on piles of cash with nothing to spend it on last 9 months.

Any new developments I've been looking at have sold within a day in one case and 2 weeks in most others and that's even with COVID restrictions.

I've gone sale agreed on my property few weeks ago.
For what should be dead time of year for sales, saw property go from on the market to sale agreed in less than a week.

TheSheriff

ongarite wrote: »

Can't see anything but rises in new builds in Dublin and surrounding counties.
HTB & people sitting on piles of cash with nothing to spend it on last 9 months.

Any new developments I've been looking at have sold within a day in one case and 2 weeks in most others and that's even with COVID restrictions.

I've gone sale agreed on my property few weeks ago.
For what should be dead time of year for sales, saw property go from on the market to sale agreed in less than a week.

That's a pretty impressive turn around. What general area and price range was this?

bilbot79

Yipeeee. I made first page ))))

Hoping prices fall this year

hometruths

Timing belt wrote: »

Rise as money will flow out of deposits in banks and into property

I'm in agreement with the -ve interest rates/fear of inflation theories but 10-15% would be massive rise.

What sort of figure do you reckon x will be in "banks start charging negative interest rates on amounts over x"?

i.e if that is 100k what point in the market will that effect? it wont be ftb new builds.

Do you think people will put their savings into their PPRs or investment properties?

Pelezico

bilbot79 wrote: »

Yipeeee. I made first page ))))

Hoping prices fall this year

It is going to be a long year.

The lack of supply is an enormous issue. That said, the number of people not paying mortgages is enormous and will impact banks capital adequacies.

TheSheriff

schmittel wrote: »

I'm in agreement with the -ve interest rates/fear of inflation theories but 10-15% would be massive rise.

What sort of figure do you reckon x will be in "banks start charging negative interest rates on amounts over x"?

i.e if that is 100k what point in the market will that effect? it wont be ftb new builds.

Do you think people will put their savings into their PPRs or investment properties?

No evidence of this, but I remember some article last year vaguely which mentioned 50k?

If its 50k as an example, it will impact this market.

We'll have to wait and see.

Pelezico

In my home town during the last downturn,there were 500 houses on daft. Now there are only 130 houses.

So daft is suffering and there is poor supply.

Ronan Lyons may have to amend his report to encourage more supply.

Timing belt

schmittel wrote: »

I'm in agreement with the -ve interest rates/fear of inflation theories but 10-15% would be massive rise.

What sort of figure do you reckon x will be in "banks start charging negative interest rates on amounts over x"?

i.e if that is 100k what point in the market will that effect? it wont be ftb new builds.

Do you think people will put their savings into their PPRs or investment properties?

Think it will start at around 100k but will drop to 50k by end of year. Maybe I am wrong and they don’t do it for some legal reason and sit with losses for the next few years or increase margins on lending to compensate.

I think they will spend on personal property mainly as it’s perceived as a safe asset that will hold value.

In addition to banks charging negative interest I think the Stock market will have a correction at some stage in Q1 if their is no sign of inflation. Normally people shift funds from shares to bonds when this happens which would lead to lower bond yields. But can see people moving to property as an alternative to avoid negative yields on bonds. And this will drive the investment properties.

Busi_Girl08

Will be starting the mortgage application process with my fiance soon. I'm a solid mix of excited and nervous about what's facing us this year! Both FTBs.

tommyombomb

Fear property is only going to increase, too many people like myself who are fortunate to be still working and with wfh along with potentially moving back in with parents are seeing their nest eggs grow. (not giving a percentage as feel impossible to say with proper data analysis, whole thing could crash as easily, only using a micro economic factor to reach a conclusion anyway)

Roll on 2022 when i will be able to apply to mortgage and hopefully a market correction.

hometruths

Timing belt wrote: »

Think it will start at around 100k but will drop to 50k by end of year. Maybe I am wrong and they don’t do it for some legal reason and sit with losses for the next few years or increase margins on lending to compensate.

I think they will spend on personal property mainly as it’s perceived as a safe asset that will hold value.

