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Property Market 2020

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    #3722
    Cyrus
    Registered Users Posts: 19,904 ✭✭✭✭Cyrus


    Mic 1972 wrote: »
    Taking 1 year to buy a second hand property is pretty standard considering the time spent searching for the right property, evaluating the cost of renovation and then going through with the sale. It's the same if you buy second hand property right now. On the other hand the market was moving very fast in 2013 already, not sure where you are getting your facts,

    between 2003 and 2019 only one year had fewer sales than 2013, thats a fact. so the market wasnt moving very fast.


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    #3723
    MrMusician18
    Registered Users Posts: 7,281 ✭✭✭MrMusician18


    JimmyVik wrote: »
    I dont think there will be much of problem with AirBnbs soon.
    I think there will be a major shortage of rental properties and a shortage of sort term lets for that matter.
    This will be the catalyst for private landlords who were hanging in there hoping things would get better for them to sell up and ship out.


    The plus side is there may be a good few extra houses and apartments for a while, but I think building of new properties is going to slow to a crawl and that overhang will be swept up by buyers pretty quickly.
    So the renters will be competing for an even smaller pool of rentals that there are now.

    That doesn't make sense unless the population explodes and building supply doesn't match. In the short term this is not going to happen, extra supply is going to come from foreign unemployed workers leaving. Ireland has a large, mobile, foreign born working cohort in the population - and they are not going to stay here to sit this out all the while paying enormous rents. Many will go home - just like in the last crisis.

    This in turn will cause rents to collapse, forcing some but by no means all, (no one will want to sell in a falling market) to sell, thus increasing supply on the sales side. No one wants to buy in a falling market which in turn depresses demand and prices further.

    The contraction in the market ultimately comes from the low end of the jobs and employment market leaving, and that is of course directly related to the success of the economy in general. These economic loops all feed into one another - break one and it impacts several others.


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    #3724
    Hubertj
    Registered Users Posts: 2,000 ✭✭✭Hubertj


    MrMusician18 wrote: »
    That doesn't make sense unless the population explodes and building supply doesn't match. In the short term this is not going to happen, extra supply is going to come from foreign unemployed workers leaving. Ireland has a large, mobile, foreign born working cohort in the population - and they are not going to stay here to sit this out all the while paying enormous rents. Many will go home - just like in the last crisis.

    This in turn will cause rents to collapse, forcing some but by no means all, (no one will want to sell in a falling market) to sell, thus increasing supply on the sales side. No one wants to buy in a falling market which in turn depresses demand and prices further.

    The contraction in the market ultimately comes from the low end of the jobs and employment market leaving, and that is of course directly related to the success of the economy in general. These economic loops all feed into one another - break one and it impacts several others.


    where will the workers move to? I think there will be an impact on the global economy. If we take Brazilians working in the service sector in Ireland, will they return home to Brazil where their employment prospects and earning potential is even worse? How does the social welfare system in Ireland compare to Brazil? Would they not stay and search for employment? I'm not saying people wont leave Ireland and return home but people will weigh up the benefit......
    Why will rents collapse? Does that mean a 20% reduction or further? Will supply exceed demand by that much?
    I'm not a landlord or tenant and dont know much about the property market but there seems to be a lot of variables to consider.


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    #3725
    Ap2020
    Registered Users Posts: 39 ✭Ap2020


    Hubertj wrote: »
    where will the workers move to? I think there will be an impact on the global economy. If we take Brazilians working in the service sector in Ireland, will they return home to Brazil where their employment prospects and earning potential is even worse? How does the social welfare system in Ireland compare to Brazil? Would they not stay and search for employment? I'm not saying people wont leave Ireland and return home but people will weigh up the benefit......
    Why will rents collapse? Does that mean a 20% reduction or further? Will supply exceed demand by that much?
    I'm not a landlord or tenant and dont know much about the property market but there seems to be a lot of variables to consider.

