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

PropQueries

Interesting development on the WFH front in relation to mortgages. According to the Irish Times:

"Banks now want evidence that employees have permission to work permanently from home before approving mortgages on houses beyond a commutable distance from the employee’s workplace. The main advantage of moving out the capital is a lower cost of living. For example, a couple with a joint income of €100,000 could afford to buy a house worth €388,888 based on the Central Bank of Ireland’s lending rules."

The bargaining power is quickly moving from the seller to the buyer, especially in Dublin, and it may begin to start showing up in the official data much quicker than many people believe IMO

Link to Irish Times article here: https://www.irishtimes.com/business/personal-finance/banks-seeking-work-from-home-proof-in-mortgage-applications-1.4515026

fago

https://www.theguardian.com/world/2021/mar/20/can-you-help-me-the-quiet-desperation-of-new-zealands-housing-crisis

Interesting article in the context of removal of ltv limits at the start of covid which perhaps contributed to runaway increases.
Obviously more than ltv limits a factor in an insane 27% YoY increase, but need policies to protect us against ourselves.

awec

PropQueries wrote: »

Interesting development on the WFH front in relation to mortgages. According to the Irish Times:

"Banks now want evidence that employees have permission to work permanently from home before approving mortgages on houses beyond a commutable distance from the employee’s workplace. The main advantage of moving out the capital is a lower cost of living. For example, a couple with a joint income of €100,000 could afford to buy a house worth €388,888 based on the Central Bank of Ireland’s lending rules."

The bargaining power is quickly moving from the seller to the buyer, especially in Dublin, and it may begin to start showing up in the official data much quicker than many people believe IMO

Link to Irish Times article here: https://www.irishtimes.com/business/personal-finance/banks-seeking-work-from-home-proof-in-mortgage-applications-1.4515026

How do you feel this is power moving from the seller to the buyer?

Banks have historically refused mortgages to people looking to buy outside of reasonable commute distance. Now they will give it, but only if the employer provides proof of permanent remote work.

Nothing is really changing.

If anything, it puts a bit of a dampner on the notion that there's going to be a mass exodus. Sure, you can move down the country so long as your employer is willing to state that you're never going to have to come back to the office.

awec

Hubertj wrote: »

Away from the idiocy and what ifs and back to property this is a lovely looking place. More the setting than the house itself. I don’t see anywhere that indicates if the property has fibre or what broadband options might be. I think that would be a good feature to include.

https://www.myhome.ie/residential/brochure/glenfahan-ventry-dingle-kerry/4456110

I think this place is fairly meh to be honest. I wouldn't pay 750 for it.

The actual layout and design of the house is IMO poor. And I'm not sure I'd fancy being that exposed in the middle of winter.

Hubertj

awec wrote: »

I think this place is fairly meh to be honest. I wouldn't pay 750 for it.

The actual layout and design of the house is IMO poor. And I'm not sure I'd fancy being that exposed in the middle of winter.

Yea that’s why I said it’s the setting... and only for summer holidays because we know it’s always sunny in Kerry during summer.

PropQueries

awec wrote: »

How do you feel this is power moving from the seller to the buyer?

Banks have historically refused mortgages to people looking to buy outside of reasonable commute distance. Now they will give it, but only if the employer provides proof of permanent remote work.

Nothing is really changing.

If anything, it puts a bit of a dampner on the notion that there's going to be a mass exodus. Sure, you can move down the country so long as your employer is willing to state that you're never going to have to come back to the office.

If anything it will just show there is a real cost to employees from the hybrid working model. It's now going to cost some employees up to €200k more in housing costs if their employer demands they come in for 2 days a week.

Employees will begin to genuinely ask why they need to come in for 2 days a week when can work perfectly well remotely the other three. It may encourage more companies to move to full time WFH more quickly IMO

awec

PropQueries wrote: »

If anything it will just show there is a real cost to employees from the hybrid working model. It's now going to cost some employees up to €200k more in housing costs if their employer demands they come in for 2 days a week.

Employees will begin to genuinely ask why they need to come in for 2 days a week when can work perfectly well remotely the other three. It may encourage more companies to move to full time WFH more quickly IMO

Employees can ask all they want. But since you are absolutely convinced that:

1. There'll be no more FDI in Ireland
2. The current MNC jobs are all going to leave
3. Foreign workers are all heading to eastern europe

it therefore seems very strange that you also believe that employees who are fortunate enough to have employment in your future vision of Ireland are going to be in a strong position to dictate their working conditions.