In addition to banks charging negative interest I think the Stock market will have a correction at some stage in Q1 if their is no sign of inflation. Normally people shift funds from shares to bonds when this happens which would lead to lower bond yields. But can see people moving to property as an alternative to avoid negative yields on bonds. And this will drive the investment properties.

Negative interest rates or not I do agree many will think keeping significant sums on deposit is a mugs game.

This is what I think will release the pent up supply, it will largely go into trader upper properties, and some normal level of turnover will come back to the market across all levels. This wont start until H2.

With increased supply/turnover I cannot see 10-15% rises.

Wanderer78

schmittel wrote:

I think the pent up supply will exceed the pent up demand and prices will fall. By how much I have no idea!

Cant see prices falling at all, can see demand increasing in certain regions, hence prices increasing

Hubertj

I think the lockdown will be extended to include construction. How long it is for will determine impact on supply for 2021. Many people will not put their house on market until COVID is gone.
I think warehouse and industrial prices could increase due to demand brought about by brexit.

I don’t think residential prices will increase and we will continue to see regional increases / decreases. Impact of wfh? WeWork and others reported record day pass sales in q4 for some countries. Novelty wearing off.

I look forward to hearing about the “vested interests”, conspiracy theories and impending market crash. I also look forward to some insightful discussion based on facts and data.

Happy new year all.

random_banter

Happy New Year.

We're working off the theory/hope that this year will see some pent up supply released after people held on to their properties during the height of the pandemic. With vaccine programmes rolling out people may feel more comfortable making changes and put their properties on the market.

2020 was to be the year we bought our first home but despite a great deposit we found that the homes we were viewing were being snapped up quickly by desperate buyers paying well over asking. Supply was truly terrible (searching in South Dublin). After spending the last 9 months working in the kitchen of our tiny apartment, we’re praying we can get some more space soon. Seems like many of our rival bidders were in a similar situation. 2020 was incredibly disappointing from a buyer’s point of view. Hoping for a better ‘21.

TheSheriff

Hubertj wrote: »

I think the lockdown will be extended to include construction. How long it is for will determine impact on supply for 2021. Many people will not put their house on market until COVID is gone.
I think warehouse and industrial prices could increase due to demand brought about by brexit.

I don’t think residential prices will increase and we will continue to see regional increases / decreases. Impact of wfh? WeWork and others reported record day pass sales in q4 for some countries. Novelty wearing off.

I look forward to hearing about the “vested interests”, conspiracy theories and impending market crash. I also look forward to some insightful discussion based on facts and data.

Happy new year all.

The WeWork stats are certainly telling with regards WFH.

Personally, I'd love if my company offered similar

mcsean2163

Looking to move to somewhere with a bigger back garden, not great options Wicklow/ Kildare.

We're in Dublin 8 and there seems to be new empty apartment blocks all around. I would have thought a lot of foreign nationals would leave with covid19 but maybe not, so surprised by market resilience and wondering if there will be a collapse at all. We can't find anything my wife is happy with....

ongarite

Hubertj wrote: »

I think the lockdown will be extended to include construction. How long it is for will determine impact on supply for 2021. Many people will not put their house on market until COVID is gone.
I think warehouse and industrial prices could increase due to demand brought about by brexit.

Construction won't be shutdown IMO.
Its too late already anyway as trades are back on sites all across this island North and South tomorrow.

Stopping construction again will only reduce supply & piss off future home-owners who are waiting on completion dates.
Private sector/industry builds can't afford another 3 month delay again.

Smouse156

Happy New Year!

As someone looking to buy, hoping for some discounts. Probably likely to find them on homes over 600k or apartments. The stuff with HTB will keep rising and commuter towns also.

Overall flat year as Sheriff states +- a few % and Daft trying to spin asking price rises.

The bank negative interest rates won’t be a factor at all as most people will just set up new accounts with different banks or pay the cost. I don’t see it being a factor. BOI introduced the €6/month charge as they know most people won’t be bothered moving current account...and they were right! Any small negative interest rate will just be paid by the vast majority or they’ll shift money to new banks to stay under the cap

Wanderer78

Smouse156 wrote: »

Happy New Year!

