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

Villa05

The Late Debate from 10 June 2021


Orla Hegarty, Killian Woods, Eoin O Brion and a FF Councillor Fitzpatrick


Alot of political spoofing but interesting points by Killian and Orla. aprtment developments in DCC have little private demand and are effectively being built for people who cant afford them - Risk of being the ghost estates of the future. IMO these will increase the poverty trap as the recipients would need an extraordinary income to match what is being received by the state, so the incentive to work is completely removed



alot of spoofing on shared ownership FF claim all the criticism was prior to measures being put in to alleviate concerns, yet the plan is to have it up and running later this year while supply is hovering around record lows. FF are surely aware of this and as result the scheme will be extremely inflationary.


There does not appear to be discounted state land for building housing, as this land sits as an asset on state entities and it would appear that compensation linked to market value will be forthcoming.


FF when asked why not buy rather than lease in relation to an apartment development in Stoneybatter. FF claimed they were not for sale. A prime time program on investment funds stated the opposite and specifically referenced the Stoneybatter development



Social housing provided by the private sector appears to be dependent on their being demand for the private houses in the development (in relation to Poolbeg and O Devany gardens development). This would be questionable at the prices



Killian Woods on a number of occasions had to call out FF on Factually incorrect statements

Amadan Dubh

Not unexpected to anyone that prices have risen YoY, this Celtic Phoenix just continues to soar! "House price growth accelerates" has such Celtic Tiger, euphoric connotations, I hate the way they describe house prices rising.

It will be interesting to see if there ends up being any economic fallout from covid and if that affects the property market. But we won't know this until supports and restrictions are eased, which looks like end of 2021, meaning we probably won't see any sort of economic fallout until next year. Property market usually lags the economy.

https://www.irishtimes.com/business/economy/house-price-growth-accelerates-to-4-5-as-covid-boom-continues-1.4594912?mode=amp

House price growth accelerates to 4.5% as Covid boom continues

Prices in Dublin rose by 3.5 per cent over the 12-month period to the end of April while prices outside Dublin rose by 5.4 per cent.

Existing dwellings accounted for 85 per cent of the homes purchased, while the balance of 14.7 per cent were new dwellings.

The figures show households paid a median or middle-range price of €265,000 for a home in the Republic over the past year. The Dublin region had the highest median price at €390,000.

A separate CSO report showed the median age of home buyers here has risen from 35 in 2010 to 38 in 2019. The report also found the proportion of properties purchased jointly increased from 47 per cent in 2010 to just over 62 per cent in 2019.

JDD

Marius34 wrote: »

What is "affordability point"? If its 3.5 income, I guess all areas in Dublin would be above affordability point. So not sure what you would achieve with it.

Well, it would be an objective measure. Rather than saying "oh but prices in this area are still under what houses were being sold for in 2007, so we can't say that this area is overheating", or "prices in this area have increased 60% since 2012, so this area is definitely overheating".

Price means nothing unless it is tied into what average people can afford to spend.

If prices are increasing much faster than wages, and banks have not loosened their lending rules, then something else is skewing the market price. If cash buyers and REITs are severely skewing market price, or if cost to build is doing it, then this objective measure of affordability should show that.

It also might be a reality check for some first time buyer savers, who think that they can buy a semi-d in Dundrum or Stillorgan when in fact the affordability index shows them - pretty early on - that certain areas are going to be out of their price bracket. It might stop the "wait/hope/bid/fail" circle that so many of those in their 30's are in.

Marius34

JDD wrote: »

Well, it would be an objective measure. Rather than saying "oh but prices in this area are still under what houses were being sold for in 2007, so we can't say that this area is overheating", or "prices in this area have increased 60% since 2012, so this area is definitely overheating".

Price means nothing unless it is tied into what average people can afford to spend.

If prices are increasing much faster than wages, and banks have not loosened their lending rules, then something else is skewing the market price. If cash buyers and REITs are severely skewing market price, or if cost to build is doing it, then this objective measure of affordability should show that.

It also might be a reality check for some first time buyer savers, who think that they can buy a semi-d in Dundrum or Stillorgan when in fact the affordability index shows them - pretty early on - that certain areas are going to be out of their price bracket. It might stop the "wait/hope/bid/fail" circle that so many of those in their 30's are in.

But if its 3.5, all areas will show above affordability level, not just Dublin, but any capitals around the world. So we know it already, whats the difference will it make. Regarding if prices go faster than income, you still will need to go back to choose historical point of time.

