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2021 Irish Property Market chat II - *read mod note post #1 before posting*

  • #2
    Moderators, Society & Culture Moderators Posts: 17,637 mod Graham


    Continued from here



    Mod Warning

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

    Additionally, the specific issue of Geodirectory/vacancy figures has been done to death please take that topic to a new thread.

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    Post edited by L1011 on


«134567138

Comments

  • #2


    Crash on the way.....


  • #2


    DellyBelly wrote: »
    Crash on the way.....




    You'll be right eventually.


    Prediction is no good without a timeframe.


  • #2


    DellyBelly wrote: »
    Crash on the way.....

    We might as well start where the trend in these threads have been for the last 5-6 years. Sooner or later the people propagating it will be right and able to say I told you so


  • #2


    According to the SBP today:

    “Nine of the country’s 31 local authorities have no sites listed on their vacant site register and six county councils have not valued the sites on their register and so cannot collect the vacant site levy.”

    I think I’ve driven through every county in Ireland at some stage over the past few years and for 9 local authorities to have no sites at all on their register is impossible.

    Link to SBP article here: https://www.businesspost.ie/houses/a...-levy-2d0c4678


    4 years after they were supposed to set these up. All the focus has been on these funds, but our very inept public service 'professionals' are as much of a problem. Some commentators see them as part of the solution. Don't make me laugh.

    The SBS seems to have cottoned onto the fact we are a mess. We're getting this stuff drip fed to us. Amusing if it wasn't so serious.


  • #2


    DellyBelly wrote: »
    Crash on the way.....

    What date does it kick off? Asking for a friend.


  • #2


    It just occurred to me that in all the talk about the property market at the moment I have not heard anyone in the public sphere use the phrase "getting on the property ladder". The housing ministers "help to buy unaffordable homes" isn't being swallowed by the public either.


  • #2


    Cal4567 wrote: »
    According to the SBP today:

    “Nine of the country’s 31 local authorities have no sites listed on their vacant site register and six county councils have not valued the sites on their register and so cannot collect the vacant site levy.”

    I think I’ve driven through every county in Ireland at some stage over the past few years and for 9 local authorities to have no sites at all on their register is impossible.

    Link to SBP article here: https://www.businesspost.ie/houses/a...-levy-2d0c4678


    4 years after they were supposed to set these up. All the focus has been on these funds, but our very inept public service 'professionals' are as much of a problem. Some commentators see them as part of the solution. Don't make me laugh.

    The SBS seems to have cottoned onto the fact we are a mess. We're getting this stuff drip fed to us. Amusing if it wasn't so serious.

    Yep, doesn’t matter what the policy is if the people charged with implementing it are incompetent and not accountable. We have weak management and TRADE UNIONS to thank for that. I find it funny that many of the solutions left leaning parties propose to resolve the housing crisis do not include reform of the public sector, which will be key to any progress being made. I wonder why?


  • #2


    https://www.daft.ie/for-sale/terraced-house-21-phelan-avenue-royal-canal-park-ashtown-dublin-15/3224560

    350k brand new in 2016. This is a 55% increase in that time. That's double what the statistics say. They may get it but it's a massive increase. How were these so cheap new?


  • #2


    DellyBelly wrote: »
    Crash on the way.....

    This has some merit ! Last time crash came from global phenomenon and this time it will as well....some signs already visible

    Current value of money people have has diluted a lot which means the property value although high are not aligned to its intrinsic value ! People have made lot of easy money whether in crypto/stocks/gold etc.

    You don't want to be on the wrong side buying high value stuff with low value money you earned with all the hard work ! Remember you are competing with investment funds who made easy money from above list !

    Irrespective, its not ideal situation to wait for a crash for many....If you are paying low rent, living with small compromises wait for couple of years and you would get good opportunities soon !

    https://edition.cnn.com/2021/05/13/business/global-real-estate-prices/index.html


  • #2


    tobsey wrote: »
    https://www.daft.ie/for-sale/terraced-house-21-phelan-avenue-royal-canal-park-ashtown-dublin-15/3224560

    350k brand new in 2016. This is a 55% increase in that time. That's double what the statistics say. They may get it but it's a massive increase. How were these so cheap new?

    Cost of building has increased with commodities prices sky rocketing ! However i get your point...this is just not sustainable !


  • #2


    Cost of building has increased with commodities prices sky rocketing ! However i get your point...this is just not sustainable !

    Cost of building has not increased anywhere near that much!


