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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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Bob24

The_Conductor wrote: »

In a Dublin context rental supply is rising- and landlords are increasingly likely to forego their 4% per annum rent rise- as tenants are finding it easier to up sticks and move if they feel they are paying over the odds. The only reason that Dublin rents still seem to be rising- is the large number of very high price units under the control of REITs that are hitting the market (with the prospect of more over the next 3-4 years).

I was only referring to my local market (Grand Canal Dock) which isn’t necessarily representative of the overall city.

There is what you are saying with new developments fully owned by the original developer or a REIT and which are bringing a good quantity of new apartments to the market at very high prices (3000-4500 per month for a 2 beds).

But I don’t think the rental market for “old” builds (which means late 90s to mid 2000s in that market) is stagnating. The pace of increase might have reduced a bit but I think rents are still increasing. In the developments I am familiar with, I see apartments which would have fetched 1600-1800 per month when they were brand new and considered luxurious just before the recession now easily going for 3000-3500 (at the very worst time of the recession, I believe those would have gone for 1000-1200).

Dolbhad

Bob24 wrote: »

Yep, same thing here. High demand area in Dublin. I think rents are still rising however, although they already are at stratospheric levels - more or less double the pre-recession peak.

I know a lot of REITs are buying as they can set the bar high in terms of rent for first time. I’ve heard of people buying property through pension companies now working the returns on the rent now. However makes me wonder what happens when rents do go down. They can’t keep rising at this pace. Ireland has never been able to get the property cycle correct and we tend to have a lot of booms and bust.

Dolbhad

leahyl wrote: »

Why are new builds so expensive? I’ve looked at all the new builds in Cork city suburbs and most of them start at around 285k and just go up from there - this is for a 3 bed terraced house, not even a 3 bed semi. I can’t afford that :-( then the second hand houses, supply isn’t there. If they are in good condition, you’re talking high 200k also, if not, then you’d have to be putting 50k into them to make them liveable. It’s so frustrating.

A number of reasons. Building regulations are to a very high standard to get an A3 rating and regulations are only increasing. That eats into their margin.Then with 10% of the estate having to be given over the local authority at cost price, I have always assumed that gets passed over the buyers to make up the difference. Lastly it’s a well known fact the minute HTB came in, new builds increased in line with that.

The only 3 bed new build semi’s in Cork I have seen here in Cobh, Little Island and Watergrasshill and your looking at 270-280k mark anyway. I’ve seen some new builds over the 300k and they have oil and not even air to water.

We were looking last year in the 200-300k bracket in Cork and it was a disaster. It’s the most competitive market in Cork and houses are very overpriced in that bargain when second hand. We decided to take a break for 6 months, move in with parents and save as much as we could to increase our deposit to get us above the 300k bracket. Now back to house viewings etc but a bit better value for money.

leahyl

Why are new builds so expensive? I’ve looked at all the new builds in Cork city suburbs and most of them start at around 285k and just go up from there - this is for a 3 bed terraced house, not even a 3 bed semi. I can’t afford that :-( then the second hand houses, supply isn’t there. If they are in good condition, you’re talking high 200k also, if not, then you’d have to be putting 50k into them to make them liveable. It’s so frustrating.

The_Conductor

Bob24 wrote: »

Yep, same thing here. High demand area in Dublin. I think rents are still rising however, although they already are at stratospheric levels - more or less double the pre-recession peak.

In a Dublin context rental supply is rising- and landlords are increasingly likely to forego their 4% per annum rent rise- as tenants are finding it easier to up sticks and move if they feel they are paying over the odds. The only reason that Dublin rents still seem to be rising- is the large number of very high price units under the control of REITs that are hitting the market (with the prospect of more over the next 3-4 years).

I'm not sure if supply side issues are resolving in a similar manner in other cities- I suspect not- though I do know there are units coming onstream in Cork.

The current price rises for renters- are REIT driven- the market as a whole has hit a more stable patch (at least partially stable, because its hit the maximum that people can actually afford to spend on rent).

Keep in mind- salaries are no longer rising here- as was the case for much of the last decade. Salaries have hit a plateau- they're not falling- but they're also certainly not increasing.

We're in an interesting time- where various factors are coming to play in the various sectors, moderating the historic (as in over the last 10 years) trends.

Bob24

Dolbhad wrote: »

However asking is up from the last two years ago also so in the end the houses are still going for more than last year.

Yep, same thing here. High demand area in Dublin. I think rents are still rising however, although they already are at stratospheric levels - more or less double the pre-recession peak.

Dolbhad

Bob24 wrote: »

Same in my area. 2 years ago 10 or even 20% above asking was very common. Doesn’t seem to be the case anymore.

It’s the same in my areas. However asking is up from the last two years ago also so in the end the houses are still going for more than last year. I’m in Cork and it’s very pricey but haven’t hit the wall yet as Dublin seems to have.

Bob24

Bigmac1euro wrote: »

At the moment people seem to be getting just about asking price, in the area I’m looking anyway.

