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

Former Former Former

https://www.boards.ie/discussion/comment/121745080#Comment_121745080

Hang on.

Where did I say the market wasn’t dysfunctional? It absolutely is.

all I said was that a 6% annual return is not “phenomenal”. It isn’t.

combat14

German landlord TAG warns home prices could fall 30% from peak

"The market for transactions is incredibly difficult," he said. "You hardly see any big transactions."

https://www.reuters.com/markets/europe/german-landlord-tag-warns-home-prices-could-fall-30-peak-2024-02-07

Caquas

https://www.boards.ie/discussion/comment/121745276#Comment_121745276

Can you point me to a reliable 6%?

Everything other than real estate has been a rollercoaster for the past few years. And who knows when real estate will blow up again.

Eclectic Econometrics

https://www.boards.ie/discussion/comment/121746073#Comment_121746073

In a world where you can get a 20,000% return from Nvidia over a decade, surely there's a difference between reliable and phenomenal?

combat14

78,000 extra jobs needed to fill oversupply of Dublin office space by 2025

New analysis from BNP Paribas shows that vacancy rates in the commercial property market will get worse before getting better

(Business Post)

with advent of rising interest rates, WFH and AI who knows where commercial property will end up next couple of years

Blut2

https://www.boards.ie/discussion/comment/121745276#Comment_121745276

The return on that house is actually closer to 8%.

8% a year increase in your house price, from an already very high base, over 7 years+ is statistically phenomenal. Thats not a normal/commonly found housing market. Very few places on the planet have had increases at that level for similar or longer periods of time when not coming out of external disasters like war or communism.

Former Former Former

https://www.boards.ie/discussion/comment/121746073#Comment_121746073

So the house is up 62% in 7 years.

If you'd invested your money in the S&P500 index, you'd be sitting on a gain of 100% over the same period. If you'd gone for the Nasdaq composite, you'd be closer to 200%. If you'd gone old school and put your money in gold, you'd be over the 60% mark too. Brent crude about 50%.

So no, it's not an outlandish return, by any stretch.

chalky_ie

Do some people in this thread not understand the change in Ireland as a country in the last 30-40 years? All this talk of houses not being worth this and that because they cost x in year x, Ireland as a country is not the same country it was in the 80s or 90s, Dublin is the place where that is exacerbated, as the capital.

A house in Glasthule in 2024 is not the same as a house in Glasthule in 2017, there is not some constant environment that houses exist in. More high income immigrants, more Irish people earning more money, more people selling houses for better prices as the economy continued to recover after 08, covid price increases, I could go on. The house is worth what the market deems it to be worth.

RichardAnd

https://www.boards.ie/discussion/comment/121746942#Comment_121746942

I don't think anyone doesn't understand that. No one is saying that the house is not worth its price tag in the current market, rather many of us are pointing out that the said market is dysfunctional in the extreme and that it will be hugely destructive in the long run.

If you'll indulge me an allegory, we all know that the house is on fire. Some of us are asking why it started and how best to put it out, and others are saying that we shouldn't complain about things burning because fire is hot....

That's enough from me for today :)

chalky_ie

https://www.boards.ie/discussion/comment/121747752#Comment_121747752

How are you determining that the pricing of that house is dysfunctional, though? Go around the world to any major city and find a highly desirable suburb, pick a house right beside a village and public transport lines and I'm sure you can find similar, South Dublin is just a very expensive place to live now. I'm not arguing that the exact price is what it should be, but I'm sure it will sell for in and around that, and there will probably be a number of people interested at that price.

Jonnyc135

https://www.boards.ie/discussion/comment/121748264#Comment_121748264

Keynesian economics on steroids has caused this balloon in asset prices for western countries, all in the name of chasing that golden goose of GDP. The CB influence is staggering at the minute, there is no such thing as a free market now.

chalky_ie

https://www.boards.ie/discussion/comment/121748872#Comment_121748872

That's a nice bit of word salad, but it's not really refuting anything I've said. Housing in nice areas is a finite thing, when the economy is doing well in a very wealthy country people have money and spend it on houses in nice areas with good amenities. Any new builds in that area will be on some patch of land that was usually undesirable until this point, it's not surprising that the price of a house in a great location is more than most would deem 'good value' for the actual property itself.

Bass Reeves

https://www.boards.ie/discussion/comment/121748902#Comment_121748902

The majority if people will buy tge most expensive house they can afford or buy a house that needs work and poured money into that.

When an economy is going string this will always lead to house price inflation. Normally FTB's would nearly get completly squeezed out of such a market. Builders would be building for mover uppers or thise doing extensions.

However with the different HTB and tge house refurbishment grant the government has loaded the deck in favour of them. This has probably left a bitter taste in some who own smaller properties and see the government supports working against them

combat14

https://www.boards.ie/discussion/comment/121746942#Comment_121746942

more low or no income migrants too and looks like big changes coming with AI which could shortly put a severe dent in some high incomes as well - so yes the environment is definitely changing all the time

Blut2

Heres another house for the posters in the thread questioning how dysfunctional the housing market is: an €860k C2 BER, ex-council house:

https://lisney.com/property/ard-nua-newtownpark-avenue-blackrock-co-dublin/

Not much change from a million euro for a small ex council house, a 45-60min commute from the city center, is absolutely bonkers.

