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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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kippy

cruizer101 wrote: »

CSO figures on residential property sales
https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexjanuary2019/

It shows drop over past few months for Dublin.
That said a single figure doesn't tell all, it could be a case expensive houses have dropped off but average house are still increasing.

This is what I am reading:
"Residential property prices increased by 5.6% nationally in the year to January. This compares with an increase of 6.4% in the year to December and an increase of 11.8% in the twelve months to January 2018.

In Dublin, residential property prices rose by 1.9% in the year to January with house prices rising by 2.3% and apartments by 1.6%. The highest house price growth in Dublin was in South Dublin at 4.0%, while the lowest growth was in Fingal at 2.6%.

Residential property prices in Ireland excluding Dublin were 9.5% higher in the year to January, with house prices up by 8.5% and apartments up by 18.6%. The region outside of Dublin that saw the largest rise in property prices was the Mid-West at 16.5%, while the smallest rise was recorded in the Mid-East at 5.1%.
"

Pussyhands

Bluefoam wrote: »

I genuinely don't see the same thing you see...

"in the year"

House prices fell. You are interpreting data wrong to suit yourself.

shenanagans

Pussyhands wrote: »

"in the year"

House prices fell. You are interpreting data wrong to suit yourself.

Most of the media attention about drops in prices are in relation to affluent parts of Dublin. High end prices. Prices for one and two beds are up.

Any drops won't help the average ftb with budgets under 400k IMO.

Pussyhands

shenanagans wrote: »

Most of the media attention about drops in prices are in relation to affluent parts of Dublin. High end prices. Prices for one and two beds are up.

Any drops won't help the average ftb with budgets under 400k IMO.

There's always an area where prices fall first.

Bluefoam

Pussyhands wrote: »

"in the year"

House prices fell. You are interpreting data wrong to suit yourself.

House prices fell a small amount, in a small space of time... you are focusing on a finite sample in order to suit your arguement. Averages are based on large samples... hence statistical data.

cruizer101

Bluefoam wrote: »

I genuinely don't see the same thing you see...

The year on year has increased but if you look at the chart you can see the last few months show a drop. Just not enough of a drop to mean the year on year has dropped.
Tbh the really should revise the text the include with this as it is a bit misleading

shenanagans

Pussyhands wrote: »

There's always an area where prices fall first.

Until rents drop in Dublin I can't see a drop in demand for ftb properties. People in 20/30s in Dublin getting robbed with rent.... Desperate to buy. Can't see that changing in the short term.

People with 400k plus budgets can afford to wait for a bust that may not come. But I think people paying crazy rent would rather be paying a mortgage.... Rents won't fall.

cruizer101

Here is the chart I'm talking about. Yellow highlight for drop, blue lines showing the year so you can see the increase.

There is often a bit of drop at beginning of year anyway but this is a bit more.
Just to say I don't think this means there is going to be a crash but there is a definite leveling off of prices for some reason (Brexit, central bank limits, return of recession, who knows)

awec

cruizer101 wrote: »

Here is the chart I'm talking about. Yellow highlight for drop, blue lines showing the year so you can see the increase.

There is often a bit of drop at beginning of year anyway but this is a bit more.
Just to say I don't think this means there is going to be a crash but there is a definite leveling off of prices for some reason (Brexit, central bank limits, return of recession, who knows)

Given the rate they have been growing, prices levelling off is an inevitability. There is a limit to what people can afford.

zreba

kippy wrote: »

I am not sure where people are seeing an overall "Drop" in house prices.

Central Statistics Office montly reports on transaction values. The last three months seen transaction values decreasing.

cruizer101

awec wrote: »

Given the rate they have been growing, prices levelling off is an inevitability. There is a limit to what people can afford.

I'd agree, I think central bank limits seem to be working to stop excessive rises, thats why I'm not convinced there will be a downturn.

Fol20

shenanagans wrote: »

Until rents drop in Dublin I can't see a drop in demand for ftb properties. People in 20/30s in Dublin getting robbed with rent.... Desperate to buy. Can't see that changing in the short term.

People with 400k plus budgets can afford to wait for a bust that may not come. But I think people paying crazy rent would rather be paying a mortgage.... Rents won't fall.

A bust will come, it may or may not be in short term but its always cyclical. Personally as a ll, i do think rent rates are too high at the moment and i dont know how anyone with a average job can afford a place.(im not complaining just observervation). Its all based on supply and demand however and right now demand far out weighs supply and looks like it might continue to get worse in rental market before it gets better.

awec

cruizer101 wrote: »

I'd agree, I think central bank limits seem to be working to stop excessive rises, thats why I'm not convinced there will be a downturn.

A downturn is also an inevitability IMO.

But there's an enormous difference between a downturn and a crash.

JJJackal

awec wrote: »

A downturn is also an inevitability IMO.

But there's an enormous difference between a downturn and a crash.

Another way to look at house prices is that there has been no increase in house prices since 2005

shenanagans

Fol20 wrote: »

A bust will come, it may or may not be in short term but its always cyclical. Personally as a ll, i do think rent rates are too high at the moment and i dont know how anyone with a average job can afford a place.(im not complaining just observervation). Its all based on supply and demand however and right now demand far out weighs supply and looks like it might continue to get worse in rental market before it gets better.

Agreed. It's all cyclical. But can't see a bust in Dublin property anytime soon.... Maybe a slowdown.... Slight fall... But no crash in prices. Not unless rents also crash which I can see happening.

kippy

zreba wrote: »

Central Statistics Office montly reports on transaction values. The last three months seen transaction values decreasing.