As someone looking to buy, hoping for some discounts. Probably likely to find them on homes over 600k or apartments. The stuff with HTB will keep rising and commuter towns also.

Overall flat year as Sheriff states +- a few % and Daft trying to spin asking price rises.

The bank negative interest rates won’t be a factor at all as most people will just set up new accounts with different banks or pay the cost. I don’t see it being a factor. BOI introduced the €6/month charge as they know most people won’t be bothered moving current account...and they were right! Any small negative interest rate will just be paid by the vast majority or they’ll shift money to new banks to stay under the cap

am i right in saying, negative rates are for government bonds, and not the majority of deposits?

Pelezico

Here is the other thing. Lots of multinational workers in Ireland and they have plenty of share options in new economy booming stocks.

There is a wealth effect and a lack of supply.

DubLad69

ongarite wrote: »

Can't see anything but rises in new builds in Dublin and surrounding counties.
HTB & people sitting on piles of cash with nothing to spend it on last 9 months.

Any new developments I've been looking at have sold within a day in one case and 2 weeks in most others and that's even with COVID restrictions.

There are new builds in Maynooth, Leixlip, Celbridge and Newcastle (all right on the edge of Dublin) that are in the 400k area that have been sitting around unsold for months.

I can't see any significant price rises in those areas.

Wanderer78

Pelezico wrote: »

Here is the other thing. Lots of multinational workers in Ireland and they have plenty of share options in new economy booming stocks.

There is a wealth effect and a lack of supply.

share ownership is heavily skewed within these multinationals, most would be held amongst high level employees

Smouse156

Wanderer78 wrote: »

am i right in saying, negative rates are for government bonds, and not the majority of deposits?

They’re for government bonds and bank deposits with the ECB. The bank is losing money depositing with the ECB...a cost they may pass on although some have done this through current account charges

Geuze

Wanderer78 wrote: »

am i right in saying, negative rates are for government bonds, and not the majority of deposits?

Neg rates apply to corporate deposits so far, not retail deposits.

Bass Reeves

schmittel wrote: »

Happy new year to all.

2020 was the year of pent up demand. I think 2021 will be the year the pent up supply comes to market.

I think the pent up supply will exceed the pent up demand and prices will fall. By how much I have no idea!

You were wrong last year's d you will be wrong this year. Dublin will maintain prices with any momentum in the upward direction. Outside Dublin you will see prices continue to rises in towns and villages. Larger urban area's will see pressure for upward momentum. Cities like Limerick and Waterford will as well see pressure for an upward trend in prices.

A 350k mortgage over 25yeats is sub 1600 euro. Game is at or in this direction unfortunately.

Marius34

Timing belt wrote: »

Think it will start at around 100k but will drop to 50k by end of year. Maybe I am wrong and they don’t do it for some legal reason and sit with losses for the next few years or increase margins on lending to compensate.

I think they will spend on personal property mainly as it’s perceived as a safe asset that will hold value.

In addition to banks charging negative interest I think the Stock market will have a correction at some stage in Q1 if their is no sign of inflation. Normally people shift funds from shares to bonds when this happens which would lead to lower bond yields. But can see people moving to property as an alternative to avoid negative yields on bonds. And this will drive the investment properties.

As I mentioned before I think it's close to impossible to get right timing to predict stock market. But I think I have one thing in common with you here. I do believe Tech stocks are in a Bubble, and there is high risk to burst. Will be watching it closely, I'm not sure as of yet, the impact it would cause to the Property Market.

wowy

Wanderer78 wrote: »

am i right in saying, negative rates are for government bonds, and not the majority of deposits?

https://www.independent.ie/business/personal-finance/banking/aib-to-cut-a-string-of-deposit-rates-to-zero-and-impose-negative-rates-on-more-firms-39614046.html

I dunno where this recent talk of negative interest rates for general personal deposit accounts came from? The above article from October reports that the only private deposit accounts that will be likely to incur them (this year anyway) will be for €1M+ balances, and how many of those are there?

