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Property Market 2018

castle2012

With supply still very tight. A homeless problem. Rising employment. It sure looks like where set for more large rises. There's not much to suggest otherwise. Any thoughts?

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Bob24

Eleanor Howling Anorexic wrote: »

Who will give them the mortgage though when this crash happens?

If they have a large deposit and a job they’ll get a mortgage no problem even during a downturn. If they save for several years and wait for prices to crash their LTV and LTI ratios will be rather low and they’ll be very safe borrowers.

(and if they don’t have a job at that time they probably won’t want to be stuck with a negative equity property purchased before the crash and that they can’t move on from, so buying now thinking at least if I lose my job in a downturn I’ll have a property/mortgage wouldn’t be a great idea)

q85dw7osi4lebg

Bob24 wrote: »

Yes and with people getting older (needing more space and hitting the age limit for longer mortgages), not everyone can afford to wait until the next crash. There is still a fairly large backlog of 30-somethings who want to buy their own place and feel like they don’t have all the time in the world to do so.

If someone was in their mid 20s on a good wage and thinking of buying, I think I might suggest to save as much as possible for a deposit and wait though. They have enough time in front of them to bet on a crash at some point in the next 10 years (fairly safe bet IMO) and get ready to reap the benefits with their large deposit.

Who will give them the mortgage though when this crash happens?

Bob24

M.Cribben wrote: »

I think the opposite is actually true, because the rental market is so dysfunctional people have no other choice but to look into buying.
Everyone needs to live somewhere. Housing is not some optional luxury, along with food it's a basic necessity of human life.

Yes and with people getting older (needing more space and hitting the age limit for longer mortgages), not everyone can afford to wait until the next crash. There is still a fairly large backlog of 30-somethings who want to buy their own place and feel like they don’t have all the time in the world to do so.

If someone was in their mid 20s on a good wage and thinking of buying, I think I might suggest to save as much as possible for a deposit and wait though. They have enough time in front of them to bet on a crash at some point in the next 10 years (fairly safe bet IMO) and get ready to reap the benefits with their large deposit.

M.Cribben

bigpink wrote: »

Think a lot of people are giving up trying to buy now

I think the opposite is actually true, because the rental market is so dysfunctional people have no other choice but to look into buying.
Everyone needs to live somewhere. Housing is not some optional luxury, along with food it's a basic necessity of human life.

draiochtanois

This post has been deleted.

bigpink

Think a lot of people are giving up trying to buy now

Bob24

bil_clay wrote: »

it doesnt reveal as much as you might think , during the bubble , a sh1t load of houses were built in the ar5e hole of nowhere for tax purposes , there was never much of an over supply in dublin at any stage and if there was , it was a very short lived situation , even in 2011 and 2012 , rents remained reasonably good , no one could buy due to a crippled non functioning banking sector but people still were looking for homes in dublin and struggling to get them , as many people were arriving into the country as leaving for the most part this past decade

Yes agreed with most of that.

Having said that I'd say there was a clear oversupply of rental properties in Dublin around 2009-2011. I knew someone living in one of the then just completed Grand Canal Dock developments paying 1200 for a 3 beds and half the building was left empty for several months as there were no takers to rent the apartments. Nowadays they rent like hotcakes and you'd be very happy if you can get just one bedroom in that same 3 beds apartment for 1200. People who were renting at that time will also remember that for 2-3 years they could call the landlord every year and ask for a significant drop on their rent.

*But* as you say it was very short lived. It was purely due to rising unemployment and emigration and not really due to a crazy number of new builds in the city, and demand to fill-up all properties resumed very quickly.

Samuel T. Cogley

bil_clay wrote: »

D8 is pretty rapidly gentrifying , a property should not be sold if its cash positive , is it possible because you were in negative equity for so long , you developed a get out target in mind , should you reconsider and decide to keep it for another two decades or at least another five years , your property could end up having been a good buy , a property in a city as wealthy as dublin is a good asset , do you need the money elsewhere ?

Honestly as we've locked in our fixed rate for ten years it would sit idle (or be invested) no need for the money for another ten years which I suppose supports the conclusion we maybe just hang on to it.

