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

Cyrus

DataDude wrote: »

In particular the premium end of the market was suffering the most (if the past is anything to go by, this appears to be a more leading indicator)

if by premium end you mean 800k-1.5m i think that stagnation was more around affordability limits than anything else, people at that level are still salaried in the main, just relatively well paid, the CB rules put the brakes on here (thankfully).

DataDude

Mic 1972 wrote: »

the trend has been positive all the way since 2018, especially in Dublin

False. Been flat excluding Dublin. Been declining in Dublin. Source: CSO

DataDude

Cyrus wrote: »

if by premium end you mean 800k-1.5m i think that stagnation was more around affordability limits than anything else, people at that level are still salaried in the main, just relatively well paid, the CB rules put the brakes on here (thankfully).

I think it was a little worse than stagnant. Saw some figures of -3 to -5% in the premium end.
But even if we assume stagnant, whilst those people are still generally employed. I don't think too many have seen a mega boost to earnings from COVID-19 that will, in the long term, allow them to borrow more than they would have been able were COVID not to have existed?

That's why I struggle to see a longer term trend suddenly being favorable after a period of being very static.

Browney7

Mic 1972 wrote: »

the trend has been positive all the way since 2018, especially in Dublin

Not sure what data you are inferring the above from? CSO price index had Dublin in Jan 2018 at 121.8 before peaking at 127.7 in October 18 and now stands at 125.1.

it's very interesting to see the jump in the 2017 year coincides nicely with the CBI changing the LTV rule to be a flat 90% LTV for FTBs instead of the older sliding scale. Economic growth and recovery obviously impacted here also

cnocbui

DataDude wrote: »

The only thing that I can't square off in my head is - we have been talking about a supply deficit, low interest rates, foreign investors etc. for some time now but yet prices have been meandering slowly south since 2018. In particular the premium end of the market was suffering the most (if the past is anything to go by, this appears to be a more leading indicator)

Anecdotes seem to suggest there is a bit of a frenzy on at the minute which seemed to kick off around November 2020. If one was to list all the things that the pandemic is going to change in terms of longer term supply/demand fundamentals, I personally can't see the aggregate impact being positive for prices. So not sure why the long term trend would suddenly reverse from 2018.

Short term supply/demand though is all over the place in a way that we have never seen before. Think it could be some time before all the short term issues subside and bring us back to "normality".

Prices are rising in the US, UK, Australia and NZ. But yeah, once again, Ireland is oh-so 'special' and will go against the international trend.

Villa05

Sierra Oscar wrote:

The various initiatives from the Government are essentially a direct transfer of wealth to first time buyers too, giving a refund on income tax and DIRT. It doesn't result in them having a 100% interest fee loan that they are highly likely to be unable to pay down the line. The bank are still stress testing capability to pay pretty stringently whereas that did not happen during the later stages of the Celtic Tiger.

Well many would legitamly argue that it is a transfer to developers not ftb

It may have been missed last time but it was the taxpayer that paid the bills when the banks collapsed and those that could not afford mortgages were basically left in the home

Playing musical chairs with risk is pointless if its taxpayers picking up the tab all the time

Blue Badger

MacronvFrugals wrote: »

You know its going bad when TD's tried to pressure the ESRI into not saying the shared equity scheme would push up prices, thankfully they did say it anyways.

TDs deny they tried to 'pressure' ESRI to withdraw criticism of Affordable Housing Bill



https://www.irishexaminer.com/news/politics/arid-40227935.html

Sometimes with all this carry on I feel like screaming because buying a house in this country as one of the younger generation is so maddening.

Balluba

Bad news today for 150 people who will lose their jobs with Kerry Group.

wassie

Browney7 wrote: »

Whilst I agree that the banks have a 90% LTV on paper for a new build, my own opinion is it's a riskier proposition for the bank in a time of stress than a 90% LTV on a second hand build. If you need to sell the new build a few years after purchasing you would do very well to sell it for what you paid for it especially if HTB in its current form still exists. Why would an FTB buy a second hand "new build" with no refund if they can buy one in the estate next door for a similar price and get 10% back?