Wanderer78

wowy wrote: »

https://www.independent.ie/business/personal-finance/banking/aib-to-cut-a-string-of-deposit-rates-to-zero-and-impose-negative-rates-on-more-firms-39614046.html

I dunno where this recent talk of negative interest rates for general personal deposit accounts came from? The above article from October reports that the only private deposit accounts that will be likely to incur them (this year anyway) will be for €1M+ balances, and how many of those are there?

yea, i think people are getting confused with negative bond rates, as far as im aware, negative rates already exist on high deposit accounts, which means, there probably is none in irish banks, may stand corrected on that though

Timing belt

Wanderer78 wrote: »

yea, i think people are getting confused with negative bond rates, as far as im aware, negative rates already exist on high deposit accounts, which means, there probably is none in irish banks, may stand corrected on that though

No people are not getting confused we are talking about banks passing on the cost of the excess liquidity to depositors. Currently they charge negative rates on business and some high net worth clients but I believe that during 2021 we will see the banks widen the catchment net by introducing tiered rates with any balance over x being charged a negative rate.

Wanderer78

Timing belt wrote: »

No people are not getting confused we are talking about banks passing on the cost of the excess liquidity to depositors. Currently they charge negative rates on business and some high net worth clients but I believe that during 2021 we will see the banks widen the catchment net by introducing tiered rates with any balance over x being charged a negative rate.

i really cant see many, if any businesses holding deposits above the cut off point, theyd be nuts to try introduce negative rates further down the trough, but who knows

Timing belt

Wanderer78 wrote: »

i really cant see many, if any businesses holding deposits above the cut off point, theyd be nuts to try introduce negative rates further down the trough, but who knows

Why would they be nuts if it saves them a considerable amount of money and is the difference between posting a profit or a loss for a year?

Yes money would leave the banks and look for a new home which I think could be property as shares look overvalued, bonds have negative yield. So without taking on significant Risk property will be the natural choice.

Wanderer78

Timing belt wrote: »

Why would they be nuts if it saves them a considerable amount of money and is the difference between posting a profit or a loss for a year?

Yes money would leave the banks and look for a new home which I think could be property as shares look overvalued, bonds have negative yield. So without taking on significant Risk property will be the natural choice.

it doesnt make sense to me for a businesses or individuals to hold deposits above threshold points, if negative rates kick in, so does it actually happen in reality, i suspect not, but i could be wrong? it would makes sense to me to have multiple accounts across many providers, making sure no account ever hits this threshold, even though im unsure if that is in fact allowed?

Villa05

TheSheriff wrote:

Plenty of FTB's out there looking to buy, government eager to prop up prices.

schmittel wrote:

Negative interest rates or not I do agree many will think keeping significant sums on deposit is a mugs game.

Timing belt wrote:

Yes money would leave the banks and look for a new home which I think could be property as shares look overvalued, bonds have negative yield. So without taking on significant Risk property will be the natural choice.

Ye do realise what you are describing is the mother of all asset price bubbles. I wonder if their are any pins out there to burst it

Timing belt

Wanderer78 wrote: »

it doesnt make sense to me for a businesses or individuals to hold deposits above threshold points, if negative rates kick in, so does it actually happen in reality, i suspect not, but i could be wrong? it would makes sense to me to have multiple accounts across many providers, making sure no account ever hits this threshold, even though im unsure if that is in fact allowed?

There are only 5 providers in Ireland and if the banks set a threshold of 30k for negative rates then that would mean any deposits over 150k (30k x 5) would end up being charged negative interest.

The thing that needs to be remembered is the longer we are in a low interest rate environment the likelihood of this happening increases.

Yes ECB has been charging negative rates for years but the banks benefited from a yield on government bonds. With the yield on Government bonds being negative and looking to remain like this for quite a bit the banks end up having to roll over bonds onto a negative rate and this is when they will pass the cost onto retail customers.
E.g.
Bank of Ireland hold 16bn of governments bonds and the rate of return dropped to 0.14% at June 2020... At the year end this will probably be half that at 0.07% and June 2021 0.00%.

