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Property Market 2019

The_Conductor

As is now becoming a custom- we'll start a new thread to discuss all topics as they pertain to the property market in general, alongside people's predictions and experiences- for the year 2019.

Its going to be an interesting year- with Brexit, if it comes to pass, at the end of March- and to misquote Donald Rumsfeld - the unknown unknowns that are likely to jump out at us, when we least expect them to.

2018 thread is now closed.

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awec

klaaaz wrote: »

Not so. Those with a good savings history with that hefty deposit will still get credit, just like in the last crash. Lending from banks back then for mortgages was reduced not wiped out.

Yes. It was reduced.

The reason property prices drop is because it is difficult to get credit.

If property prices drop a little bit, it's because getting credit has got a little bit more difficult.

If they drop a lot, it's because getting credit has got a lot more difficult.

The reason property prices dropped so much last time was most people couldn't get credit to buy.

The biggest benefactors of a big, fast drop are cash buyers and investors, who'll be laughing. For the average person, not so great a scenario.

q85dw7osi4lebg

klaaaz wrote: »

Not so. Those with a good savings history with that hefty deposit will still get credit, just like in the last crash. Lending from banks back then for mortgages was reduced not wiped out.

I work with mortgages so I'll just take my own opinion on this one.

Cuddlesworth

Rex Disgusting Tariff wrote: »

I work with mortgages so I'll just take my own opinion on this one.

I don't think increasing the LTI ration during a market slowdown/crash makes sense from a risk perspective. The risk of significant income loss is much higher for dual income earners. Twice as likely really.

tobsey

awec wrote: »

Yes. It was reduced.

The reason property prices drop is because it is difficult to get credit.

If property prices drop a little bit, it's because getting credit has got a little bit more difficult.

If they drop a lot, it's because getting credit has got a lot more difficult.

The reason property prices dropped so much last time was most people couldn't get credit to buy.

The biggest benefactors of a big, fast drop are cash buyers and investors, who'll be laughing. For the average person, not so great a scenario.

The main reason proces dropped so much last time was people were over extended, with 100% interest only mortgages on multiple properties, that the banks then closed in on. The owners had no choice but to sell, therefore prices plummeted. The lending rules this time mean that there is much more equity in property so that there is less likely to be a firesale and therefore less likely they will fall dramatically. There might be a small reduction in values, but not at the level seen in the crash. That was the only time in history that houses values dropped at that rate. Even in recessions before then property didn't collapse in the same way. There's no reason to believe it would happen during the next recession.

Nobodysrobots

awec wrote: »

The biggest benefactors of a big, fast drop are cash buyers and investors, who'll be laughing. For the average person, not so great a scenario.

Big, fast drops are very rare in the property market even in the worst recession in the State's history, the biggest single year drop was 13.6% in 2012 (open to correction on this).

You're assuming these canny investors can call the bottom of the market accurately. What happened during the recession from 2008-2013 was, nobody was buying because if they waited a year they could get a double-digit % discount on the current price.
The people who can call the top/bottom of markets accurately are most likely already rich and have information the wider public aren't aware of yet. As an example, I find the behaviour and recent activity by international REITs, pouring billions into the Irish property market at a time of (generally perceived) uncertainty a little suspicious.

Bob24

Rex Disgusting Tariff wrote: »

I work with mortgages so I'll just take my own opinion on this one.

I can definitly confirm that it was no problem to get mortgage approval during the recession if you had decent savings and a full time permanent position with decent salary.

Plenty of mid level IT/finance workers in my circle did get approvals and as a matter of fact banks would welcome safe enough borrowers with open arms as they were desperate for more business at higher rates than tracker mortgages.

Reduced lending wasn’t really due to banks having more drastic lending criteria compared to nowadays (they didn’t), it was more than less people did meet those criteria. But there was no issue for those who did.

Pussyhands

Nobodysrobots wrote: »

Big, fast drops are very rare in the property market even in the worst recession in the State's history, the biggest single year drop was 13.6% in 2012 (open to correction on this).

It's all relative obviously....

Samuel T. Cogley

Having had the displeasure but also good luck to be in a position to buy during the 'crash' it was slim pickin's for sure. People stayed put.

q85dw7osi4lebg

Bob24 wrote: »

I can definitly confirm that it was no problem to get mortgage approval during the recession if you had decent savings and a full time permanent position with decent salary.

Plenty of mid level IT/finance workers in my circle did get approvals and as a matter of fact banks would welcome safe enough borrowers with open arms as they were desperate for more business at higher rates than tracker mortgages.

Reduced lending wasn’t really due to banks having more drastic lending criteria compared to nowadays (they didn’t), it was more than less people did meet those criteria. But there was no issue for those who did.

I said struggle, I didn't say impossible.

Seems to be no middle ground with this thread, an all or nothing approach taken by both sides. :rolleyes:

Bob24

Rex Disgusting Tariff wrote: »

I said struggle, I didn't say impossible.

Seems to be no middle ground with this thread, an all or nothing approach taken by both sides. :rolleyes:

You said “those hoping to buy in a drop will struggle to get finance at all”.

As I was saying, there is a decent group of people for which the above statement didn’t apply the last time around (many of them in my group of friends/colleagues including myself). Which is why I don’t think putting everyone in the same basket and saying they’ll struggle to get finance at all is a moderate a statement about what would happen.

I also don’t think I offered an all or nothing view, as I clearly stated the total amount of borrowing would indeed drop due to less people meeting the bank’s lending criteria.

klaaaz

Rex Disgusting Tariff wrote: »

I said struggle, I didn't say impossible.