Why do you think it'll cost 200k more? Surely with the exodus out of cities prices there are about to completely collapse? If anything it could be more expensive to buy the rural gaffs if what you say comes to pass, we could see a real surge in rural prices.

You didn't answer my question either. How do you feel this news is evidence of power shifting from seller to buyer?

PropQueries

awec wrote: »

Employees can ask all they want. But since you are absolutely convinced that:

1. There'll be no more FDI in Ireland
2. The current MNC jobs are all going to leave
3. Foreign workers are all heading to eastern europe

it therefore seems very strange that you also believe that employees who are fortunate enough to have employment in your future vision of Ireland are going to be in a strong position to dictate their working conditions.

Why do you think it'll cost 200k more? Surely with the exodus out of cities prices there are about to completely collapse? If anything it could be more expensive to buy the rural gaffs if what you say comes to pass.

You didn't answer my question either. How do you feel this news is evidence of power shifting from seller to buyer?

In relation to the shifting power, the banks are bringing in this requirement as there must be increasing demand for it i.e. buyers are indeed applying for mortgages in areas that are not commutable to their office base. They wouldn't be doing that unless they're fairly sure they will be able to WFH on a near continuous basis going forward.

Many potential buyers will no longer tied into buying in e.g. Swords to be near their workplace. That's bargaining power shifting from seller to buyer right there IMO

In relation to the rural gaffs becoming more expensive. It won't happen. There's too many of them lying vacant and if there really is a market for such homes, the owners of of these vacant homes will refurbish them and start bringing them to market in short order IMO

The free market may very well indeed solve this housing issue very quickly IMO

awec

PropQueries wrote: »

In relation to the shifting power, the banks are bringing in this requirement as there must be increasing demand for it i.e. buyers are indeed applying for mortgages in areas that are not commutable to their office base. They wouldn't be doing that unless they're fairly sure they will be able to WFH on a near continuous basis going forward.

Many potential buyers will no longer tied into buying in e.g. Swords to be near their workplace. That's bargaining power shifting from seller to buyer right there IMO

In relation to the rural gaffs becoming more expensive. It won't happen. There's too many of them lying vacant and if there really is a market for such homes, the owners of of these vacant homes will refurbish them and start bringing them to market in short order IMO

The free market may very well indeed solve this housing issue very quickly IMO

Can you explain how? I do not see how this puts buyers in a position of power.

The banks are bringing in a requirement to allow you to buy far away if your employer is willing to provide the proof that you will no longer need an office. This is not the massive shift that you want it to be. As the article evidences, it does not matter a jot what the employee thinks or is "fairly sure" about, all that matters is what the employer is willing to agree to.

I also note you did not address the point regarding this sudden exodus of jobs, yet employees acting like it's still an employees market. I am genuinely curious as to how you feel that circle will be squared.

ExMachina1000

Cant see the majority of employers giving a definitive yes to permanent working from home if asked by a staff member who is chasing a mortgage.

Why would employers back themselves into a corner like that?

Might suit some companies but wfh on a majority scale is a pipe dream. Most will be back in the office when the time comes. As they were pre pandemic.

The inevitable "yeah but my company said" or "this multinational said" is not reflective of the majority of sme opinion I would think

donnaille

ExMachina1000 wrote: »

Cant see the majority of employers giving a definitive yes to permanent working from home if asked by a staff member who is chasing a mortgage.

Why would employers back themselves into a corner like that?

Might suit some companies but wfh on a majority scale is a pipe dream. Most will be back in the office when the time comes. As they were pre pandemic.

The inevitable "yeah but my company said" or "this multinational said" is not reflective of the majority of sme opinion I would think

As far as I understand it is the employer confirming that the flexibility to wfh will remain in place, rather than confirmation that a permanent wfh arrangement exists. A little bit of a non story as this was similar prior to COVID for some banks. Presumably more aimed towards those borrowing at their max capacity on Dublin salaries for a home outside of commutable range.

PropQueries

ExMachina1000 wrote: »

Cant see the majority of employers giving a definitive yes to permanent working from home if asked by a staff member who is chasing a mortgage.

Why would employers back themselves into a corner like that?

Might suit some companies but wfh on a majority scale is a pipe dream. Most will be back in the office when the time comes. As they were pre pandemic.