Timing belt

Villa05 wrote: »

Ye do realise what you are describing is the mother of all asset price bubbles. I wonder if their are any pins out there to burst it

Yip well aware of it... the only asset that does not look like it has a bubble is property and hence why I am saying funds will start to flow into it.

If we do have a repeat of the roaring 20's as a lot expect will happen accompanied by inflation then there is an argument for the valuations but if this does not materialise then the Pin that I think will burst it is a lack in Inflation in the months ahead.

hometruths

Timing belt wrote: »

Yip well aware of it... the only asset that does not look like it has a bubble is property and hence why I am saying funds will start to flow into it.

If we do have a repeat of the roaring 20's as a lot expect will happen accompanied by inflation then there is an argument for the valuations but if this does not materialise then the Pin that I think will burst it is a lack in Inflation in the months ahead.

Look at global commodity prices. Inflation is happening. It’s about the only argument for rising property prices that I can get my head around.

Wanderer78

Timing belt wrote: »

There are only 5 providers in Ireland and if the banks set a threshold of 30k for negative rates then that would mean any deposits over 150k (30k x 5) would end up being charged negative interest.

The thing that needs to be remembered is the longer we are in a low interest rate environment the likelihood of this happening increases.

Yes ECB has been charging negative rates for years but the banks benefited from a yield on government bonds. With the yield on Government bonds being negative and looking to remain like this for quite a bit the banks end up having to roll over bonds onto a negative rate and this is when they will pass the cost onto retail customers.
E.g.
Bank of Ireland hold 16bn of governments bonds and the rate of return dropped to 0.14% at June 2020... At the year end this will probably be half that at 0.07% and June 2021 0.00%.

would introducing such thresholds increase the potential of bank runs?

Timing belt

schmittel wrote: »

Look at global commodity prices. Inflation is happening. It’s about the only argument for rising property prices that I can get my head around.

What we are seeing in commodity prices is inflation in metals as people hedge as they expect to see inflation in the future. This is speculation and not real inflation with the exception of Steel as China is push steel prices higher with the demand that they have to build infrastructure as part of their fiscal spending to deal with Covid.

Energy prices are still low and not what you would expect for booming economies

Agriculture and lumber have modest inflation (with the exception of Coffee).

hometruths

Timing belt wrote: »

What we are seeing in commodity prices is inflation in metals as people hedge as they expect to see inflation in the future. This is speculation and not real inflation with the exception of Steel as China is push steel prices higher with the demand that they have to build infrastructure as part of their fiscal spending to deal with Covid.

Energy prices are still low and not what you would expect for booming economies

Agriculture and lumber have modest inflation (with the exception of Coffee).

Not real inflation! Do you work for a central bank?!

Timing belt

schmittel wrote: »

Not real inflation! Do you work for a central bank?!

What I mean is that it is speculation with investors pilling into gold, Silver, Bitcoin etc as they expect to see inflation in the future. They are not using the Gold or Silver to produce any goods so it will not make its way into the CPI.

Idbatterim

The interesting thing is, it's mostly apartments that are being built in dublin. Very few for build to sell. Its one thing paying mad money for a new build house , but mad money for a new build apartment ...

Pelezico

Timing belt wrote: »

What we are seeing in commodity prices is inflation in metals as people hedge as they expect to see inflation in the future. This is speculation and not real inflation with the exception of Steel as China is push steel prices higher with the demand that they have to build infrastructure as part of their fiscal spending to deal with Covid.

Energy prices are still low and not what you would expect for booming economies

Agriculture and lumber have modest inflation (with the exception of Coffee).

Inflation in all asset classes abounds. From bitcoin, NASDAQ, Tesla, gold, silver, commodities. Oil at $50 a barrel is very high given usa and europe in recession.

Iron ore booming and demand from China is enormous.