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

wassie

The boom is getting boomier!

GoldFour4

https://www.boards.ie/discussion/comment/118510487#Comment_118510487

Netflix did not beat all estimates. Their subscriber growth (key metric for a company such as them) was below its estimates. They are also projecting that new subscriber growth in Q1 is about 50% of what analysts expected.

In terms of where the money is coming from - I think there has always been a lot of potential buyers ( saying 2 people in this case) whose 3.5 times came to somewhere in the €350k-€450k range without exemptions. The supply side issues has meant that these people are now paying €420k for a house that they could have got a few years ago for €330k for example. That price range is by far the most heated from what I've seen. I'd be more concerned if I'd bought a house in the €800/900k range than €400k as I think there will always be a relatively strong market in that range.

It'll be another 3/4 years until we see any sort of change imo when the currently new developments are built and being lived in.

Also the self build market is a bit of an isolated case in reality. These houses are generally being built as peoples forever homes - normally they aren't expecting to be selling in 10 years time so are willing to go a bit over the top on the spend.

Pussyhands

https://www.boards.ie/discussion/comment/118510567#Comment_118510567

I said Netflix beat the top line estimates.

Earnings per share (EPS): $1.33 vs 82 cents expected in a Refinitiv survey of analysts.

Revenue: $7.71 billion vs $7.71 billion expected, according to Refinitiv.

Global paid net subscriber additions: 8.28 million vs 8.19 million expected, according to StreetAccount estimates

While demand can remain high, unless there's money to go with them then prices will come down.

With the pandemic everyone was stuck at home all day and many probably went all in to get a nice house because they were at home all the time. With pandemic coming to an end will all those savings be spent? Will people turn to splurging on megaholidays now instead?

All I know is, there's no such thing as a free lunch.

fliball123

https://www.boards.ie/discussion/comment/118510622#Comment_118510622

Free lunch or not there were record savings recorded in Irish bank accounts there not so long ago. Also people have to live somewhere there is no getting around that and regardless of how netflix are doing or if they increase their price, they have to compete with sky, disney, virgin etc so you can pick and choose to watch or not to watch or choose a competitor. When it comes to having a roof over you head there are not that many options that are cheap if you dont buy your paying out more in rent. There is no way prices of property will be coming down in the next 5 years. Labour shortages, material shortages and both of the prices on these are zooming up just look at the price of Timber then throw in the price of oil.. Add in we are not building enough to sustain the growth in population even if we had no deficit in housing the amount build last year would not of been enough for the new demand coming on that year. So unless there is a mass exodus of our population (may happen it has happened before) or/and the cost of building a property suddenly drops by at least 30/40% (cant see this happening either) and builders decide they dont want to make a profit and just build for the good of their health (more chance of me winning the lotto 5 times in a row) then there will be no reduction in price. I find it funny people take one head line drop in a certain non related industry and equate it to people who have bought in the last 6 months as a sign of an upcoming Armageddon. I mean we just had brexit and we still have covid you cant get any worse when it comes to putting fear into people when it comes to spending.

timmyntc

https://www.boards.ie/discussion/comment/118510487#Comment_118510487

If I had just bought a house in the last 6 months I'd be anxious.

Why? Interest rates rising maybe, but until our supply catches up with demand prices will not be dropping. And that wont be happening any time soon unless a mass unemployment scenario arises and the demand itself disappears.

Pussyhands

https://www.boards.ie/discussion/comment/118511074#Comment_118511074

Demand has outstripped supply for the past 8 years yet prices have increased like 90% since then.

Think about why prices increase and then you might see reasons for potential rocky road ahead.

Imagine wages stayed flat, do prices increase simply because demand is greater than supply?

All it takes is one nervous cow in a herd to start the domino effect.

History shows nothing ever stays the same. Are we going to see labour shortages forever? Are we going to see houses going up 10% a year forever? The whole thing has been propped up globally for years and years more than it should. Can't be propped up any longer. The US FED are going for the lesser of two evils. Let's see what the markets and economies do now.

SmokyMo

People who recently bought most likely have fixed rate secured. They are fine.

Houses might not increase another 10% but I dont see any potential scenarios where they crater 20%+ short term.

Pandemic showed that people who are looking to buy have good job security.

There is a solid pool of buyers looking to buy.

Potentially I can see issues down the line with rates or war in eastern Europe and everything that comes with it. In bad case scenario, credit lines will be dry, or only available at high rate making housing market stagnant.

SmokyMo

https://www.boards.ie/discussion/comment/118510487#Comment_118510487

NFLX is down 20% YTD. Not because of ER. Whole growth sector is down the hole atm. Look at Hubspot which 8x from 2020 march lows and now -50% from ATH.

Peleton was a basket case.

You are looking at specific sector within a sector and not the whole market. For example value companies are doing great.