Hubertj

Villa05 wrote: »

The Late Debate from 10 June 2021


Orla Hegarty, Killian Woods, Eoin O Brion and a FF Councillor Fitzpatrick


Alot of political spoofing but interesting points by Killian and Orla. aprtment developments in DCC have little private demand and are effectively being built for people who cant afford them - Risk of being the ghost estates of the future. IMO these will increase the poverty trap as the recipients would need an extraordinary income to match what is being received by the state, so the incentive to work is completely removed



alot of spoofing on shared ownership FF claim all the criticism was prior to measures being put in to alleviate concerns, yet the plan is to have it up and running later this year while supply is hovering around record lows. FF are surely aware of this and as result the scheme will be extremely inflationary.


There does not appear to be discounted state land for building housing, as this land sits as an asset on state entities and it would appear that compensation linked to market value will be forthcoming.


FF when asked why not buy rather than lease in relation to an apartment development in Stoneybatter. FF claimed they were not for sale. A prime time program on investment funds stated the opposite and specifically referenced the Stoneybatter development



Social housing provided by the private sector appears to be dependent on their being demand for the private houses in the development (in relation to Poolbeg and O Devany gardens development). This would be questionable at the prices



Killian Woods on a number of occasions had to call out FF on Factually incorrect statements

Any commentary on the OBrion’s spoofing or was it solely a red tinted discussion on current/existing policy?

jill_valentine

"Average age of a solo first-time buyer rises to 43"

https://www.irishexaminer.com/news/arid-40315109.html

"The median age for a sole purchaser increased from 34 years in 2010 to 43 in 2019, the CSO found."

This is just such an obvious disaster on the way. A very sizeable number of these people are going to wind up trying to pay off their mortgage with a state pension.

I suppose on the flipside, for many others, once they've actually been able to get a mortgage, they may well be able to pay off quicker than agreed because Imho on an individual basis actually getting the mortgage sum for a property is the barrier, rather than repayment capacity.

Sheeps

Villa05 wrote: »

The Late Debate from 10 June 2021


Orla Hegarty, Killian Woods, Eoin O Brion and a FF Councillor Fitzpatrick


Alot of political spoofing but interesting points by Killian and Orla. aprtment developments in DCC have little private demand and are effectively being built for people who cant afford them - Risk of being the ghost estates of the future. IMO these will increase the poverty trap as the recipients would need an extraordinary income to match what is being received by the state, so the incentive to work is completely removed



alot of spoofing on shared ownership FF claim all the criticism was prior to measures being put in to alleviate concerns, yet the plan is to have it up and running later this year while supply is hovering around record lows. FF are surely aware of this and as result the scheme will be extremely inflationary.


There does not appear to be discounted state land for building housing, as this land sits as an asset on state entities and it would appear that compensation linked to market value will be forthcoming.


FF when asked why not buy rather than lease in relation to an apartment development in Stoneybatter. FF claimed they were not for sale. A prime time program on investment funds stated the opposite and specifically referenced the Stoneybatter development



Social housing provided by the private sector appears to be dependent on their being demand for the private houses in the development (in relation to Poolbeg and O Devany gardens development). This would be questionable at the prices



Killian Woods on a number of occasions had to call out FF on Factually incorrect statements

Orla Hegarty is an urban sprawl activist masquerading as an expert. She routinely defeats her own arguments about how supply isn't a solution to the housing crisis when she responds to people who point out obvious holes in her reasoning and logic. I'd discard anything that comes out of her mouth as complete and utter gibberish. I genuinely don't understand why she continuously gets airtime regarding housing.


https://twitter.com/ronanlyons/status/1403679096031387648

Villa05

Hubertj wrote:

Any commentary on the OBrion’s spoofing or was it solely a red tinted discussion on current/existing policy?

What I found interesting is that FF were talking SF policy. I know she is not senior FF but she seemed under severe pressure which may have impacted her many slips.
Eoin is a highly skilled communicator and you could see how he was complimenting the crazy house prices creator that there was very smart politicking going on

I have little thrust in Irish politics, were they in power and making things worse I won't be shy in calling them out

Cyrus

Villa05 wrote: »

Eoin is a highly skilled communicator and you could see how he was complimenting the crazy house prices creator that there was very smart politicking going on

crazy house prices FFS :rolleyes: a school teacher trying to make a few quid out of the property 'crisis' with special content for his patreon subscribers,

any politician referencing him tells you all you need to know.

genericgoon

JDD wrote: »

There has to be some kind of algorithm that can calculate average/median salary for a particular area, and then calculates the average size family home, and then works out how much the market value is above or below that affordability point? That way were not constantly using 2007 or 2012 as marker points.