  • #2


    Since it's the start of a new thread and a crash has been mentioned;

    Rents have surpassed Celtic Tiger levels and house prices are not far off what they were in the Celtic Tiger. While mortgage borrowing limits have been imposed on people, salaries have not increased since the Celtic Tiger years

    https://www.statista.com/statistics/416212/average-annual-wages-ireland-y-on-y-in-euros/

    I don't know of anyone who thinks the Celtic Tiger market was anything but ridiculously overpriced and grossly inflated due to the level of cheap and easy money flowing into it. Therefore, to think the current situation is anything but a grossly unsustainable situation would mean you think the Celtic Tiger market was a good level.

    The only things I wonder are what will be the straw that breaks the camel's back, when will it happen and who will ultimately lose the most from the growth of the last few years.


  • #2


    d who will ultimately lose the most from the growth of the last few years.

    Anyone who takes out a mortgage to buy one of the €450k "affordable" homes will find themselves in deep doodoo in a few years once the market inevitably crashes. As said, its completely unsustainable.


  • #2
    This has some merit ! Last time crash came from global phenomenon and this time it will as well....some signs already visible

    Current value of money people have has diluted a lot which means the property value although high are not aligned to its intrinsic value ! People have made lot of easy money whether in crypto/stocks/gold etc.

    You don't want to be on the wrong side buying high value stuff with low value money you earned with all the hard work ! Remember you are competing with investment funds who made easy money from above list !

    Irrespective, its not ideal situation to wait for a crash for many....If you are paying low rent, living with small compromises wait for couple of years and you would get good opportunities soon !

    https://edition.cnn.com/2021/05/13/business/global-real-estate-prices/index.html


    Agreed, a huge crash will likely arrive in around 4-5 years. If people are not paying high rent they should park their hard earned savings in cash and some safe haven stocks and be ready to pounce.


    This insanity won't last forever and the biggest correction in history is coming, however, short term it does not look good.


  • #2


    Anyone who takes out a mortgage to buy one of the €450k "affordable" homes will find themselves in deep doodoo in a few years once the market inevitably crashes. As said, its completely unsustainable.

    "in a few years" but if those prices dropped 30% in 3 years for example, you'd have paid off a decent chunk of that 30% and would barely be in negative equity. These homes wouldn't have been bought with much leverage (3.5 times household earnings + 10% deposit). I don't think these mortgage holders are the ones with that much to lose if I'm being honest. The €1m+ properties which were taken out with sizeable mortgages potentially are the ones to lose out a lot more.


  • #2


    derekgine3 wrote: »
    Agreed, a huge crash will likely arrive in around 4-5 years. If people are not paying high rent they should park their hard earned savings in cash and some safe haven stocks and be ready to pounce.


    This insanity won't last forever and the biggest correction in history is coming, however, short term it does not look good.

    You will see this euphoria continue...atleast for 1-2 years until something gives at global stage resulting in cascading effect across the globe...

    Remember last time's unchecked lending has been replaced by pandemic savings by people making them pay more deposit and little bit less mortgage...it still does not solve inability to pay in adverse conditions !


  • #2


    timmyntc wrote: »
    Cost of building has not increased anywhere near that much!

    true but that plays a part along side insane demand, lack of supply and huge savings by people !


  • #2
    You will see this euphoria continue...atleast for 1-2 years until something gives at global stage resulting in cascading effect across the globe...

    Remember last time's unchecked lending has been replaced by pandemic savings by people making them pay more deposit and little bit less mortgage...it still does not solve inability to pay in adverse conditions !


    Absolutely, if i was to put money on it from a global perspective. We will enter into hyperinflation in 2022/2023, the governments will have a knee jerk reaction and jack up interest rates, which will be the catalyst for the crash.


    In Ireland, FFFG in a last ditch attempt to save themselves will start ramping up supply (too little too late). SF will come to power in a snap election or 2024 and will continue to ramp up supply. The above global crash will impact on people's income, confidence and ability to borrow, thus reducing demand when supply finally catches up or surpasses demand.


    Smart money is not getting into the market right now, only brainwashed/panic money (with the exception of those paying huge rent with a family to support and can't move home/house share). Smart money is actually getting out, they will sell now at near all time high and be able to pick up similar property within less than half a decade for probably 40-50% less.


  • #2


    For anyone predicting a crash, do ye have any reasoning for it? Any idea what might cause it?

    I can't see a crash happening anytime soon when there's so many more people that want to buy homes than homes available. Last time out people were buying second homes so that caused the crash.

    I'm not predicting it happens, but the only potential threat I see at present is the reliance on Silicon Docks and the FAANG names in Ireland. If anything upset them, be it tax treaties or Data Protection rulings and they upped and moved, we'd be down quite a lot of people to buy houses.


