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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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fliball123

GreeBo wrote: »

The house spec is continually rising though, there are far more materials going into houses today than there were 15 years ago.

Not to mention the new health and safety and green codes new houses has to adhere to, sure it costs a fair whack just to have someone come out and tick the box to say the house has adhered to the above codes.

awec

GreeBo wrote: »

Is that a fall in supply or demand though?

Demand. Ireland had an over-supply of properties fueled by super-easy-to-get credit during the tiger. Once that credit dried up, there was suddenly a large supply and low demand, so prices dropped.

GreeBo

Interested Observer wrote: »

They go hand-in-hand to some extent surely. If a homeowner decides not to move (reducing demand) their own property won't go on the market either (reducing supply). Builders went bust reducing supply, hundreds of thousands lost their jobs reducing demand. Or else it could have been external factors like being much harder to get a mortgage.

They go hand in hand to some degree, but reduced demand tells you more about the economy/market than reduced supply IMO.

GreeBo

voluntary wrote: »

The cost of construction is rapidly falling. Check the raw material prices, they're falling as well as fuel. This will soon translate to cheaper building materials. High unemployment releases a lot of man power into the labour market, labour cost is going down. The speculative land prices is going down too, similarly to other assets, investors run away to cash (US Dollars).

The house spec is continually rising though, there are far more materials going into houses today than there were 15 years ago.

Knex*

Graham wrote: »

I do admire your absolute certainty that there is a 'correct' value for property and that market value is somehow incorrect.

A single, first time buyer needs an income of about 120k to buy a house in Dublin.

It's hard not to say property is overvalued.

GreeBo

lomb wrote: »

That isn't worth more than 550-600k. I've no idea the mindset of the lunatic that buys this house. Even if you have the money why would anyone wealthy want to live there? Alot of South Dublin property is overbought and alot of other property isn't.

Ah come on now, of course its worth more than 600K!

If a 150m2 house in Clonskeagh is 600K, what is the same house in Stepaside worth?
How about the same house in Celbridge?

Soon enough you get to the stage where you cant build a house for less than you sell it. => building stops.

[Deleted User]

GreeBo wrote: »

Is that a fall in supply or demand though?

They go hand-in-hand to some extent surely. If a homeowner decides not to move (reducing demand) their own property won't go on the market either (reducing supply). Builders went bust reducing supply, hundreds of thousands lost their jobs reducing demand. Or else it could have been external factors like being much harder to get a mortgage.

Assetbacked

Graham wrote: »

I do admire your absolute certainty that there is a 'correct' value for property and that market value is somehow incorrect.

3.5 times salary is affordability. Looking at median salaries, that renders prices in Ireland beyond affordable. Hence, correction.

voluntary

cnocbui wrote: »

Houses have an underlying basic cost of construction. If the market considers a house to be worth less than it costs to build, no one will build them.

The cost of construction is rapidly falling. Check the raw material prices, they're falling as well as fuel. This will soon translate to cheaper building materials. High unemployment releases a lot of man power into the labour market, labour cost is going down. The speculative land prices is going down too, similarly to other assets, investors run away to cash (US Dollars).

GreeBo

The Belly wrote: »

Well from the table below there is a fair fall in lending during a recession if the last one was anything to go by.
Source Central Bank

Loan approvals - All Agencies - by year
Year New Houses Other Houses Totals
Number Value €m Number Value €m Number Value €m
2000 33,289 3726.2 47,567 5277.4 80,856 9003.7
2001 29,277 3695.9 39,785 5036.6 69,062 8732.6
2002 39,399 5985.9 53,737 8373.4 93,136 14359.3
2003 39,676 6968.2 58,212 10477.8 97,888 17446.1
2004 50,018 9750 54,287 11269.2 104,305 21019.2
2005 58,104 12971 61,933 14782.3 120,037 27753.3
2006 53,895 13994.7 60,698 17387.5 114,593 31382.2
2007 40,497 10560.4 48,250 13503.7 88,747 24064.1
2008 26,293 6625.2 29,586 8515 55,879 15140.3
2009 12,584 2719.7 15,340 3711.4 27,924 6431.1
2010 6,991 1,354.60 13,030 2,799.20 20,021 4,153.90
2011 2,960 541.2 9,874 1886.4 12,834 2427.7
2012 3,457 599.5 14,312 2625.5 17,769 3225
2013 2,974 530.6 16,284 3178.6 19,258 3709.3
2014 4,461 869.7 27,436 5317.4 31,897 6187.2
2015 4,685 996.5 27,551 5329.4 32,236 6326
2016 6,450 1517.1 28,587 5767.7 35,037 7284.8

Notes:
Source: From lending institutions and local authorities

Is that a fall in supply or demand though?

cnocbui

SozBbz wrote: »

Completely agree - who's to say what the correct price is?

A house is worth what a person is willing to pay for it, end of story.

Houses have an underlying basic cost of construction. If the market considers a house to be worth less than it costs to build, no one will build them.

Cuddlesworth

voluntary wrote: »

If you're hunting for a home right now I think there may be some good opportunities in former airbnb market very soon. Some will be trying to enter the regular rental market, but I'm near certain many will exit the investments at this stage, especially when the rental market is at standstill and even asking lower rents may not currently secure tenants.

I think the rather large glut of properties on the market recently(rental and sale) are air B&B esc properties returning to the market. Because for all of them, their next 3-4 months are dead, probably 6-9 months and they know it.

SozBbz

Graham wrote: »

I do admire your absolute certainty that there is a 'correct' value for property and that market value is somehow incorrect.

Completely agree - who's to say what the correct price is?

