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

mcsean2163

All Ireland housing supply still increasing:

Mobile searches

10-Sept-2021

All - 12509

Wicklow - 475

Kildare - 450

Dun laoghaire - 28

Glenageary - 25

13-Sept-2021

All - 12583

Wicklow - 468

Kildare - 462

Dun laoghaire - 28

Glenageary - 26

Villa05

David McWilliams bottle half full views on the new housing plan. The usual points being made. Alot of low hanging fruit left unpicked

https://play.acast.com/s/the-david-mcwilliams-podcast/168-thoughtsonthenewirishhousingplan

Pussyhands

Be difficult to see prices coming down if current conditions stay as they are and numbers build go to 35k a year. Developers aren't going to drop prices. The minute they see a slow down they'll be throttling back supply.

I hope interest rates are increased.

Pussyhands

Yer man from Crazy House Prices was on Claire Byrne last night.

He bought a house. Seemingly house prices aren't so crazy for him considering he had the luxury of deciding where he wanted to live and went around putting letters in peoples letterboxes.

I have severe doubts whether someone would be willing to not go to market to sell their house.

They have essentially left probably 30-50k on the table by not going to market. If someone was not knowledgeable on the market and maybe a bit older and they thought they'd save money on fees as the letter in the door said that, that's a bit dodgy.

It doesn't really save the seller time either. They still have to show the house. The buyer had no idea on the condition of the house so it's not like they could have offered them 350k with the first letter either.

Bannasidhe

My resident in Switzerland since 1979 brother is selling a house he bought in a Cork commuter town for our late father to live in.

Valuations put this house as worth €250 k based on what a nearby house sold for in July.

Brother is horrified.

Why?

Because the house he is selling is in a small development of 48 semi-d's built in the early 90s.

There are 3 house Types:

A = 3 bed, 2 bath, L room, Family Room, Kit/diner, garage/additional family room, very large enclosed garden, floor area c 127 sq m.

Type B = 3 bed, 1 bath, L room, Family Room, Kit/diner, room, large enclosed garden, floor area c 100 sq m.

Type C 3 bed, 1 bath, living room, kit/diner, small enclosed garden, c 85 sq m.

The auctioneers reference the last house sold as the benchmark (July 21).

The last house sold was a Type A BER D1 127 sq m in turnkey condition - it sold for €2,188 per sq m (property in Switzerland is always sold/rented by sq m).

The house he is thinking of selling is Type C BER D2 82 sq m and the engineers report states it is structurally sound but needs new windows and heating system as a matter of urgency, it has zero insulation, needs a new kitchen (incl ceiling) due to a leak in the upstairs bathroom while unoccupied. Since it was built the only work done was the bath was removed and replaced by a walk in shower to aid an elderly man. It has been 'valued' as worth €3,049 per sq m.

A nearby hse gone sale agreed which is bigger and has an addition living room and larger garden but BER is D2 and it needs work is valued at €1,479 per sq m.

A another nearby hse of slightly diff design, also bigger with additional L room, BER D2 sold Dec 2020 at €1,442 per sq m.

These two houses were not mentioned at all by the auctioneers.

If the sale price of the house that was genuinely in a similar condition was the benchmark the value of my late father's home is €130,800.

Brother, who owns property in Switzerland where it is considered very expensive- and his 3 daughters have bought apartments/houses in the last year - has concluded EA's are taking the Micheal with property valuations not based in market reality as evidenced by the sale prices in the local area but on how much commission they wish to earn. If the 'valuation' of €3,049 per sq m was used as the valuation price of the home it was benchmarked against that house would have have sold for an additional €110k.

Auctioneers keep telling him how much money he can make, he keeps telling them he doesn't need to make any more money. He made millions by being an honest dealer in business. He want's a valuation based on what the property is worth which references properties in a similar state of repair - not what it might make in a frenzied bubble based on price achieved by a far superior property.

Or to put it another way - don't blow smoke up his ass and tell him a Skoda can be valued based on what a Merc of the same age in better condition sold for.

mcsean2163

https://www.boards.ie/discussion/comment/117890311#Comment_117890311

Never have i heard such crap in my life. Man unhappy because he wants less money for his house.

If he really wants, I'll pay him 130 and sell it on for 250.

mcsean2163

https://www.boards.ie/discussion/comment/117889978#Comment_117889978

What's this about letters?

Bannasidhe

https://www.boards.ie/discussion/comment/117891403#Comment_117891403

And that kind of crap is why house prices spiral. Greedy little hands all want to get their greedy little share of easy money. But crap or not, rich man thinks estate agents are gougers out for a quick buck for little work.. Seem there's a lot of that around.

Any comment on why property price cannot be based on price per square metre achieved by local dwellings of the same type?

