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

fliball123

https://www.boards.ie/discussion/comment/117983344#Comment_117983344

There has been commentary about holding back and likening every year in the period between 2016 - 2021 to that of 2006 and telling people to hold off because of brexit, covid, prices are too high. Until the fundamental supply issue is dealt with prices are not coming down. Its not 2006 we don't have a glut of property on the market waiting for people to put a bid in. We have a very small supply and demand is still very high.

Villa05

https://www.boards.ie/discussion/comment/117983387#Comment_117983387

The terminology used by my employer is very vague although they do seem committed to it.

They say employees will be in the office at a minimum 1 day a week.

A person in 5 days a week is meeting this statement.

You can understand why banks are seeking clarity

timmyntc

https://www.boards.ie/discussion/comment/117983416#Comment_117983416

Agreed - when making a decision to buy or not, assess the market locally yourself. You always have people saying that a nationwide crash is around the corner.

Some areas have serious undersupply, others not so much. If you're still renting, I would buy, seeing as rents are continuing to climb and will do so for the foreseeable.

Bass Reeves

https://www.boards.ie/discussion/comment/117982654#Comment_117982654

I remember a couple of decades ago when companies first started to leave staff with van operate from home. A lot of people were of the opinion that it would never last especially when lads were using them a bit on the side as well. Not only did it last, companies gave staff the permission for private use of most vans.

Working from home is here to stay. It may step back a bit now but it will be embraced, especially for the higher salaried employees or those who's work is easily collated. But it will roll out. It has huge advantages to employers as well as to employees. I know of a lad that is living in Rural Limerick, he only goes into the office in Dublin once a month, the company picks up his train ticket costs and as well if he is needed to be in consecutive days the employer pick up his overnight costs in Dublin and he doesn't stay in a hostel either

Villa05

https://www.boards.ie/discussion/comment/117983416#Comment_117983416

That's why I included the names of the commentators as they are quiet balanced in their assesments as opposed to consistent bears

fliball123

https://www.boards.ie/discussion/comment/117983519#Comment_117983519

Once again almost all other commentators stating prices were going to fall seemed to have a balanced argument and in the face of prices going up, covid and brexit they seemed to have some reason to why prices would drop in the period of 2016 to 2021 and yet it still has not happened. As i say until the supply problem is an issue prices will not be dropping anytime soon.

Murph85

massively rising material and labour costs already and the CB want to further hike prices by allowing people to spend more? This is nearly like the tiger boom again! It will no doubt end in tears, in several years. One thing is clear, there is so much going on, so many moving pieces. Its also clear that these busts are like volcanoes, it takes years and years for them to build and blow. What do you do now if looking to buy and want to settle in Ireland?

Well given rip off rents, the fact that the housing crisis if anything is just going to get worse. If you are hell bent on staying in ireland or have too. Buying might make sense, unless you are renting at well below market rent etc...

https://www.boards.ie/discussion/comment/117982291#Comment_117982291

Which is very easy, if you have a reasonably priced place to live while sitting it out.

not so easy when you have to pay 2500/3000 euro a month rent. What can they do!

Villa05

https://www.boards.ie/discussion/comment/117983547#Comment_117983547

Cormac Lucey is a former Government advisor.

Chris Jones and Jim power are former long serving banking economists

Their opinion is as valid as anyone posting here

mcsean2163

https://www.boards.ie/discussion/comment/117982291#Comment_117982291

People know how to add, €2,500 per month for three bed in Dublin is €30k per year and €150k over 5 years that goes nowhere except into the landlords pocket. That's why the cost is so high and people willing to pay extortionate amounts.

However, in your instance, sounds like your advice helped them dodge a bullet.

Villa05

https://www.boards.ie/discussion/comment/117983736#Comment_117983736

Every Ponzi/pyramid scheme needs a carrot or stick to drive submission

Carrot- promise of riches

Stick - suffering if you don't

Scheme continues until found out

rob316

https://www.boards.ie/discussion/comment/117983667#Comment_117983667

But sure everyone is an expert, when really there is too many factors at play here to give any answer into the future.

