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

ApeEvolved

Property prices are going down at least 20 percent. But you know what, property will still be expensive, at least for anyone taking out a big mortgage. They may well be much more expensive then ever before.

People dont understand what's coming, the low interest rate cycle is done for some time. Expect central banks to bail out institutions to get out of trouble, rather then cut rates. The tax payer will foot the bill, while paying higher then ever rates on their debt and trying to manage crazy energy and food prices.

Its always the same, the poor saps buying now are those trying to get a family home.

PommieBast

https://www.boards.ie/discussion/comment/120533265#Comment_120533265

Isn't Extra.ie basically the Irish Daily Mail? Selective use of stats at best..

herbalplants

However, the Marker deal may not be representative of the market in general.

https://m.independent.ie/irish-news/reduced-price-for-marker-apartments-suggests-market-is-on-the-down-slope-for-investors/a1441550705.html

BlueSkyDreams

https://www.boards.ie/discussion/comment/120534970#Comment_120534970

Good observations, but i think its still somewhat of a macro level view and doesnt really take into account the micro level scenarios at play.

For instance, the average household size is a fixed measure.

There will be parts of the country where above average numbers of single people live and these people can take up a dwelling each.

In Dublin, you get a lot of Multinational workers on high salaries and many live alone.

Also, there are possibly more vacant properties in rich areas of Dublin because people are holding assets there, as prices are highest.

Therefore, the owner has no intention of renting the property, they just sit on asset appreciation. So that dwelling doesnt really exist as far as occupation is concerned.

So perhaps that slight oversupply in Dublin at the Macro level still constitutes an undersupply, when all nuance is considered.

combat14

https://www.boards.ie/discussion/comment/120538099#Comment_120538099

"Nonetheless, if it closes at the price level currently being discussed, it could force a write-down across all the Ires Reit assets within months, which could have a domino effect across the entire market."

timmyntc

https://www.boards.ie/discussion/comment/120538139#Comment_120538139

In my experience most well paid MNC workers do not live alone - most are in flat shares or else living with a partner.

Even a well paid MNC employee would find it prohibitively expensive to live alone in Dublin - not to mention the shortage of supply in the first place for both rent and sale.

Across all sectors hiring is a big struggle for MNCs now in Ireland. The #1 reason is lack of available/affordable housing. Positions on 70/80k are going unfilled because the people with that skillset do not want to move to Ireland unless they can get somewhere to live - being put up in a hotel by your employer for a month or 2 is not ideal, especially since there's no guarantee you'll find anything.

With that in mind I just cant see how we are not currently in a big shortage of housing - if there really is enough stock in this country already then how is it so hard for new arrivals to find a place? (This applies to Galway and Cork also, I havent heard anything about Limerick)

hometruths

https://www.boards.ie/discussion/comment/120538139#Comment_120538139

Sure if you're trying to buy a house right now, the fact that people are holding houses for capital appreciation, those houses might as well not exist for all practical purposes as far as supply today is concerned.

But at some stage in the future the owners will decide to cash in on the capital appreciation, and will decide to sell. At which stage they go from being essentially non existent, to live supply on the market overnight.

And if these owners, driven by market sentiment, make the decision to sell at similiar time, its possible to move from undersupply to oversupply very quickly. And this is the point I'm making that Skehan's warnings we should be careful we don't find ourselves in a position of huge oversupply are not as mad as they sound.

In trying to estimate future housing demand we count people who don't yet exist - i.e they haven't been born yet or they have not moved to the country yet.

But in trying to estimate future housing supply we don't count houses that already exist.

That seems counterintuitive.

Villa05

https://www.boards.ie/discussion/comment/120538414#Comment_120538414

It's more advanced in Limerick as it had a low oversupply from the last crash, little or nothing built in the last decade, social housing demolished with very slow to no rebuilds. Rising student numbers

Profile of worker that lost there jobs in the crash often very different to the new jobs being created. Alot of work done to correct that, but an imbalance all the same

ingo1984

https://www.boards.ie/discussion/comment/120538643#Comment_120538643

Agreed. We had offered jobs to people living in Ireland but they had to turn them down as nowhere affordable to live. Company then resorted to transferring in employees from offshore offices, but they last six months before returning home citing cost of living as main driver.

