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

Smouse156

Mic 1972 wrote: »

The Daft report for Q4 sales is showing a significant increase in YOY prices.
Not only there was no price drop in 2020, prices went up a lot

https://ww1.daft.ie/report/2020-Q4-houseprice-daftreport.pdf?d_rd=1

No they didn’t! Asking prices aren’t selling prices.
Latest real data is slightly down, more so in Dublin

Bellejelles

You will see the covid crisis really hit this year as people start losing jobs. 2021 there was average fall of prices of sold houses 2020 by 4% but asking prices have gone up 10%

Timing belt

schmittel wrote: »

Record approvals or drawdowns?

It was meant to say approvals and a genuine mistake... Thank you for pointing this out.

The Drawdown data is only available for the first 3 Qtrs of the year and can be found here.

https://bpfi.ie/publications/bpfi-mortgage-drawdowns-report-q3-2020/

It shows that Drawdowns for house purchases for the first 9 months of the year is down to 78% of the value of loans drawn-down for the same period in 2019.

When you drill into the data it shows that new Builds are 85% and secondhand is 75% value of the first 9 months of 2019.

Hubertj

schmittel wrote: »

Record approvals or drawdowns?



In the interests of making sure nobody is interpreting information to justify their opinion are you talking about approvals or drawdowns? There is a fairly significant difference.



https://www.irishtimes.com/business/economy/mortgage-drawdowns-fall-by-almost-a-third-compared-to-2019-1.4391707

According to BPFI mortgage drawdowns collapsed by nearly 30% in the middle of a crisis.

What about the comparative supply during the periods? How much of the 30% is down to they’re being nothing to draw down on? How much is due to consumer sentiment? How much is down to being refused drawdown? I’m surprised it was only 30% considering all that has and continues to happen.

I fcuking hate the word “collapse”. Never liked it, I think it’s the sound.

Villa05

Hubertj wrote:

I fcuking hate the word “collapseâ€. Never liked it, I think it’s the sound.

As time elapse, perhaps you can find some apps to prevent a relapse

hometruths

Timing belt wrote: »

It was meant to say approvals and a genuine mistake... Thank you for pointing this out.

The Drawdown data is only available for the first 3 Qtrs of the year and can be found here.

https://bpfi.ie/publications/bpfi-mortgage-drawdowns-report-q3-2020/

It shows that Drawdowns for house purchases for the first 9 months of the year is down to 78% of the value of loans drawn-down for the same period in 2019.

When you drill into the data it shows that new Builds are 85% and secondhand is 75% value of the first 9 months of 2019.

When you drill into the data it shows that in terms of drawdowns Covid had zero impact on Q1 2020, which would be expected. So given the data we have the Covid impact can only be seen in Q2 and Q3. And the figure is down 30% in the same timescale.

Would you really claim that the housing market didn't suffer due to Covid?

fliball123

schmittel wrote: »

When you drill into the data it shows that in terms of drawdowns Covid had zero impact on Q1 2020, which would be expected. So given the data we have the Covid impact can only be seen in Q2 and Q3. And the figure is down 30% in the same timescale.

Would you really claim that the housing market didn't suffer due to Covid?

In terms of prices dropping it didnt

hometruths

Hubertj wrote: »

What about the comparative supply during the periods? How much of the 30% is down to they’re being nothing to draw down on? How much is due to consumer sentiment? How much is down to being refused drawdown? I’m surprised it was only 30% considering all that has and continues to happen.

A lot due to all of the above I would guess!!

The interesting thing about comparative supply is looking at the mover/purchaser drawdowns... Mover/purchasers are about 60% in volume of what they were Q2/Q3 2019. Trigger warning - I am going to make some assumptions here...