WFH has had an impact on the market but how long lasting will it be? Once all restrictions are gone, how many will be back in the offices? I'm of the strong opinion we will see salaries fall for 100% WFH roles going forward.

There is massive supply chain problems leading to ridiculous costs of materials and shortages. That will be corrected

Buyers with larger than normal cash deposits saved during the pandemic, aren't going to last forever. Salaries are just not matching up with this market, double digit property growth is not sustainable against salaries that are rising around 2%.

I got approved the other day for what I wanted but I'm taking a calculated and I suppose optimistic decision to sit this out until 2023. I'll be tight for space in current accommodation but I have the luxury of been able to do it, so I judge no one with a gun to their head and contributing to this bubble.

The 3.5 times rule is the one thing stopping this from getting far worse so the CB are right to resist any pressure. However I feel telling someone you can afford to rent somewhere for 2,000 a month but cant afford a 1,000 a month mortgage is bit a galling. There could be more flexibility but I just don't know how you would control it.

rob316

One more thing the councils need a fire lit under their asses fast to bring vacant council properties back to use and I'm not talking derelict homes. I live in a mixed council/bought out development. There is 2 currently vacant 3 bed homes, 1 is absolutely immaculate, decorated and furnished to a high spec by the previous tenant and has been empty for 2.5 years. The other is vacant over a year as the previous tenants were evicted for been scum but the house is fine.

That's 2 houses out of 12, 2 families on HAP that are in a private rental. This must be the same all over the country.

Yes we need to build a hell of a lot of homes but it isn't the only answer to this question of how you fix this housing crisis. Where there is a will there is a way but is there really a will?

MacronvFrugals

https://www.boards.ie/discussion/comment/117984007#Comment_117984007

With this carry on is it any wonder the supply situation is so bad...

Why hundreds of finished homes lie empty across the country

https://www.rte.ie/news/primetime/2021/1005/1250924-housing-crisis-irish-water-delays/

Castle View, a brand-new housing estate with 100 residential units in Lucan, Co Dublin, was completed in May. Pristine and picture perfect, the houses are energy-efficient, and the development also comes with a playing field for children and a huge playground.

Primarily due to delays in connecting the water mains and the main sewer, it was only this week that three new tenants got their keys, five long months after the estate was finished.

Respond, the housing charity that manages the estate, told Prime Time that there was a three-and-a-half-month delay connecting the homes to the mains water supply, and a five-and-a-half-month delay connecting them to the main sewer.

Irish Water said there were complications with the connection to the sewer, which required a "complete redesign".

mcsean2163

https://www.boards.ie/discussion/comment/117983835#Comment_117983835

I don't deny the wisdom of your statements but difficult for many especially those with kids to put their lives on hold.

Timing belt

https://www.boards.ie/discussion/comment/117983835#Comment_117983835

The majority of people buy a property to live in not for the promise of riches.

The majority will live in the property for most of their lives and the ones that do change property don't benefit from the value of the property increasing unless they sell up and move to a country with cheaper housing as the value of the new property will also have increased.

At the end of the day the value of a property is dictated by the price that an individual is willing to pay. It is the underlying factors that makes an individual pay more where they are able to do so.

e.g.

High rent

living at home with parents

Lack of Supply

desire to live in a specific location

Property inflation/FOMO

Perception of cost of building

Of all of these the 2 that are the easiest to change by the government are: supply and cost of building

increase supply and people wont feel pressured to pay such a high price or will be able to look for cheaper rent else where.

The cost of building can be addressed by heavily taxing profits (80+%) taken when land gets rezoned to residential and in turn lowering tax on building materials or using the tax intake to build social houses to reduce future HAP.

yagan

https://www.boards.ie/discussion/comment/117984064#Comment_117984064

Thanks, this actually may answer my wondering about all the new estates I've recently seen around Cork that look ready to move into but they've remained behind harris fencing for months.