Ah, thanks.

shenanagans

awec wrote: »

A downturn is also an inevitability IMO.

But there's an enormous difference between a downturn and a crash.

Exactly.

Wishful thinking by people predicting a property crash. Won't happen in short term.

Graham

There are individuals whose housing strategy consists of a small nest egg and waiting for a catastrophic drop in house prices.

Any hint of downward pressure on prices is seized as evidence that a crash is imminent. You might call it confirmation bias. Undoubtedly those people will be right at some point, if you spend years making a weekly prediction of a recession, it is a fairly safe bet you will eventually be correct (aka stopped clock syndrome).

While buying when prices are low is undoubtedly a sensible (simple) strategy there are a myriad of potential/probable complications. Things like unemployment, changes in individuals family circumstances, availability of finance and life in general often see the best laid plans thrown under a bus.

For those and many other reasons it is probably wise not to be too smug about having the property market sussed until such time as the masterplan has come to fruition.

zreba

Fol20 wrote: »

A bust will come, it may or may not be in short term but its always cyclical. Personally as a ll, i do think rent rates are too high at the moment and i dont know how anyone with a average job can afford a place.(im not complaining just observervation). Its all based on supply and demand however and right now demand far out weighs supply and looks like it might continue to get worse in rental market before it gets better.

It's a common practice to use rents levels to calculate the profitability of investments. The problem with that aproach is that when rents drop then your calculations are no longer valid. Increasing rents have been pushing the property prices to the limits, but this is leveling off now. People have been rushing to buy because it has been cheaper to pay mortgage than to pay rent for a longer while now. Swap these two factors around and you enter a completely different investment environment. Drop in rents and increase in mortgage payments/interest rates will pull the trigger.

Plus risks like brexit, global economy slowdown, very low growth in Europe, global trade bariers, a serious risk of recession in Germany, massive slowdown in China and the world is nearing the end of the current economy cycle. We're walking on the edge of a cliff. Very easy to drop off.

zreba

awec wrote: »

A downturn is also an inevitability IMO.

But there's an enormous difference between a downturn and a crash.

This is a very good point. Sooner the correction happens, the less of a 'crash' this will be. The last crash wouldn't be as bad if the correction would have come earlier.

aloooof

Pussyhands wrote: »

When the recession comes there will be a considerable drop.

I've highlighted the problem with this logic. It's virtually impossible to predict. Meanwhile, the fundamentals of purchasing a home remain the same; if a property will suit your needs for the medium-to-long term, and you can afford it, then it's always a good time to buy.

Askthe EA

zreba wrote: »

This is a very good point. Sooner the correction happens, the less of a 'crash' this will be. The last crash wouldn't be as bad if the correction would have come earlier.

Indeed. IMO the correction is underway already.

zreba

shenanagans wrote: »

Exactly.

Wishful thinking by people predicting a property crash. Won't happen in short term.

I can't imagine anybody wishing a property crash. Unless you're sitting on a pile of cash waiting to buy cheap properties. Regular Joe with 20% deposit will not get a mortgage in the middle of the crisis, that's given. In bad times banks are reluctant to lend, hence the opportunity for cash rich investors only.

Bluefoam

Askthe EA wrote: »

Indeed. IMO the correction is underway already.

Thanks, I always base my financial descisions on your opinion.

Pussyhands

zreba wrote: »

I can't imagine anybody wishing a property crash. Unless you're sitting on a pile of cash waiting to buy cheap properties. Regular Joe with 20% deposit will not get a mortgage in the middle of the crisis, that's given. In bad times banks are reluctant to lend, hence the opportunity for cash rich investors only.

PokeHerKing

zreba wrote:

I can't imagine anybody wishing a property crash. Unless you're sitting on a pile of cash waiting to buy cheap properties. Regular Joe with 20% deposit will not get a mortgage in the middle of the crisis, that's given. In bad times banks are reluctant to lend, hence the opportunity for cash rich investors only.

Plenty of average Joe's bought in 2012/2013. I know plenty in my wider circle of friends who would welcome a crash of property prices.

They're simply looking at the most obvious reason they can't buy the house of their dreams and that's high prices.

Wishing for them to drop seems like the most natural thing in the world to me.

combat14

Drogheda saw the greatest fall in the survey (6.5pc) from €230,000 to €215,000

https://m.independent.ie/business/personal-finance/property-mortgages/big-freeze-in-house-prices-blamed-on-central-bank-rules-stifling-the-market-37946912.html

awec

PokeHerKing wrote: »

Plenty of average Joe's bought in 2012/2013. I know plenty in my wider circle of friends who would welcome a crash of property prices.

They're simply looking at the most obvious reason they can't buy the house of their dreams and that's high prices.

Wishing for them to drop seems like the most natural thing in the world to me.

Plenty more couldn't.

The whole reason it was so cheap to buy in 12/13 was it was very difficult to buy.

Pussyhands

Of course people are dying for a crash. Rent prices are linked to property prices. If property crashes, so do rents.

You don't have to want to buy to want a crash.

PokeHerKing

awec wrote:

Plenty more couldn't.

Similar to now, no?

awec wrote:

The whole reason it was so cheap to buy in 12/13 was it was very difficult to buy.

Who says it was difficult to buy? More so than it normally is? The reason it was cheap was because we were at the bottom of a cycle. Public opinion can make it just as hard to buy.