Like, if the average family is two adults, two kids, you might say that a terraced house with two and a half beds and a modest back garden should reasonably accommodate that family.

Then we work out the average price of that modest house within the major areas of Dublin (West/East/Commuter towns etc) and we can then say how much over or under the average wage for that area a family must earn in order to afford a house in that area.

Doing this thing where we say the average three bed across Dublin costs €370k is useless because it's vastly different buying a three bed in Darndale than it is in Blackrock. And saying the average salary is €47k and therefore a couple earning the average is able to afford the average priced house under the 3.5 times mortgage rules is also next to useless as a statistic.

If we took the suburbs along the Dart Line, and worked out the average salary of those both living and renting there, I'm sure it would be higher than €47k. But would it be high enough to actually buy a modestly sized house? Of course just because you rent an apartment in Blackrock shouldn't mean that you should be able to afford to buy a three bed house there, but it should give a good indicator of affordability and whether cash buyers/REITs are artificially pushing prices high in that area.

While it would be difficult to do this at granularity suggested, it is possible to compare median house prices (Residential Property Price Index) versus median household gross income (Census + income inflation estimate from SILC) for each local authority area. If the idea is that the average household should be able to buy the average house, this broadly makes sense.

Using Central Bank rules (3.5 times income, deposit of 15% (splitting difference between FTB and other buyers)) as a "target" price for the median household, a basic analysis suggests that house prices would need to fall ~45% in Dún Laoghaire-Rathdown LEA (target: 305k, actual: 540k) and by at least 15% in all the Dublin LEA, Dublin commuter belt (Wicklow, Meath, Kildare) and cites with a distinct LEA (Cork, Galway). Note that housing inflation is quite aggressive so this is likely getting worse rather than better. Table here: https://ibb.co/X5RTVbM

Though house prices could increase by 100% in Roscommon and Longford and only be slightly above the "target".

JDD

genericgoon wrote: »

While it would be difficult to do this at granularity suggested, it is possible to compare median house prices (Residential Property Price Index) versus median household gross income (Census + income inflation estimate from SILC) for each local authority area. If the idea is that the average household should be able to buy the average house, this broadly makes sense.

Using Central Bank rules (3.5 times income, deposit of 15% (splitting difference between FTB and other buyers)) as a "target" price for the median household, a basic analysis suggests that house prices would need to fall ~45% in Dún Laoghaire-Rathdown LEA (target: 305k, actual: 540k) and by at least 15% in all the Dublin LEA, Dublin commuter belt (Wicklow, Meath, Kildare) and cites with a distinct LEA (Cork, Galway). Note that housing inflation is quite aggressive so this is likely getting worse rather than better. Table here: https://ibb.co/X5RTVbM

Though house prices could increase by 100% in Roscommon and Longford and only be slightly above the "target".

So by that measure the average house is €540k in DLR, but the median income for a couple in that local authority area is only €74k? I seriously doubt that is the case, given the average income in Dublin is approx €45k for a single person and you'd expect those living in DLRR (Killiney/Dalkey/Foxrock etc) already to skew that income level up over the average for Dublin as a whole.

I know this is getting far too granular, but we'd want to be thinking about what we think is a reasonable age to buy a house. If we think that you *should* be able to buy a house between the ages of 30-40, we need to be looking at the median income of couples in that age category, in that local authority, and see whether they can afford to buy a modest house. If not, what is the gap between the income level and the market value of that modest house, and if that gap is large, what is causing it.

I think it's acceptable to say that couples who are just out of college should not be expecting to be in a position to buy a house.

I think it is also reasonable to say that the days of a single income being able to afford a house are gone. If needed, we could use the same algorithm to calculate whether the median single income in a local authority area could reasonably be expected to buy a 2 bed apartment in that area.

timmyntc

JDD wrote: »

So by that measure the average house is €540k in DLR, but the median income for a couple in that local authority area is only €74k? I seriously doubt that is the case, given the average income in Dublin is approx €45k for a single person and you'd expect those living in DLRR (Killiney/Dalkey/Foxrock etc) already to skew that income level up over the average for Dublin as a whole.

I know this is getting far too granular, but we'd want to be thinking about what we think is a reasonable age to buy a house. If we think that you *should* be able to buy a house between the ages of 30-40, we need to be looking at the median income of couples in that age category, in that local authority, and see whether they can afford to buy a modest house. If not, what is the gap between the income level and the market value of that modest house, and if that gap is large, what is causing it.

