Softening house market?

fliball123

https://www.boards.ie/discussion/comment/119947227#Comment_119947227

I think the majority of sentiment was that we would see the end of the year out and December is not looking great either the only saving grace is the fact is Xmas falls in this month. People seem to forget the quintessential Irish mentality of having a last hoorah before the gloom kicks in. I put an analogy of being in the pub and the bell for last orders sound which I would equate to now (December with xmas around the corner) and it being last orders and being half p1ssed ye go up and order 3 pints for you and your group of merry makers and a whiskey to top it off. Slapping it on the card as you have ran out of cash and Its great while your drinking it and your buddies think your the man for buying this round, yet come the next morning (Jan/Feb/March of next year) when you have to get up for work , your heads in bits , you have a few Scheckels (not enough for bus fair) and your scrambling to see if you can find the rest of the fare.

Our politicians are not the only ones who kick financial issues down the road (there was a huge uptake of spending going on credit cards towards the end of this year). With higher energy costs and inflation still raging and interest rates set to climb a good deal higher there will be no options for the unwashed masses but to cut right back to the bare essentials and this is already happening. Unfortunately we are going to see a lot more job losses and I can see us having to pay more tax and getting less services for the next couple of years due to the recession that will be starting early next year. The tech jobs are eroding away with Intel the latest getting in on the act. Not to mention SMEs simply hitting the wall with the increase in costs that they simply cannot continue to pay and stay solvent and a lot are hanging on for the xmas bounce like every year Jan, Feb and even most of March are horrible times for anyone working in certain areas in the economy like restaurants, pubs etc.. Already insolvencies are way up from last year.

Bradz213

There is a bit of softening in the market but not sure if that's down to interest rates etc, due to the time of year or being overpriced to start with.

We went sale agreed in August for 85k over asking. We got 60k over asking on our sale. Probably around an increase of 12/15% respectively on the asking prices.

We missed out on a lot of house and tracked them when they closed so I feel I have a decent idea of the value in the area we looked at. The asking price means nothing because generally estate agents just put it up at around the price something similar sold for.

I've seen a few houses go up recently that were at least 10% overpriced to start with and either have dropped in price or have no bids on them yet.

RichardAnd

https://www.boards.ie/discussion/comment/119948468#Comment_119948468

I think that what we're seeing is the shedding of the inflation that was caused by the lockdowns. Probably, the market is going back where it was in 2019, and it likely will rise from there. Demand is very high, the country is awash with cash and the state has proven that it will sacrifice just about anything to keep prices up. In other words, I think the market is softening, but it's not crashing.

I could, of course, be wrong, and I actually hope that I am wrong. We need something to knock the stuffing out of this market, because it's causing a demographic disaster.

DataDude

https://www.boards.ie/discussion/comment/119948592#Comment_119948592

Ignoring possible effects of interest rates the above would seem sensible.

Only counter is average earnings are up about 13% from Q3 2019 to now and probably looking at at least another 5% next year with inflation running high.

L1011

https://www.boards.ie/discussion/comment/119947130#Comment_119947130

https://www.boards.ie/discussion/comment/119946873#Comment_119946873

Take this to PM or drop it entirely.

RichardAnd

https://www.boards.ie/discussion/comment/119948666#Comment_119948666

Constantly rising wages is something that I worry about. We're already seeing very large rises in the public sector and a lot of the private sector. This simply adds up to more cash that chases a limited supply of goods. Ergo, more inflation.

DataDude

https://www.boards.ie/discussion/comment/119948803#Comment_119948803

Yup! And with the whole multiplier limit in bank lending - in normal circumstances it would directly feed through to borrowers being able to fire more money at the same limited number of houses.

Higher incomes AND higher lending limits you’d imagine would be disastrous for prices. But then the bank response to higher rates may more than offset that. Who knows!

The big one to watch will be the BPFI mortgage approval data. Volumes of mortgages are already starting to fall. Average loan values have also dipped since July. Any spike in January will interesting.