Would be interesting to see what % of new builds below the HTB threshold are bought by non FTB's.

Its a good point about why HTB distorts the market. But dont forget Revenue can claw back the HTB if you sell within 5 years. That being said, I would be curious to know if this happens and if it is on a pro-rata basis for balance of 5 year period remaining.

TobyHolmes

cnocbui wrote: »

Prices are rising in the US, UK, Australia and NZ. But yeah, once again, Ireland is oh-so 'special' and will go against the international trend.

i'm not sure what you mean by your comment but even if prices are rising in those countries there are still alot more property options and commutable areas then we have here in Ireland so an increase in prices affects ireland drastically - we are only a small small market compared to those other countries you list - with the exception of New Zealand

Marius34

DataDude wrote: »

I think it was a little worse than stagnant. Saw some figures of -3 to -5% in the premium end.
But even if we assume stagnant, whilst those people are still generally employed. I don't think too many have seen a mega boost to earnings from COVID-19 that will, in the long term, allow them to borrow more than they would have been able were COVID not to have existed?

That's why I struggle to see a longer term trend suddenly being favorable after a period of being very static.

There are many components why this happens. Here are some of the main components:

1) Increased Household savings (probably most important factor)
2) WFH
3) Reduced concerns on Brexit
4) Reduced concerns on Recession (second half of 2020)
5) HTB
6) Increased Build-2-Let
7) Increased Social Housing
8) Reduced number for sale due to Lockdowns.
...

thefridge2006

https://www.independent.ie/business/personal-finance/moneylenders-are-creeping-into-middle-income-areas-tds-are-told-40098022.html

UH OH..... but we're grand, we'll be propped up forever and things won't get any worse...

Yurt2

TobyHolmes wrote: »

i'm not sure what you mean by your comment but even if prices are rising in those countries there are still alot more property options and commutable areas then we have here in Ireland so an increase in prices affects ireland drastically - we are only a small small market compared to those other countries you list - with the exception of New Zealand

Interestingly, NZ has a chronic housing crisis probably an order of magnitude worse than Ireland (I know a well-paid kiwi who got a mortgage with two of his uni mates in Wellington as it was the only way to 'get on the ladder'), and for the same reasons we have an affordability crisis.

The government response (Kiwibuild) is startlingly similar to the proposed 'affordable' housing measures here, was a complete cluster*ck and inflated prices further, and basically only further advantaged people who had the money to buy in the first place.

You'd wonder do the civil servants in the Department of Housing have access to the internet to research this at all?

Cyrus

thefridge2006 wrote: »

https://www.independent.ie/business/personal-finance/moneylenders-are-creeping-into-middle-income-areas-tds-are-told-40098022.html

UH OH..... but we're grand, we'll be propped up forever and things won't get any worse...

Care to give any analysis or context about why posting about money lenders lending to middle income people is important in the context of the property market ? Or do you just like bad news stories regardless ?

DataDude

Marius34 wrote: »

There are many components why this happens. Here are some of the main components:

1) Increased Household savings (probably most important factor)
2) WFH
3) Reduced concerns on Brexit
4) Reduced concerns on Recession (second half of 2020)
5) HTB
6) Increased Build-2-Let
7) Increased Social Housing
8) Reduced number for sale due to Lockdowns.
...

Again, not denying there is a clear upward trend in prices currently. But if anything your list would reinforce to me that the primary drivers at play at the moment very much short term effects. If all we read is to be true and house prices were stagnating in 2019 due to affordability limits being reached on demand side. I can't see how any of the below are going to dramatically enhance the demand side outlook in the coming years (i.e. average earnings are not going to massively increase)

