Irish Housing/residential property market

Easten

I completed the purchase of an Apartment in Cork city. I had been unsuccessful a couple of times as the prices always went way over the asking prices. I only got this one as the estate agents came back to me after the original buyers failed to complete for some reason.

I have mixed feelings on the current market, I know I didn't get a Bargain and had several people telling me to hold off that we are heading for a recession and that it could all go tits up again. But how could this be the case? what are peoples view on the current market, do they think we'll see some type of pull back of 10% or more?

Baybay

IMO, no one really knows for sure. Everyone has an opinion though! What we do know is that interest rates are widely expected to rise which may cause people to hold off on purchasing. We do know construction costs for materials & labour are high & seem expected to continue to rise. Both these things may affect supply which in turn may affect price. Location always seems to be an important factor in gauging any property price but everyone has to be somewhere & prices will dictate in most cases.

10%? Who really knows?

Easten

https://www.boards.ie/discussion/comment/119160707#Comment_119160707

But why would interest rates cause anyone to hold off. Surly the cost of renting would be the greatest influence. And this is what puzzles me the most, I had no sooner agree to buy when the estate agent had a list of Tenants vetted and ready to go. What's more is the rent agreed was far higher than I thought possible which made be a bit uneasy as maybe they know something is coming down the line and are holding off buying themselves.

Patsy167

https://www.boards.ie/discussion/2058248890/irish-housing-residential-property-market

You've bought it now so your best bet is to move on and ignore any headlines on property price expectations. Nobody knows what will happen so its wasted energy.

Murph85

If you decide to wait it out, you would want to be paying no, to below market rent! A few things are for sure, even when the writing is on the wall, it takes years, rather than months, for things to play out. If prices drop, it usually wont be BANG, 50% drop and then increase. The price drops, to the trough, take place over YEARS, the way prices rise from trough to peak take years... Listening to all this nonsense, there will be a bust, there will be a boom, etc etc etc. Yeah there will be, but nobody has much more insight than knowing, such basics as the aforementioned...

Baybay

https://www.boards.ie/discussion/comment/119160741#Comment_119160741

The cost of renting is already very high, even it’s possible to find somewhere to rent. A lot of apartments aren’t suitable either, not enough bedrooms, no parking, difficult/no management company etc etc. Irish people traditionally emigrate when times are tough. Is there somewhere to go this time? With WFH, is it feasible/appealing to live with parents or older relatives in a way that it mightn’t have been twenty years ago? I don’t think anyone can be sure yet.

Easten

https://www.boards.ie/discussion/comment/119161314#Comment_119161314

Wouldn't encourage the kids to do WFH (Work from home - had to look that up!). I know plenty families now with adult children gone passed the 30s and still no sign of moving on. Add WFH on to that and it would be the parents who would end up moving out!

Recession or not my gut feeling is prices are going to continue to rise a lot further until Mortgage repayments are far costlier than renting. idf where that will be with prices though

Undividual

https://www.boards.ie/discussion/2058248890/irish-housing-residential-property-market

Just my opinion...

I think you might have some negative equity for a couple of years if we hit a recession, but it wont be a big deal over the course of the next 5 or 10 years. The situation we're in isnt like 2007, so I dont think it'll be the same kind of subdued property market we had after 2008. In fact, every person I know who is saving for a house is holding off for a significant drop in prices. This suggests that even if prices drop 10 or 20%, there will be buyers waiting for their individual targets. When it comes down to it, people will most likely buy at a price they can afford than wait til the market bottoms out. My guess is that this will probably result in a much slower fall for prices over the next couple of years, but the overall demand for property in Ireland is not going away.

I'll just add the caveat that if there is an unexpected international event (like a major Chinese bank going out of business) then all bets are off.

DubCount

Rents are increasing (for new rentals), yields are increasing (for new rentals) and number of rentals are falling. You cant just look at residential property in Ireland in terms of just returns. The risk side of the equation is bad and getting worse. There is a constant tinkering with legislation (all anti-landlord) restricting ability to adjust rents or evict tenants (good or bad). If you get stuck with a bad tenant, it can take 2 years plus to get a successful eviction. Add up 2 years of no rent, legal costs and cost of property damage when you eventually do get a property back. Civil proceedings against the tenant (assuming you can find him/her) may yield a few Euro per week against the tens of thousands you can lose.

Forget tax, forget rent controls, forget capital appreciation, the risk of a sting from a bad tenant is just too much to make the yields worthwhile.

AnF Chuckie egg

' n

Mach 3

https://www.boards.ie/discussion/comment/119469617#Comment_119469617

"Tell me how the story ends now"

If We have a visit the old Chestnut of "Supply and Demand" if usually is the best starting point in a question like this.

As mentioned already there will be buyers in the wings to purchase at a price affordable to them (these are individual buyers) - Whom are their competitors?

As mentioned, interest rates will play a part In individual decisions, but many in that boat too.

Individual Landlords are leaving the market - Why, and Whom are their competitors?

Is Wage inflation high or low? - Who benefits from this answer?

Mach 3

Who is Building what, where and why?

Mach 3

Who is Buying what, where and why?

Tonesjones

https://www.boards.ie/discussion/comment/119469936#Comment_119469936

I bought it. I lived there and then I sold it.

They bought it and live there now

It's in Mayo

Dante

Genuine question, how will prices drop when supply is at an all time low and demand is only going to increase? Its basic economics, right?

The only way I see prices dropping is if an 08-style recession hits and people lose their jobs en masse, or markets plummet hard and those pesky foreign investment funds need to sell up some of their property portfolios to cover their losses.

Mach 3

You'd make a fortune in Mayo!

Geuze

https://www.boards.ie/discussion/comment/119450199#Comment_119450199

Negative equity these days would require price drops of in excess of 10%.

Given the latent demand for housing, I can't see that happening.

If house prices stabilise, or fall by up to 10%, then there won't be any negative equity.

Geuze

https://www.boards.ie/discussion/comment/119469981#Comment_119469981

Yes, correct.

There is no over-supply of new houses at the moment.

At the peak in 2005-2008 we built up to 90k houses.

Now we are building 25-33k???

Plus there is huge latent demand, backing up by billions in savings.

So while I strongly hope for a slowdown, and price stability, I can't see any price falls happening.

AnF Chuckie egg

There will be no drop in prices for the simple reason it is now costing even more to new build than what is out there. I see another hike in prices due to low supply and the cost of Building. Add to that wage inflation, Government help to buy, Government social housing competing for limited stock and the days of picking up a 3 bed semi for €260k are coming to an end. I predict the next price hike will see average house prices pushing €400k.

Then we'll get the moaners and begrudges out in force. It will be the talk of talks