Average FTB mortgage approval amounts are up 20% since 2019!

Padre_Pio

https://www.boards.ie/discussion/comment/119948803#Comment_119948803

Wage stagnation is bad.

Rising wages is bad.

Solution is still to build more houses.

Bass Reeves

https://www.boards.ie/discussion/comment/119952035#Comment_119952035

I think a lot of people cannot understand the solution is to build more houses.

It's the same with the rental sector. The solution is to get more supply. That means encouraging people with houses that they are not renting to rent them. However present regulation's discourage that

handlemaster

https://youtu.be/a_M6VaBQ8Q0

very similar to Ireland.

Wanderer78

https://www.boards.ie/discussion/comment/119948803#Comment_119948803

...again, current inflationary pressures are primarily coming from the supply side, i.e. virtually nothing to do with the demand side, i.e. the money supply, the solution to this is resolving supply chain problems, including stabilizing energy markets. wage inflation has remained low in comparison to asset prices inflation, these have now decoupled, solution, reduce the rate of asset price inflation, and slowly increase wages!

RichardAnd

https://www.boards.ie/discussion/comment/119952422#Comment_119952422

It's both. Supply chains were disrupted by lockdowns, and the "solution" of printing more money added to inflation.

https://www.boards.ie/discussion/comment/119952035#Comment_119952035

It takes time to build a house or an apartment block, and rising costs are making that more difficult. There's no one-bullet to the housing crisis. We need a discussion that considers building, immigration, social welfare, investment funds and all other aspects that have contributed to this mess. Sadly, this discussion was needed years ago, and it's seemingly not possible to have discourse anymore without people screaming at each other.

Wanderer78

https://www.boards.ie/discussion/comment/119952557#Comment_119952557

yes it is indeed both, but its primarily supply side based, theres actually as possibility of deflation if the supply chain issues didnt exist, some still stating, this is what could be on the cards post supply chain and energy market issues, hard to know though, again, cb mandate is for inflation, but clearly not this rate of inflation, and once again we ve learned, central banks are not the only cause of inflation, but a part of it....

your second point is very important though, yup its time to have adult conversations about these issues, in particular the whole process of financialisation of our property markets has collapsed.....

Jmc25

Current experience is it's a mixed bag out there. In the areas I'm looking in on the Northside if Dublin, I've seen a number of houses that have been sitting there for two or more months with no offers, despite price reductions. Generally these are in not great to poor condition or were listed too high in the first place.

On the other hand, have seen houses in ok to good condition, priced low/accurately go sale agreed at very high prices within a couple of weeks.

For the ones that aren't moving, I've heard a few agents say the vendor is "waiting for January" in the hope that the mortgage rules will kickstart things again. Interestingly though, BOI are already offering approval in principal at the higher LTI ratio so you would think we'd already be seeing some of this trickle into the market if it there was going to be a big bang in January.

Most interesting, and heartening from a buyer's perspective, some of the houses sitting for months with no offers were previously sale agreed at 20/30 over the asking they can't currently achieve.

And most disheartening from a buyer's perspective, some houses continue to go sale agreed at what are likely all-time record high prices.

Padre_Pio

https://www.boards.ie/discussion/comment/119952557#Comment_119952557

Nope, just need to build some great big apartment blocks in Dublin city. Build them to a high spec so you can't hear your upstairs neighbor clip clopping around in high heels, and implement management companies that keep tenants and owners in check.

Build a thousand apartments and sell them to people on the condition they're PPR for the first 3 years.

Donald Trump

https://www.boards.ie/discussion/comment/119947554#Comment_119947554

It's most certainly not a tangent. It is in response to your obsession about en-suites. You appear to think that if, instead of having 50 student apartments, we just built 10 semi-Ds and squashed 5 students into each, that it would solve the problem. I am trying (unsuccessfully it seems) to explain to you that it would actually be more efficient and profitable for everyone involved to build the 50 apartments.