Mover/purchasers represent significant supply of 2nd hand homes - i.e they are selling their existing properties.
Mover/purchasers without mortgages represent bulk of balance of second hand home supply.
They will also likely to be down approx 60% (likely more)
Pattern likely to continue until well clear of lockdown, say Q3 2021
This is creating a backlog of pent up supply of people who ordinarily would have sold in this timeframe. These people will still want to sell when things get back to normal.
The longer COVID goes on, more people will be considering selling than normal due to Covid lockdown experience - house too small, garden too small, WFH, etc etc etc.

If the above assumptions hold vaguely true we are looking at releasing significant supply of second hand homes into the market - 40% of a years normal supply + COVID lockdown induced supply + normal sales supply in Q2/Q3 of this year.

Just well all these mortgage approvals are in the pipeline!!

Timing belt

schmittel wrote: »

When you drill into the data it shows that in terms of drawdowns Covid had zero impact on Q1 2020, which would be expected. So given the data we have the Covid impact can only be seen in Q2 and Q3. And the figure is down 30% in the same timescale.

Would you really claim that the housing market didn't suffer due to Covid?

Demand is still very strong, prices are holding up despite everyone expecting the opposite when Covid first hit. Supply is down but so is immigration.

Mortgage approvals are at a all time high for the past 3 months which suggests that banks have the ability to lend and are not constrained by having to hold additional Capital to deal with the crisis.

If anything this shows that property market up to now has been resilient to Covid.

Timing belt

schmittel wrote: »

A lot due to all of the above I would guess!!

The interesting thing about comparative supply is looking at the mover/purchaser drawdowns... Mover/purchasers are about 60% in volume of what they were Q2/Q3 2019. Trigger warning - I am going to make some assumptions here...

Mover/purchasers represent significant supply of 2nd hand homes - i.e they are selling their existing properties.
Mover/purchasers without mortgages represent bulk of balance of second hand home supply.
They will also likely to be down approx 60% (likely more)
Pattern likely to continue until well clear of lockdown, say Q3 2021
This is creating a backlog of pent up supply of people who ordinarily would have sold in this timeframe. These people will still want to sell when things get back to normal.
The longer COVID goes on, more people will be considering selling than normal due to Covid lockdown experience - house too small, garden too small, WFH, etc etc etc.

If the above assumptions hold vaguely true we are looking at releasing significant supply of second hand homes into the market - 40% of a years normal supply + COVID lockdown induced supply + normal sales supply in Q2/Q3 of this year.

Just well all these mortgage approvals are in the pipeline!!

Yes the supply of second hand homes has been impacted. Who would want to move house during a pandemic.... but we all know this.

If there is pent up supply of second hand homes about to hit the market then it safe to assume that there will be equal pent up demand as people will need to live somewhere.

The big question is are they upgrading or downsizing or moving location.

If they are emigrating then yes we will have additional supply but if they are remaining in Ireland then it is safe to assume that there will be demand along with the supply.

combat14

Huge spike in house prices to hit buyers as average Dublin home goes for almost €400,000

https://www.dublinlive.ie/news/huge-spike-house-prices-hit-19563339.amp


Looks like there is tons of money out there!

great to see that our government has plenty of room now to raise taxes and cut govt expenditure to pay back our 250 billion national debt before the next economic crisis or recession hits - it was only 40 billion 12 years ago time to get it down

hometruths

Timing belt wrote: »

The big question is are they upgrading or downsizing or moving location.

I would say the bigger question is whether the credit worthy mortgage approval numbers on the pent up demand side are keeping pace with the would be seller numbers on the pent up supply side.

i.e if this supply comes on stream a few months after we get back to normal, government wind down supports etc, will rising unemployment take out some of the approvals ability to drawdown.

and how many individual approvals are being granted, many will be same person with AIP from two or three banks.

PommieBast

combat14 wrote: »

Huge spike in house prices to hit buyers as average Dublin home goes for almost €400,000

https://www.dublinlive.ie/news/huge-spike-house-prices-hit-19563339.amp

That article reads like a shill job. Averages are meaningless without info on volume, and it quotes asking prices which are basically fiction.

