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

FedoraTheAura

https://www.boards.ie/discussion/comment/120143106#Comment_120143106

Exactly. The ECB/Fed etc want markets to expect rates to continue rising in order to force them cut back. But markets have factored in rate increases finishing in the middle of this year and then lowering in the latter half. So markets feel things are about as bad as they're going get, which is shooting themselves in the foot as the ECB will have to keep increasing rates to counteract them.

The February and March rate-rises have been signalled since the rise last month, which was going to be .75 but Lagarde talked them around to going for .5 in exchange for these next two rises being the same. It will mean the rates will have gone from 2% to 3.5% in just 3 months. Wild.

combat14

https://www.boards.ie/discussion/comment/120143726#Comment_120143726

anyone buying a house will have to reassess can they afford the higher payments or offer a lower amount for the prospective house

Jonnyc135

https://www.boards.ie/discussion/comment/120143726#Comment_120143726

The main reason for that is due to the Fed and the ECB loosing all credibility. The market couldn't care less what they say only what they actually do

J_1980

https://www.boards.ie/discussion/comment/120143761#Comment_120143761

This!

Stock have been moving higher for months now. Pretty obvious that no one believes the central Banks. As long as governments run large deficits, none of the inflation will end.

SwimClub

https://www.boards.ie/discussion/comment/120143749#Comment_120143749

That's true but the lower offer doesn't have to be accepted, the seller can just take it off the market unless they are forced to sell.

If they are in a chain the big risk is selling at a low price, that takes many months in a slow market, then they have to go sale agreed on a new place, if the prices go up, and many end up renting for a while in the middle period, they take a big hit.

So liquidity could just dry up, it's unlikely to mean the supply problems in this country are solved and everyone gets a massive discount on buying, I can't see how we get to that scenario. And if new builds end up loss making we will have construction workers fleeing the country again and no supply.

FedoraTheAura

https://www.boards.ie/discussion/comment/120143749#Comment_120143749

Have been at a couple of viewings recently and it might just be coincidental but noticing agents seem to be more engaging than last year. Asking questions, one even had a questionnaire he was completing for each person viewing to get an idea of what they're looking for. I expected with the relaxation of lending rules viewings would be much busier but they've been as quiet as they were the last 3/4 months of last year, not seeing them transfer to offers, and offers in are below asking price. It's a complete difference to this time last year when most places were going over asking price from the first viewings.

I viewed a place just before Christmas that had an offer of about 10% under asking. I called the agent and put in an offer 5% under asking and the response was 'Wow. I'm going to strongly advise the vendor to accept'. Over the moon at getting 5% under the asking price! An investor eventually offered 1k more and they accepted because it was cash. But it does feel different out there.

Villa05

https://www.boards.ie/discussion/comment/120143726#Comment_120143726

Has ring of

"Don't talk down the economy"

about it, remember that

These are the institutions that caused this mess in the first place for all there talk of blaming it on Putin

SwimClub

https://www.boards.ie/discussion/comment/120143841#Comment_120143841

Well austerity, mass emigration etc. might get us there, but I wouldn't be that pessimistic.

Timing belt

https://www.boards.ie/discussion/comment/120143450#Comment_120143450

There is zero chance that we will have a real positive interest rate unless inflation falls down to 2%.

If the real interest rate was to be positive at the moment it would need to be 9%+

likewise the pullback or slow down in inflation was mainly down to the oil price falling since June.

The strength of the dollar to the euro isn’t mainly down interest rates. The dollar is seen as a safe haven in times of risk thanks to it being the worlds reserve currency.

Ozark707

https://www.boards.ie/discussion/comment/120143427#Comment_120143427

Property are dropping in many parts of Europe (Germany/Netherlands/Sweden/Denmark...) so beware of catching falling knives. As the ECB raises rates it is highly likely to further depress HP's in Europe as well.

Villa05

https://www.boards.ie/discussion/comment/120143706#Comment_120143706

Cash was amongst the best performing assets of 2022.

The job losses appear to be at the higher end of the scale this time round, not sure if companies cutting numbers employed would be raising salaries

Timing is the difference a good buy and a bad one.

We have not seen the full effects of the rate rises yet. They take time to filter through.

Business with increased wage, energy and capital costs will suffer

Villa05

https://www.boards.ie/discussion/comment/120143921#Comment_120143921

The US is getting closer to restrictive rates, why not Europe

It's a process not a switch, talk hawkish and scare the inflation rate down as you raise rates and meet in the middle. 6 months ago the US needed 9% + but by following the process it is now expected to be just over 5%

Oil is falling cos the market fears a recession

Some dollars are escaping the US now into Europe as valuations are seen more favourable

Villa05

Falling tax revenues because of lower profitability at big tech companies is a greater risk to the Irish economy than the recent job losses in the sector, according to a new report from Goodbody.

They just would not increase supply of affordable rentals from the increased corporation taxes thereby insulating exchequer revenues from the shocks we are currently experiencing and making the economy more competitive.

Instead we have an oversupply of commercial property and increasing long term leases locked down to the madness of 0 interest rates

We have used increased taxes to increase our liabilities long into the future, utter incompetence

howiya

https://www.boards.ie/discussion/comment/120141034#Comment_120141034

I remember looking at the planning application for the estate in Newbridge. There's a thread on here about it and people were wondering about its location close to the Liffey etc.

The planning application was submitted by Ardstone. It's then built by Glenveagh and houses are sold back to Ardstone. Seems bizarre.

Villa05

From Bloomberg

Turmoil at trophy properties in London and Frankfurt offer a glimpse of the damage awaiting European real estate investors as they face the sharpest reversal on record.