I think it's acceptable to say that couples who are just out of college should not be expecting to be in a position to buy a house.

I think it is also reasonable to say that the days of a single income being able to afford a house are gone. If needed, we could use the same algorithm to calculate whether the median single income in a local authority area could reasonably be expected to buy a 2 bed apartment in that area.

A higher than average proportion of pensioners in DLR who have quite low incomes perhaps.
Bought the houses long ago, now their income is reduced.

genericgoon

JDD wrote: »

So by that measure the average house is €540k in DLR, but the median income for a couple in that local authority area is only €74k? I seriously doubt that is the case, given the average income in Dublin is approx €45k for a single person and you'd expect those living in DLRR (Killiney/Dalkey/Foxrock etc) already to skew that income level up over the average for Dublin as a whole.

I know this is getting far too granular, but we'd want to be thinking about what we think is a reasonable age to buy a house. If we think that you *should* be able to buy a house between the ages of 30-40, we need to be looking at the median income of couples in that age category, in that local authority, and see whether they can afford to buy a modest house. If not, what is the gap between the income level and the market value of that modest house, and if that gap is large, what is causing it.

I think it's acceptable to say that couples who are just out of college should not be expecting to be in a position to buy a house.

I think it is also reasonable to say that the days of a single income being able to afford a house are gone. If needed, we could use the same algorithm to calculate whether the median single income in a local authority area could reasonably be expected to buy a 2 bed apartment in that area.

Median age in Ireland is around 36.5 with a median household size of 2.75. While this doesn't map exactly onto your criteria it is hardly a huge push from your definition of a household who should be able to purchase a home.

JohnK

jill_valentine wrote: »

[...]
This is just such an obvious disaster on the way. A very sizeable number of these people are going to wind up trying to pay off their mortgage with a state pension.
[...]

From what I've seen the max duration of the mortgage is lower as you get older so it'll always have to be paid off in full by the time you turn (I think) 67 - doesn't matter if you start the mortgage at 35, 45, or 55. Biggest problem with this is it means each extra year it takes to find a suitable house is one less year you can get the mortgage for so your monthly payments will be higher which then makes the affordability harder especially with the stress test on it.

MacronvFrugals

Villa05 wrote: »

What I found interesting is that FF were talking SF policy. I know she is not senior FF but she seemed under severe pressure which may have impacted her many slips.
Eoin is a highly skilled communicator and you could see how he was complimenting the crazy house prices creator that there was very smart politicking going on

I have little thrust in Irish politics, were they in power and making things worse I won't be shy in calling them out

Look the way they wont on with nine units being brought back into stock, TicToks in all, gone be the days FF were building 80k a year!


https://twitter.com/Caolanmcaree/status/1397884080696565760?s=20

Zenify

MacronvFrugals wrote: »

Look the way they wont on with nine units being brought back into stock, TicToks in all, gone be the days FF were building 80k

He lost all credibility with the affordable housing scheme. Every last drop is now gone!

timmyntc

MacronvFrugals wrote: »

Look the way they wont on with nine units being brought back into stock, TicToks in all, gone be the days FF were building 80k a year!


https://twitter.com/Caolanmcaree/status/1397884080696565760?s=20

Only explanation for the music is that theyre both in La la land

Villa05

timmyntc wrote:

A higher than average proportion of pensioners in DLR who have quite low incomes perhaps. Bought the houses long ago, now their income is reduced.

With prices in the area, only social and affordable policies can afford to buy/lease in the area. This would probably bring down the average earnings

Mad_maxx

Timmyr wrote: »

Yea its quite different than Ireland, I'm from Mayo where you generally live in one house for your entire life.
Here houses are just treated as commodities, "getting on the ladder" is really the aim.

Since I've been here (5ish years), my girlfriends parents have lived in 3 separate "homes"

I lived and worked in NZ way back in 1998 , the country was really cheap back then , much cheaper than Ireland ,amazing how expensive it has become

cnocbui

I'd be concerned about buying property in NZ at current prices.



That's from a Bloomberg article about global housing bubbles: https://www.bloomberg.com/news/articles/2021-06-15/world-s-most-bubbly-housing-markets-flash-2008-style-warnings

As I would have suspected, Irish house price increases are very modest compared to the trend.

snow_bunny

MacronvFrugals wrote: »

Look the way they wont on with nine units being brought back into stock, TicToks in all, gone be the days FF were building 80k a year!


