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Property Market 2020

Bigmac1euro

Maybe an article for “Property Market 2020”
Anyhow looks like developers are going to start strangling supply in order to keep prices in check.

Worth a read anyway.

https://www.independent.ie/business/personal-finance/property-mortgages/developers-now-fear-flooding-market-as-house-prices-in-decline-38820967.html

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listermint

There's alot of people even in multinationals that need to have a good hard think about closing a sale.

The job losses stemming from this are going to be global. The US market if your job relies on it or your company is headquartered there hasn't been begun to really feel the impacts . It's going to come down like a ton of bricks.

Personally I'd be holding off until at least the end of the summer when this is bedded in.

No house is worth the mental anguish and associated relationship pain that would come from job losses and large scale debt.

Be rational and really rationalise your purchase including properly war gaming one or both job losses in the household. Rents have already taken a hit so renting future won't be the same in future as it is now.

Zenify

garhjw wrote: »

In relation to the property market..... nothing has happened yet. Prices have not floored. There is not a flood of units coming to market at knock down rates..... this is a property thread, nothing has happened to the property market yet in terms of prices falling, supply increasing etc...

Everyone I know in the process of buying has pulled out. Is that nothing?

beauf

listermint wrote: »

There's alot of people even in multinationals that need to have a good hard think about closing a sale.

The job losses stemming from this are going to be global. The US market if your job relies on it or your company is headquartered there hasn't been begun to really feel the impacts . It's going to come down like a ton of bricks.

Personally I'd be holding off until at least the end of the summer when this is bedded in.

No house is worth the mental anguish and associated relationship pain that would come from job losses and large scale debt.

Be rational and really rationalise your purchase including properly war gaming one or both job losses in the household. Rents have already taken a hit so renting future won't be the same in future as it is now.

I assume all building activity will be the first to stop. This the supply of new property will also stop.

So you've got supply, demand and finance all shrinking together. I can't see demand thats built up over a decade or more shrinking as fast the other two. I think the housing crisis will still remain.

I don't think population will shrink as fast as it grew either.

Eric Cartman

Zenify wrote: »

Everyone I know in the process of buying has pulled out. Is that nothing?

A high likelihood of new build completions delayed for months and a possibility of job losses , neither of which impact the price of a house are quite likely

House prices will only be impacted if banks stop lending again but then sure those people are screwed anyway. House prices dropping more than 5-6% will only help cash buyers

enricoh

garhjw wrote: »

In relation to the property market..... nothing has happened yet. Prices have not floored. There is not a flood of units coming to market at knock down rates..... this is a property thread, nothing has happened to the property market yet in terms of prices falling, supply increasing etc...

Do you think house prices will rise, stay the same or fall this year?
Someone posted a link that us unemployment may hit 30% by summer, I read Cormac Lucy's article in the Sunday times yesterday about Irish unemployment, it was sobering stuff and the emigration valve is welded shut.

Sweet.Science

enricoh wrote: »

Do you think house prices will rise, stay the same or fall this year?
Someone posted a link that us unemployment may hit 30% by summer, I read Cormac Lucy's article in the Sunday times yesterday about Irish unemployment, it was sobering stuff and the emigration valve is welded shut.

A 3 month pause to banks isnt going to affect them too much . Plenty of credit still available. Things will bounce back quick enough

enricoh

sun0shine wrote: »

I am in process of buying a new build house in commuter town ~360K range, loan offer in place but haven't signed contracts yet.
Certainly market is going to tumble..
Bargain on new build an option in this stage? or time to pull out?

I'd be looking for a serious reduction not a bit of paving thrown in. Who else is going to buy it?
Surely all the government funded charities/ associations will have their funding slashed when tax receipts tumble

lawred2

Sweet.Science wrote: »

A 3 month pause to banks isnt going to affect them too much . Plenty of credit still available. Things will bounce back quick enough

3 months?

WHO saying 12 months at least for a vaccine... you think we'll be sorted by June?

FernandoTorres

I can't figure out whether the people saying there won't be an effect on property prices are deluded, in denial or plain crazy. This is a massive event and one of the biggest financial meltdowns we've ever seen. Property is an illiquid asset so the effect will not be seen for a while yet.

To suggest that there can be a situation where there is a 40%+ fall in equity markets, mass unemployment and a shutdown of the global economy but Irish property prices remain static is insane. I'd suggest reading through some of the threads from 2007/2008 as you can see the same delusion there and we all know how that ended up.

garhjw

FernandoTorres wrote: »

I can't figure out whether the people saying there won't be an effect on property prices are deluded, in denial or plain crazy. This is a massive event and one of the biggest financial meltdowns we've ever seen. Property is an illiquid asset so the effect will not be seen for a while yet.

