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

Marius34

Zenify wrote: »

I've been following this property page for about 6 years and only have posted 2 or 3 times a month. I was always bearish about the Dublin property market and I've been wrong for 6 years! but I have learned something. I have come to realize our property market is being controlled by external forces: politics, banking, social and so so many more.

Banking is a major one. People say there is so much demand, it is the banks that control most of that demand, it is only there because they are allowing/fueling it. What will happen to property in 2021 is completely unknown. It all depends on politics (eg. stimulus), banking and all the rest.

Everyone who predicted a major drop in 2020 would have been absolutely correct if it wasn't for the external intervention (PUP and extra EU stimulus and policies to get banks lending etc.) Who honestly knows what policies will come in or go out in 2021. nobody could have imagined this level of stimulus for 2020 back in March. That's why so many got it wrong... even the normal property bulls said we would have a small fall.

If anyone here says we would have property increases in 2020 without all these external factors is a liar. imagine if they took away artificially low interest rates, got rid of Help to Buy, stopped buying social houses. taxed REITS 50% like all the Irish landlords.... They truth is we have high property prices because they are being kept high. I don't belive this is malicious, its just what the policy makers believe is best for the economy.

So please everyone stop arguing about a rise or a fall and look more into the factors that will influence the 2021 market.

The biggest speculators were the ones who saw large fall. Myself and many others are looking at the factors that influence the market.
Low interest rates, HTB, social housing, or REITS not being taxed 50%, was well expected factors for 2020. As is for 2021.
High Demands, increase in Mortgage approvals, high savings are known factor, not a speculation, that will influence market.

yagan

I just want to add on the supply side if I had been thinking about selling there's no way I'd put it on the market now because then for viewings I'd have to leave the house in the dead of cold damp winter during a pandemic and then let people who could be covid positive walk around my gaff, touch surfaces etc..

The pandemic is gumming up the market so although I have my own thoughts about certain segments I think it's really hard to call the winners and losers during the largest civic emergency since the civil war.

Idbatterim

What I think will happen this time is, there is wont be money to give away a few billion each budget, I see things staying static, as pay back for the tens of billions paid out on pup , wage supports, hse etc...

Will be interesting to see how it plays out, the days of giveaway budgets ended well before covid...

Timing belt

Zenify wrote: »

I've been following this property page for about 6 years and only have posted 2 or 3 times a month. I was always bearish about the Dublin property market and I've been wrong for 6 years! but I have learned something. I have come to realize our property market is being controlled by external forces: politics, banking, social and so so many more.

Banking is a major one. People say there is so much demand, it is the banks that control most of that demand, it is only there because they are allowing/fueling it. What will happen to property in 2021 is completely unknown. It all depends on politics (eg. stimulus), banking and all the rest.

Everyone who predicted a major drop in 2020 would have been absolutely correct if it wasn't for the external intervention (PUP and extra EU stimulus and policies to get banks lending etc.) Who honestly knows what policies will come in or go out in 2021. nobody could have imagined this level of stimulus for 2020 back in March. That's why so many got it wrong... even the normal property bulls said we would have a small fall.

If anyone here says we would have property increases in 2020 without all these external factors is a liar. imagine if they took away artificially low interest rates, got rid of Help to Buy, stopped buying social houses. taxed REITS 50% like all the Irish landlords.... They truth is we have high property prices because they are being kept high. I don't belive this is malicious, its just what the policy makers believe is best for the economy.

So please everyone stop arguing about a rise or a fall and look more into the factors that will influence the 2021 market.

Just a few factors to consider:

• interest rate are low in a effort to prevent a great depression.
• A side effect of low interest rate is that it encourages investors to take on more risk while chasing yield hence why you have a increase in institutional investors in the property market which pushes up property and rent prices
• if the government sopped buying social houses and continued with a rental policy then this would encourage further investment from institutional investors and just switching demand from one buyer to another.
• Yes you could tax REITS at 50% but the majority of the institutional investors are not REITS but pension/insurance/property funds. If you increased the taxes on this industry it would be a net loss for the Irish economy as Ireland is a leading country in the funds industry which creates a lot of employment.
  

fliball123

Zenify wrote: »

I've been following this property page for about 6 years and only have posted 2 or 3 times a month. I was always bearish about the Dublin property market and I've been wrong for 6 years! but I have learned something. I have come to realize our property market is being controlled by external forces: politics, banking, social and so so many more.