It's been an eye opener helping my relative house hunt this year, there is definitely supply heading for the market and we can already see that the offers have massively improved since June, even if sellers expectations haven't caught up yet.

Timing belt

Practically every new house that is being built in cork has already been sold. Most of the new supply that will be hitting the market will be apartments which will be bought by investors no doubt if they ever get to the stage of building them.

jill_valentine

https://www.boards.ie/discussion/comment/117983464#Comment_117983464

My entire department is work from home permanently and was since before the pandemic. We have a general email from the head advising of such, but I was told this would not be sufficient, I'd need a personalised letter from HR advising I, personally, was full time WFH "from now on", as the broker had experienced issues with it before.

It might not have been an issue for some people, but in my case it would have been because it was a cheap one bed apartment - so the loan would have been either below what banks want to mortgage or else above the LTV they wanted to offer. It was a weird one. Also it would have been easier to get a letter like that from the Soviet government than my HR department.

I didn't see how it would have worked out in the end because I'm going another way, but the broker was vehement, so anybody going that route, be careful and make enquiries.

wassie

Australia & NZ regulators have both taken steps today to address rising property prices. They would outwardly appear modest in their increases, but send very clear signals to the market over concerns with the rate of housing prices increases.

Australia's regulator APRA has announced an increase of 0.5% in the serviceability buffer assessment by lenders to “at least 3.0 percentage points over the loan interest rate”.

The Conversation reports:

APRA says it is not trying to target the level of housing prices, and it looks as if it isn’t (yet) concerned that lending standards are lax, but it wants to ensure “borrowers are well-equipped to service their debts under a range of scenarios”.

Its announcement says increases in the share of heavily indebted borrowers mean “medium-term risks to financial stability are building”. More than one in five new loans approved in the June quarter were at more than six times the borrowers’ income. As prices have surged, borrowers have pushed themselves deeper into debt in order to get a foothold in the market.

Meanwhile NZ is taking the sledgehammer approach over inflation concerns more broadly by raising the official cash rate. This comes after after tightening LVRs last month. The Reserve Bank of New Zealand is lifting its benchmark from a record low 0.25 per cent to 0.5 per cent.

The Committee noted the Reserve Bank’s assessment is that the level of house prices is currently unsustainable. Members noted that a number of factors are expected to constrain house prices over the medium term. These include a high rate of house building, slower population growth, changes to tax settings, and tighter bank lending rules.

Rising mortgage interest rates, as monetary stimulus is reduced, would also constrain house prices to a more sustainable level. Members noted a risk that any continued near-term price growth could lead to sharper falls in house prices in the future.

DataDude

https://www.boards.ie/discussion/comment/117959621#Comment_117959621

Dragged to see this by my other half. Was in a sour mood arriving, ready to hate it…to my surprise, having viewed a lot of houses over the last 2 years (and many more pricey than this), internally this is the best I’ve seen. If I had a blank canvas and was building a house, I’d hand the builders the plans and say build that! For me it answered a question discussed earlier in this thread around what’s the ‘ideal size’ house. 240m2 it seems!

Wont be bidding as the Eden Gate is too big and awkward to get to, but would highly recommend having a look if it’s of even a slight interest. Will sell quickly, and (probably) above asking. The 650 one you mentioned wasn’t arms length. Others on the road were going for 750 back in the beginning of 2018.

Timing belt

https://www.boards.ie/discussion/comment/117985835#Comment_117985835

You can add Poland to that list....they raised rates today to battle inflation

mcsean2163

https://www.boards.ie/discussion/comment/117986029#Comment_117986029

Interesting, what do you mean wasn't arms length?

DataDude

https://www.boards.ie/discussion/comment/117986331#Comment_117986331

I don’t believe €650k represented the market value at that time. Whether it was intra-family or some tax games going on, I have no idea. But there are several other identical houses sold in early 2018 (and 2018 saw strong price increases) for 805,810,785 etc.

Also as pointed out by another poster, they were making 600 all the way back in 2011.