  • #2
    tobsey wrote: »
    https://www.daft.ie/for-sale/terraced-house-21-phelan-avenue-royal-canal-park-ashtown-dublin-15/3224560

    350k brand new in 2016. This is a 55% increase in that time. That's double what the statistics say. They may get it but it's a massive increase. How were these so cheap new?


    Know the area well (we grew up in D7). It is very soulless, high social housing % and high service fees. 350k is too expensive for that, in a sane market.


  • #2
    Shedite27 wrote: »
    For anyone predicting a crash, do ye have any reasoning for it? Any idea what might cause it?

    I can't see a crash happening anytime soon when there's so many more people that want to buy homes than homes available. Last time out people were buying second homes so that caused the crash.

    I'm not predicting it happens, but the only potential threat I see at present is the reliance on Silicon Docks and the FAANG names in Ireland. If anything upset them, be it tax treaties or Data Protection rulings and they upped and moved, we'd be down quite a lot of people to buy houses.


    See my post above.


  • #2


    timmyntc wrote: »
    Cost of building has not increased anywhere near that much!

    I think that’s the new one that will be bandied around for a while.

    If the proposed affordable housing bill puts a max selling price of €225k on an affordable a-rated house in Co. Tipperary, all we have to do is work backwards to get to the real reasons why the same affordable housing bill believes the same affordable house in Dublin should cost €450k.

    If it’s not primarily materials, wages etc., it can only really be land costs. Therefore, the affordable housing bill is a direct government subsidy to some of the funds etc. who bought the same Dublin sites off the banks, NAMA etc. for a pittance (c. as low as €15k each in Cairn Homes case) just a few short years ago IMO

    And that subsidy has to start to be paid back in full by that ‘affordable’ home buyer in a few years.


  • #2


    Shedite27 wrote: »
    For anyone predicting a crash, do ye have any reasoning for it? Any idea what might cause it?

    I can't see a crash happening anytime soon when there's so many more people that want to buy homes than homes available. Last time out people were buying second homes so that caused the crash.

    I'm not predicting it happens, but the only potential threat I see at present is the reliance on Silicon Docks and the FAANG names in Ireland. If anything upset them, be it tax treaties or Data Protection rulings and they upped and moved, we'd be down quite a lot of people to buy houses.


    Little known fact :)

    Nobody can ever see a crash coming.
    They only guess and the ones who guessed right will tell you after how they predicted it.
    Do not believe these people unless they are rich beyond believe. Because thats what they would be if they could really predict things.


  • #2


    derekgine3 wrote: »
    Absolutely, if i was to put money on it from a global perspective. We will enter into hyperinflation in 2022/2023, the governments will have a knee jerk reaction and jack up interest rates, which will be the catalyst for the crash.


    In Ireland, FFFG in a last ditch attempt to save themselves will start ramping up supply (too little too late). SF will come to power in a snap election or 2024 and will continue to ramp up supply. The above global crash will impact on people's income, confidence and ability to borrow, thus reducing demand when supply finally catches up or surpasses demand.


    Smart money is not getting into the market right now, only brainwashed/panic money (with the exception of those paying huge rent with a family to support and can't move home/house share). Smart money is actually getting out, they will sell now at near all time high and be able to pick up similar property within less than half a decade for probably 40-50% less.

    SO you agree that supply is too low now for demand, so we're not the same as 2005/6 when we were bulding 3 times the homes we're building today. You say supply will ramp up in the next 2-3 years, then SF will continue that in power thereafter. That I can agree is likely, so we're 5 years away from saturation in supply at the earliest, but given the pent up demand that's likely to be further away while we catch up on supply. If that does happen and prices start to fall or collapse, nobody will get a mortgage for the next couple of years while prices are falling. Anyone who has saved a huge amount won't want to buy because they'll expect to get a house cheaper.

    So one of two things will happen I think, either it plays out as you suggest and we're 8-10 years away from the optimum time to purchase. There are very few people who can live happily rent free for the next 10 years while life passes them by.

    Or, you're right about some global downturn and the economy contracts and potential purchasers lose their buying power and demand contracts. If that happens then supply will slow as well. Unless, SF do get into power, build massive estates of social housing, for people with even lower unemployment rates than today and create social issues that will take decades to resolve.

    The only reason not to buy now in my mind is you can't afford it, or you haven't decided to settle in a location yet. Waiting for the market to come back down is not going to give you a very good quality of life.


  • #2


    derekgine3 wrote: »
    Absolutely, if i was to put money on it from a global perspective. We will enter into hyperinflation in 2022/2023, the governments will have a knee jerk reaction and jack up interest rates, which will be the catalyst for the crash.