Zenify

Is it now safe to say that house prices are falling and housing stock is increasing?

timmyntc

https://www.boards.ie/discussion/comment/120545010#Comment_120545010

No

https://www.boards.ie/discussion/comment/120545010#Comment_120545010

You can say what you want, but it helps to have data to support what you say.

ittakestwo

Anybody notice prices for apartments in dublin going up alot atm despite interest rate rises.

https://www.auctioneera.ie/property/apartment-9-70-main-street-clongriffin-dublin-d13-kw84

Asking 265k, offer of 300k

https://www.auctioneera.ie/property/apartment-15-west-courtyard-tullyvale-cabinteely-dublin-d18-wr63

Asking €320k current offer of €370k.

The asking prices dont seem to be over priced compared with 2022 prices. But both have offers a good bit over asking and are in different parts of the city.

DownByTheGarden

https://www.boards.ie/discussion/comment/120534242#Comment_120534242

I think holiday homes are starting to get sold now too. Myself and my siblings have a holiday home between us for the last 10 years or so.

My family were just in it at the weekend. All of the other holiday homes are now occupied full time, even though this place was always never planned to allow people to live full time in it. It doesnt feel like a holiday going there anymore where everyone in the place is on their holidays. It feels like walking into any residential estate now. Might as well buy a normal house as a holiday home in an estate in Lucan or Santry. Was talking to my brother yesterday and he feels the same. We are going to all meet up next week and decide whether or not to just sell it.

DownByTheGarden

https://www.boards.ie/discussion/comment/120534666#Comment_120534666

3 houses near me gone sale agreed in the last couple of weeks. I heard a couple of the prices they were sale agreed at. Things are definitely heating up again.

DownByTheGarden

https://www.boards.ie/discussion/comment/120545276#Comment_120545276

many people realizing they will have to settle for an apartment.

I goes like this

! want a nice big detatched house with a garden near Dublin city center ... Prices rise as time goes on

I want a 3 bed house anywhere within an hours drive if Dublin ..... Prices rise as you wait for your dream home price to come down

I want any house at all .... And prices continue to rise

Ill settle for a nice 2 bed apartment in a nice area, but prices are a bit high. I'll wait for them to come down .... They dont come down

I better take that 1 bed apartment that was €150k 2 years ago and is now €220k before i end up priced out of the market. ....

Jesus, I cant even afford a bedsit, better keep renting.

DataDude

https://www.boards.ie/discussion/comment/120545276#Comment_120545276

Unfortunately same at higher end too.

Been keeping an eye for a work colleague who’s looking at similar houses we looked at over the last few years. I sometimes use the Hunters homepage as a quick barometer as they have high end houses and show live bids.

Just before Christmas there was pages of houses with absolutely no offers for weeks on end. Now it seems everything, including the houses previously languishing, have offers 10s or 100s of thousands over asking again.

If I had our house search back, I wish we didn’t assume every single slight lull in prices was the signal for an impending 40% crash in prices and instead capitalised on the lulls when they came. There were so many false dawns during 2021 and 2022 where it looked like bidding was cooling, only for prices to then jump another 5-10% in the subsequent few months.

timmyntc

https://www.boards.ie/discussion/comment/120545433#Comment_120545433

Could further interest rate hikes on the horizon be creating more urgency among would be homebuyers? Buy now or see your affordability drop further?

DataDude

https://www.boards.ie/discussion/comment/120545495#Comment_120545495

Yes I think you might be right. Irish mortgages are still ‘too cheap’ and will rise at least another 1%.

So if you can lock in a 5 year fixed now at 1% below what they’ll be next year - even a 5% drop in prices would leave you in the same place. Only thing is general economic literacy in Ireland is quite low so not sure people think too deeply about things like that?

Bakharwaldog

https://www.boards.ie/discussion/comment/120545149#Comment_120545149

Price declines in Dublin for the last 5 months. Highest home completions since before the crash.

timmyntc

https://www.boards.ie/discussion/comment/120545512#Comment_120545512

Yes, I think people just hear the chatter of "rates are going to keep rising, fix your mortgage now ASAP" and then the panic sets in. Buy now or risk being frozen out in a high rates environment for years*

*Anyone familiar with the Euro markets will be confident that current high rates will not last very long, but these arent the kind of people to panic buy an expensive house

DownByTheGarden

https://www.boards.ie/discussion/comment/120545433#Comment_120545433

When we moved the house was going up in increments of 5k for about 3 rounds. In the end there were 2 other bidders besides ourselves.

We took a time out for about 2 weeks to think about a new strategy. And we decided we could be messing around for weeks driving the price up. The other bidders are probably like us. Why dont we just take the view that if we dont get this house it will probably cost us 50k more next year the way prices are increasing. Sure if we had bought it the year before we would feel good now having got it for 50k less and here we are bidding at 50k more than it would have been last year and thinking we are spending more than its worth.