The inevitable "yeah but my company said" or "this multinational said" is not reflective of the majority of sme opinion I would think

Entirely possible. But it does show that factors are coming into play that not many would have looked too much into so far in relation to full-time in the office vs hybrid vs full-time WFH.

Someone did give the example before (entirely reasonable argument IMO) about how if one partner is working hybrid in the office and the other is full time WFH, they would still need to live closer to the office of the partner who is working hybrid in the office.

This may result in employees working hybrid placing pressure on their employer to make a decision sooner rather than later in relation to hybrid vs full-time WFH as any continuing indecision on behalf of the employer is costing the employee real money i.e. should they go ahead and buy in Dublin or wait for the employer to decide and buy outside Dublin.

Either way, it removes a certain percentage of potential buyers in Dublin from the marketplace. As someone mentioned before if there are 11 people looking at purchasing only 10 available houses, the sellers have the bargaining power. If there are only 7 people looking at purchasing 10 available houses, the bargaining power shifts right back to the buyers.

Marius34

PropQueries wrote: »

In relation to the shifting power, the banks are bringing in this requirement as there must be increasing demand for it i.e. buyers are indeed applying for mortgages in areas that are not commutable to their office base. They wouldn't be doing that unless they're fairly sure they will be able to WFH on a near continuous basis going forward.

Many potential buyers will no longer tied into buying in e.g. Swords to be near their workplace. That's bargaining power shifting from seller to buyer right there IMO

In relation to the rural gaffs becoming more expensive. It won't happen. There's too many of them lying vacant and if there really is a market for such homes, the owners of of these vacant homes will refurbish them and start bringing them to market in short order IMO

The free market may very well indeed solve this housing issue very quickly IMO

As I understand you speak tens of thousands of those homes, that will come up in demand for WFH. Can you share couple of the myhome/daft links that wouldn't have demand now, but will have due to WFH? I'm not sure anyone understands what kind of homes we talking here.

PropQueries

Marius34 wrote: »

As I understand you speak tens of thousands of those homes, that will come up in demand for WFH. Can you share couple of the myhome/daft links that wouldn't have demand now, but will have due to WFH? I'm not sure anyone understands what kind of homes we talking here.

There are and my theory is that once the owners see there's actually demand for them, they will refurbish them and then bring them to the market.

If they believed in 2019 that there was no real demand for their vacant property and it would only achieve c. €100k, even if they did spend €10k on refurbishing it and bringing it up to standard e.g. new windows, doors, heating, fitted kitchen etc., they probably weren't incentivised to do anything with it.

Now, with all this WFH talk, they may very well be incentivised to refurbish it (it would take 4 weeks max for the above) and bring it to market for e.g. c. €150k.

We're going to see an awful lot of these entering the market in the not too distant future IMO

Hubertj

Marius34 wrote: »

As I understand you speak tens of thousands of those homes, that will come up in demand for WFH. Can you share couple of the myhome/daft links that wouldn't have demand now, but will have due to WFH? I'm not sure anyone understands what kind of homes we talking here.

Apparently there are loads, hundreds of thousands according to some people. A lot in places like Leitrim.

voldejoie

PropQueries wrote: »

Interesting development on the WFH front in relation to mortgages. According to the Irish Times:

"Banks now want evidence that employees have permission to work permanently from home before approving mortgages on houses beyond a commutable distance from the employee’s workplace. The main advantage of moving out the capital is a lower cost of living. For example, a couple with a joint income of €100,000 could afford to buy a house worth €388,888 based on the Central Bank of Ireland’s lending rules."

The bargaining power is quickly moving from the seller to the buyer, especially in Dublin, and it may begin to start showing up in the official data much quicker than many people believe IMO

Link to Irish Times article here: https://www.irishtimes.com/business/personal-finance/banks-seeking-work-from-home-proof-in-mortgage-applications-1.4515026

I'm not sure I agree that the bargaining power is shifting, but the salary cert I had filled out by work had a few different questions on it around whether I'm "approved" to work from home. I'm looking to buy a good bit away from where the office is, but it's a distance I've commuted for years.

Anecdotally, a good few of my friends who are also hoping to buy this year are looking further and further out from the city centre but it's more forced by price and supply than because they want to decamp from the city. I can't see there being as much a fall in demand for properties in Dublin as may be anticipated, but will be interesting to see the shape that the WFH landscape starts to take once the covid crisis ends.