1) Increased Household savings (probably most important factor)Short term demand side impact. Not a sustainable long term change in buying power.
2) WFHPotential change in the type of demand but not directly improving overall demand side, although argued by some here, would be more likely to lead to demand moving from supply constrained areas to less supply constrained areas
3) Reduced concerns on Brexit Fair point, although not like the Brexit outcome was fantastic. Also talk around election time was that nobody actually seemed to care. https://www.irishtimes.com/news/politics/don-t-mention-the-b-word-brexit-barely-figures-as-an-election-issue-1.4167398
4) Reduced concerns on Recession (second half of 2020)Would explain bounce back in late 2020 for sure, but I'm talking versus 2019. Not sure how people could be more economically confident now than late 2019.
5) HTBIncrease of €10k a factor for sure
6) Increased Build-2-Let Not sure
7) Increased Social HousingNot sure
8) Reduced number for sale due to Lockdowns.Short term supply side effect which is what I think is currently the biggest factor at play along with number (1) above

decreds

cnocbui wrote: »

Prices are rising in the US, UK, Australia and NZ. But yeah, once again, Ireland is oh-so 'special' and will go against the international trend.

Where do you get your information from? Please link evidence to such bizarre claims.

US: House-prices-fall-for-first-time-in-six-months-in-january



https://www.msn.com/en-gb/finance/other/house-prices-fall-for-first-time-in-six-months-in-january/ar-BB1dj1bD



Prices have dropped in the big cities as people flee for bigger "safer" havens. This is reason behind any increase in sales but prices are not rising.


UK: UK Property prices fall in January as property market runs out of steam



https://www.independent.co.uk/news/business/uk-house-prices-average-latest-halifax-b1798414.html


Australia: The property market in OZ is literally the worst model to follow. It is at the tail end of a massive bubble that is heavily reliant upon mining and propped up by massive debt. Nearly everyone i know in OZ who owns property is up to their eyes in debt, it is not sustainable.

https://www.theguardian.com/australia-news/2021/feb/16/the-australian-property-market-is-booming-but-the-gains-are-based-on-massive-debts

NZ: Prices are in fact dropping. Shock horror 3/4.
National median prices were down 2 per cent from December


https://www.nzherald.co.nz/business/reinz-data-auckland-house-prices-drop-25000-sales-fall-46/Z5FKCEW3MJ2F2NFI42XR6QTW4Q/


To quote yourself "But yeah, once again, Ireland is oh-so 'special' and will go against the international trend" . I wonder if Ireland will be so special and go against the international trend which is facing the biggest recession in history.


I find it ironic that you called out a poster who historically uses data to back up their claims with no actual data lol. Hilarious

Yurt2

cnocbui wrote: »

Prices are rising in the US, UK, Australia and NZ. But yeah, once again, Ireland is oh-so 'special' and will go against the international trend.

There's more to the world than anglo-countries you know. These are the countries with the most liberalised financial sectors and 'hands-off' attitude from governments. It's primarily a cultural problem as well as an economic and social one, as evidenced by your dismissive post.

It's no surprise that Anglo countries are experiencing this issue most acutely. If you want to take these countries as 'the world', go ahead. But you're highlighting the worst in class, and I'd rather Ireland not go down that road when there are clear alternatives how to approach this problem if there was the political will to do so.

Marius34

DataDude wrote: »

Again, not denying there is a clear upward trend in prices currently. But if anything your list would reinforce to me that the primary drivers at play at the moment very much short term effects. If all we read is to be true and house prices were stagnating in 2019 due to affordability limits being reached on demand side. I can't see how any of the below are going to dramatically enhance the demand side outlook in the coming years (i.e. average earnings are not going to massively increase)

1) Increased Household savings (probably most important factor)Short term demand side impact. Not a sustainable long term change in buying power.
2) WFHPotential change in the type of demand but not directly improving overall demand side, although argued by some here, would be more likely to lead to demand moving from supply constrained areas to less supply constrained areas
3) Reduced concerns on Brexit Fair point, although not like the Brexit outcome was fantastic. Also talk around election time was that nobody actually seemed to care. https://www.irishtimes.com/news/politics/don-t-mention-the-b-word-brexit-barely-figures-as-an-election-issue-1.4167398
4) Reduced concerns on Recession (second half of 2020)Would explain bounce back in late 2020 for sure, but I'm talking versus 2019. Not sure how people could be more economically confident now than late 2019.
5) HTBIncrease of €10k a factor for sure
6) Increased Build-2-Let Not sure
7) Increased Social HousingNot sure
8) Reduced number for sale due to Lockdowns.Short term supply side effect which is what I think is currently the biggest factor at play along with number (1) above