A house is worth what a person is willing to pay for it, end of story.

voluntary

If you're hunting for a home right now I think there may be some good opportunities in former airbnb market very soon. Some will be trying to enter the regular rental market, but I'm near certain many will exit the investments at this stage, especially when the rental market is at standstill and even asking lower rents may not currently secure tenants.

awec

LuckyLloyd wrote: »

You’re completely right, but the answer to your last question remains “no house”. Do not consign yourself to a decade or more of negative equity. Stay mobile. Stay flexible. Stay liquid.

Easy for young, socially mobile singletons to say.

Graham

Assetbacked wrote: »

For example, calling it a drop rather than a correction indicates their view on the price decreases.

I do admire your absolute certainty that there is a 'correct' value for property and that market value is somehow incorrect.

lomb

Augeo wrote: »

........... I bought my first property in 2005, I very much gave a sh1t what happened to property prices over the following decade.

Likely on a tracker though with a payment less than rent or even current buyers paying 3 percent

Assetbacked

https://m.independent.ie/business/personal-finance/house-prices-could-fall-by-up-to-20pc-amid-coronavirus-uncertainty-report-39071128.html

Indo article on a Davy report which outlines scenarios where property prices could drop by up to 20%. I always take reports from the likes of Davy with a pinch of salt given their vested interest in the market. For example, calling it a drop rather than a correction indicates their view on the price decreases. An interesting point in the article notes the price of land is expected to decrease which of course makes it cheaper to build.

[Deleted User]

Interested Observer wrote: »

Or, I can buy the house that myself, my wife and my kids all now live in and just not give a **** what happens to property prices over the next decade.

........... I bought my first property in 2005, I very much gave a sh1t what happened to property prices over the following decade.

garhjw

lomb wrote: »

That isn't worth more than 550-600k. I've no idea the mindset of the lunatic that buys this house. Even if you have the money why would anyone wealthy want to live there? Alot of South Dublin property is overbought and alot of other property isn't.

It’s definitely worth more than €600k but is overvalued at €1m+ if we ignore the current issues.

lomb

Interested Observer wrote: »

Or, I can buy the house that myself, my wife and my kids all now live in and just not give a **** what happens to property prices over the next decade.

Exactly. Property is a long term purchase

lomb

kevinc565 wrote: »

I love it when these unrealistically priced houses fall in price. Still way too expensive though!

Down €100k earlier this month.

https://www.myhome.ie/residential/brochure/3-whitebeam-avenue-clonskeagh-dublin-14-d14a3t7/4406210

That isn't worth more than 550-600k. I've no idea the mindset of the lunatic that buys this house. Even if you have the money why would anyone wealthy want to live there? Alot of South Dublin property is overbought and alot of other property isn't.

[Deleted User]

LuckyLloyd wrote: »

You’re completely right, but the answer to your last question remains “no house”. Do not consign yourself to a decade or more of negative equity. Stay mobile. Stay flexible. Stay liquid.

Or, I can buy the house that myself, my wife and my kids all now live in and just not give a **** what happens to property prices over the next decade.

Ush1

LuckyLloyd wrote: »

You’re completely right, but the answer to your last question remains “no house”. Do not consign yourself to a decade or more of negative equity. Stay mobile. Stay flexible. Stay liquid.

People renting with families often don't have those options, they need security.

Maitguel

There are 2 property markets, there is the Dublin market and the rest of Ireland market. There is no doubt there will be a correction in the Dublin, the level of this correction is what is unknown. As for the rest of the country it really depends on the property. What incentive is there for person to sell their home at a loss? It is extremely difficult to evict people and will be even more so after this, so why would people dramatically drop their prices on these houses in the coming months; when they can continue to stay in them or at the very least rent then and make a return. Perhaps some landlords will want to cash out now after having a good run for many years but again the bulk of this supply will be in the inner Dublin City and mainly apartments.

handlemaster

landofthetree wrote: »

In 3-4 weeks time everybody will see how bad things are.

Anybody thinking we aren't facing a huge downturn is in for a shock.

So true.... they say when America sneezes europe gets a cold.. read below from the bbc

Last week Treasury Secretary Steve Mnuchin predicted that US unemployment could reach 20%. On Thursday the Treasury Department will release last week's new jobless claims, and the numbers are sure to be in the millions. A Goldman Sachs report estimated that the nation's gross domestic product in the second quarter could shrink by 24%, dwarfing the previous 10% record decline in 1958.

LuckyLloyd

awec wrote: »

If they are on the property ladder.

Let's be absolutely clear here, because it seems to be getting lost, if some people get bargains it's because many more people have been taken out of the market.

That is to say, this notion of "everyone wait, everyone get a bargain" is just not how it works. It's nonsense.

The choice for many people is not overpriced house now or cheap house later. It's overpriced house now vs no house later.

You’re completely right, but the answer to your last question remains “no house”. Do not consign yourself to a decade or more of negative equity. Stay mobile. Stay flexible. Stay liquid.

Graham

LuasSimon wrote: »

A third higher rate of tax circa 50% will be needed for central funds for welfare etc

Mod

That would be an interesting discussion for the Taxation or Economics forum.

milhous

LuasSimon wrote: »

The government will have to recoup taxs from somewhere when this is over, increased property tax might balance the books to replace business rates for local councils.
A third higher rate of tax circa 50% will be needed for central funds for welfare etc

I know theres a difference between úsc and tax.. But with both combined for a large number of people theyre at more than 50% already.
Anything more for us and we'll just decrease how much we work.

TheSheriff

The rental drops are quite staggering to be honest, I have old active daft alerts from two years back for one beds in Dublin around 1300e have gotten relatively nothing over the past year.

Must have had over 20 emails today with properties.

Also, another email today re a property: this one we hadn't bid on, just went to the viewing maybe two months back. Property has dropped 25k from 440k.