PropQueries

Hubertj wrote: »

Apparently there are loads, hundreds of thousands according to some people. A lot in places like Leitrim.

History has shown that people will move to wherever the jobs are. And now the jobs are potentially everywhere (even in Leitrim with the advent of remote working). For example, Abbott employs lots of people in Longford and if the IFSC had been originally set up in Leitrim, people would have moved to Leitrim.

The next tick box on deciding where to live is cost of living. Accommodation costs are the biggest living cost.

I'm removing the possibility of working in another EU country for the sake of clarity.

Hubertj

Hubertj wrote: »

Apparently there are loads, hundreds of thousands according to some people. A lot in places like Leitrim.

nothing wrong with leitrim!
its two hours from Dublin, if you needed to be in the office for a day.

my brother & his girlfriend have been wfh for 12 months, they are renting in Dublin, now looking to buy in the countryside, Im sure there's many more like them.

PropQueries

bubblypop wrote: »

nothing wrong with leitrim!
its two hours from Dublin, if you needed to be in the office for a day.

my brother & his girlfriend have been wfh for 12 months, they are renting in Dublin, now looking to buy in the countryside, Im sure there's many more like them.

I think they bring up Leitrim to knock back the idea. But Dublin is also only a 2 hour drive to Limerick City and a shorter distance from every town in between Limerick City and Dublin.

I think people fail to realise remote working has opened up vast swathes of the country as a possible place to live in the not too distant future.

How that impacts Dublin prices depends on how long sellers intend to wait for a rebound in demand that may now never happen.

donnaille

PropQueries wrote: »

I think they bring up Leitrim to knock back the idea. But Dublin is also only a 2 hour drive to Limerick City and a shorter distance from every town in between Limerick City and Dublin.

I think people fail to realise remote working has opened up vast swathes of the country as a possible place to live in the not too distant future.

How that impacts Dublin prices depends on how long sellers intend to wait for a rebound in demand that may now never happen.

I think people living further outside Dublin will happen, the question is whether it has a visible effect on property prices. Personally I think it’s too difficult to prove it as relevant or not - we could all debate it for weeks, but the data won’t exist to prove conclusive.

Marius34

PropQueries wrote: »

There are and my theory is that once the owners see there's actually demand for them, they will refurbish them and then bring them to the market.

If they believed in 2019 that there was no real demand for their vacant property and it would only achieve c. €100k, even if they did spend €10k on refurbishing it and bringing it up to standard e.g. new windows, doors, heating, fitted kitchen etc., they probably weren't incentivised to do anything with it.

Now, with all this WFH talk, they may very well be incentivised to refurbish it (it would take 4 weeks max for the above) and bring it to market for e.g. c. €150k.

We're going to see an awful lot of these entering the market in the not too distant future IMO

10K for a house? You hardly can fit a single kitchen for that amount if it's includes change of windows&heating. You live in Ireland, you should know that labour is not that cheap in ireland, even without looking at the material costs.

Marius34

awec wrote: »

If anything it could be more expensive to buy the rural gaffs if what you say comes to pass, we could see a real surge in rural prices.

PropQueries wrote: »

In relation to the rural gaffs becoming more expensive. It won't happen. There's too many of them lying vacant and if there really is a market for such homes, the owners of of these vacant homes will refurbish them and start bringing them to market in short order IMO

but it will

PropQueries wrote: »

If they believed in 2019 that there was no real demand for their vacant property and it would only achieve c. €100k, even if they did spend €10k on refurbishing it and bringing it up to standard e.g. new windows, doors, heating, fitted kitchen etc., they probably weren't incentivised to do anything with it.

Now, with all this WFH talk, they may very well be incentivised to refurbish it (it would take 4 weeks max for the above) and bring it to market for e.g. c. €150k

Hubertj

bubblypop wrote: »

nothing wrong with leitrim!
its two hours from Dublin, if you needed to be in the office for a day.

my brother & his girlfriend have been wfh for 12 months, they are renting in Dublin, now looking to buy in the countryside, Im sure there's many more like them.

Apologies I’m not saying there is anything wrong with Leitrim, I think 1 of the reports on vacant properties showed there area disproportionate number in the county.
Also need to consider the infrastructure where a lot of the vacant properties are depending on stage in life - childcare, schools, broadband - already available or part of NBP etc.