I thought it wasn't clear to you why it's starting to go upwards after the stability on previous 2-3 years.
The reasons I listed is why there is likely upwards trends for now & 2021&2022. Not long term ones. It's anyone's guess where price will move in 5 or 10 years...

decreds

Yurt! wrote: »

There's more to the world than anglo-countries you know. These are the countries with the most liberalised financial sectors and 'hands-off' attitude from governments. It's primarily a cultural problem as well as an economic and social one, as evidenced by your dismissive post.

It's no surprise that Anglo countries are experiencing this issue most acutely. If you want to take these countries as 'the world', go ahead. But you're highlighting the worst in class, and I'd rather Ireland not go down that road when there are clear alternatives how to approach this problem if there was the political will to do so.

Exactly, terrible housing markets to model. What's even worse is prices are actually falling in 3/4 countries lmao. That post should not be taken seriously.

decreds

Marius34 wrote: »

I thought it wasn't clear to you why it's starting to go upwards after the stability on previous 2-3 years.
The reasons I listed is why there is likely upwards trends for now & 2021&2022. Not long term ones.

That's because there likely won't be long term price rises.

Villa05

Sierra Oscar wrote:

Assuming demand collapses. Do you see that happening? First-time buyers are fueling the demand, I don't really think that demand will fall away too easily. They still want a place to live.

It's possible, many of the jobs being created ar being filled by foreign applicants. This increases our transient population.

More likely is:

We are also pushing towards 40% of the population renting. These people are finding it tough, they will be looking politically for solutions and their parents siblings will be looking at it also
We amongst the most underdeveloped nations in the EU, its not difficult to solve the supply side. Land, capital and increasingly sufficient labour is available to solve it

People will say that it would take years, but a simple declaration that we will deal with the supply side issues with a plan will move the market, just as the incompetence/apathy to solving it has moved the market for the last 10 years

cnocbui

decreds wrote: »

Where do you get your information from? Please link evidence to such bizarre claims.

US: House-prices-fall-for-first-time-in-six-months-in-january

https://www.msn.com/en-gb/finance/other/house-prices-fall-for-first-time-in-six-months-in-january/ar-BB1dj1bD

I'd be glad to. You are cherry picking apallingly. 'fall for fist time in 6 months' So 6 out of 7 months were price rises but a slight pull back negates the trend? Are you for real?

The US:

Cash sales tend to take place at the higher end of property market chains and include larger type houses in the country so the Land Registry shows the greatest increase and the highest average price.

The Halifax and Nationwide statistics are based only on transactions involving a mortgage. Typically about a third of sales are for cash and this proportion is even higher in retirement areas.

The Nationwide index is statistically weighted to compensate for this so we have the Land Registry saying prices have risen 7.6% and Nationwide closely shadowing this saying 7.3%.

Halifax is much lower at 6% although the Halifax average price is higher than the Nationwide’s. What they all agree is that 2020 saw a significant increase in house prices.

https://www.mortgagefinancegazette.com/market-news/housing/house-price-analysis-statistics-really-tell-us-08-02-2021/

Here's the trend in established family home sales:


https://dqydj.com/historical-home-prices/

Here's the trend in new home sales:


https://www.census.gov/construction/nrs/pdf/newressales.pdf

Existing home sales in 2020 hit highest point since 2006, but listings are at a record low
Published Fri, Jan 22 202110:00 AM ESTUpdated Fri, Jan 22 202110:26 AM EST

Pandemic-driven demand sent total 2020 home sales to the highest level since 2006.
Closed sales of existing homes in December increased 0.7% from November to a seasonally adjusted annualized rate of 6.76 million units, according to the National Association of Realtors.
Sales were 22% stronger than December 2019.
...
Still, even the most avid buyers are bumping up against barriers in today’s housing market. Record low supply and record high prices are limiting the exceptionally high demand.

https://www.cnbc.com/2021/01/22/existing-home-sales-in-2020-were-highest-since-in-over-a-decade.html

Sorry, did you make up something about prices falling?