Pussyhands

https://www.boards.ie/discussion/comment/117891405#Comment_117891405

Basically yer man who runs the instagram page said he wanted to live in a certain place in D8. So he went around putting letters in the doors asking if they were selling. Apparantly someone bit and he bought a house without an estate agent.

mcsean2163

https://www.boards.ie/discussion/comment/117892000#Comment_117892000

House prices are based on whatever people will pay. It is the estate agents job to get the best price for the seller.

It sounds like your brother is upset by the loss of the deceased and wants a fair price and not a market price. He can easily do the research to invent a 'fair' price based on historical prices and insist the EA sell at that price.

First world problems.

mcsean2163

https://www.boards.ie/discussion/comment/117892036#Comment_117892036

Wow, maybe it was a mate of Bannasidhe.

Fair play to him anyway.

Cyrus

https://www.boards.ie/discussion/comment/117892036#Comment_117892036

That lad is a spoofer, but reflective of the age we live in.

rob316

https://www.boards.ie/discussion/comment/117890311#Comment_117890311

What is this crap. The market is whatever someone is willing to pay for similar properties. Auctioneers job is to get as much as he think he can get for the property. In what planet does the seller want less than it's worth?

Bubbaclaus

The residential property price index out in the morning, given how flat property prices were last year I am expecting another headline grabbing 12 month increase.

Cyrus

https://www.boards.ie/discussion/comment/117866532#Comment_117866532

Where are you getting your numbers? They look like gross margin figures, you do realise that the 'generous' pay for management isn't a cost of sale.

cnocbui

https://www.boards.ie/discussion/comment/117890311#Comment_117890311

Your brother has an interesting viewpoint, given the average apartment price in Switzerland is €6,133 per square metre. https://realadvisor.ch/en/property-prices

And you really don't want to even look at the Zurich or Geneava prices.

Bannasidhe

https://www.boards.ie/discussion/comment/117892579#Comment_117892579

His viewpoint is that in Switzerland property is bought and sold based on verifiable published figures, not on what some EA can 'get in the current market'. No one said property is cheap to buy in Switzerland - far from it. It doesn't have a culture of buying - it has a culture of secure renting. We have a situation where in a country with a buying culture we have people in insecure high cost renting and unable to save for deposits. Extremely large deposits as house prices increase and increase to where a 30 year old small semi in a Cork commuter town with a justified BER of D1 is half the price per sq m as an apt in Switzerland.

Asking over €3000 ppsm for a needs serious upgrades small house in a commuter town is insane - particularly when a larger house needing no work just sold for a little over €2 k ppsm. That is blatant price inflation.

Because an EA's 'job is to get the most dosh' isn't the stunning argument people seem to believe it is. It is an indication of how dysfunctional the Irish market is that Gordon Gecko seems to be the poster boy. Again. I'm old enough to remember a few other bubbles bursting and we are heading that way again.

It is interesting that quite a few people got their portfolios in a twist because a man believes that system is immoral. Who believes The EA's job is to facilitate the sale, not inflate prices to inflate their own commission.

But once again no-one has answered exactly why Ireland cannot use a system of valuing property using PPSM achieved in similar dwellings as a guide price. How property is valuated needs to be more science and less wet finger in the air. If after that people want to get into bidding wars that's their own business. At least start from an honest and verifiable place.

cruizer101

Who believes The EA's job is to facilitate the sale, not inflate prices to inflate their own commission.

The EA's job is to get the best price for vendor, the result of that is inflation of prices, I'm no fan of EA's but they are just doing their job in that respect. It is the governments responsibility to moderate the market.

But once again no-one has answered exactly why Ireland cannot use a system of valuing property using PPSM achieved in similar dwellings as a guide price

I think anyone who is sensible will look at that themselves, yes it is not explicitly stated but you can work it out. Also there is a lot more to a total price than the PPSM, garden size, aspect, on street parking, potential for expansion as well as the fact PPSM will go down the bigger the house as there is an inherit value in a property regardless of size.

Bannasidhe

https://www.boards.ie/discussion/comment/117893167#Comment_117893167

There is nothing stopping EA's getting the best price, they are at the end of the day sales people. My issue is with inflating the valuation - so they start from a false base which heats up the housing market until the point where 350k is deemed affordable.

I really don't think expecting that valuation prices be based in some verifiable reality is too much to expect. PPSM is accepted in many countries - it's used by the CSO to work out the property price register. Yes, there are variables. Some of which are quantifiable (e.g ERSI says BER grade affects sale price - 10% per grade), others like state of interior are not. But at least by using the same formula across the board there is a level playing field and a verifiable starting point to begin negotiations.

It's then up to the EA to 'get more' if they can.