    Many of the workers here from Brazil are here on study visas, they will not have any access to social welfare while on a study visa where they are a non EEA national.

    In general it costs a lot of money for them to be here, and if they cannot earn then they will quickly be unable to afford to stay. We're also likely to see the collapse of a lot of the English language schools that they attend, many of which are pretty fly-by-night operations - that will reduce the flow of new students pretty quickly even if others are still willing to travel.

    As for how their social welfare conditions are at home, however poor they might be they are somewhat less relevant than their familial support structures at home. Few people want to be unemployed in a foreign country, it is a far scarier prospect when you do not have a home to move back to and a family as a safety net.


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    #3726
    MrMusician18
    Registered Users Posts: 7,281 ✭✭✭MrMusician18


    Hubertj wrote: »
    where will the workers move to? I think there will be an impact on the global economy. If we take Brazilians working in the service sector in Ireland, will they return home to Brazil where their employment prospects and earning potential is even worse? How does the social welfare system in Ireland compare to Brazil? Would they not stay and search for employment? I'm not saying people wont leave Ireland and return home but people will weigh up the benefit......
    Why will rents collapse? Does that mean a 20% reduction or further? Will supply exceed demand by that much?
    I'm not a landlord or tenant and dont know much about the property market but there seems to be a lot of variables to consider.

    They won't stay. They will go home to their families. A generous social welfare system is hardly any use when current rents would swallow up close to 75% of it for renting only a room in Dublin. And that's assuming they are entitled to it.

    Many foreigners are not.

    Supply only needs to slightly exceed demand for a dramatic impact on price. 5% oversupply doesn't mean a 5% reduction in prices, it is often much much more than that as the market has to find a new equilibrium level.


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    #3727
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    To summarise this thread, "Some" people seem to think they will get all of the advantages of a falling market with none of the disadvantages. They are predicting some sort of wealth redistribution will happen where the rich get poorer and the less get richer.

    Also even though the economics of this are global so no one place is better than another, and demographics are entirely different than last time, it will happen exactly the same. (Regardless of not being aware of what happened last time) Except this time those that missed the boat the last time will be the only ones to catch it this time.


    That pretty much sums up the last few weeks of this forum.


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    #3728
    Ap2020
    Registered Users Posts: 39 ✭Ap2020


    beauf wrote: »

    That pretty much sums up the last few weeks of this forum.

    Hardly just the last few weeks, in fairness...


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    #3729
    MrMusician18
    Registered Users Posts: 7,281 ✭✭✭MrMusician18


    beauf wrote: »
    To summarise this thread, "Some" people seem to think they will get all of the advantages of a falling market with none of the disadvantages. They are predicting some sort of wealth redistribution will happen where the rich get poorer and the less get richer.

    Also even though the economics of this are global so no one place is better than another, and demographics are entirely different than last time, it will happen exactly the same. (Regardless of not being aware of what happened last time) Except this time those that missed the boat the last time will be the only ones to catch it this time.


    That pretty much sums up the last few weeks of this forum.

    You are forgetting the "others", the landlords and property owners, who think that the massive economic damage and the virtual freezing of the entire economy, not just property will have close to negligible impact on the value and returns on their investment.

    When the economy thaws, the state will be left to foot a €20bn bill that it hadn't budgeted for. Business at best will be missing an entire quarters worth of revenue and tourism and transport will be looking to survive 2021 as the remainder of the year will be a write off.

    No one knows what way the property market will react, but Id bet the house and the farm that it will not be as benign as some are hoping and trying to convince themselves that it will. It's 2007-8 levels of head in the sand stuff.


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    #3730
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    MrMusician18 wrote: »
    They won't stay. They will go home to their families. A generous social welfare system is hardly any use when current rents would swallow up close to 75% of it for renting only a room in Dublin. And that's assuming they are entitled to it.

    Many foreigners are not.

    Supply only needs to slightly exceed demand for a dramatic impact on price. 5% oversupply doesn't mean a 5% reduction in prices, it is often much much more than that as the market has to find a new equilibrium level.