Same in my area. 2 years ago 10 or even 20% above asking was very common. Doesn’t seem to be the case anymore.

Bigmac1euro

At the moment people seem to be getting just about asking price, in the area I’m looking anyway.
A search of a particular area on PPR and a google job brings you to the daft ad seems to reflects this.
Good signs. Hopefully the market slowly levels off and dips a little. Was becoming madness there for a while. Hopefully I’ll be in just about a good enough position come July.

Mic 1972

Cyrus wrote: »

Someone has done all the work for you already

https://thepropertypin.com/t/the-pretty-charts-thread/47913/311

Thank you, that 's excellent data
The correlation between asking and selling prices is striking, the asking prices basically replicates the selling price trend with a delay of about 1 quarter

Cyrus

Mic 1972 wrote: »

Again, looking at individual properties is useless for the sake of data analysis
Asking price wont tell you how much properties actually sell for, that's a given.
It will however tell you a lot about the status of the market, more than any other personal story of people who know someone who heard something

if the only source of actual sales data is the property register then there is never going to be any accurate reporting on it, because sales are registered several months after initial agreement and the register doesn't indicate property type and number of beds

Someone has done all the work for you already

https://thepropertypin.com/t/the-pretty-charts-thread/47913/311

beauf

Mic 1972 wrote: »

Again, looking at individual properties is useless for the sake of data analysis
...

That's not what my comment was saying. You've just selectively quoted to change the meaning. The point is we all know places which are way off the general trend. In both directions. So we know it's not accurate. That just obvious.

That said it's not useless to look at specific properties. People are generally looking at the difference of a specific property Vs the market trend. Also some properties maybe buck the general trend in with direction due to something specific. Location, location location. Which is why two almost identical places on the same street can be different prices. Which is why you generally need to have some local knowledge to judge prices.

There isn't one black and white answer to all this.

Mic 1972

beauf wrote: »

You all know places where the final price was well above the asking price. Also places where they are asking far more than it's worth. I know one that's about 100k over a realistic price.

There is a relationship with asking prices but it's very in accurate Vs achieved prices. It's it enough to establish a general trend. Certainly with enough data over time.

Again, looking at individual properties is useless for the sake of data analysis
Asking price wont tell you how much properties actually sell for, that's a given.
It will however tell you a lot about the status of the market, more than any other personal story of people who know someone who heard something

if the only source of actual sales data is the property register then there is never going to be any accurate reporting on it, because sales are registered several months after initial agreement and the register doesn't indicate property type and number of beds

beauf

You all know places where the final price was well above the asking price. Also places where they are asking far more than it's worth. I know one that's about 100k over a realistic price.

Some people are stubborn. Isn't this the reason the price register was set up in the first place.

There is a relationship with asking prices but it's very in accurate Vs achieved prices. It's it enough to establish a general trend. Certainly with enough data over time.

Mic 1972

The_Conductor wrote: »

Bobs right- and his explanation is spot on.
It is a direct correlation- however, its a correlation that migrates with the market.
I.e. the nature of the correlation changes at different stages in the property market cycle- and I'd also suggest that the correlation differs across different regional markets- which don't tend to be in sync with one another.

Anyhow, trying to use it to prove cause and effect, as it relates to a single property- simply doesn't work- you have to look at the market as a whole.

That was my point entirely, correlation does exists and yes, you can't talk about trend by looking at individual properties
So, going back to where this conversation began, the asking prices are showing sings of a drop which means that the market has slowed down.Llonger wait to close a sale and lower selling prices

Mic 1972

Bob24 wrote: »

It sounds like you don't want to be convinced, but here is a simple example of why selling prices can't be simply inferred from asking prices:
- in a depressed market, sellers will tend to set asking prices close and possibly slightly higher to the selling price they expect, because they know interest will be limited and every buyer will try to negotiate the price regardless of how high or low it was set.
- in a booming market, sellers will tend to set asking prices significantly below the selling price they expect, as they know they will be mad competition anyway and they want to attract as many bidder as possible into a bidding war.

These are not examples, there are assumptions
- In a booming markets sellers will set high asking prices to maximize profit
- in a depressed market asking prices will gradually decrease in order for sales to keep happening

the evidence to this is in the historical data for the last few years, during the property crash the asking prices were decreasing, not the other way around
Asking price and Sale price are not the same thing but they follow the same trend, it's Supply and Demand logic

The_Conductor

Bobs right- and his explanation is spot on.
It is a direct correlation- however, its a correlation that migrates with the market.
I.e. the nature of the correlation changes at different stages in the property market cycle- and I'd also suggest that the correlation differs across different regional markets- which don't tend to be in sync with one another.

Anyhow, trying to use it to prove cause and effect, as it relates to a single property- simply doesn't work- you have to look at the market as a whole.

