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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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Graham

Pussyhands wrote: »

Doesn't mean banks don't lend though.

It pretty much did mean banks weren't lending.

Irish banks particularly were watching the daily erosion of their collective capital bases as savers ran for cover elsewhere.

Many were on the verge of insolvency.

PokeHerKing

Banks need people to borrow, that's how money is created. You can say chicken egg etc but it's factually incorrect to say that banks stop lending in down cycles.

awec

Pussyhands wrote: »

Because they had no jobs?

Doesn't mean banks don't lend though.

Because they had no jobs.

Because their salaries were slashed and they could no longer afford it.

Because they knew it would be a waste of time as they wouldn't meet the banks stricter criteria for lending.

Because they were stuck in their current property and wouldn't be able to sell.

And so on.

So yea, banks do reduce their lending (of course they do), driven by two things:

1. They just cannot afford to lend
2. Much fewer people can afford to borrow.

1+2 together = house prices fall.

So if there is another crash, certainly there will be some winners. Cash buyers will be laughing. People with enormous deposits will be laughing. People trying their best to clobber together some cash to try get a mortgage... not so much.

Pussyhands

awec wrote: »

Good grief.

Why do you think people suddenly stopped applying for mortgages?

Because they had no jobs?

Doesn't mean banks don't lend though.

awec

zreba wrote: »

All right, just wanted to point to the fact that banks pull back from lending in a riskier times. I did not make it up. This is how it is.

Of course you didn't make it up.

The idea that banks do anything other than reduce their lending in riskier times is pure fantasy.

House prices are low during periods of economic difficulty because banks are unable to lend to any great degree. People being unable to get credit is what causes the prices to fall in the first place.

zreba

All right, just wanted to point to the fact that banks pull back from lending in a riskier times. I did not make it up. This is how it is.

awec

Pussyhands wrote: »

Kinda obvious.

If no one is applying for mortgages you can't say banks are not willing to lend.

If 3k people applied in 2012 and 3k people got mortgages they are willing to lend.

If 100k people applied in 2018 and 50k people got mortgages...which period is more willing to lend?

I have no idea on the figures exactly, I'm just pointing out that approved loans doesn't make your point fact.

Good grief.

Why do you think people suddenly stopped applying for mortgages?

Pussyhands

zreba wrote: »

U.S. banks quietly pull back from riskiest loans amid recession fears

Careful, posting news to inform people will lead to being accused of link dumping. You have to give your own synopsis of the article!

jam_mac_jam

Its different this time... soft landing (sorry we don't use that anymore how we say downturn)..all this caution is just wishful thinking… defensiveness… all reminds me of a time just a few years ago.

Not saying there will be a crash, I don’t know what is around the corner or ten years down the line. Just sounds very familiar.

Pussyhands

awec wrote: »

In what way do you think that makes a difference?

Kinda obvious.

If no one is applying for mortgages you can't say banks are not willing to lend.

If 3k people applied in 2012 and 3k people got mortgages they are willing to lend.

If 100k people applied in 2018 and 50k people got mortgages...which period is more willing to lend?

I have no idea on the figures exactly, I'm just pointing out that approved loans doesn't make your point fact.

zreba

U.S. banks quietly pull back from riskiest loans amid recession fears

Graham

120,000 down to 12,700

Approvals*

awec

Pussyhands wrote: »

How many applications?

In what way do you think that makes a difference?

Pussyhands

Graham wrote: »

Loan approvals - Banks & Building Societies

2005 - 27,737
2011 - 2,415

*millions

Pretty much as close as you can get to stopped lending.

How many applications?

zreba

Graham wrote: »

Loan approvals - Banks & Building Societies

2005 - 27,737
2011 - 2,415

*millions

Pretty much as close as you can get to stopped lending.

Numbers don't lie.

awec

PokeHerKing wrote: »

Similar to now, no?

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.

Er, no. The reason it was cheap was there was much fewer people able to buy.

Houses are expensive now because demand is greater than supply. Houses were cheap in 2011/12 because supply was far greater than demand.

Demand was low in 11/12 because very few people were able to buy.

Bob24

shenanagans wrote: »

Exactly.

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

It is wise to say that a downturn and a crash are two different things and that while a downturn is likely, nothing garantes a crash.

However it doesn’t mean a crash can’t happen.

zreba

PokeHerKing wrote: »

Difficult to debate a one word statement. My opinion would be banks lending practices revolve very much around public sentiment. The percieved lack of lending during the crash was predicated in large part by a lack of public appetite to buy a depreciating asset.

Now you offer your opinion? That's how discussions work.

It's just the way it is. Banks tighten their lending criteria when the risks increase. Banks also need to keep cerain capital levels to be able to lend. In bad times these capitals go under water (negative equity and stuff like that), so even if they wanted to, they may not be able to lend.

In good times banks would lend to nearly anybody (hence the regulator come to play to cool them down a little), but in bad times banks are reluctant to lend.

It's not like the whole lending activity just stops. The levels are decreasing though. Some people will still be able to secure mortgages, but a lot of people will not be able.

Graham

PokeHerKing wrote: »

They always lend.

Loan approvals - Banks & Building Societies

2005 - 27,737
2011 - 2,415

*millions

Pretty much as close as you can get to stopped lending.

Fol20

zreba wrote: »

Bull****.

How. He is factually correct. its just the quantity of lending varies based on what type of boom or bust we are in. As others have said they will only lend to the best candidates when in a bust but might be more willing to open their pockets in the good times.

PokeHerKing

zreba wrote:

Bull****.

Difficult to debate a one word statement. My opinion would be banks lending practices revolve very much around public sentiment. The percieved lack of lending during the crash was predicated in large part by a lack of public appetite to buy a depreciating asset.

Now you offer your opinion? That's how discussions work.

zreba

PokeHerKing wrote: »

Banks make money by lending. They always lend.

Bull****.

PokeHerKing

zreba wrote:

Banks stop lending in bad times! They need capital to lend. They will likely lend to some (people with the best credit ratings and icomes), but on very limited basis. If you struggle to get mortgage today, don't expect you'll get one in the crash scenario.

Banks make money by lending. They always lend. Sometimes they lend frivolously and it ends badly for all. Asset bubbles and crashes involve more than just credit or lack of.

Fol20

shenanagans wrote: »

Not unless rents also crash which I can see happening.

Interested to see how you see rents crashing. Ehy do you think this?

Declining supply of landlords and although uptick in REIT, they only hold a markshare of circa 30pc i believe in most areas of dublin with the exception of on or 2 areas where they are a majority - sandyford being one i believe. Nationally private ll are the majority by far.

Higher and higher demand with influx of foreign workforce and increased jobs.

No good future outlook on rental market incl social hosuing to soften the pain.

zreba

PokeHerKing wrote: »

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.

Banks stop lending in bad times! They need capital to lend. They will likely lend to some (people with the best credit ratings and icomes), but on very limited basis.
If you struggle to get mortgage today, don't expect you'll get one in the crash scenario.

zreba

Pussyhands wrote: »

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.

There's no better time then recession if you get to keep your job/income. Everything gets cheap and you still have your income.

The key is, many don't get to keep their incomes. This is the point of recessions that people lose jobs.

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.

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.

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.

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