As per development knowledge, it appears you only have the small-time amateur developer mentality. Developers building large blocks of accommodation aren't going into the bank, cap in hand, after each stage of the building process trying to get a few quid to do the next stage. The piecemeal amateur hour approach is one we need to get away from as it is a large part responsible for why the market here is so dysfunctional.

You appear to acknowledge that your grandparents had a great standard of living for their time (but by todays standards they probably most certainly would not). You have made some progress but I fear you may not have the capacity to extend that to understand the point I was making. Which is that you cannot compare a standard from 40 years ago absolutely with a standard today. In the same way that students are not necessarily pampered and lazy today because they won't accept the same standards that you imagine you persevered through 40 years ago, it is equally not legitimate to compare your standard of living today with your grandparents of 40 years ago.

In other posts you imply that your better standard of living today compared to your 20's is because "it was paid for" with your hard work. If you want to compare absolute levels and use your logic then your grandparents could have had central heating and a couple of TVs and a couple of foreign holidays a year. Well if only they weren't lazy and spending it all on avocados. You did it with your hard work. They didn't. Must have been just lazy like today's students.

cute geoge

Imo If people are waiting for prices to softening before buying they are going to miss the boat .There is a shortage of housing only getting bigger with every passing week due to an idodic government policy of open borders .Mary Lou grand plan to build 100000 social houses will barely cover the influx of refugees currently in the system .I don't know who is more idotic the government or Sinn Fein .They are hell bent on destrying the tourism industry and on top the greens wont stop until they close down the country ,some banana republic!!!

herbalplants

https://www.boards.ie/discussion/comment/119954431#Comment_119954431

Plenty of houses for sale at the moment. And refugees won't be buying them.

cute geoge

https://www.boards.ie/discussion/comment/119955394#Comment_119955394

My friend they are not that foolish but there will be people out there buying houses to make money housing refugees ,It is turning into a sucessfull cottage industry

herbalplants

https://www.boards.ie/discussion/comment/119955492#Comment_119955492

I agree mental money. Where is all this cash coming from for housing refugees, sure our tax. Yet not used for where it is needed.

dontmindme

All properties->28/11/22 to 04/12/22

All Dublin

31 Price changes

24 Decreases

07 Increases

Rest of Ireland

52 Price changes

37 Decreases

15 Increases

RichardAnd

https://www.boards.ie/discussion/comment/119953446#Comment_119953446

One thousand apartments would not solve the supply issues. It's estimated, I believe, that 50k units per year for the next ten years will be needed to meet demand, and I think that that figure was posited some time ago, so it may well be out of date. Assuming that it isn’t, that’s 500k units. Where will these units be built, and how will they be paid for? Is the manpower to build them available? Are the materials available?  I’m not trying to belittle you, but the often cited solution of building more houses is a very easy thing to say.

This problem needs to be resolved, and we no longer have the luxury of avoiding sensitive issues. As I see it, we are simply beyond the point of crisis and heading towards an outright disaster.  

RichardAnd

https://www.boards.ie/discussion/comment/119954431#Comment_119954431

One of the major issues here, as I see it, is that the elites have no skin in the game. Realistically, no one who is making decisions here (politicians AND civil servants) is struggling to pay rent, searching for a home or sharing a house with several other people. Indeed, how many of those in power actually profit from this situation either though private rentals, investments or though the provision of cheap labour supplied by mass immigration? The current disaster was created by the policies of these people, and now we seemingly expect them to resolve it. I don’t feel too confident about that, and they themselves don’t seem too interested in doing anything differently. It’s as if they don’t care, and based on their actions, they do not care.