Banking is a major one. People say there is so much demand, it is the banks that control most of that demand, it is only there because they are allowing/fueling it. What will happen to property in 2021 is completely unknown. It all depends on politics (eg. stimulus), banking and all the rest.

Everyone who predicted a major drop in 2020 would have been absolutely correct if it wasn't for the external intervention (PUP and extra EU stimulus and policies to get banks lending etc.) Who honestly knows what policies will come in or go out in 2021. nobody could have imagined this level of stimulus for 2020 back in March. That's why so many got it wrong... even the normal property bulls said we would have a small fall.

If anyone here says we would have property increases in 2020 without all these external factors is a liar. imagine if they took away artificially low interest rates, got rid of Help to Buy, stopped buying social houses. taxed REITS 50% like all the Irish landlords.... They truth is we have high property prices because they are being kept high. I don't belive this is malicious, its just what the policy makers believe is best for the economy.

So please everyone stop arguing about a rise or a fall and look more into the factors that will influence the 2021 market.

What about the 2 biggest factors
Our increase in population by 500k in the last decade and all needing somewhere to live.

Lack of decent supply in decent areas.

yagan

fliball123 wrote: »

What about the 2 biggest factors
Our increase in population by 500k in the last decade and all needing somewhere to live.

Lack of decent supply in decent areas.

You're very sure that immigration will continue at the same rate when travel bans eventually lift.

Zenify

fliball123 wrote: »

What about the 2 biggest factors
Our increase in population by 500k in the last decade and all needing somewhere to live.

I mentioned social factors, I would include this as social. However, my point is that these 500k people do not have €350k + in the bank. They aren't really controlling the price of property. there is no demand for those people without the banks and government assistance etc. A prudent bank would not lend to most of those people in today's economic climate, but the banks are being pushed with policies from governments and the EU central bank.

Timing belt

Zenify wrote: »

I mentioned social factors, I would include this as social. However, my point is that these 500k people do not have €350k + in the bank. They aren't really controlling the price of property. there is no demand for those people without the banks and government assistance etc. A prudent bank would not lend to most of those people in today's economic climate, but the banks are being pushed with policies from governments and the EU central bank.

Whether these people have 350k+ in the bank or not is irrelevant as they have to live somewhere and if renting they are still using housing stock which is reducing supply.

Banks are only interested in one thing and that is making money to pretend otherwise and think that they will act prudent if left unregulated is joke.. Just look at what happened in the 08 crisis.

As for the policies being pushed on the banks by governments and the ECB could you please explain in more detail please

gandalfio

Has anyone any information on the proposed Shared Equity Scheme?

I had read this was supposed to be announced onm 22nd December, but still no details on it.

Timing belt

gandalfio wrote: »

Has anyone any information on the proposed Shared Equity Scheme?

I had read this was supposed to be announced onm 22nd December, but still no details on it.

No details have been published or shared since that I am aware of.... They did mention that they were following the example of the UK so I would imagine that 90% of the Scheme will be the same as the UK.
https://www.gov.uk/affordable-home-ownership-schemes/shared-ownership-scheme

hometruths

Zenify wrote: »

I mentioned social factors, I would include this as social. However, my point is that these 500k people do not have €350k + in the bank. They aren't really controlling the price of property. there is no demand for those people without the banks and government assistance etc. A prudent bank would not lend to most of those people in today's economic climate, but the banks are being pushed with policies from governments and the EU central bank.

If you say these people are not buying property somebody will post doesn’t matter, they still need somewhere to live, house prices will go up.

If you say these people represent hardest hit in terms of job losses/wage cuts, somebody will post, doesn’t matter, they weren’t buying property anyway, house prices will go up.

TLDR - nothing matters, house prices will go up.

fliball123

yagan wrote: »

You're very sure that immigration will continue at the same rate when travel bans eventually lift.