MayoSalmon

In 2006 nearly 100,000 houses were built...in 2017 we built around 12,000-15,000.

I think that says it all really.

Samuel T. Cogley

Bob24 wrote: »

Out of curiosity if you rent it again will you bother advertising it or you will just go with people who have heard about it in your own circle or have been referred to you? (I'm not looking for a place :-) - just wondering how landlords usually do it as I will leave my well below market rate apartment soon and I know people who would be interested in taking it over - don't know of there is any point mentioning them to the landlord).

Just going with recommendations if I cant convince the wife

Augeo wrote: »

If you overpaid at the height of the boom at 295 surely you won't get 250k now?

Not sure, there is a ground floor, smaller, as well maintained without parking that's on the market at 200K offers being refused to 205K (So he's had that offer). My maths put us at about 225K with hopefully some scope for a 5-7% rise from Feb-July putting us at around 235-240ish.

Just doing the maths now another year does seem prudent.

However there is planned building works which may put off buyers. While that would come out in the searches I think that's better than cranes looming large.

[Deleted User]

Samuel T. Cogley wrote: »

Mine says take 250K and run They're not quite there yet. The wife see's it as losing 45K - we paid 295. I see it as getting out while the goings good. This is only a one bed and we overpaid even at the height of the boom.

If you overpaid at the height of the boom at 295 surely you won't get 250k now?

Bob24

Johngoose wrote: »

If I were you I’d wait a year and sell this time next year. Very easy to get a tenant in at the moment

I'd agree waiting another year is very likely to lead to a higher selling price and pretty low risk in terms of a correction/crash happening by then.

The reason I was saying in my previous post I would consider selling now is that since the tenant is leaving there is an opportunity window, and if starting a new tenancy there is a risk of ending-up with bad tenant which causes problems and/or refuses to leave when they get a notice prior to the sale. Maybe not a huge risk, but not insignificant and could be very annoying if it happens.

But if there is a known and safe tenant lined-up, I would indeed wait another year.

Bob24

Samuel T. Cogley wrote: »

Rent controlled I'm afraid it's not going to be available for a while and because it's rent controlled I've a few people already looking at it. Sorry Bubbaclaus.

Out of curiosity if you rent it again will you bother advertising it or you will just go with people who have heard about it in your own circle or have been referred to you? (I'm not looking for a place :-) - just wondering how landlords usually do it as I will leave my well below market rate apartment soon and I know people who would be interested in taking it over - don't know of there is any point mentioning them to the landlord).

Samuel T. Cogley

Bubbaclaus wrote: »

What's the rent? I'll take it

Rent controlled

I'm afraid it's not going to be available for a while and because it's rent controlled I've a few people already looking at it. Sorry Bubbaclaus.

Bubbaclaus

Samuel T. Cogley wrote: »

My tenants are moving out so I'm trying to convince the wife we should sell. Not keen on losing money on it but not sure how long we have before we'll see a correction. Anyone fancy getting the crystal ball out? D8 btw.

What's the rent? I'll take it

Johngoose

Samuel T. Cogley wrote: »

Mine says take 250K and run They're not quite there yet. The wife see's it as losing 45K - we paid 295. I see it as getting out while the goings good. This is only a one bed and we overpaid even at the height of the boom.

If I were you I’d wait a year and sell this time next year. Very easy to get a tenant in at the moment

Bob24

Samuel T. Cogley wrote: »

Mine says take 250K and run They're not quite there yet. The wife see's it as losing 45K - we paid 295. I see it as getting out while the goings good. This is only a one bed and we overpaid even at the height of the boom.

I understand you. The amounts involved are much smaller in my case but I recently signed contracts to sell a rental property I have abroad and in spite of the slight loss I’m making I’m happy to be able to forget about it and move on as there were many issues with the place and the rental market in that city has become pretty bad since I bought and never quite recovered.

Samuel T. Cogley

Bob24 wrote: »

If we are playing that game, what does your own crystal ball say btw? ;-)

Mine says take 250K and run They're not quite there yet. The wife see's it as losing 45K - we paid 295. I see it as getting out while the goings good. This is only a one bed and we overpaid even at the height of the boom.