Patsy167

https://www.boards.ie/discussion/comment/121749332#Comment_121749332

Nothing shocking about this. That looks like a fair price to me based on the location. The rule of thumb seems to be €200k per room for any house in the right area in south Dublin.

chalky_ie

https://www.boards.ie/discussion/comment/121749332#Comment_121749332

You are delusional, 125m2 is not small, it has a big back garden, in a very nice area. I would say that's a decent price, it doesn't matter that it was a council house 50 years ago.

DataDude

https://www.boards.ie/discussion/comment/121749404#Comment_121749404

I’d be shocked if that doesn’t go for well over asking.

Walk-in condition (kitchen is a bit dated but might be to some tastes).

Excellent, private front drive way with parking for several cars. Massive back garden. All on Newtownpark Avenue . Bargain!

Blut2

https://www.boards.ie/discussion/comment/121749392#Comment_121749392

https://www.boards.ie/discussion/comment/121749404#Comment_121749404

Its not that the house is bad in itself as a house/location, its perfectly reasonable and in a nice area. Its the price of it for what you get.

Dun Laoghaire's median household income is €68k. That house is over 12 times median household income. For that ratio in an anyway functioning housing market you'd have an exceptionally nice house, not an ex-council house of that size.

Eclectic Econometrics

https://www.boards.ie/discussion/comment/121749332#Comment_121749332

I think the market is dysfunctional but I don't think the examples being posted are great examples of that dysfunction. Houses in the nicest parts of town are going to go for decent money. I can go out to eat at the weekend, leave Drury Street car park and be back on my sofa in 25 minutes with that last house.

Forget Kensington or Chelsea, I could find ex local authority housing that sold for seven figures in Hackney.

chalky_ie

https://www.boards.ie/discussion/comment/121749463#Comment_121749463

The median household income of Dun Laoghaire bears no relevance to the price of that house. Places evolve, my parent's estate is half full of single income, older families either retired or nearing retirement, and new families, dual income or single income making comparatively way more money than my father ever made.

The price of the homes when my parents bought was far cheaper(accounting for inflation) than what they cost now, because the town they exist in is not the same town it was 40 years ago. Dun Laoghaire's median income takes into account generations of people, who were able to buy homes there at various points in time.

Donald Trump

https://www.boards.ie/discussion/comment/121746859#Comment_121746859

If you think they are the same thing, then by all means take 50k of your own savings, add 200k of borrowed money to it to put into the S&P (with your portfolio as security), and come back to us in a few years to let us know how you get on.

Bass Reeves

https://www.boards.ie/discussion/comment/121749463#Comment_121749463

Median income of 68k is about 20K above the national average. The house you are BS about is about 1400sqft which is over 40% larger than most new 3 bed semiD's. With a back garden doubke the size of modern ones and a front garden as big as a town house's back garden. The house is in very liveable condition.

Basically you are beginning to lose it

Caquas

https://www.boards.ie/discussion/comment/121746859#Comment_121746859

None of these currently offer reliable returns. Even within the period we are discussing i.e. the past 7 years, it was possible to lose money on the S&P and lose a lot more on Nasdaq, gold or Brent crude. Every chart for the last 7 years shows sustained downturns i.e. you lose if you mistime your trades.

You may say that these markets provided reliable gains for long-term investors but I could point to earlier eras of long-term losses in all these markets. How many decades would I need to hold on if the market crashed tomorrow?

Roberto_gas

https://www.boards.ie/discussion/comment/121749332#Comment_121749332

great area and great house ! City center is no longer gold standard to compare how far houses are from there ! Price is probably 100k-120k over what its worth but there are ppl have minted/saved money last three years to absorb that overvalue !

Villa05

2 stories from this week that reminds us of How Ireland works.

Nothing learned from the crash or any other major state malfunction in the past under FFG. Continue on as before

https://twitter.com/davidmcw/status/1754822423696871531?t=Z4uSAIQdW7pivU5gfK64RA&s=19

https://www.thejournal.ie/new-childrens-hospital-ireland-2-6292389-Feb2024/

Augme

https://www.boards.ie/discussion/comment/121749864#Comment_121749864

Given the fact that we keep voting them I to government it's hardly surprising nothing changes with FFG.

RichardAnd

https://www.boards.ie/discussion/comment/121748264#Comment_121748264

Because we can zoom out and look at what's happened over decades. As I mentioned earlier in the thread, my grandfather comfortably afforded a very similar house on a single income whilst simultaneously supporting a family of five, and he was just a very average civil servant. That house is today totally out of reach of anyone in a similar economic position. Thus, we can see that the price of housing has risen well beyond the rate of inflation.

I'll grant that "dysfunctional" may not be the adjective to use as it implies that we once had a functional housing situation here, whatever that would be.

Former Former Former

https://www.boards.ie/discussion/comment/121749704#Comment_121749704

The Irish property market does offer not reliable returns either. If you adjust for inflation, prices actually fell last year.

You can indeed point to earlier losses in those markets. As someone who lost a huge amount of money in a previous property crash, I can assure you it’s not restricted to stocks and commodities. Having bought in 2006, I can further assure you that mistiming your moves in the property market is very possible and very, very costly.

Anyone buying this house or any other houses needs to be well prepared for such losses, hence the lending rules and absence of 100% mortgages.

Former Former Former

https://www.boards.ie/discussion/comment/121749518#Comment_121749518

where did I say they were the same?

The argument was that the increase in the value of this house was PHENOMENAL. That’s the words of the shinnerbots, not me btw.

It very clearly isn’t.