I am yeah have you anything to counter this ?? I will set my stall and say that people will start coming back to Ireland as

There are good Visa options for people wanting to learn English
We are the only English speaking country in the EU
We have a lot of opportunities in the likes of IT and Pharma that we could not fill prior to 2020 (not sure how this looks after corona)
We have a decent standard of living and education and would be looked at as a very stable country to live in. As in not a lot of gun / bomb related deaths over the past couple of decades in comparison to say the US, UK

Have you anything to counter this?

hometruths

fliball123 wrote: »

I am yeah have you anything to counter this ?? I will set my stall and say that people will start coming back to Ireland as

There are good Visa options for people wanting to learn English
We are the only English speaking country in the EU
We have a lot of opportunities in the likes of IT and Pharma that we could not fill prior to 2020 (not sure how this looks after corona)
We have a decent standard of living and education and would be looked at as a very stable country to live in. As in not a lot of gun / bomb related deaths over the past couple of decades in comparison to say the US, UK

Have you anything to counter this?

The Dept of Housing and the ESRI do.

fliball123

Zenify wrote: »

I mentioned social factors, I would include this as social. However, my point is that these 500k people do not have €350k + in the bank. They aren't really controlling the price of property. there is no demand for those people without the banks and government assistance etc. A prudent bank would not lend to most of those people in today's economic climate, but the banks are being pushed with policies from governments and the EU central bank.

And yet all 500k need to have somewhere to live regardless of if they have 350+ or not in the bank .. It means less supply as our social policy is to try and have everyone in the country housed. The banks don't come to your door and put a gun to your head and say take that mortgage or else. They are simply facilitating people who want to buy the bank does not drive this at all..If anything they stifle demand by not letting people borrow as much as they would like. In fairness all banks didnt lend to anyone on PUP during the pandemic I thought that was very prudent of them. If the central bank had not brought in the 3.5 times your wage and 10% deposit property prices would actually be higher.

hometruths

Timing belt wrote: »

No details have been published or shared since that I am aware of.... They did mention that they were following the example of the UK so I would imagine that 90% of the Scheme will be the same as the UK.
https://www.gov.uk/affordable-home-ownership-schemes/shared-ownership-scheme

Minister was on newstalk this morning, saying the “nuts and bolts” still had to be worked out. Judging from some of his waffly answers it needs a bit more work than nuts and bolts.

fliball123

schmittel wrote: »

If you say these people are not buying property somebody will post doesn’t matter, they still need somewhere to live, house prices will go up.

If you say these people represent hardest hit in terms of job losses/wage cuts, somebody will post, doesn’t matter, they weren’t buying property anyway, house prices will go up.

TLDR - nothing matters, house prices will go up.

Its because the argument made means little or nothing on the 2 major factors of price supply and demand.

If someone needs to be housed and they cant get a mortgage then they rent and if they cant afford rent the get sorted by the social. Anyway you dice that one you have this person and a property regardless of buying , renting or placed in it by the social

As for the hardest hit. It has been proven that the hardest hit where those on the lower to mid on the wage spectrum those on the mid to upper have shown an increase in 20billion in savings..Hardly hit that hard and when its shown the amount of mortgage approvals have gone through the roof at the tail end of the year. It shows that even with PUP and people losing jobs Demand has not gone away. So there are reasons why people are saying your argument does not make sense when you look at it when it comes to supply and demand

Timing belt

schmittel wrote: »

The Dept of Housing and the ESRI do.

The report looks at a high emigration scenario and a low emigration scenario nowhere does it say that it expects low or high emigration

" These projections are highly sensitive to international migration flows and in a high international migration scenario the total population would reach almost six million people by 2040, whereas in a low international migration scenario the population would stand at around 5.554 million people by 2040. "

hometruths

Timing belt wrote: »

The report looks at a high emigration scenario and a low emigration scenario nowhere does it say that it expects low or high emigration

" These projections are highly sensitive to international migration flows and in a high international migration scenario the total population would reach almost six million people by 2040, whereas in a low international migration scenario the population would stand at around 5.554 million people by 2040. "

Amazing what you learn when you read the whole thing, and not just the info you are looking for.