Bob24

Samuel T. Cogley wrote: »

My tenants are moving out so I'm trying to convince the wife we should sell. Not keen on losing money on it but not sure how long we have before we'll see a correction. Anyone fancy getting the crystal ball out? D8 btw.

If we are playing that game, what does your own crystal ball say btw? ;-)

Bob24

Samuel T. Cogley wrote: »

My tenants are moving out so I'm trying to convince the wife we should sell. Not keen on losing money on it but not sure how long we have before we'll see a correction. Anyone fancy getting the crystal ball out? D8 btw.

Totally non-binding prediction from my crystal ball: we have 1 to 4 years of decent price increases to go with a reasonnable possibility for them to rise above previous 2007 peak prices in the next 2 years* (exact duration depending on if/when some kind of external factor or economic crises triggers a correction during that period). If the correction is triggered by an external/economic crisis (which my crystal ball says has 40% probability to happen within that timeframe), it will hit hard and unexpectedly and prices could fall fairly sharply, otherwise it will just be some kind of stabilisation at the end of that 4ish years period as we hit affordability limits.

I think if I was you and the long term plan wasn't to keep the property, I would seriously consider selling as well. Maybe it will seem like it was a bad idea in 4 years time as prices will have risen, but you could also end-up with a very troublesome tenant and/or price could drop at some point within that timeframe and you could miss the boat while seeing your rental income drop if the rental market is not as pressured anymore.

* and to be clear I hate to say this and am not cheering about it, but objectively the probability of it happening is increasing

Samuel T. Cogley

My tenants are moving out so I'm trying to convince the wife we should sell. Not keen on losing money on it but not sure how long we have before we'll see a correction. Anyone fancy getting the crystal ball out? D8 btw.

Mickiemcfist

So ehh, that property eh!

Bob24

Bubbaclaus wrote: »

Ireland's labour taxes are the most progressive in the EU. That means the higher earners pay a ****load of tax and low earners pay nothing. Just because the overall tax take is considered "below average" on an overall basis doesn't mean our income taxes applied to individuals are low.

You are completely misinterpreting the data outlined in the study. Not sure whether you have an agenda or whether you have just innocently done it, but you need to take a step back and look at what is actually being shown.

As I have said before I do understand that taxation level relative to other countries varies greatly depending on income and I agree we need more tax brackets at the higher income levels so that the rate doesn’t reach 40% that quickly.

*but* I would completely disagree in saying “higher earners pay a ****load of tax” compared to other EU counties (depending in income range Irish workers are between very low and medium in terms of labour taxation, none are high). Those who are the most at a disadvantage are probably in the 50k-80k salary range (wild guess, not saying it is 100% correct and it really depends on which poultry you compare to) and they indeed possibly have a slightly above average labour taxation level compared to other EU countries. But they certainly don’t pay ”a ****load” and as per my post you quoted they should not forget that their gross salary would be lower if we didn’t have low corporate tax and exchequer money has to come from somewhere (and to be clear I include myself in that group and have worked elsewhere in Europe).

Just as an exemple of what people can overlook, in France the equivalent of employer PRSI is close to 50% of the employee’s salary and on average the equivalent of employee PRSI/USC is between 20 and 25%. Ireland is very, very, far from that so even if you pay 40% income tax on a large part of your salary while a French employee pays 30% because on that same share because they don't hit the French 41% bracket before routhly 72k of salary*, you labour in Ireland is still taxed much less than theirs if you take everything into account. Tax allowances and tax credits also have a large influence on total income tax paid and can vary greatly depending on countries.

I have an impression that those here saying that we have high labour taxation levels probably underestimate the impact of these different taxation mechanisms and just look at a few headline rates and tax brackets, and they certainly haven’t posted a single serious study/report here documented with numbers to back their statement.

Anyway at this stage it's going off topic and it might be time to agree to disagree.