To suggest that there can be a situation where there is a 40%+ fall in equity markets, mass unemployment and a shutdown of the global economy but Irish property prices remain static is insane. I'd suggest reading through some of the threads from 2007/2008 as you can see the same delusion there and we all know how that ended up.

There will be an impact but we don’t know the extent and for how long or when. Difference from 2008 is there is not an over supply of units, especially in urban areas - Dublin, cork etc.

JJJackal

Zenify wrote: »

Everyone I know in the process of buying has pulled out. Is that nothing?

It makes sense to postpone a purchase at present. For many reasons including buyers think they will get a reduction when this is over.

Alas in my opinion nobody knows

mosii

I think at best ,there is going to be a recession after this,starting in about 12 months .House sales will fall off a cliff in the interim,so its only common sense that this is going to affect house prices.I think they are overvalued anyway,even outside pent up demand.

SozBbz

garhjw wrote: »

There will be an impact but we don’t know the extent and for how long or when. Difference from 2008 is there is not an over supply of units, especially in urban areas - Dublin, cork etc.

Exactly.

You can't compare this to 2008 because this is more akin to a natural disaster.
in 2008, it was build on borrowed "wealth". People thought they were rich because they had apartments in Bulgaria and were building investment property in Leitrim. Very little equity, everything was based on prices going up, and people just assumed that prices would always go up.

Yes, huge numbers of people have lost jobs but many of those jobs will come back once we've broken the back of this. It will probably get worse before it gets better, but it will get better. People wont suddenly have lost the desire to go out and socialise in bars and restaurants, take holidays, buy consumer goods. Speaking personally, I will definitely want to get out and support small businesses as soon as possible.

What I see coming is inflation, the likes of which we won't have seen since before the crash, due to governments printing money to get us beyond this crisis. That could actually make nominal house prices go up, and decrease in real terms the value of the borrowing made by existing home owners. Too early to say if this would mean houses are actually more affordable in real terms , I'm not sure. Obviously there will be no volume of sales for the coming months - but I don't see why anyone would drop their prices to force a sale (outside of the 3 D's - Dead, Divorced, Desperate)... to be honest I'm not sure it would work anyway, as if the banks stop allowing people to draw down until things return to a more certain footing, then it would be moot anyway.

We won't know anyway because the one thing that is certain is there won't be any significant number of sales going through to establish what values are looking like.

Assetbacked

It's the rental market where returns will plummet, as anticipated. This only hurts investors and speculators and it was a bubble anyway so it is not unexpected. This looks like it will fall quite dramatically as inward migration is at zero for the next few months (corporate lets and new jobs) at least as is tourism (Airbnbs). I also expect that we will start to see job losses with some of the big multinationals like Indeed (recruitment company), Airbnb and the online advertisement companies with big sales teams here.

There is still pent up demand for houses and a lot of people renting who are not shackled with debt. With lowering rents, of course people will be happier to rent for longer now that it won't cost as much as a mortgage but it also means people who are renting can save more money. However, it is likely to not drop only at the more affordable levels (under €600k), the less affordable houses could see big drops. It will probably take a while to see the market moving again in any event.

milhous

Nvm the billions of euro invested in loan books that "vulture funds" have bought up. These will be offloaded as their investors start trying to take their money out. The trillions of euro taking out of the European economy and the same in America which will all come down to huge job loss.

I'm not saying it won't recover eventually, but to think that the property prices here won't be effected too much here is ludacris.

I'd be waiting to buy.

landofthetree

SozBbz wrote: »

Exactly.

You can't compare this to 2008 because this is more akin to a natural disaster.
in 2008, it was build on borrowed "wealth". People thought they were rich because they had apartments in Bulgaria and were building investment property in Leitrim. Very little equity, everything was based on prices going up, and people just assumed that prices would always go up.

Yes, huge numbers of people have lost jobs but many of those jobs will come back once we've broken the back of this. It will probably get worse before it gets better, but it will get better. People wont suddenly have lost the desire to go out and socialise in bars and restaurants, take holidays, buy consumer goods. Speaking personally, I will definitely want to get out and support small businesses as soon as possible.

What I see coming is inflation, the likes of which we won't have seen since before the crash, due to governments printing money to get us beyond this crisis. That could actually make nominal house prices go up, and decrease in real terms the value of the borrowing made by existing home owners. Too early to say if this would mean houses are actually more affordable in real terms , I'm not sure. Obviously there will be no volume of sales for the coming months - but I don't see why anyone would drop their prices to force a sale (outside of the 3 D's - Dead, Divorced, Desperate)... to be honest I'm not sure it would work anyway, as if the banks stop allowing people to draw down until things return to a more certain footing, then it would be moot anyway.