It is likely that travel restrictions, uncertainty about the evolution
of the pandemic and lower confidence may result in migration being lower than in the baseline scenario at least in the short term. The low international migration scenario assumes that international migration falls from +33,700 in 2019 to +5,000 by 2022 and thereafter follows the Baseline scenario.

Zenify

Timing belt wrote: »

As for the policies being pushed on the banks by governments and the ECB could you please explain in more detail please

negative interest rates at the ECB. it costs the bank to hold onto money so they are encouraged to lend it out...? I thought this was common knowledge?

Timing belt

schmittel wrote: »

Amazing what you learn when you read the whole thing, and not just the info you are looking for.

As you know from previous discussions on this report I have read the whole thing.

Anyone can select a few sentences from the report.

"The low international migration scenario assumes that international migration falls from +33,700 in 2019 to +5,000 by 2022 and thereafter follows the Baseline scenario. This low international migration scenario is consistent with both/either a deterioration in relative economic conditions and/or migration being lower because of other external factors, such as the global health pandemic. The longer the pandemic and measures to contain it persist, the more likely estimates of structural housing demand will be closer to those in the low international migration scenario.

Furthermore, the sharp decline in economic activity, particularly in Q2 of this year will negatively affect the demand side of the housing market with lower incomes and higher unemployment affecting housing demand through the affordability channel (see Allen-Coghlan and McQuinn, 2020). The recovery in the residential market will depend on the recovery in the macro-economy and therefore it is likely that the housing demand estimates will be more consistent with the lower scenario in the short run"

As everyone has agreed on previous posts the housing market didn't suffer so it could be argued that the there is no recovery

Timing belt

Zenify wrote: »

negative interest rates at the ECB. it costs the bank to hold onto money so they are encouraged to lend it out...? I thought this was common knowledge?

Yes this is common knowledge but it is also common knowledge that banks have been lending less by way of mortgages since 2015!!!!

The data on CBI website will back up what I am saying

Villa05

TheW1zard wrote:

My neighbours house is up for rent.. Our mortgage =1150 Neighbours rent =2940

Crazy

Imagine that amount of money leaving the country every month tax free to a foreign entity for every rented home (averaged out of course)

This is Government policy

This is beyond stupid

What percentage of private rents are then paid by the state

Could you come up with a more effective way of destroying the wealth of a nation

Dwarf.Shortage

Villa05 wrote: »

Imagine that amount of money leaving the country every month tax free to a foreign entity for every rented home (averaged out of course)

This is Government policy

This is beyond stupid

What percentage of private rents are then paid by the state

Could you come up with a more effective way of destroying the wealth of a nation

If you think Irish firms don't hold overseas investments (including property) that they repatriate the profits from then you are wrong.

Capital is international now and will only get more so.

hometruths

Timing belt wrote: »

As you know from previous discussions on this report I have read the whole thing.

Anyone can select a few sentences from the report.

"The low international migration scenario assumes that international migration falls from +33,700 in 2019 to +5,000 by 2022 and thereafter follows the Baseline scenario. This low international migration scenario is consistent with both/either a deterioration in relative economic conditions and/or migration being lower because of other external factors, such as the global health pandemic. The longer the pandemic and measures to contain it persist, the more likely estimates of structural housing demand will be closer to those in the low international migration scenario.

Furthermore, the sharp decline in economic activity, particularly in Q2 of this year will negatively affect the demand side of the housing market with lower incomes and higher unemployment affecting housing demand through the affordability channel (see Allen-Coghlan and McQuinn, 2020). The recovery in the residential market will depend on the recovery in the macro-economy and therefore it is likely that the housing demand estimates will be more consistent with the lower scenario in the short run"

As everyone has agreed on previous posts the housing market didn't suffer so it could be argued that the there is no recovery

As this thread shows, anything can be argued, whether it is sensible or not is another matter. Agreeing that price falls did not materialize is a very different thing than saying the housing market did not suffer.

However my post in response to yours was entirely about immigration projections and your claim that nowhere does the report say whether it expects high or low immigration scenario.

It clearly says that they expect immigration to be lower or are you arguing otherwise?

yagan

On thing is for sure there won't be Chinese coming to Ireland for English language lessons until Covid is years in the rearview mirror. China is mostly back to normal and enjoying economy growth which will erase their lockdown losses by March.