    A lot of "foreigners" are here 20yrs. This is home. A lot are in very well paid jobs many won't be going near social welfare. They will have a load of cash and have good business heads. They will be looking to take advantage of the market.

    What rent. Its frozen with no evictions. Everyone's predicting immediate massive falls in rent. Why would you not wait and see. People are predicting low rent and plentiful supply. Sounds like good reason to stay.


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    #3731
    Queasy Tadpole
    Registered Users Posts: 219 ✭✭Queasy Tadpole


    So whats everyone best guess at how much the prices on average in Dublin are going to drop? 20%? 30%?

    Honestly feeling my heart sink at the moment, along with everything else happening due to this mess my we might be priced out of selling and stuck here another few years.


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    #3732
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    MrMusician18 wrote: »
    You are forgetting the "others", the landlords and property owners, who think that the massive economic damage and the virtual freezing of the entire economy, not just property will have close to negligible impact on the value and returns on their investment....

    Your idea is that people savvy enough to build wealth won't see the opportunities here.

    They can sell up and buy back in later. They will cash rich and will be able to out bid people.

    Far less people over leveraged this time.


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    #3733
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Queasy Tadpole wrote: »
    So whats everyone best guess at how much the prices on average in Dublin are going to drop? 20%? 30%?

    Honestly feeling my heart sink at the moment, along with everything else happening due to this mess my we might be priced out of selling and stuck here another few years.

    Going on the predictions here property is likely to be free in about 6 days time.

    Your only guide is economies coming out of lock down. Look at their rent and property markets.


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    #3734
    MrMusician18
    Registered Users Posts: 7,281 ✭✭✭MrMusician18


    beauf wrote: »
    A lot of "foreigners" are here 20yrs. This is home. A lot are in very well paid jobs many won't be going near social welfare. They will have a load of cash and have good business heads. They will be looking to take advantage of the market.

    What rent. Its frozen with no evictions. Everyone's predicting immediate massive falls in rent. Why would you not wait and see. People are predicting low rent and plentiful supply. Sounds like good reason to stay.

    A lot of foreigners were here 10 years, made a good life here and still left in the great recession. Many of them even had good jobs, professionals that thought themselves safe enough - but the rot spread from construction and development through the whole economy.

    Many wealthy will stay here, and indeed many will take advantage of a looser market, but it's those on precarious employment and students that are difference between under and over supply. Small percentages under/over equilibrium have a dramatic impact on price. It's why you see €5k/month airbnbs for 50% on daft and he won't even get that - it will remain vacant.


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    #3735
    dubstepper
    Registered Users Posts: 592 ✭✭✭dubstepper


    beauf wrote: »
    They can sell up and buy back in later. They will cash rich and will be able to out bid people.


    Think the horse has bolted on selling up to buy later.


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    #3736
    Marius34
    Registered Users Posts: 1,173 ✭✭✭Marius34


    Queasy Tadpole wrote: »
    So whats everyone best guess at how much the prices on average in Dublin are going to drop? 20%? 30%?

    Honestly feeling my heart sink at the moment, along with everything else happening due to this mess my we might be priced out of selling and stuck here another few years.

    It would be nice to have polls on boards for next 3-12 months prediction, I guess there is no possibility here..
    So that we could see who are more reasonable here in the discussion, and who are off to the moon with their predictions.
    My guess fall of -5% (+/-2%).


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    #3737
    voluntary
    Registered Users Posts: 871 ✭✭✭voluntary


    Marius34 wrote: »
    It would be nice to have polls on boards for next 3-12 months prediction, I guess there is no possibility here..
    So that we could see who are more reasonable here in the discussion, and who are off to the moon with their predictions.
    My guess fall of -5% (+/-2%).