Timing belt

schmittel wrote: »

I would say the bigger question is whether the credit worthy mortgage approval numbers on the pent up demand side are keeping pace with the would be seller numbers on the pent up supply side.

i.e if this supply comes on stream a few months after we get back to normal, government wind down supports etc, will rising unemployment take out some of the approvals ability to drawdown.

and how many individual approvals are being granted, many will be same person with AIP from two or three banks.

Yes there will be individuals with AIP from two or three banks.
This tells us that the banks have the ability to lend as there is a capital cost to issuing these and banks would be more reluctant to issue these if they were under pressure and watching capital. This suggests that that the provisions they booked at half year are sufficient to deal with the crisis and they are adequately capitalised.

With regards unemployment I wouldn't expect people to be looking to move home (unless to downgrade) if they thought there employment was at risk.

hometruths

Timing belt wrote: »

With regards unemployment I wouldn't expect people to be looking to move home (unless to downgrade) if they thought there employment was at risk.

I used to think like that too. Before I moved back to Ireland.

Marius34

Don't know how this will affect Property Market, but it seem we going to have another Big Problem.

Sampling finds UK variant in quarter of Irish cases
https://www.breakingnews.ie/ireland/covid-19-sampling-finds-uk-variant-in-quarter-of-irish-cases-1059965.html

I might be very wrong, but we may end up being on Level 5 lockdown for many months.

Timing belt

Marius34 wrote: »

Don't know how this will affect Property Market, but it seem we going to have another Big Problem.

Sampling finds UK variant in quarter of Irish cases
https://www.breakingnews.ie/ireland/covid-19-sampling-finds-uk-variant-in-quarter-of-irish-cases-1059965.html

I might be very wrong, but we may end up being on Level 5 lockdown for many months.

A lot will depend on how sever the lockdown is and how long it lasts.

I am hearing that it will mean everything closed with the exception of real essential this time and things like click and collect will no longer be allowed operate.

Timing belt

Denmark banks are starting to offering 20 year fixed mortgage at 0%


https://www.bloomberg.com/news/articles/2021-01-05/danes-get-20-year-0-mortgages-as-interest-rates-keep-sinking?srnd=economics-vp


https://www.smh.com.au/business/banking-and-finance/denmark-offers-homeowners-20-year-loans-at-a-fixed-interest-rate-of-zero-20210106-p56rzj.html

Geuze

Timing belt wrote: »

Denmark banks are starting to offering 20 year fixed mortgage at 0%


https://www.bloomberg.com/news/articles/2021-01-05/danes-get-20-year-0-mortgages-as-interest-rates-keep-sinking?srnd=economics-vp


https://www.smh.com.au/business/banking-and-finance/denmark-offers-homeowners-20-year-loans-at-a-fixed-interest-rate-of-zero-20210106-p56rzj.html

I recall this being discussed here or on AAM before, it is not as simple as it sounds, there are fees, and/or other costs.


https://www.askaboutmoney.com/threads/the-mortgage-system-in-denmark.178532/


https://www.askaboutmoney.com/threads/danish-bank-issuing-20-year-mortgages-at-0.213799/

Brussels Sprout

If the construction sites are shut again then that will restrict supply with obvious knock-on affects on prices.

TheSheriff

Brussels Sprout wrote: »

If the construction sites are shut again then that will restrict supply with obvious knock-on affects on prices.

Did I read the news correct today, that private sites will be shut, but social sites will be kept going?

Madness if so

Zenify

TheSheriff wrote: »

Did I read the news correct today, that private sites will be shut, but social sites will be kept going?

Madness if so

yeah and schools will keep going too. I'm wondering how builders will get around this. Cherrywood is a massive development near me and it is supposed to include a few schools... I wonder if the entire site will continue or will they focus their building on the schools? anyone got any ideas?

Sweet.Science

TheSheriff wrote: »

Did I read the news correct today, that private sites will be shut, but social sites will be kept going?

Madness if so

How are social more essential than private ?