AdamD

You're severely overestimating the power of EAs. Houses aren't selling for 350k because the EAs stuck on a higher price on the ad. They're selling for 350k because demand is huge and supply is tiny. They could stick 250k on the ad and they'd still end up selling for the same price

Asking prices mean little

https://www.boards.ie/discussion/comment/117893299#Comment_117893299

It’s not the EA ‘getting more’ or ‘inflating the valuation’. EAs are actually pitching asking prices below market in most cases right now, to generate interest. It’s multiple people being interested in the same property and there being a lack of supply that’s the issue. If no one is interested then how does the EA ‘get more’? If you want to blame anyone, blame the government for mismanaging our housing stock

I just paid 30% over asking for a rural property. Because I wanted it and so, unfortunately, did a couple of other people.

Cyrus

https://www.boards.ie/discussion/comment/117892777#Comment_117892777

Im not sure what point you are trying to make, an EA is there to facilitate a sale, an extra 20/30/50k isnt a whole lot of extra commission for them they just want the property sold and move on to the next one, and price per sq/m (along with various other factors) is the general guide here as it is everywhere else for a price for a property.

If someone is way off on the price it wont sell.

As for secure tenure, we are working towards that here with institutional land lords, but it turns out we dont really want them either.

Bannasidhe

https://www.boards.ie/discussion/comment/117893584#Comment_117893584

My point was quite simple.

A house was just valued at €250k by an EA, €240k by another, and €200k by a third.

The EA's giving the first 2 valuations quoted the price achieved by a house sold in July 2021 as the basis of their valuation. A 127 sq m house with a higher BER and in turn key condition. The house was sold for €2,047 per sq m. The house going on sale is valued at €3,048 per sq m according to one EA, and €2926.82 by another.

Even ignoring the variables if the actual ppsm of the house sold was applied to the house being valued (since the EA's claimed this is what they were using to arrive at their valuation) the house would be for sale for €167,854.00.

If people are ok with that that is their business. But it is not good business if one is trying to buy a home.

How quickly the shock of the last crash has been forgotten.

Cyrus

https://www.boards.ie/discussion/comment/117893833#Comment_117893833

and if people dont see it as value they wont buy it, no one is forcing anyone to pay anything, people make up their own mind what something is worth.

Sarn

The main issue I would have, as a seller, with EAs using unrealistic asking prices is that it could scare off potential buyers. If the property is that overvalued compared to recently sold properties, it could languish on the market for a very long time.

It is surprising that two EAs gave such high valuations. I wonder if the other properties were sold at full market value.

Amadan Dubh

In what is likely to be the least surprising news to anyone, 8.6% YoY increases in house prices in Ireland. Frothy, buoyant, growth, this time it's different etc. Add in CPI inflation and wage growth to these stats which are the highest they've been for a decade and the red warning lights are flashing in the economy! Extremely troubling news.

https://www.irishtimes.com/business/economy/growth-in-house-price-jumps-to-3-year-high-of-8-6-1.4674616

Growth in house price jumps to 3-year high of 8.6%

Dublin prices rise 8.1% over 12 months while prices outside capital increase 9%

Annual house price inflation jumped to 8.6 per cent in July, the fastest level of growth seen in the market in almost three years. The headline rate of growth was up from 6.9 per cent in the previous month.

Buyers paid on average of €310,641 for a home in the 12 months to July. The mean price in Dublin (€479,454) was the highest in any region or county. Dún Laoghaire-Rathdown had the highest average price in the Dublin region at €649,916, while South Dublin had the lowest at €391,652.

At the same time, we have two other stories today of homebuilders offloading ready-to-go sites, Glenveagh and Gannon Properties. Peculiar.

https://www.irishtimes.com/business/commercial-property/north-dublin-site-with-full-planning-for-1-937-homes-for-50m-1.4673718

https://www.irishtimes.com/business/commercial-property/foxrock-site-at-4-75m-has-scope-for-bespoke-dermot-bannon-housing-scheme-1.4672824

Mad_maxx

https://www.boards.ie/discussion/comment/117891403#Comment_117891403

Il pay 190 k so you'll have to outbid me

L1011

https://www.boards.ie/discussion/comment/117893833#Comment_117893833

People are not obliged to bit what an EA has put a house up for.

Cyrus

https://www.boards.ie/discussion/comment/117893936#Comment_117893936

What are you inferring from the developers selling the sites?

On the glenveagh one its very obvious that its not a core asset for them.

fliball123

https://www.boards.ie/discussion/comment/117892000#Comment_117892000

As that is not how it works its simply supply and demand with a few other factors such as quality , location and size. You cannot simply base it on size the property or an any one of the above areas alone. The market has worked this way since its conception. I think we can see your bias in your last post as its all pi$$ and vinegar. I don't think there are many people who would turn down an additional 40% more on an asset they own or maybe that's just me. Mmm I wonder?