Bubbaclaus

Bob24 wrote: »

And to add to my previous post And I’ll reiterate what I said before: on top of the fact that labour taxation is not that high, we have very low corporate tax so companies have more money here than elsewhere in Europe to pay a high gross salaries. These two taxes can’t be looked at in isolation as the exchequer has to get money somewhere (I.e. people who think there should be significant labour tax reduction have to acknowledge it means large increase of corporate tax which would obviously have consequences on our economy and thus on workers companies paying more corporate tax would likely mean less jobs and lower wages in Ireland ... not saying the way we balance our taxes between labour and corporate profits is not a valid discussion or have, but thinking we can significantly cut one area without accordingly increasing the other one is dreaming).

Ireland's labour taxes are the most progressive in the EU. That means the higher earners pay a ****load of tax and low earners pay nothing. Just because the overall tax take is considered "below average" on an overall basis doesn't mean our income taxes applied to individuals are low.

You are completely misinterpreting the data outlined in the study. Not sure whether you have an agenda or whether you have just innocently done it, but you need to take a step back and look at what is actually being shown.

Marius34

Depends on what tax we speak, Ireland may look Low or High taxed country, but for average person with a payroll only, I'll say it’s relatively low.
If you get anything other than payroll it’s difficult to compare with other countries, because in Ireland it's all sums up as your income, meanwhile in most countries that's not a case.
That's why I would divide in separate segments to compare with other European countries:
Corporate tax - Low
Payroll tax - Very Low (for low wage) to Average/High (for Medium/High wage)
Self-Employed/Contractor - High
Additional income over wage - Very High.

Bob24

And to add to my previous post And I’ll reiterate what I said before: on top of the fact that labour taxation is not that high, we have very low corporate tax so companies have more money here than elsewhere in Europe to pay a high gross salaries. These two taxes can’t be looked at in isolation as the exchequer has to get money somewhere (I.e. people who think there should be significant labour tax reduction have to acknowledge it means large increase of corporate tax which would obviously have consequences on our economy and thus on workers companies paying more corporate tax would likely mean less jobs and lower wages in Ireland ... not saying the way we balance our taxes between labour and corporate profits is not a valid discussion or have, but thinking we can significantly cut one area without accordingly increasing the other one is dreaming).

Bob24

draiochtanois wrote: »

So I did ...

Guess what - the example they (and you cherry picked) is very slightly over where income in Ireland starts being taxed at our marginal rate.

€34,847 versus €34,550

And guess what values they use for "typical" salaries in a few other countries:

€46,693 Belgium
€47,042 Germany
€49,235 Netherlands

It becomes clear to me this paper was written to make Ireland look like it has low taxes on income

They’re taking the average worker, it is fair enough. If you have another study with a different methodology which shows Ireland has high taxation level on labour you can post it here. But I suspect depending on methodology Ireland will range between medium-low and very low level of labour taxation compared to other European countries, it will never be high as we are miles away from the likes of France and Belgium.

See another study here which also says Ireland’s labour tax burden isn’t high at all: https://taxfoundation.org/comparison-tax-burden-labor-oecd-2016/

But I guess the OECD which defined the methodology is biased and voluntarily cherry picked figures to misrepresent Ireland?

Cyrus

Bob24 wrote: »

Average wages in Ireland would drop to rebalance (ie new employees would get lower salaries and your pay raises wouldn’t cover inflation). Of course all taxation on labour should be included.

Now if people want to move to another European country and see how it goes they are free to do so. But most we realise the grass was actually not greener.

you are making an assumption there, to present it as a fait accompli is wrong.

anyway, i agree with you on your second point, i have a decent job here and was offered the chance to move to London, i reckoned that i would need to earn 3 times as much to have a similar house in a similar area and maintain the familys lifestyle. So Ireland will do for me :pac:

[Deleted User]

Johngoose wrote: »

If house prices spiral to ridiculous levels it’s a good thing,as they will crash again.

I fail to see the good thing here.

[Deleted User]

Bob24 wrote: »

Average wages in Ireland would drop to rebalance (ie new employees would get lower salaries and your pay raises wouldn’t cover inflation).

Or I suspect in small companies like the crew I work for we might move from having 30 engineers to having 28/29 as the costs rise.