Amadan Dubh

https://www.boards.ie/discussion/comment/118511074#Comment_118511074

I think what has happened in the rental market has contributed to inflating the housing market as a whole. Sure there is demand for housing, but I don't think there is demand for 1700pm/1 bed, 2000pm/2 bed places to rent. Additionally, a lot of the demand comes from the State itself (1/3 of all tenancies get State assistance). The rental market is ripe for some price discovery.

Timing belt

https://www.boards.ie/discussion/comment/118510622#Comment_118510622

With the pandemic everyone was stuck at home all day and many probably went all in to get a nice house because they were at home all the time. With pandemic coming to an end will all those savings be spent? Will people turn to splurging on megaholidays now instead?

yeah people will splurge on holidays but not if they are serious about buying a house.

The deposits in the banks are still very high and I can't see much of a correlation or cause and effect from an overvalued stock like Netflix (that now has plenty of competition) and Irish house prices.

I would be more concerned about the Chinese economy slowing that they needed started to cut interest rates the other day, rather than a stock that every retail investor has pilled into for the past 2 years despite the fact that the pandemic has caused other companies to focus on their improving their streaming products/offerings.

Amadan Dubh

https://www.boards.ie/discussion/comment/118511441#Comment_118511441

I also think a lot of older people who held off in the pandemic will start to put their houses on the market as they see that the threat from the pandemic subsides. There's also the pre-Brexit sellers who have delayed and will now look to sell up since Brexit fears have also reduced. This could be essentially 3 to 4 years of house sellers who held off that may now look to sell, so I could see this being a fairly significant source for supply.

https://www.boards.ie/discussion/comment/118509346#Comment_118509346

Anything can be sold to a cash buyer. And I’m sure that there are unscrupulous landlords out there with that amount of cash to hand

Timing belt

https://www.boards.ie/discussion/comment/118511488#Comment_118511488

unless the older people (or pre-Brexit sellers) have died or emigrated they are still going to need somewhere to live..... if they are selling they are probably also buying.

I don't see how a significant source of supply can come from this as we still have the same no of people in the country and the same housing stock.

iColdFusion

https://www.boards.ie/discussion/comment/118511340#Comment_118511340

There is a solid base of buyers but im not sure there is a solid base of people prepared to bid €50k over an already optimistic asking price due to pure desperation, people have different needs and buying capacities which might bring a bit of sense back to the market and people more prepared to wait for a new build than get into mad bidding wars for 2nd hand properties but long term that is based on the Shinners not getting into power and removing HTB.

Overall I think one good kick to the Irish economy would shake a lot of apples loose from the tree, we have a lot of highly educated immigrants coming for high paying jobs who are prepared to pay high rents for now but no major plans to stay in Ireland long term but still in the property market as they see rent as dead money so one economic shock could see them heading for somewhere like Germany, the UK or working remotely from their home country which could alleviate housing things here a bit but also hit our economic growth.

Same with demographics as those workers get older and think about starting a family, Ireland is a bad place to start one compared to most European countries, one Croatian girl nearly had a heart attack when I told her its approx €1000 a month for childcare here, its around €250 in their capital city Zagreb.

Bass Reeves

https://www.boards.ie/discussion/comment/118511546#Comment_118511546

Anybody with that amount of cash is no idiot. Landlords are aware of all risks. You be some idiot to buy such a property especially after your solicitor advised against it. Its highly unlikly it could even be allotted a folio number. An engineer would be required to subdivide it and you would want your own engineer to to verify the property.

TBH I expect there is some sort of problem with the ownership. Maybe the property was left to multiplr owners or there is CAT owed on it. However unless you can subdivide it and an OMC is in place no unscrupulous landlord even will touch it. You would be 7 different types of an idiot to buy it even if all the ducks were in a row, not to mind if they were not.

Thargor

Wow, I wandered over to the Property Pin to see what their opinion was on future price movements in the property market, they've had great analysis in the past and one of the few Irish outlets to warn about 2008 before it happened. I hadnt been there in a couple of years for some reason but looking at it today its completely degenerated into a screaming mentally ill anti-vax mess, Ive never seen a site go off the rails so badly, its worse than Twitter or Facebook now, pure chemtrails and magnets in the vaccines stuff.

Heres a thread the site admin just posted on the main page, this used to be a place that gave better advice than askaboutmoney or boards, wtf happened?:

Pussyhands

https://www.boards.ie/discussion/comment/118511370#Comment_118511370

No no, Netflix are down 15% so far this year.....they went down 20% further after hours because of the earnings report. It also dragged other stocks down.