Depends on the state of “vacant” as well. Some geniuses seem to think it is cheap to refurbish a house.

Gael23

What’s the story with the property market after April 5th?

ExMachina1000

Will European tax laws be changing to reflect the supposed wfh revolution?
People dont need to even reside in the state to work for a company. Could it happen?

What percentage of fb, google etc employees are non national? Must be a high percentage. If they could return home but continue to work for those companies it would help our housing supply issues no doubt.

Would they face a pay cut though? 100k salary working for an "Irish based" company but paying Romanian or Lithuanian rents and living expenses would be a different standard of living altogether.

PropQueries

Marius34 wrote: »

but it will

"Bring to market at"

There may be some first mover advantage for the first few sellers but as more and more jump on the bandwagon, more and more will start entering the market and prices will fall below what they were even before the refurbishments etc. I think that's economics 101 and just like when Telecom Eireann started to have competitors, prices will plummet.

Remote working has now made housing little more than a commodity and home ownership will soon be available to everyone no matter how poor they are IMO

There is/will be no difference between living in Swords compared to a similar three bed in e.g. Leitrim and the prices of such houses will be similar.

Unfortunately, places like e.g. Dalkey will be competing with similar wealthy areas around the world so they will be severely impacted (price wise) as well IMO

awec

PropQueries wrote: »

"Bring to market at"

There may be some first mover advantage for the first few sellers but as more and more jump on the bandwagon, more and more will start entering the market and prices will fall below what they were even before the refurbishments etc. I think that's economics 101 and just like when Telecom Eireann started to have competitors, prices will plummet.

Remote working has now made housing little more than a commodity and home ownership will soon be available to everyone no matter how poor they are IMO

There is/will be no difference between living in Swords compared to a similar three bed in e.g. Leitrim and the prices of such houses will be similar.

Unfortunately, places like e.g. Dalkey will be competing with similar wealthy areas around the world so they will be severely impacted (price wise) as well IMO

There is a difference between Swords and Leitrim though. Swords is essentially a Dublin suburb and Leitrim is 2 hours away. Very different lifestyles on offer.

Or are we now pretending that this doesn’t matter?

PropQueries

ExMachina1000 wrote: »

Will European tax laws be changing to reflect the supposed wfh revolution?
People dont need to even reside in the state to work for a company. Could it happen?

What percentage of fb, google etc employees are non national? Must be a high percentage. If they could return home but continue to work for those companies it would help our housing supply issues no doubt.

Would they face a pay cut though? 100k salary working for an "Irish based" company but paying Romanian or Lithuanian rents and living expenses would be a different standard of living altogether.

Leo appears to believe this will happen:

"Dublin, Cork, Limerick, Waterford and Galway will be competing with Barcelona, Liverpool, Paris and Lisbon in the battle for talent. And talent can remote work from almost anywhere, so our cities need to be vibrant places where talent wants to live"

But, then again he's only the Tanaiste and his best buddy is only the Minister for Finance.

Link to Leo's interview on RTE: https://www.rte.ie/news/2021/0318/1204784-living-wage-varadkar/

PropQueries

awec wrote: »

There is a difference between Swords and Leitrim though. Swords is essentially a Dublin suburb and Leitrim is 2 hours away. Very different lifestyles on offer.

Or are we now pretending that this doesn’t matter?

There is absolutely no difference between Swords and Leitrim. If you mentioned a similarly distanced suburb outside e.g. London, I would agree, but Dublin has absolutely nothing to offer that would entice someone to spend an extra c. €200k on a similar type house to be close to it IMO

cnocbui

Hubertj wrote: »

Apologies I’m not saying there is anything wrong with Leitrim, I think 1 of the reports on vacant properties showed there area disproportionate number in the county.
Also need to consider the infrastructure where a lot of the vacant properties are depending on stage in life - childcare, schools, broadband - already available or part of NBP etc.

Depends on the state of “vacant” as well. Some geniuses seem to think it is cheap to refurbish a house.

Not only do they think it cheap and easy to renovate an old property, they think it's a given that the owner has the capital or ability to borrow to finance it.

I thought about renovating my old property, but the amount of money required to do so is prodigious and I would never remotely consider borrowing such a sum to do it as the repayments would be greater than I would want to take on and I am not convinced that I could recoup the value of the renovation on selling the property.