Seems to be no middle ground with this thread, an all or nothing approach taken by both sides. :rolleyes:

Have a look at the Irish Banking Federation stats on mortgage lending over the last decade, they still lent to first time buyers and movers at the time. It was much reduced, but that reduction was from crazy unsustainable levels of around 2005/6. Lots of occupations unrelated to the fallout of the crash, who had met the criteria of being prudent and have some job security were able to borrow for a mortgage.

q85dw7osi4lebg

klaaaz wrote: »

Have a look at the Irish Banking Federation stats on mortgage lending over the last decade, they still lent to first time buyers and movers at the time. It was much reduced, but that reduction was from crazy unsustainable levels of around 2005/6. Lots of occupations unrelated to the fallout of the crash, who had met the criteria of being prudent and have some job security were able to borrow for a mortgage.

Completely agree, I remember friends buying at the depths in 2012.

L1011

Rex Disgusting Tariff wrote: »

Completely agree, I remember friends buying at the depths in 2012.

Look back at the old threads here, there was a panic on to draw down by the end of 2012 to get MIR/TRS, fairly significant number of posters were buying with mortgages at the time.

q85dw7osi4lebg

L1011 wrote: »

Look back at the old threads here, there was a panic on to draw down by the end of 2012 to get MIR/TRS, fairly significant number of posters were buying with mortgages at the time.

Yeah I see that, I'd imagine not as many as are drawing them down now though, looking at the Saving/Applying for a mortgage 2015/16/17/18/19 thread.

tobsey

https://www.bpfi.ie/wp-content/uploads/2014/08/IBF-PwC+Mortgage+Market+Profile+Q1+2013.pdf

https://www.bpfi.ie/wp-content/uploads/2018/10/BPFI-Mortgage-Drawdowns-Report-Q3-2018-for-website.pdf

The first link gives the total drawdowns in 2012, 15881. Now over 6000 of those came in the last quarter presumably to get the TRS. However compare that to 2018 where it looks like 40,000 will be drawn down. So it was only 37% of todays lending by volume so yes it was small, but it was still a reasonable number.

Edit: Attached also is approvals per year, bottomed out in 2011 at about 13,000.

[Deleted User]

In 2009 I got mortgage of 320,000 with a 70,000+ deposit. I could have had more.
Now, I have 250,000+ deposit, I can get 175,000 mortgage, hopefully a bit more if I get an exemption.
It's much harder now, in my experience.

el Fenomeno

Not sure if suitable for this thread, but if I have my eyes on a development that has already had 1 or 2 (successful) phases launched and sold out, and I know that people were queuing well before the official launch e-mail went out (more people than there were houses available) - how can I compete with that? Considering I don't live near the location, and don't know anybody involved on-site or even any locals - am I just shít out of luck and need to suck it up?

Zenify

el Fenomeno wrote: »

Not sure if suitable for this thread, but if I have my eyes on a development that has already had 1 or 2 (successful) phases launched and sold out, and I know that people were queuing well before the official launch e-mail went out (more people than there were houses available) - how can I compete with that? Considering I don't live near the location, and don't know anybody involved on-site or even any locals - am I just shít out of luck and need to suck it up?

What development? There are a few threads on specific developments.

Zenify

The Upside of a Global Downturn? Juicy Real Estate Deals https://www.bloomberg.com/news/articles/2019-02-14/real-estate-deals-are-one-upside-of-a-global-downturn

Dublin is mentioned in the article. That expensive properties in places like D4 are falling.

optogirl

I have definitely noticed an increase in supply under 270k in Dublin 7 - I have been signed up to alerts from Daft & MYHOME.IE and was getting very few over the last year or so. I got about 6 in the past 2 weeks

Pussyhands

optogirl wrote: »

I have definitely noticed an increase in supply under 270k in Dublin 7 - I have been signed up to alerts from Daft & MYHOME.IE and was getting very few over the last year or so. I got about 6 in the past 2 weeks

How long do houses generally be advertised before a deal is struck if there is interest? There's an apartment I have my eye on out of interest, the price isn't absolutely outrageous imo but it's been up about 6 weeks I'd say if not more and it has 2k views on daft.

I would have thought in this market at the price it would be sold by now.

Pussyhands

Also when will the January figures be released?

Bob24

CSO figures for December are out: https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexdecember2018/

Pussyhands

Bob24 wrote: »

CSO figures for December are out: https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexdecember2018/

Makes me sick

Zenify

Bob24 wrote: »

CSO figures for December are out: https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexdecember2018/

Did property prices fall in November and December of last year?

Pussyhands

Zenify wrote: »

Did property prices fall in November and December of last year?

Looks like they fell .1%

Bluefoam

Pussyhands wrote: »

Makes me sick

What makes you sick? the fact that people wanted to buy houses and then bought houses? Or the fact that you didn't buy a house?

Pussyhands

Bluefoam wrote: »

What makes you sick? the fact that people wanted to buy houses and then bought houses? Or the fact that you didn't buy a house?

Yeah I'm sick that I could have made almost 100% profit in 7 years.

Bluefoam

Pussyhands wrote: »

Yeah I'm sick that I could have made almost 100% profit in 7 years.

You should have... Just shows, some people make the right descisions at the right time, others don't. I should have been a millionaire five times over, but I'm not.

JohnCleary

Pussyhands wrote: »

Yeah I'm sick that I could have made almost 100% profit in 7 years.

There were better returns than that.

I'm aware of one Galway City example - purchased in 2011, sold in 2018 for 3 times the purchase price.... that's the market, I guess!