Tech stocks are the big employers. Amazon, Facebook, Microsoft, Mastercard, Google, Dell, Oracle, Workday for example. If tech suffers a contraction they'll tighten their belts, cut spending, reduce hiring etc.

wassie

https://www.boards.ie/discussion/comment/118511488#Comment_118511488

Anecdotally I have had a number of agents report that since the pandemic begun they have a lot clients who haven't been prepared to go to market as there is nothing for them to trade-up to. Likewise selling up and renting on the sidelines 6-12 months is simply not an option.

Given we are at historically low supply, I suspect once we see properties starting to come to market, seller sentiment may change and motivate homeowners thinking of selling to get to market (driven by fear). If this were to occur and supply began to normalise, this would certainly put pressure on the rate of price growth.

This seems to be the scenario that is playing out in the 2 biggest markets in Australia, Sydney & Melbourne. After months of increasing steady price growth, prices at the end of last year are signalling a slowdown that correspond with improved supply dynamics.

Timing belt

https://www.boards.ie/discussion/comment/118511381#Comment_118511381

If rent didn't drop in cities areas during covid when demand dropped what makes you think that it will drop now? will there be a load of new supply coming onto the market at lower prices when the cost of labour in construction has gone up 5% for the year (up to Q3 2021).

Then CPI in the period up to Q3 2021 was nowhere near as high as it is now so you can expect a further jump of 5-10% this year when you consider inflation and the shortage of labour in construction. That's no even taking into account materials that have also increased.

Marius34

https://www.boards.ie/discussion/comment/118511285#Comment_118511285

"Imagine wages stayed flat, do prices increase simply because demand is greater than supply?"

Yes. This is close to what happened in last decade.

Amadan Dubh

https://www.boards.ie/discussion/comment/118511817#Comment_118511817

And despite the wage-earning workers not being able to pump up prices, they have soared as the government picked up the slack and made up the difference to get them back to their ludicrous Celtic Tiger highs. We haven't learned and from my reading of wages versus demographics versus rents and house prices, I don't see any sustainability at current levels. Yet, there will be another push on prices for sure once covid restrictions end before things start to correct. The question is how the correction will be managed.

Amadan Dubh

https://www.boards.ie/discussion/comment/118511768#Comment_118511768

The commercial property sector has corrected 20% so far. The residential rental sector had a slight correction which has been cancelled out. Why? State intervention with eviction bans preventing tenancies ending, rental assistance payments and RPZs putting a floor on rents, combined with the State action of shutting building sites to stop supply getting ahead of immigration.

Pussyhands

https://www.boards.ie/discussion/comment/118511817#Comment_118511817

No they haven't?

Maybe in min wage jobs but not professional. STEM have seen big increases.

JimmyVik

I have a friend sale agreed on hi property and sale agreed on the one he is buying.

A couple of weeks ago he was saying he feels like pulling the plug since the value of his house has gone up so much since they went sale agreed.

I told him he better go and check that if the owner of the house he is buying sees this and decides the same he will have to look for another house. Check what the other houses are going for now that would suit you.

He came back and said he cant find any. So hes lucky he didnt do anything to jeopardize the sale.

Some people just cant see in front of their own noses.

I know someone who did that back in 2007 with a house he was selling and all of a sudden 20% was wiped off, so he waited. Eventually 50% was wiped off. he spent the next decade wishing he had just sold it when it was agreed in the first place.

Marius34

https://www.boards.ie/discussion/comment/118511953#Comment_118511953

Wages increased in the last decade, but far from the level of property prices.

Marius34

https://www.boards.ie/discussion/comment/118511908#Comment_118511908

Demands increase from all sectors. Even on wage-earning people, except maybe not from low income ones.

timmyntc

https://www.boards.ie/discussion/comment/118511953#Comment_118511953

Big wage increases in stem etc are only in the last 3/4 years as the sector is growing so rapidly they cant hire staff quick enough (well not the good staff anyways). House prices were already rising before this.

Timing belt

https://www.boards.ie/discussion/comment/118511953#Comment_118511953

stem wages up 11% q3 2021 ytd

It doesn’t take a genus to work out wage increases like that plus covid savings and a short supply have all contributed to the jump in house prices

Villa05

https://www.boards.ie/discussion/comment/118507051#Comment_118507051

If we are paying top dollar for social housing and thereby reducing the appeal of other units, we are in for some hiding

I think there was a standoff for some time pre covid hence stabilisation in price. I think the herd have been spooked by rents recovering from the initial covid shock.

Overpaying is overpaying no matter what way you dress it up

The only escape is for skilled people to leave to countries who value them more

In no other time in the history of this country was renting almost double the cost of buying, maybe Cromwellian times, but we were barred from buying then, maybe that's where we are headed

fliball123

https://www.boards.ie/discussion/comment/118511285#Comment_118511285

Once again this had a lot to do with the over correction after 08 prices dropped by 50 - 80% so prices had to rebound. There was no way a house should of been selling for less than it cost to build and yet that is what was happening back in 2012.