My God, what the **** is happening...

Amadan Dubh

Central Bank of Ireland has released its first financial stability review of 2021, which discuses the general economic state of affairs in the Irish economy including performance, risks and outlook. It also touches on property related matters as well.

A couple of interesting property related items included the commercial real estate sector outlook and details of the timeline for drawdown from mortgage approvals.

https://www.centralbank.ie/news/article/press-release-conditions-have-improved-but-recovery-may-be-bumpy-and-uneven-16-june-2021

The CRE market was considerably impacted by
the COVID-19 shock. CRE values on average declined 6 per cent from end-2019 to end-2020.
However, the decline has been much worse for retail CRE (19 per cent), in part reflecting larger
rental income falls for this sector (see Risks). Additionally, there has been reduced activity in the retail market, indicating a potential decline in liquidity. Anticipated declines in valuations and rents of 5 per cent in the next 12 months, point to a weak outlook for the CRE market. Additionally, the withdrawal of government supports to businesses, particularly in the hospitality and non-retail sectors, could potentially result in increased insolvencies that would also impact this sector.

Hubertj

Amadan Dubh wrote: »

Central Bank of Ireland has released its first financial stability review of 2021, which discuses the general economic state of affairs in the Irish economy including performance, risks and outlook. It also touches on property related matters as well.

A couple of interesting property related items included the commercial real estate sector outlook and details of the timeline for drawdown from mortgage approvals.

https://www.centralbank.ie/news/article/press-release-conditions-have-improved-but-recovery-may-be-bumpy-and-uneven-16-june-2021

[IMG][/img]https://www.boards.ie/vbulletin/attachment.php?attachmentid=556050&d=1623866709

Tough times for retail alright. PVH are paying about €2m to get out of their lease for the Tommy Hilfiger shop on graft on st as the landlord wouldn’t negotiate on the terms. But a little birdie is telling me that PVH will open 2 new shops (Tommy hilfiger and Calvin Klein) on grafton st in 2022/2023 when CRE rents have fallen significantly on grafton st…..

Ozark707

Hubertj wrote: »

Tough times for retail alright. PVH are paying about €2m to get out of their lease for the Tommy Hilfiger shop on graft on st as the landlord wouldn’t negotiate on the terms. But a little birdie is telling me that PVH will open 2 new shops (Tommy hilfiger and Calvin Klein) on grafton st in 2022/2023 when CRE rents have fallen significantly on grafton st…..

Makes sense. Once rents come down a lot you will see the prime areas fill back up. The less desirable areas...well I truly wonder what the future holds for them.

The more issues on way
The cheap labor which came back home to Eastern Europe does not want back to Ireland due with small wages and high rents
And better salaries and smaller rents in own countries
Government already crying that small busineses cant find workers
The shops owners from central part of Dublin was already talking about that before Covid
That they cant find low pay staff because rents sky high
This gona be interesting

MacronvFrugals

Revolution 1917 wrote: »

The more issues on way
The cheap labor which came back home to Eastern Europe does not want back to Ireland due with small wages and high rents
And better salaries and smaller rents in own countries
Government already crying that small busineses cant find workers
The shops owners from central part of Dublin was already talking about that before Covid
That they cant find low pay staff because rents sky high
This gona be interesting

Have tried to order a skip over the last few days and the earliest is two weeks they told me, 20 drivers (all eastern European) never returned

Balluba

The Central Bank is carrying out a review of mortgage lending rules. If things change and buyers are allowed to borrow four and a half times their salary will developers then just hike up their prices further ??

enricoh

Balluba wrote: »

The Central Bank is carrying out a review of mortgage lending rules. If things change and buyers are allowed to borrow four and a half times their salary will developers then just hike up their prices further ??

No, builders and developers are nice people and not money driven at all!

enricoh

enricoh wrote: »

No, builders and developers are nice people and not money driven at all!

I would say more
They could simply stop sell houses now because as they say they gona cost 7 per cent more next year !
What the point waste money to builders paying for overtime if houses gona cost more any way !
The slower they build them the more they could get for them later!

Ace2007

Balluba wrote: »

The Central Bank is carrying out a review of mortgage lending rules. If things change and buyers are allowed to borrow four and a half times their salary will developers then just hike up their prices further ??

Of course they will, sure half the crowd on boards are handing over their bank statements and all to the EA's that ask. Fast forward 2 years, and there will be calls to increase the limit to 5.5 salary