One selling randomly for €650k in 2020 looks out of whack to me so wouldn’t be using it as an indicator of prices up 50% in a year if that one makes €1m

Amadan Dubh

https://www.boards.ie/discussion/comment/117983547#Comment_117983547

I think a sudden demand shock could render a supply increase less important. There is an assumption that demand is strong and will continue to stay strong but there are increased risks to the projected demand figures.

For example, Brexit (which is only recently starting to have a noticeable impact on the British economy), global corporate tax reform, interest rate increases, QE easing, Big Tech (in particular Facebook) companies growing more slowly/reducing headcount in Ireland etc.

It's not just "increased supply" which would bring down prices but I think a hit to demand, which is possible, could also do it. Now of course wider economic issues would follow in such a scenario.

Villa05

https://www.boards.ie/discussion/comment/117984289#Comment_117984289

People are much wiser to the promise of riches in ponzi schemes. Housing very much works off the stick approach. We know that we are most likely doomed to the not fit for purpose more expensive rental market if we do not buy. There is no other option over the private market in housing for the majority of working people

The lack of supply is the single biggest determinant of price. In the most underdeveloped nation in Europe, Lack of supply would appear to be a choice by those in power by creating barriers to supply. People in power change and one day we may choose to remove these barriers and allow demand and supply meet

It's the byproduct of commoditised housing. The process makes buying a home like walking into a betting shop with your life savings and much of your future life earnings in a system that is rigged against you

There are surely better systems out tgere

LeeroyJ.

https://www.boards.ie/discussion/comment/117983736#Comment_117983736

This is exactly it, I took out a mortgage this year and even at a relatively high loan on an ambitious repayment schedule, my monthly mortgage is a little over 30% less than my previous rent. Over the next 25 years, that is a significant saving in addition to an investment. As long as renting is completely broken in Ireland, buying will always be the better option, no matter how high the prices of property are.

fliball123

https://www.boards.ie/discussion/comment/117983667#Comment_117983667

They are entitled to their opinion but until they can do something about the supply issue their words mean diddlysquat and how many of the so called experts foreseen property price increases during Brexit or Covid? The fact is until the supply tap is turned on and can catch up with demand their opinion means diddlysquat same as anyone spouting what way prices will go. You can only look at the factors that are there in front of us. The 3 main factors are

Supply - Way too low and no plan to build the houses needed, Ability to build severely hampered by lack of workers and material costs sky rocketing.

Demand - Way too high we have pent up demand from Brexit and Covid, We have also 1/2 million more people in the country then 10 years ago. We have seen year on year births vs death rates on the birth side since recordings started and we have had 8 years of nett immigration inwards to Ireland meaning more bodies to house. Add in dropping the time from 8 years to 4 months for people who are seeking asylum in this country to be processed will mean an even high migration figure inwards in the coming years.

Access to Credit - People have record savings, tax take recovering better than expected, banks still lending even during and after brexit/pandemic.

I dont pretend to be an economist but all 3 factors that make up the price of property would suggest to me that prices are not dropping any time soon, they may level off if wages lag behind inflation.

wassie

All your points are valid and make a lot of sense, but I'd agree with @Amadan Dubh point that a sudden demand shock could alter things very quickly. If people suddenly lose confidence in their job security, they are unlikely to saddle themselves with a big mortgage, especially if its an existing house with a lot to be desired.

Before the pandemic there was a lot of fear about the level of corporate debt and the risks that posed to the global economy. We hear very little of this now but the issue hasn't gone away. IMF boss Kristalina Georgieva spoke only 2 days ago of the risks associated with debt, inflation and divergent economic trends after the pandemic. If China is not able to contain the Evergande implosion we could see a serious hit to global demand if their economy goes south.

pkvader

Just a quick question about Auctioneera,when you put in an offer that matches the asking price it triggers a 15 day count down?,yeah?.What happens when you put in a bid less than the asking price and there are no other bidders?.Do Auctioneera contact you to tell you the offer has been accepted or rejected?.Is that how it works?;would appreciate any opinions if any of you have experience with the Auctioneera process.Thanks.