Property Market 2018

Wanderer78 wrote: »

So gentrification is good?

Clearly, Dublin city centre is filled with dodgy estates/blocks of flats, if they were gentrified we'd have a much nicer city. Same way parts of Ringsend was a no go area for years but is now getting pretty trendy with GCD etc.

Wanderer78 wrote: »

So where do those go to that where once living there, and can they afford this new accomodation?

Presumably they'll have a nice chunk of change from the sale, so wherever?

Wanderer78 wrote: »

So where do those go to that where once living there, and can they afford this new accomodation?

I think the main problem with gentrification is that the auld dubliners wont be able to afford the inflated cost of avocado toast etc..

Henbabani wrote: »

another signs of slowdown:

https://www.independent.ie/business/personal-finance/property-mortgages/new-analysis-of-house-prices-shows-significant-slowdown-in-increases-for-first-time-36590464.html

I saw that yesterday and was laughing at this sentence:

“prices for four-bed semis and two-bed apartments in south county Dublin have also fallen back. For instance, two-bedroom apartments rose by just 2.5pc - increasing to €348,750.”

So prices for two beds in SCD have fallen, increasing by 2.5% ... Sure that makes sense :-D

Henbabani wrote: »

another signs of slowdown:

https://www.independent.ie/business/personal-finance/property-mortgages/new-analysis-of-house-prices-shows-significant-slowdown-in-increases-for-first-time-36590464.html

I saw that yesterday and was laughing at this sentence:

“prices for four-bed semis and two-bed apartments in south county Dublin have also fallen back. For instance, two-bedroom apartments rose by just 2.5pc - increasing to €348,750.”

So prices for two beds in SCD have fallen, increasing by 2.5% ... Sure that makes sense :-D

Sentence makes sense to me.
Any idea what the 5 areas in Dublin are that are seeing double digit growth?

Gentrification is like anything - good in moderation. What needs to happen along with it is mixed social housing so it's impossible to buy a new build where you've not got social housing in the development. Social housing should be the norm and no different from the house next door. The ghettoization of area is simply bad all round which is what's happened in parts of Dublin. I'm in an area that's seen a posative change by having a smallish number of social housing tenants remaining and the rest in private ownership.

Unfortunately as with most Capitals a large number of people on lower salaries have to commute, that's already practical from North Co. Dublin, Kildare and Louth.

whatever76 wrote: »

Cork market is not slowing down especially in City ; Not very much out there under 300k that is not in need of a significant upgrade !

When you say the city, do you mean Douglas, Blackrock etc or nearer the centre? Plenty sub 300 in decent areas of Cork from what I’ve seen.

theboringfox wrote: »

I would agree that 300k in Cork in somewhere like Ballinllough is going to at best get you a small 3 bed Semi D in need of fair bit of modernisation. That makes them very dear as if trying to extend and modernise to make it more of a family home could all of a sudden be an expensive house.

thats it exactly - you struggle big time to get a house in ballinlough under 300k . anywhere in a mature type area that are old type home are very much between 250-300 that need alot of work so makes them v expensive and you get into a bidding war with these type of houses as well . trust me - am going through it at the moment - its deadly. Glammire/Carriglaline/Midleton are fine and it get a good house for 300 k but in around the city - lough, mointenotte, turners cross, parts of douglas, blackrock is v competive and houses are going well over the asking !

GingerLily wrote: »

This, I fixed the whole mortgage for 5 years but I could have kept 10% or so on a variable, silly mistake really but I was under pressure to get my application through (new builds), so didn't do it at the time!

Check the penalty if you overpay (if you want to ) it’ll likely be nil or close to it

frefrefre wrote: »

Turners cross has 3 beds for sub 200k. Plenty around 250k in Douglas too. Presume there's a premium for being inside the ring road in Cork, hence why Ballintemple, Blackrock etc are more expensive?
Still a lot of value in comparison to Wicklow, North Kildare. We won't even mention the capital.