    My bet for residential properties in dublin 12 months from now:

    - Affordable housing < 250k 10% drop
    - around 300k 15% drop
    - over 400k 20% drop


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    #3738
    dor843088
    Registered Users Posts: 1,171 ✭✭✭dor843088


    Marius34 wrote: »
    It would be nice to have polls on boards for next 3-12 months prediction, I guess there is no possibility here..
    So that we could see who are more reasonable here in the discussion, and who are off to the moon with their predictions.
    My guess fall of -5% (+/-2%).

    So a fall of 15k on a 300k house ? That's optimistic for sure. Think theres sale agreed folk who have already negotiated more than that off previously agreed figures .


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    #3739
    dor843088
    Registered Users Posts: 1,171 ✭✭✭dor843088


    First to come down to earth will be all the frothy priced properties. The silliness . The grand canal docks of this world . The stuff everyone knew was madness even at the time but just shrugged off . I think when this is said and done the average couple will be able to afford an average house because the speculators ,the funds ,the construction industry etc will have been brought back down to reality. Until next time.


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    #3740
    Claw Hammer
    Registered Users Posts: 6,179 ✭✭✭Claw Hammer


    dor843088 wrote: »
    First to come down to earth will be all the frothy priced properties. The silliness . The grand canal docks of this world . The stuff everyone knew was madness even at the time but just shrugged off . I think when this is said and done the average couple will be able to afford an average house because the speculators ,the funds ,the construction industry etc will have been brought back down to reality. Until next time.

    The funds will be getting paid to borrow money. Build to rent will be the only show in town.


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    #3741
    LuckyLloyd
    Registered Users Posts: 36,237 ✭✭✭✭LuckyLloyd


    Queasy Tadpole wrote: »
    So whats everyone best guess at how much the prices on average in Dublin are going to drop? 20%? 30%?

    Honestly feeling my heart sink at the moment, along with everything else happening due to this mess my we might be priced out of selling and stuck here another few years.

    A ~20% drop is probable imo. It will not distribute evenly across the board - expect the higher brackets to fall less and bigger drops to take place in the commuter 2 - 3 bed market.


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    #3742
    Hubertj
    Registered Users Posts: 2,000 ✭✭✭Hubertj


    dor843088 wrote: »
    First to come down to earth will be all the frothy priced properties. The silliness . The grand canal docks of this world . The stuff everyone knew was madness even at the time but just shrugged off . I think when this is said and done the average couple will be able to afford an average house because the speculators ,the funds ,the construction industry etc will have been brought back down to reality. Until next time.

    what do you mean by the construction industry brought back down to earth? Thousands of constructions workers unemployed? Yea that serves them right for earning a living. Regarding the construction companies the margins dont look that great on new build sales......

    I do agree with you on some of the rents at top end stuff around GCD. Mad money altogether


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    #3743
    PommieBast
    Registered Users Posts: 2,633 ✭✭✭PommieBast


    Marius34 wrote: »
    My guess fall of -5% (+/-2%).
    Typical Dublin 2-bed apartment (circa €300k) down 10%.


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    #3744
    dor843088
    Registered Users Posts: 1,171 ✭✭✭dor843088


    Claw Hammer wrote: »
    The funds will be getting paid to borrow money. Build to rent will be the only show in town.

    They didnt build here in the last downturn . Theres plenty of better places to seek a yield right now than build to rent. Nobody will be building anything given the choice for quite a while I imagine.


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    #3745
    Claw Hammer
    Registered Users Posts: 6,179 ✭✭✭Claw Hammer


    dor843088 wrote: »
    They didnt build here in the last downturn . Theres plenty of better places to seek a yield right now than build to rent. Nobody will be building anything given the choice for quite a while I imagine.

    They bought up unfinished developments and sites. With fee money they will run riot.


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    #3746
    MrMusician18
    Registered Users Posts: 7,281 ✭✭✭MrMusician18


    LuckyLloyd wrote: »
    A ~20% drop is probable imo. It will not distribute evenly across the board - expect the higher brackets to fall less and bigger drops to take place in the commuter 2 - 3 bed market.

