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

Donald Trump

https://www.boards.ie/discussion/comment/120361000#Comment_120361000

Investors are already lining back up to buy back into European Banks in general.

Villa05

Wonder will they get a deposit guarantee similar to the US

DataDude

CSO finally showing price drops. Down -0.6% in January alone in figures released today. A big figure after relentless increases since 2019.

Monos

Hi

CSO figures now show last 4 months of stats there have been price drops in Dublin houses.....

Ozark707

https://www.boards.ie/discussion/comment/120361313#Comment_120361313

Anyone recall when IR rises were first passed on here? My understanding is that even the latest figures released would have been for properties SA in Q4 (possibly even early Q4)?

farmingquestion

https://www.boards.ie/discussion/comment/120361217#Comment_120361217

B-b-b-but everyone told us it was all supply and demand and that demand far exceeds supply so prices could never come down unless there was more supply?

farmingquestion

https://youtu.be/YYAORGZ_BMw?t=12

Watch the first minute of this. History doesn't repeat itself, but it rhymes.

lordleitrim

https://www.boards.ie/discussion/comment/120361584#Comment_120361584

I believe the first rise of 0.5% was last June followed by 0.75 in Aug, 0.75 in Oct and another 0.5 in Dec. As the retail banks only passed on rate rises 1 or 2 months later, there was a bit of a delayed reaction so probably had only negligible impact in 2022 Q4 sales.

As we've had another 0.5% rise last month and another one set for tomorrow, I can see an acceleration in price falls over the coming months as the full whack of these 6 rate rises combined with whatever the ECB had planned for the summer takes its toll on the size of mortgages that housebuyers will be allowed take out.

RichardAnd

https://www.boards.ie/discussion/comment/120361615#Comment_120361615

This time it's different! 😏

J_1980

Peak rate looks more like 3.25 now than 4.00.

there won’t be any crash. You’re mad holding cash.

topal

https://www.boards.ie/discussion/comment/120361615#Comment_120361615

We won't make the same mistakes as last time round..

The new mistakes will be innovative and unexpected!

RichardAnd

https://www.boards.ie/discussion/comment/120362113#Comment_120362113

I don't think that there will be a 2008-like crash, but I second the advice of not holding cash. If I had no mortgage and a bit pile of cash at the moment, I'd pour the cash into something more "real". Gold would be a good option, as ever.

https://www.boards.ie/discussion/comment/120355829#Comment_120355829

What is a market value though? I already mentioned it but extended family member listed a property at €460k on EA recommendation, top bid for weeks was €430k (which is then the market value) until idiot local council came in and paid €460k. Had the EA listed at €490k no doubt the idiot council would have wasted more money.

Cyrus

https://www.boards.ie/discussion/comment/120361613#Comment_120361613

not too many people posting that at all from what i have seen,

there tends to be 2 types of poster in these threads, the ones that constantly post any scrap of bad news they can find, however tangential it is to irish property and proclaim the end is coming, a massive crash is around the corner, etc etc and there are others (i would count myself among them) that could see some softening of prices, probably single digits, but nothing more than that because of the demand that is still out there.

the same doom mongers (with a varying array of usernames) have been posting the same stuff for years now, of course its possible one day they may be correct, but a single month 0.6% decrease isnt it.

enricoh

https://www.boards.ie/discussion/comment/120362113#Comment_120362113

Think eurozone inflation was 9% last year, if the ecb stop rate hikes it could be the same again this year.

Got a tempting offer on my business last year but didn't bite as I didn't want a hape of euro devaluing in the bank. Have a few quid at the minute might buy myself a classic bike n car - not a midlife crisis love, I swear!

Beigepaint

https://www.boards.ie/discussion/comment/120362422#Comment_120362422

The first decrease is the turning point. Prices will fall from now on. There will be no more rises until the next bubble.

If you think that prices can fall slightly, and then go back to rising, then that’s a sign of economic illiteracy.

As another poster says here every few weeks: it’s doesn’t mean hooray cheap houses for all, it means that for a significant cohort, they can no longer buy due to rate rises and as such, will not be buying.

StevenToast

Some day an asteroid bigger than the one that wiped out the dinosaurs will crash into this planet....it might not be tomorrow....but it will happen...

Ozark707

https://www.boards.ie/discussion/comment/120362422#Comment_120362422

Look again at the chart posted, 4 months in a row of prices going down in Dublin.