We won't know anyway because the one thing that is certain is there won't be any significant number of sales going through to establish what values are looking like.

That's the problem. Many many businesses won't get through this.

Some of the biggest companies have feck all cash reserves

coolshannagh28

Another factor in the Irish market is the presence of so much US big money which is supporting prices , a lot depends on how this affects them ; if they feel the pinch in the US they may cut and run in Ireland with major consequences.

[Deleted User]

SozBbz wrote: »

..............

What I see coming is inflation, the likes of which we won't have seen since before the crash, due to governments printing money to get us beyond this crisis. That could actually make nominal house prices go up, and decrease in real terms the value of the borrowing made by existing home owners..................

We have a nation will have spent billions on payments etc linked to Covid19.
That will have to be recouped over the next decade, I don't think we'll see house prices going up.

Rents will certainly fall due to the increased supply as loads of AirB&Bs are now available to rent. Once they become someone's home again they won't be going back on AirB&B unless they are sold ......... tourism will be quite a while recovering from Covid19.

Roberto_gas

Have been waiting for 2 years now for prices to fall ! Another 1 year wait perhaps.....how is everyone else doing ?

PommieBast

JJJackal wrote: »

It makes sense to postpone a purchase at present.

Never mind postponement, more a case of just nothing getting done..

landofthetree wrote: »

Some of the biggest companies have feck all cash reserves

I expect some Carillion-style collapses in the near future.

From https://www.ft.com/content/c98362f0-6aa4-11ea-800d-da70cff6e4d3

"The corporate sector looks a lot like the financial sector did [..] highly leveraged [..] reliant on financial engineering to create the illusion of growth and innovation."

0gac3yjefb5sv7

Roberto_gas wrote: »

Have been waiting for 2 years now for prices to fall ! Another 1 year wait perhaps.....how is everyone else doing ?

Same, I am close to sale agreed now & don't know if I can wait any longer.

It always seems to be next year is the right time.

lawred2

Roberto_gas wrote: »

Have been waiting for 2 years now for prices to fall ! Another 1 year wait perhaps.....how is everyone else doing ?

Let's hope you don't lose your job in the meanwhile

[Deleted User]

Roberto_gas wrote: »

Have been waiting for 2 years now for prices to fall ! Another 1 year wait perhaps.....how is everyone else doing ?

How much rent have you paid in the meantime?

[Deleted User]

Interested Observer wrote: »

How much rent have you paid in the meantime?

I doubt he's spent 30/40% of the price of a house anyway.

19233974

Im absolutely amazed that people think this wont impact property prices. This is going to be the worst pandemic of modern history. Looking at the numbers the UK and US will be a war zone within 2 months unless drastic drastic action is taken and we will have hundreds of thousands of job losses and companies folding. Ho could it not impact property, this is going to change the world economically and culturally

[Deleted User]

19233974 wrote: »

Im absolutely amazed that people think this wont impact property prices...........

Folks see Ireland doing a decent ish job at trying to slow the rate of infection spread but as you say the US and the UK are a joke.

Even if Ireland's domestic economy gets back on track we are hugely exposed to externals.

Buying now is insanity but over the next year or two we might see transactions down to 10,000/annum again. So lots of bargain hunters will be disappointed I reckon. Folk sh1ting on since 2007 that they are waiting to but, well most of them are still waiting and they'll continue to do so.

Roberto_gas

Interested Observer wrote: »

How much rent have you paid in the meantime?

Rent is 18k per year ! Job is well secured... ! If markets correct 30-40% i wont need a mortgage !

sorry for disappointment !

Roberto_gas

Pheonix10 wrote: »

Same, I am close to sale agreed now & don't know if I can wait any longer.

It always seems to be next year is the right time.

If your rent is below market average and you have a secure job you might want to wait !

Roberto_gas

Interested Observer wrote: »

How much rent have you paid in the meantime?

36k so far

Dante

I want whatever a lot of people in this thread are smoking. How can anybody honestly believe that the housing market will not be compeltely decimated by this? The 08 crisis will be nothing compared to what is on the horizon globally. Mass fear, unemployment, personal/corporate/soverign defaults, zero credit lines, and probable hyperinflation as central banks pump more money into the supply to keep economies afloat. Its hard to see how any market won't be crippled by this, let alone the housing market which is heavily dependent on a well-oiled economy.