Also

Hawkish talk by the ECB sent the euro to a 9 month high v dollar

Jonnyc135

https://www.boards.ie/discussion/comment/120145179#Comment_120145179

Long may in continue

LJ12345

Here’s the full article

https://uk.finance.yahoo.com/news/europe-bracing-sharp-abrupt-real-050000005.html

the article centres around commercial but also references residential. I just hope that theres a short sharp shock back to realistic asset prices but I worry that it’s going to be a long drawn out process finding the bottom of the market. There’s so much money to be washed out that any positive news will continue to drive inflation further and interest rates higher.

DataDude

https://www.boards.ie/discussion/comment/120146100#Comment_120146100

It appears on the surface like the early days of a crash in prices in that just nothing is selling anymore (anecdotal I guess) which is what you’d typically expect as sellers struggle to accept the changing market. Fall comes after that.

The only confusing thing for me is, if that were occurring you’d expect number of houses for sale to be increasing but it’s actually going the opposite way. Back down under 14k on my home today. Heading towards record lows again.

There was someone on this thread tracking movements over time, would be interesting to get an update on that.

Galwayhurl

https://www.boards.ie/discussion/comment/120146496#Comment_120146496

January is the trough when it comes to listings. July/august is the peak.

Happens every year.

SwimClub

https://www.boards.ie/discussion/comment/120146496#Comment_120146496

People don't have to sell, because affordability limits have been imposed in regulations since the last crash, many are on fixed mortgages etc.

In a country with a chronic undersupply of housing who are the sellers, where are they going to move?

People upsizing are not going to walk away from 2% fixed mortgages to get a new mortgage on 4 or 5% right now, they will wait for interest rates to come down.

Sellers can just wait it out until rates come down again, without crashing the market.

In the last crash there was surplus supply, not the case at the moment.

We'd need mass emigration to reduce supply pressure.

This is it

I'm sale agreed at the moment. I value the house at around what we're paying so I'm happy to go ahead, but reading all the doom and gloom has me a bit worried to be honest. We're fixing for 5 years and will hopefully beat any further increases. We don't plan on ever moving again, property is ideal, great location, etc.

Deub

https://www.boards.ie/discussion/comment/120146733#Comment_120146733

If you don’t plan to move, there is no need to worry. If the price of your house goes down once you bought it, it won’t matter to you anyway. Yes, you could buy it for less but it would be like buying a lotto ticket and hoping to win.

LJ12345

https://www.boards.ie/discussion/comment/120146496#Comment_120146496

I think we’ll know which way it’s going by the summer. I doubt investment funds will be very active going forward but who knows what level of council purchasing there might be. People need houses but it’s first time buyers that drive the market and they may take their money and their skills elsewhere. We’ve yet to have a normal selling/buying cycle post covid and if landlords are allowed to exit en mass after this ‘winter emergency period’ from April and buyers are holding off amid interest rate increases and cost of living pressures the only way is down. Essentially we’re at this current price level through bizarre and no longer present covid circumstances and external pressures from excess money printing which found its way into assets. Unless something changes and asset bubbles are re-inflated to sustain prices housing is going to deflate to a point where salary’s and savings can prop it up.

Villa05

https://www.boards.ie/discussion/comment/120146733#Comment_120146733

If its ticking all the boxes and your forever home, you should be ok

With prices where they are, alot of people will be forced to compromise and may buy a transitory home which would be worrying

5 year fixed is OK, same as what's left on my fixed rate

FedoraTheAura

https://www.boards.ie/discussion/comment/120146733#Comment_120146733

Best of luck!

If you’re comfortable paying the rate you’re currently being quoted for 5 years, go for it. It seems like the days of extremely low interest rates are gone for the forseeable, but hopefully when your renewal comes up, you’ll be paying less!

And if you’re comfortable with the current value of the house and it’s going to be your forever home, even if there is a massive crash, if won’t matter too much as you won’t be in negative equity and stuck and unable to move.

manniot2

https://www.boards.ie/discussion/comment/120146733#Comment_120146733

Best of luck - not a single sinner on here knows what is going to happen to the market. Best to just do what suits you and your family best. You could be a long time waiting for a big drop (or not, who knows).

robnet77

https://www.boards.ie/discussion/comment/120143845#Comment_120143845

On the other hand, in December I went to view a house in Citywest, and there were offers for about 470K against an asking price of 440K. It wasn't the end of it, I didn't like the house and did not put an offer in, but the price may have gone up since.

dashdoll

Terraced house on market that iv been keeping an eye on in Limerick area for 295k. It's been on sale since October amd not budging so I'm hoping for a drop there, haven't even enquired yet as not overly bothered but interested to see how it goes. I know terrace isn't for everyone but would suit me for a couple of reasons. 295k is definitely inflated for what it is. Hopefully we have a bit more clarity by June time on the market.

robnet77

https://www.boards.ie/discussion/comment/120145179#Comment_120145179

In the UK mortgage rates have increased very fast, and are probably going down already, but here it looks like banks have been cautious and have avoided applying the same increases. Rates have gone up only slightly here, if I'm correct, and it's possible they will only raise a further 0.5% until the situation in Europe stabilizes.

Of course this is my guess, which means nothing, but it's more than possible that neither Irish banks nor FF/FG want house prices to drop significantly, and they're doing everything in their power to sustain these high market prices.

The next phases of some new developments seem to have kept prices steady, but I've noticed small increases, rather than reductions. The second hand market may be impacted if there are job losses here, or other factors like landlords exiting the rent market, but again my guess is that it will take much more than that in order to see huge changes to house prices this year.

herbalplants

https://www.boards.ie/discussion/comment/120146496#Comment_120146496

Also we have noticed few houses for sale that are not showing up on my home or daft. Few! So are estate agents trying to bring down the number of houses for sale? Not sure