Bob24

Mic 1972 wrote: »

sorry that's just non sense

It sounds like you don't want to be convinced, but here is a simple example of why selling prices can't be simply inferred from asking prices:
- in a depressed market, sellers will tend to set asking prices close and possibly slightly higher to the selling price they expect, because they know interest will be limited and every buyer will try to negotiate the price regardless of how high or low it was set.
- in a booming market, sellers will tend to set asking prices significantly below the selling price they expect, as they know there will be mad competition anyway and they want to attract as many bidder as possible into a bidding war.

Mic 1972

Rex Disgusting Tariff wrote: »

Asking price literally has no correlation to sales price.

sorry that's just non sense

Bdjsjsjs

Brussels Sprout wrote: »

Pretty sure the trickle down theory of economics was debunked as a scam for rich people to pay less tax a long time ago.

No one believes in trickle down economics. Even Ronald Reagan or Thatcher or Milton Friedman. It's basically a red herring.

Cyrus

Mic 1972 wrote: »

The Property register does not provide any report, it's just raw data. you will have to compile your own data base over a consistent number of months in order to build a sales report and highlight any trend. Alternatively you have the Asking Price report from Daft ready to use out of the box.
Asking price is a direct reflection of the market trend, if sales go down the asking price will too otherwise overpriced properties won't sell, it's very basic logic

You don’t want to listen to logic or do your own analysis

q85dw7osi4lebg

Mic 1972 wrote: »

The Property register does not provide any report, it's just raw data. you will have to compile your own data base over a consistent number of months in order to build a sales report and highlight any trend. Alternatively you have the Asking Price report from Daft ready to use out of the box.
Asking price is a direct reflection of the market trend, if sales go down the asking price will too otherwise overpriced properties won't sell, it's very basic logic

Asking price literally has no correlation to sales price.

Mic 1972

The Property register does not provide any report, it's just raw data. you will have to compile your own data base over a consistent number of months in order to build a sales report and highlight any trend. Alternatively you have the Asking Price report from Daft ready to use out of the box.
Asking price is a direct reflection of the market trend, if sales go down the asking price will too otherwise overpriced properties won't sell, it's very basic logic

Bob24

Interested Observer wrote: »

The property price register records every (I think?) house sold in the country. You can download all the data.

https://www.propertypriceregister.ie/website/npsra/pprweb.nsf/PPR?OpenForm

Yep - although it is good to know that there can be a bit of a lag. There is a property next to my place which I was following and I know when sale agreed in January. I was keeping checking the the register for it to see the price, and it only came up a few weeks ago with a selling date of May. This is Because it took 4-5 months for the buyer and seller to complete the sale after going sale agreed, and presumably it took unusually long for the information about the sale to go from the solicitors to the government (I think such a long delay is unusual, but it regularily takes 2+ months between the time the sale is closed and when it shows on the register).

The the register should probably be seen as an idea of the average market in the past couple of months rather than an instant capture of the situation.

And to go back to prices, even with the register it is hard to get a definite idea of what's going on, because it doesn't document the type of property being sold. So technically the average selling price on the register could go up while the average price per square meter is going down (if the property being sold are for some reason getting larger and larger). Or another case where it can be misleading is that if a whole apartment block is being sold as a single transaction, this could be a single line on the register with a price of over 100 million euros (see an example here - it is impossible to treat that data automatically, and even manually is a problem as there us a mix of residential and commercial units with no obvious way to distribute the total price). More or less of these transactions can drastically influence average selling prices in a way which is misleading.

[Deleted User]

Mic 1972 wrote: »

Are there official reports on Selling Price? i couldn't find any I'd love to see them

The property price register records every (I think?) house sold in the country. You can download all the data.

https://www.propertypriceregister.ie/website/npsra/pprweb.nsf/PPR?OpenForm

riclad

https://www.daft.ie/report/ronan-lyons-2019q3-dafthouseprice

price are going down, it maybe a few per cent depending where you live.
I think its due to the threat of brexit,
and maybe supply is catching up with demand in dublin .
Also there s a limited amount of people who can pay 200-250k for a house.

Brussels Sprout

Wanderer78 wrote: »

The wealth created from such activities trickles down, so I certainly wouldn't worry about it

Pretty sure the trickle down theory of economics was debunked as a scam for rich people to pay less tax a long time ago.

Cyrus

Mic 1972 wrote: »

Are there official reports on Selling Price? i couldn't find any I'd love to see them

All data you need is in the property price register

duffman13

Mic 1972 wrote: »

you didnt answer the question, what is the assumption you are making with this argument? it's unclear if you are assuming Asking prices are going up

Your the only person assuming anything, your assuming lower asking prices are equal lower selling prices being achieved. You've no way of proving that, I see your logic, it's just not necessarily true

Mic 1972

Cyrus wrote: »

there is nothing to answer, i am not assuming anything as i dont need to, there are hard facts available.

i said your assumption that falling asking prices meaning prices are decreasing may not be correct.

Are there official reports on Selling Price? i couldn't find any I'd love to see them