    In Ireland, FFFG in a last ditch attempt to save themselves will start ramping up supply (too little too late). SF will come to power in a snap election or 2024 and will continue to ramp up supply. The above global crash will impact on people's income, confidence and ability to borrow, thus reducing demand when supply finally catches up or surpasses demand.


    Smart money is not getting into the market right now, only brainwashed/panic money (with the exception of those paying huge rent with a family to support and can't move home/house share). Smart money is actually getting out, they will sell now at near all time high and be able to pick up similar property within less than half a decade for probably 40-50% less.

    How is any of that going to change supply and demand issue? Do you really think house prices are going to be 50% less in 5 years time? And if so, are you selling?


  • #2


    tobsey wrote:
    350k brand new in 2016. This is a 55% increase in that time. That's double what the statistics say. They may get it but it's a massive increase. How were these so cheap new?

    Was it cheap? May explain why the investment funds risked there monopoly on apartments to venture into houses.

    To those in the know could the following questions be answered

    A. If a completed estate has been sold to investment fund would ftb still qualify for ftb plus shared equity were they to buy from the investment fund

    B Were the units to be rented out for a short time and then sold to ftb. Would they qualify for state supports

    Shedite27 wrote:
    I can't see a crash happening anytime soon when there's so many more people that want to buy homes than homes available. Last time out people were buying second homes so that caused the crash.

    If there is 30% inflation on building materials is correct and sustained. Central banks will have to react and address that level of inflation. The only tool they have in doing so is interest rate rises to cool economies

    I'm skeptic about the degree of inflation and would need more time to determine how much of it is down to manafacturing and supply chain issues

    Timber alone is down to administrative issues I believe in this country with delays in tree felling licences from the Dept of Agriculture reported to be an issue a year ago and still an issue today


  • #2


    tobsey wrote: »
    SO you agree that supply is too low now for demand, so we're not the same as 2005/6 when we were bulding 3 times the homes we're building today. You say supply will ramp up in the next 2-3 years, then SF will continue that in power thereafter. That I can agree is likely, so we're 5 years away from saturation in supply at the earliest, but given the pent up demand that's likely to be further away while we catch up on supply. If that does happen and prices start to fall or collapse, nobody will get a mortgage for the next couple of years while prices are falling. Anyone who has saved a huge amount won't want to buy because they'll expect to get a house cheaper.

    So one of two things will happen I think, either it plays out as you suggest and we're 8-10 years away from the optimum time to purchase. There are very few people who can live happily rent free for the next 10 years while life passes them by.

    Or, you're right about some global downturn and the economy contracts and potential purchasers lose their buying power and demand contracts. If that happens then supply will slow as well. Unless, SF do get into power, build massive estates of social housing, for people with even lower unemployment rates than today and create social issues that will take decades to resolve.

    The only reason not to buy now in my mind is you can't afford it, or you haven't decided to settle in a location yet. Waiting for the market to come back down is not going to give you a very good quality of life.

    But the supply/demand figures used by the Government, media etc. are based upon the Central Bank figures (pre-covid) that estimated we require 30k - 35k homes per annum to meed demand.

    It's based on net inward migration remaining at c. 30,000 per annum going forward despite the same report stating that "net migration contributed negatively to population growth during the years 2011 to 2016". It's also based on c. 5,000 existing homes becoming obsolete each and every year and needing to be replaced.

    If someone takes the view that net inward migration levels won't be anywhere near these levels going forward (and may even reverse) and that the projected obsolescence levels are doubtful, we may be already building more than enough homes per year to meet demand, which the same report puts at c. 18k units per annum without inward migration or obsolescence. We built c. 20k new units last year.


  • #2


    Villa05 wrote: »
    Timber alone is down to administrative issues I believe in this country with delays in tree felling licences from the Dept of Agriculture reported to be an issue a year ago and still an issue today

    YEah I think the timber issue is far bigger in the states really, we tend to use a lot more brink for houses than timber, opposite true in the states where it's a lot of 100% timber houses.


  • #2


    Just looked at the results of bidx1 auction today. I don't know how many were being sold guess...100.
    I would be looking at the run down/ middle of nowhere stuff for 30-70k. They were all sold and at around 50% higher than last year...would be my take on it!


  • #2


    derekgine3 wrote: »
    Smart money is not getting into the market right now, only brainwashed/panic money (with the exception of those paying huge rent with a family to support and can't move home/house share). Smart money is actually getting out, they will sell now at near all time high and be able to pick up similar property within less than half a decade for probably 40-50% less.
    The Dublin 1 apartment I was sale agreed on last year but then pulled out of turned up on BidX and went for about 8% less than what I offered. Makes me glad I got out..


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