Rates are forecasted to rise following EU rises, starting with rate rise in Sept. Check Euribor rates. http://www.euribor-rates.eu/euribor-rates-by-year.asp

In the UK, rates in banks rose, but banks chose to take the profit hit rather than lose to competitors.

In Ireland, having rates that deliver the most profit in EU banks, and twice the EU average, you can bet the banks will pass the rate rises onto consumers, as we've the least competitive banking sector in the EU.

Of course, there is a proposal at Oireachtas for two things to change on rates; 1. bring in community banks that will lend at 0.8% variable and 1% fixed for 20 years.
2. Allow Irish borrowers access to EU rates which is what Leo wants. Which are 0.5% to 1%.

But no mortgage holder wants to save 3-4k a year on a 200k mortgage when that bank rolls out or get access to EU rates, so no mortgage holder has asked their TD to bring in that proposal.

robcass78 wrote: »

Of course, there is a proposal at Oireachtas for two things to change on rates; 1. bring in community banks that will lend at 0.8% variable and 1% fixed for 20 years.
2. Allow Irish borrowers access to EU rates which is what Leo wants. Which are 0.5% to 1%.

But no mortgage holder wants to save 3-4k a year on a 200k mortgage when that bank rolls out or get access to EU rates, so no mortgage holder has asked their TD to bring in that proposal.

What do you mean by that?

Plenty of property in Dublin 15 under 300k. No property crisies yet

Villa05 wrote: »

One of the core issues hindering supply is the availability of competitive loans to developers. I believe interest rates for developing property are in the double digits.

The Government giving more money to fuel the demand side while completely ignoring supply side issues is more evidence that they are a big part of the problem.

We are firmly in a bubble and the government is complicit in fully supporting it.

They have seen that the central bank rules have taken some air out of the bubble and have been trying to circumvent those rules for some time.

In a normal economy a person on the salary levels spoken about which are way over the average income should have no issues in housing themselves

Absolutely spot on; lending from banks is 70% below demand for homes (population growth/2.7 people per unit).

Rates are 10-12% for build loans, which adds 20-30% onto the cost of the house.

Further, land value are a function of debt; "goal seek"; land value is 20% of the build cost to justify profits for land owner.

So the interest is on top of an inflated land value.

Finally, the irish banks ask for min 15% profit from construction, further adding to the costs.

All this means the interest, plus fictitious profit on land, plus 15% profit requirement adds 40-50k to the cost of a home.

Add in goverment income and fees, and everything in the chain on "% of house price" benefits (agents, solicitors, govt).

Then the government lobs vat & fees of 40% on top.

Finally, the bank makes then 3 to 3.5%

And all the while, the home build supply is c10,000 units a year, when 50,000 units are needed, causing home prices/mortgages / income to banks and bank balance sheet values to increase.

There is going to be 10-20% growth until supply catches up with demand. That's 3-5 years off yet.

Happy days for the banks. And landlords. Hell for teachers, nurses.

And when it pops, people will say "but how is this a bubble?" as the root cause; financing of the supply, won't matter, as banks will then mop up the assets and sell to private equity.

The solutions?

1. Build 50,000 not 10,000 a year
2. Finance the builds via community bank model (3%, not 1%) not commercial banks, saving 20-40k on the house price.
3. Issue mortgages via the bank at 1%, not 3%; that's a saving of 3-4k a year on mortgages
4. Drop VAT on purchase as it's wooden dollars. It simply inflates the price, and the 5 fold increase in construction delivers 5x more income & jobs than VAT
5. Build social homes and stop HAP payments of 8bn a year once homes built, saving 8bn in taxes.
6. Drop the taxes saved, resulting in more income for young people.
7. Bring in precast companies who build in UK & China for 40% less and higher quality, but faster build time by 40%.

That will stabilise price growth to 3-4%, but drop house costs to 120k from current 200-220k, shrinking the upward price pressure.

If we don't, we'll lose a generation not just private sector, but teachers, nurses & carers. And it's difficult to get them back in any short period of time (3-5 years).

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