Really, what we’re seeing here is the same as what is happening across Europe and the West in general, but should we really be surprised? What happens to those people in power who mess up? Many of the politicians who lead us into the 2008 crash are either still in power or are sitting on handsome pensions. The civil servants behind these people do not even have to face an election every five years.  Even personally, as someone who worked in the civil service for years, I witnessed shocking incompetence that was not punished. When there are no consequences for failure or malfeasance, should it come as strange that we are where we are?

DownByTheGarden

https://www.boards.ie/discussion/comment/119945790#Comment_119945790

Please explain how you think this is going to effect us ? Bet you cant.

DownByTheGarden

https://www.boards.ie/discussion/comment/119947855#Comment_119947855

Agreed. I think people are going reign in the spending big time once Christmas is done. Not even out of necessity, but out of an abundance of caution. This will no doubt have serious knock on effects to the economy. How it will all pan out I have no clue though. But I think there is a big contraction in spending coming soon.

DownByTheGarden

https://www.boards.ie/discussion/comment/119954431#Comment_119954431

I think everyone thinks that its free and easy to build houses in both cost and time. They seem to think "oh, we need 100,000 houses, just build them next year. All done". You need to get the money to build them. And you need time to build them. They dont appear magically once you decide you want to build them.

We are so far behind now and have put so much bureaucracy into housing, we will never ever catch up. So not only have they destroyed housing, as you rightly say the contagion is spreading now. The tourist sector is almost gone now. We will feel that in the summer. Next comes increased taxes to pay for all the damage they have done.

Donald Trump

https://www.boards.ie/discussion/comment/119958108#Comment_119958108

Wealthy people are trying to pull their money out of property investments.

As you may or may not be aware, many international funds also own property in Ireland

quokula

https://www.boards.ie/discussion/comment/119957932#Comment_119957932

This is nonsense. Politicians have a vested interest in being reelected and we live in a true democracy where the "elites" you describe aren't guaranteed anything. The vast majority of civil servants are on pay scales not particularly out of line with the private sector and have families and need homes just like everyone else.

The reason it's the same in pretty much every developed country on earth regardless of government type is that it's an incredibly difficult problem to solve, not some massive conspiracy by people pulling the strings, no matter how much populist opposition parties like to pretend otherwise. The only reliable way to reduce house prices is to crash the economy and that helps nobody. In the meantime you're dependent on increasing supply but there is only so much labour available, materials are hugely expensive, land in desirable areas is finite, and while everyone says we need more houses, the reality is that nimbyism is rife and most object to them actually being built in their area.

snotboogie

https://www.boards.ie/discussion/comment/119957917#Comment_119957917

1,000 apartments wouldn't come close to solving the problem in Cork, never mind Dublin...

The fact that people are still talking about semi d's built in phases of 10 as a solution to the housing problem is unbelievable. It's not that these developments aren't needed but complaining about density requirements next to a train station in Mallow or Midleton is absurd, especially when there is 200 million being spent to upgrade the commuter rail in Cork right now. Id also be cautious on following developer input blindly, they spent decades complaining about the planning system and when the government took out local authorities with the SHD's it was roundly abused by Irish developers who used it as a vehicle for land speculation rather than building.

DownByTheGarden

https://www.boards.ie/discussion/comment/119958291#Comment_119958291

The only way out of this now is to build 10s of thousands of low quality housing in the middle of the country somewhere. Doing it the way they are now is increasing the costs and slowing the process. Build a Tallaght style development out on a greenfield site in the middle of nowhere with the promnise that the other facilities will come after people are housed. Of course they wont come because they never do, but at least there will be an amount of people housed that can make a difference.

We are where we are and cheapness and great speed is the only way to get anywhere near the amopunt of houses you need. But people will object. Noone wants that development besdie them. Noone wants to have to move that far from Dublin. Noone wants cheap houses. Noone wants everyone bunched together because of anti social issues. Noone want to move in anywhere without all the other facilities being there first.

In short its never going to happen, we will continue as we are, not playing catchup, but actually accelerating in falling further behind. There was a time when there was a way out of this, but I just dont see it now.