Will Chinese students wait for the laggards in the west to get their shíte together? Flip not and that will reorientate that whole English market firmly towards New Zealand!

China is already post covid and it's more likely that we'll be teaching pinyin in school in the next decade. The one growth area I see for students is more USA for who Irish international fees can be cheaper than domestic fees at home.

Timing belt

schmittel wrote: »

As this thread shows, anything can be argued, whether it is sensible or not is another matter. Agreeing that price falls did not materialize is a very different thing than saying the housing market did not suffer.

However my post in response to yours was entirely about immigration projections and your claim that nowhere does the report say whether it expects high or low immigration scenario.

It clearly says that they expect immigration to be lower or are you arguing otherwise?

Yes it clearly says in section 5.6 IMPLICATIONS OF COVID-19 PANDEMIC ON PROJECTIONS that the impact on immigration may be lower due to covid but it also specifically says that that the report does not incorporate the effects of Covid on estimates of housing demand so I stand over my claim that it does not state that immigration will be high or low.

"This report focusses on generating estimates of structural housing demand at a regional level over the long term; it does not explicitly incorporate the potential effects of the COVID-19 pandemic on the population projections and estimates of housing demand. This section outlines the potential impacts of COVID-19 and discusses how, as a result of the pandemic, the estimates of housing demand may be closer to those in the low international migration scenario at least in the near term."

hometruths

Timing belt wrote: »

Yes it clearly says in section 5.6 IMPLICATIONS OF COVID-19 PANDEMIC ON PROJECTIONS that the impact on immigration may be lower due to covid but it also specifically says that that the report does not incorporate the effects of Covid on estimates of housing demand so I stand over my claim that it does not state that immigration will be high or low.

Pfft.

Timing belt wrote: »

The report looks at a high emigration scenario and a low emigration scenario nowhere does it say that it expects low or high emigration

It is likely that travel restrictions, uncertainty about the evolution of the pandemic and lower confidence may result in migration being lower than in the baseline scenario at least in the short term. The low international migration scenario assumes that international migration falls from +33,700 in 2019 to +5,000 by 2022 and thereafter follows the Baseline scenario.

So they say it is likely, i.e that's what they expect! Oh, but only because of COVID?

Timing belt wrote: »

it also specifically says that that the report does not incorporate the effects of Covid on estimates of housing demand so I stand over my claim that it does not state that immigration will be high or low

You are clearly an intelligent poster. You have no need to clutch at straws. This is the kind of nonsense that people vilified PropQueries for.

Timing belt

schmittel wrote: »

Pfft.





So they say it is likely, i.e that's what they expect! Oh, but only because of COVID?



You are clearly an intelligent poster. You have no need to clutch at straws. This is the kind of nonsense that people vilified PropQueries for.

There is no clutching at straws I am just highlighting that you have interpreted the report the way you want to.

You have accused me of not reading the report to try and discredit me.

The report is there for anyone that wants to read it and come to their own conclusion.

My take on the report is that it clearly states that it is uncertain of future outcomes due to immigration and for that reason has presented the data with both scenarios (High immigration and low Immigration) along with what they believe will be the baseline case that is 318k lower than the high immigration Scenario and 112k higher than the low immigration Scenario.

hometruths

Timing belt wrote: »

There is no clutching at straws I am just highlighting that you have interpreted the report the way you want to.

You have accused me of not reading the report to try and discredit me.

The report is there for anyone that wants to read it and come to their own conclusion.

My take on the report is that it clearly states that it is uncertain of future outcomes due to immigration and for that reason has presented the data with both scenarios (High immigration and low Immigration) along with what they believe will be the baseline case that is 318k lower than the high immigration Scenario and 112k higher than the low immigration Scenario.

I tried to discredit you? You've managed that all by yourself.

No point in further discussion on it between you and I. I am sure there are plenty of other posters who are happy to discuss fundamentals that dont take the effects of COVID into account if it suits their narrative.

yagan

Folks all that's in the future, we simply don't know the dynamics of the post covid world, we now in potentially the worst spike of it. It would certainly explain why few would want to open up their home for viewings!

March will be very interesting if sellers feel its safe to venture out again.