Prices have dropped in the big cities as people flee for bigger "safer" havens. This is reason behind any increase in sales but prices are not rising.

Which Harry Potter book did you get that from?.


The UK:

UK: UK Property prices fall in January as property market runs out of steam

https://www.independent.co.uk/news/business/uk-house-prices-average-latest-halifax-b1798414.html

You did the same for the UK - cherry picked a single month:

The average UK house price ended 2020 at a record high of £253,374, it has been estimated.

The Halifax House Price Index showed that house prices in December were 6% higher than in the same month a year earlier.

But the month-on-month price increase of 0.2% was significantly down from the 1% increase seen in November.

https://news.sky.com/story/house-prices-end-2020-at-record-high-but-pace-of-growth-has-slowed-12182077

6% growth in house price YOY is not evidence of a house price decline in the UK.


Australia:

Australia: The property market in OZ is literally the worst model to follow. It is at the tail end of a massive bubble that is heavily reliant upon mining and propped up by massive debt. Nearly everyone i know in OZ who owns property is up to their eyes in debt, it is not sustainable.

https://www.theguardian.com/australia-news/2021/feb/16/the-australian-property-market-is-booming-but-the-gains-are-based-on-massive-debts

NZ: Prices are in fact dropping. Shock horror 3/4.
National median prices were down 2 per cent from December

An Irishman (I presume?) going on about massive Australian debt, as an Australian, the irony is not lost on me.

Ireland:

Debt per Citizen 42,327 €
Debt as % of GDP 67.96%

Australia, poor sods, on the brink of financial collapse: /s

Debt per Citizen € 15,498.2
Debt as % of GDP 48.39%

https://worlddebtclocks.com/australia

Ireland has nearly 3 times the debt per head, but those poor aussies debts are unsustainable and they are in trouble? Wake up.

Australia’s house prices soar to record highs over 2020
Sue WilliamsDomain Reporter Jan 28, 2021

National house prices leapt to new record highs at the end of 2020, scotching dire predictions that COVID-19 would trigger a complete collapse of the market.

With the median house price in Sydney now at an all-time peak of $1,211,488, Melbourne’s at $936,073 and Canberra’s at $855,530, every capital city recorded massive growth over the past year.

https://www.domain.com.au/news/australias-house-prices-soar-to-record-highs-over-2020-1020487/


New Zealand:

https://www.nzherald.co.nz/business/reinz-data-auckland-house-prices-drop-25000-sales-fall-46/Z5FKCEW3MJ2F2NFI42XR6QTW4Q/

Auckland is a city, New Zealand is a country.

House prices rise nearly 20% in a year to median $725K
9:56 am on 12 November 2020

House prices have increased 19.8 percent year-on-year with the median now at $725,000.

https://www.rnz.co.nz/news/business/430418/house-prices-rise-nearly-20-percent-in-a-year-to-median-725k

I'm guessing I don't have to explain 20%?

To quote yourself "But yeah, once again, Ireland is oh-so 'special' and will go against the international trend" . I wonder if Ireland will be so special and go against the international trend which is facing the biggest recession in history.

I find it ironic that you called out a poster who historically uses data to back up their claims with no actual data lol. Hilarious

The possibility of a recession is a hypothetical, I was addressing the current state of trends in house prices in certain markets, and the above proves my point.

cnocbui

decreds wrote: »

Exactly, terrible housing markets to model. What's even worse is prices are actually falling in 3/4 countries lmao. That post should not be taken seriously.

Is that 3 out of 4 on Mars perhaps?

Sorry to use the IMF - and no, M doesn't stand for Mars - as a source of information, but it just seemed so - whats the word? - ah, yes: authoritative.