    I think the reverse is likely. The highest priced stuff is difficult to shift at the best of times so that's likely to see the largest falls - the cohort of buyers is already small and will get smaller. Although the market will also freeze up - I'd expect a substantial decrease in high end stuff going up for sale.

    At the low end you'll still have couples that have built substantial savings and trader uppers. There are many more participants in that market, lots with the need to move so it will keep churning away. Falls will be smaller at this level.


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    #3747
    Assetbacked
    Closed Accounts Posts: 2,969 ✭✭✭Assetbacked


    beauf wrote: »
    To summarise this thread, "Some" people seem to think they will get all of the advantages of a falling market with none of the disadvantages. They are predicting some sort of wealth redistribution will happen where the rich get poorer and the less get richer.

    Also even though the economics of this are global so no one place is better than another, and demographics are entirely different than last time, it will happen exactly the same. (Regardless of not being aware of what happened last time) Except this time those that missed the boat the last time will be the only ones to catch it this time.


    That pretty much sums up the last few weeks of this forum.

    It is worth noting that housing in Ireland is not just influenced by economic factors. SF did so well in the recent election, mainly due to the electorate being mightily annoyed at the lack of affordability in the housing market. This anger has not subsided and is a call for strong political action to take meaningful measures to make housing affordable. While the recent crisis is likely to stifle demand and a knock on is to bring down prices and people will be happy with this (not realising that it could also hurt them), irrespective of this, there is pressure on the government to make housing more affordable.


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    #3748
    mcbert
    Registered Users Posts: 460 ✭✭mcbert


    I'm not going to pick the facts that suit me and ignore the ones that don't, here at least, so without providing any proof, I'm expecting some disappointment here in some months when a combination of 1) prices don't drop as far as expected, 2) if they do drop, they may not for that long, 3) if prices drop, availability may reduce, so many still won't find their dream home, 4) even if dream home found at affordable price, credit may be less available.


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    #3749
    SozBbz
    Registered Users Posts: 1,889 ✭✭✭SozBbz


    Assetbacked wrote: »
    It is worth noting that housing in Ireland is not just influenced by economic factors. SF did so well in the recent election, mainly due to the electorate being mightily annoyed at the lack of affordability in the housing market. This anger has not subsided and is a call for strong political action to take meaningful measures to make housing affordable. While the recent crisis is likely to stifle demand and a knock on is to bring down prices and people will be happy with this (not realising that it could also hurt them), irrespective of this, there is pressure on the government to make housing more affordable.

    I think you're confusing politics influencing housing wiht housing influencing politics.

    Housing has undoubtedly influenced the last general election. Will politics in turn influence housing, or will things be as they ever were. Only time will tell.


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    #3750
    dor843088
    Registered Users Posts: 1,171 ✭✭✭dor843088


    Hubertj wrote: »
    what do you mean by the construction industry brought back down to earth? Thousands of constructions workers unemployed? Yea that serves them right for earning a living. Regarding the construction companies the margins dont look that great on new build sales......

    I do agree with you on some of the rents at top end stuff around GCD. Mad money altogether

    Concrete cartels , developers ratcheting up phase prices ,building supply costs going through the roof. They all played a part in the madness. Although I do have a lot of sympathy for the ordinary construction worker.


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    #3751
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Assetbacked wrote: »
    It is worth noting that housing in Ireland is not just influenced by economic factors. SF did so well in the recent election, mainly due to the electorate being mightily annoyed at the lack of affordability in the housing market. This anger has not subsided and is a call for strong political action to take meaningful measures to make housing affordable. While the recent crisis is likely to stifle demand and a knock on is to bring down prices and people will be happy with this (not realising that it could also hurt them), irrespective of this, there is pressure on the government to make housing more affordable.

    ...and SF still couldn't get in.

    Govt's have pretty much been anti social housing for decades.
    You'll be a while yet waiting for that bus to arrive.


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