JimmyVik

Sweet.Science wrote: »

How are social more essential than private ?

Votes and optics.

Sweet.Science

JimmyVik wrote: »

Votes and optics.

Thought so .

Sweet.Science

Sweet.Science wrote: »

How are social more essential than private ?

The government are spending billions paying rent to private landlords, it makes sense to build social housing and take these people out of private houses.

TheSheriff

bubblypop wrote: »

The government are spending billions paying rent to private landlords, it makes sense to build social housing and take these people out of private houses.

This is nuts.

It will delay FTBs keeping them in rentals longer. Spending money unnecessarily.

It will also further delay the delivery of private home, decreasing supply, increasing competition etc. If I was a conspiracy theorist.........

Villa05

fliball123 wrote: »

First off where are you getting we are going bankrupt we borrowed 8/9 times as much 10/12 years ago and we didnt go bankrupt.

We have not started paying back what we borrowed 10-12 years ago yet despite strong growth in that time



The wealth created in that strong growth has been absorbed by property and increasingly leaving the country untaxed.


The cycle shows no signs of stopping and is incentivised by the state



We are essentially spending our wealth on making life more difficult and expensive for our citizens for the benefit of foreign pension funds and investment trusts despite our own pensions crisis looming



This is neither smart or sustainable

Villa05

fliball123 wrote: »

Also where are you getting the idea that property is not affordable. If you take the average wage in Ireland is about 39k and the average house price in Ireland is 267k. Now do the math of a couple on the average wage buying a house at the average price. . The average house price in the country is 267k is affordable 3.5 times 78k (couple) is 273k and then add in 10% for your deposit. Also other countries like America, France, the UK and a lot of other EU countries allow 5 times your salary.

I dont know where your getting that it is unaffordable. I know people will say but not everyone can afford 267k but in the example above both the property and wage are at the average and while we have people on less than the average wage we also have housing for less than the average house price.

A. If housing was affordable we would not need to give up to 30,000 euro of taxpayers money to every first time buyer in the form of a grant.


B. following on from that we would not need to introduce a joint ownership scheme further enhancing the money available to buy property.


C we would not need to give publicly owned land to private developers at reduced market value to stimulate house building



D. In 2016, only 14.1% of households earned 100k or higher, therefore the private sector can roughly only cater for the housing needs of the top 30% of earning households. This 30% of course assumes that First time buyers are at the peak of their earning power when they buy.



E. Those that cant afford to buy are forced into a rental market that is more expensive than buying. This sucks more and more income out of the economy which would normally be spent on job/tax creating products and services



F. Government policy of sourcing social and affordable from the private market rather than sourcing their own given their natural advantages (0% rates, land ownership, planning owenership, availability of labour) over the private sector means that public housing is procurred at the highest cost. This leads to supply issues and a further spiralling of price



G. increased prices will mean that workers will have buy further and further away from there place of work. This means more commuting costs more public infrastructue requirements and maintenance plus added fines from the EU for Carbon emmissions plus the damage of those emmissions


H. Increased costs on employees puts pressure on salaries which may or may not be met. Either way it reduces our competititveness in an international market

fliball123

Villa05 wrote: »

We have not started paying back what we borrowed 10-12 years ago yet despite strong growth in that time



The wealth created in that strong growth has been absorbed by property and increasingly leaving the country untaxed.


The cycle shows no signs of stopping and is incentivised by the state



We are essentially spending our wealth on making life more difficult and expensive for our citizens for the benefit of foreign pension funds and investment trusts despite our own pensions crisis looming



This is neither smart or sustainable

.
And yet 10/12 years on without paying we are still not bankrupt. Have you any evidence of wealth leaving the country? and have you compared the wealth leaving with the wealth coming into the country ?? But back to the point we wont be going backrupt any time soon one of the biggest advantages of being in the EU is that there will always be a lender of last resort ... An addition 20/30 billion at near zero interest is not going to burst any bubbles anytime soon