DataDude

https://www.boards.ie/discussion/comment/120362478#Comment_120362478

’if you think prices can fall slightly and then continue rising then that is a sign of economic illiteracy’

That has happened multiple times over the last few years. Certainly in late 18/early 19 and then again in mid 20.

I also fall into camp that think prices will fall slightly, but will ultimately be supported over the medium term by very strong inflation. We’ve also in the last 2 days had 2 year Irish bond yields fall by almost a whole percentage point which is a big factor in supporting house prices. It’s a complex system

I believe house prices have been falling for the last 6 months (slightly) and this is just now coming up in CSO data which will show further drops into the summer due to the lag…however, forward looking indicators - primary asking prices and mortgage approval amounts would indicate to me that prices have actually stabilised, started to creep up again during early 2023 which I think is likely linked to both wage inflation and LTI limits.

Cyrus

https://www.boards.ie/discussion/comment/120362478#Comment_120362478

one of us is economically illiterate and it isn't me it seems.

Cyrus

https://www.boards.ie/discussion/comment/120362484#Comment_120362484

sorry what point are you making, i have seen that chart, i don't recall commenting on it or quoting the post however.

Beigepaint

https://www.boards.ie/discussion/comment/120362571#Comment_120362571

Do you think that interest rate rises are done in Europe? Surely the ECB still want to curb inflation.

Mr Hindley

Looking at today’s price changes in Dublin on MyHome.ie, there are more increases than reductions. That’s unusual. The stock market might be panicking over a potential financial crash, but I do have the sense things have picked up again significantly in our housing market since the new year. Possibly a last hurrah before all th brewing storm clouds flatten things out for a while.

Ozark707

https://www.boards.ie/discussion/comment/120362785#Comment_120362785

Sorry I thought you were referring to the table on a previous page which shows prices in Dublin dropping 4 months in a row.

Ozark707

https://www.boards.ie/discussion/comment/120362976#Comment_120362976

EA's figured out that councils paying AP?

https://www.boards.ie/discussion/comment/120362322#Comment_120362322

Gold is good for you?, seems high at €1825 per ounce. How long would you plan to hold on to it and would you be concerned at the potential loss if you need to sell?

Gold is almost as high as it has been at any time over the past 3 years during a global pandemic and war. If you expect a crisis, cash is often useful, not many shops accept gold if you need to buy goods.

Bass Reeves

https://www.boards.ie/discussion/comment/120363009#Comment_120363009

Ya nothing wrong with cash in a recession. Real money is made during a recession.

growleaves

https://www.boards.ie/discussion/comment/120363009#Comment_120363009

That gold has gone up as inflation has gone up is why it is considered a store of value. Its traditionally an inflation hedge - though its arguable how good or consistent.

Its not liquid as you say, and gold dealers will try to screw you on the resale.

It won't produce spectacular returns or outperform markets normally. Its just good at holding its value.

ApeEvolved

https://www.boards.ie/discussion/comment/120363209#Comment_120363209

I wouldn't recommend buying a property right now.

But...not sure I would ever recommend buying a shiny rock.

DataDude

https://www.boards.ie/discussion/comment/120362876#Comment_120362876

No. But the expectation of interest rate rises is significantly more important to financial markets than actual interest rate rises. And the financial markets are now convinced the ECB won’t be raising rates as much as they previously feared. Institutional investors etc. are much more dependent on forward looking yields (driven by expectations) not actual rate increases.

The only caveat to this is Irish banks have been very slow to pass on rate increases for specific competition reasons and high deposits.

Mortgage Rates should have been at 4/5% well over a year ago as they were across lots of europe and our non-bank lenders. In most markets that would be very significant for house prices. In Ireland our tight LTI limits have capped residential demand, artificially (and rightly) keeping a lid on houses prices.

So the only question remains, will banks pull back lending when they finally get their rates to their terminal point (which is now lower than it was expected to be a week ago). The evidence so far suggests absolutely not as average approval amounts jumped considerably in January despite rising mortgage rates.

FTBs might be sad that their repayments will be higher but ultimately they’ll still borrow what the banks will give them as it’ll be cheaper than the ludicrous rent they’re paying.

Who knows, maybe house prices might plummet this year, but it’s far from certain. You also must recognise that you’re constantly battling against the upward forces of inflation which are incredibly strong right now. House prices will be higher than they are today in 20 years time. That is almost a certainty. Sharp short term movements are a guessing game.