So we pretended it was next year and house price had increased by 50K. We called the EA. The other couples were still going and it was 10k more than we last heard.Said to the estate agent - last go, Current bid plus 50k and you get back to us in an hour wil a yes or no. They phoned back half an hour later and said yes.

One of those other bidders was a cousin of our new neighbors. They told us one day that their cousin was bidding on it and thought the EA was messing when a bid of 50k over came in so they dropped out. Im sure the other bidder thought the same.

Similar house around the corner went on the PPR for 100k more than we paid not too long ago. Even if the price had gone down, we still locked the mortgage in at 2.2%.

So even though everyone, including us, thought we were mad paying way over the current bids, we are happy we did the right thing now. Wouldnt like to be trying to buy the same house today, about 2 years down the road.

50k seems a cheap price to pay for the peace of mind and security it brought us.

DataDude

https://www.boards.ie/discussion/comment/120545552#Comment_120545552

Glad it worked out for you.

I guess it’s hindsight bias but given there was a time not too long ago that you could lock in a 30 year fixed rate with Avant at 2.5% that could move properties with you when you sold…we all should have been willing to pay any price to get a house.

Even if prices fell 25%+, you would still be laughing with that mortgage. Didn’t resonate with people (me included) just how valuable those super low, super long fixed rate mortgages truly were.

DownByTheGarden

https://www.boards.ie/discussion/comment/120545584#Comment_120545584

Its not even the rate. That was just a fluke tbh. The main thing that helped us was realizing that prices go up more for longer than they go down and that next year we would probably be delighted to bid on a property at a higher point than we were this year.

Guildenstern

https://www.boards.ie/discussion/comment/120536790#Comment_120536790

Beginning to see the start of that, the only query is if it's 20%. Could be 10, might be 30. Hard to guage where it will settle. I've noticed something close to 5% over the last 6 months and would confidently now see last summer/autumn as the high point. It won't stop some agents trying to do everything possible to keep bidding wars going, particularly in south after areas, south county Dublin being the obvious one.

A recognition also out there that the market has topped out, another reason landlords are selling?

pinksoir

The problem with trying to squeeze in before the interest rates go up is the amount of time it takes to close a sale on a property. 12 weeks is average so the coming triple whammy hike in May, June, July won't be avoided even if you go sale agreed in the next week.

So overbidding can result in major affordability issues if you're banking on the interest rates being what they currently are.

The other thing is, rates go up and down. They won't always be high, they won't always be low. With higher rates comes a potential reduction in house price as affordability hits.

Villa05

https://www.boards.ie/discussion/comment/120545360#Comment_120545360

I think this is BS

It goes like this

Cant afford, here is a ftb grant, prices go up.

More people fall into social housing need, state buys and leases existing stock. Rent and prices go up

Invite investment funds in with tax free status. Prices and rents balloon as investors chase yield in a 0 rate environment. Market is adjusted to suit investment fund and large developers resulting in exit of small developers and landlords.

Prices continue to rise, here's shared ownership, ftb grant, relaxed lending rules, go out and buy. Prices rise

Inflation and interest rates rise. Investment funds and developers pull the plug on new developments and purchase existing stock instead. Prices rise.

Suddenly there is little room left in the balloon..........

Its naive to think people refused to buy in a low interest rate environment, while paying double the mortgage repayments in rent. Most were priced out by measures sold as affordability measures

DownByTheGarden

https://www.boards.ie/discussion/comment/120545879#Comment_120545879

You are totally wrong though.

Boards, as a small example, is full of real people ovet the years, even in this thread, who are waiting for prices to come down or waiting for the big recession before they buy. We all think our own opinions are right right ones.

Nearly everyone buying this year could have bought last year or the year before, except that they thought they werent getting value for money. Anyone looking back a few years from any point (most of the time) would think they got a total bargain if they could buy a house for that price now. Yet a few years ago it was a ripoff. Humans are like that.

SwimClub

https://www.boards.ie/discussion/comment/120545959#Comment_120545959

That hasn't always been the case but what is driving it here is demographics, population growth. It's huge.

Ireland has a population much lower than greater London.

Beigepaint

https://www.boards.ie/discussion/comment/120545959#Comment_120545959

I wouldn't agree with your assessment that most people could have bought earlier but chose not to.

Obviously we run in different circles but anyone I know is buying as soon as they can - and thats people in a decent state job - early thirties.

We're not timing the market and we don't have access to another 50k.