I know, you are going to say too old - they seem slow. OECD data then:

https://data.oecd.org/price/housing-prices.htm

Ireland is in the middle of the pack, roughly. Be thankful you aren't a FTBer in Hungary or Turkey. Move to Italy.

So no, house prices are not falling in 3/4 of countries:

Q3 2020: Global house price boom strengthens, despite Covid-19 crisis

Matthew Montagu-Pollock | December 07, 2020

During the year to Q3 2020:

House price increases strengthened in many countries in Europe, Asia-Pacific, and Canada and the US during the year to Q3 2020. Real house prices (i.e., prices adjusted for inflation) rose in 43 out of the 55 world’s housing markets which have so far published housing statistics.
The more upbeat nominal figures, more familiar to the public, showed house price rises in 45 countries, and declines in only 10 countries.

https://www.globalpropertyguide.com/investment-analysis/Q3-2020-Global-house-price-boom-strengthens-despite-Covid-19-crisis

cnocbui

Yurt! wrote: »

There's more to the world than anglo-countries you know. These are the countries with the most liberalised financial sectors and 'hands-off' attitude from governments. It's primarily a cultural problem as well as an economic and social one, as evidenced by your dismissive post.

It's no surprise that Anglo countries are experiencing this issue most acutely. If you want to take these countries as 'the world', go ahead. But you're highlighting the worst in class, and I'd rather Ireland not go down that road when there are clear alternatives how to approach this problem if there was the political will to do so.

Try some of my links above - it's a global trend, mate, and not confined to evil 'anglo' countries. Canada, Australia and New Zealand are better places to live, IMO, than Ireland. So what's your criteria for worst in class? I could do with a laugh.

Yurt2

cnocbui wrote: »

Try some of my links above - it's a global trend, mate, and not confined to evil 'anglo' countries. Canada, Australia and New Zealand are better places to live, IMO, than Ireland. So what's your criteria for worst in class? I could do with a laugh.

Tell you what mate, I could get stuck in and make you look rather silly on your OECD stats from your Google-fu, but you're just one of those posters. I've a cheese toasty ready and I'm mid way through a Netflix series. Find someone else to coax into your playpen.

cnocbui

Yurt! wrote: »

Tell you what mate, I could get stuck in and make you look rather silly on your OECD stats from your Google-fu, but you're just one of those posters. I've a cheese toasty ready and I'm mid way through a Netflix series. Find someone else to coax into your playpen.

Don't forget your ball.

thefridge2006

cnocbui wrote: »

Try some of my links above - it's a global trend, mate, and not confined to evil 'anglo' countries. Canada, Australia and New Zealand are better places to live, IMO, than Ireland. So what's your criteria for worst in class? I could do with a laugh.

Nobody's forcing you to stay

Graham

Mod Note

knock it off.

PropQueries

MacronvFrugals wrote: »

You know its going bad when TD's tried to pressure the ESRI into not saying the shared equity scheme would push up prices, thankfully they did say it anyways.

TDs deny they tried to 'pressure' ESRI to withdraw criticism of Affordable Housing Bill



https://www.irishexaminer.com/news/politics/arid-40227935.html

They really laid into that poor ESRI employee today:

“ESRI officer defends comments on housing scheme amid Government pushback”

“Independent Senator Victor Boyhan welcomed the institute’s input. “I don’t believe you set out to upset people but I do believe you have given us a dose of reality,” he said.”

Talk about blaming the messenger. They must be really worried the whole housing market is built on sand to be this angry about what should basically be just another insignificant report IMO

Link to Irish Times article here: https://www.irishtimes.com/news/politics/esri-officer-defends-comments-on-housing-scheme-amid-government-pushback-1.4486703

Blue Badger

Am chucking down some interesting snippets from the Ibec report positing the benefits of a shared equity scheme for the country; see the link if you want to read the entire report

(https://www.propertyindustry.ie/Sectors/PII/PII.nsf/vPages/Publications~the-irish-equity-loan-29-06-2020/%24file/The+Irish+Equity+Loan+June+2020+version+3+July+2020.pdf)