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Property Market 2020

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    #3782
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    GreeBo wrote: »
    .........

    If your fears are true then there is a killing to be made by anyone with money by simply reopening closed businesses and hiring all the staff back... Which makes no sense.

    Cashflow.

    I know a lad who has a business supplying wine to mainly restaurants and hotels. He doesn't (dunno why) supply off licences. He reckons he quite likely may not be able to reopen. Employs 20/30 people.

    Loads of folk with money can't run businesses to be fair. Wine merchants know SFA about landscaping and landscapers know SFA about running a gym. If you need to employ expertise to run, manage and supply industry expertise you might find the margin is minimal so there's little reward for the risk.

    Bigger operators might well take over the order books of smaller operators that can't get back up and running for whatever reasons. Taking over the orders could be by chance, by agreement or by cold calling.

    I can't explain the specifics but this might be true and it might not just be pubs....... Coronavirus: Publican groups expect some bars will never reopen
    https://www.irishtimes.com/news/health/coronavirus-publican-groups-expect-some-bars-will-never-reopen-1.4203749

    The Covid payments are ok ish for workers, for many self employed folk who previously drew large salaries from their businesses after ploughing in many cases their life into their companies the help simply isn't there. Which is fair enough in the greater scheme of things.

    Forced closure of a business can be very dehabilitating, reopening might not be as simple as a normal Monday morning once this is all over.


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    #3783
    Cuddlesworth
    Registered Users Posts: 13,981 ✭✭✭✭Cuddlesworth


    Augeo wrote: »
    Cashflow.

    Created by financial commitments. Rent is still due. Rates to be paid on the premises. Electricity. Or fixed price contracts, like x kegs per month at x price.

    Lots of businesses don't really make much money. Once you drop revenue by a 1 to 2 months, while still having bills to pay, by the end of it they are probably bankrupt. I can think of a handful of businesses that I know personally who are not going to reopen.


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    #3784
    hometruths
    Registered Users, Subscribers Posts: 5,801 ✭✭✭hometruths


    I get that nobody knows whats going to happen and I'm no expert but even to a layman it seems plausible that higher property prices in Dublin are function of rental yield and demand:

    i.e scarcity of properties to rent pushes rents up, which makes rental yields more attractive to investors and owner occupiers as mortgages are cheaper than rents. Hence demand for property rises, and prices rise.

    It would follow that if rents fall, prices will fall too.

    The most likely consequence of the coronavirus is that rents will fall because:

    a) the arse will fall out the airbnb market - bookings have fallen of a cliff, and a lack of tourists for at least the next three months will see most of these properties offered for longer term lets = increased rental supply.

    b) in the unlikely event that supply and demand does not force the hand of most of the airbnb landlords, whatever flavour of government we have after the dust settles will clamp down on the airbnb rules.

    c) Increased supply of properties to rent will coincide with some level of decreased demand due to departing foreign casual workers and students etc. In the short term those who have left are unlikely to be replaced with a fresh influx.

    This increased supply is likely to come online during and immediately after the lockdown, leading to a flood of availability of rental properties, leading to a flood of headlines about falling rents and the impact this might have on house prices.

    The flood of headlines and news stories will lead to the following:

    Cash rich investors who might otherwise have bought this year chasing a 6% or whatever yield will wait and see if the prices fall to the level that offers their target yield - decreased demand.

    Investors who are not so cash rich, paying mortgages and worried about further falls, will try and get out of the market sooner rather than later - increased supply of stock for sale.

    Renters who had planned to buy this year will weigh up cheaper rents vs possibility of further falls and decide to wait and see - decreased fresh demand.

    Sellers will hold out for the price they think their property is worth, listings will linger with incremental small price decreases. Each decrease will reinforce the idea the potential buyers belief that it is better to wait.

    The only properties that go sale agreed will be from forced sellers who have to sell due to their circumstances. These will be heavily discounted, appearing on the PPR thus putting further downward pressure on the live asking prices.

    In the short term property prices will inevitably go down.

    I'll reiterate I am no expert but all of the above seems likely, the only question is how long it lasts and by how much prices drop before they bounce again as they surely will.


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    #3785
    JamesMason
    Registered Users Posts: 152 ✭✭JamesMason


    voluntary wrote: »
    Envy is one of the Seven deadly sins.
    So is greed.


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    #3786
    Dwarf.Shortage
    Registered Users Posts: 1,256 ✭✭✭Dwarf.Shortage


    Reversal wrote: »
    Laughable.

    When will restrictions on movement be lifted and what will the impact on unemployment be in the couple of years after the restrictions are lifted?


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    #3787
    Cuddlesworth
    Registered Users Posts: 13,981 ✭✭✭✭Cuddlesworth


    Dwarf.Shortage wrote: »
    When will restrictions on movement be lifted and what will the impact on unemployment be in the couple of years after the restrictions are lifted?

    Who knows, we have never seen anything like this. It's fair to say consumer confidence isn't going to come out of it unscathed, which means less spending and more saving.


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    #3788
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    Loads of businesses in the heart of Dublin rely on both tourists and office workers for the vast majority of their business.

    Tourists I doubt will flock back in summer 2020 as normal.

    And I think a degree of WFH going forward will have a not insignificant effect on footfall in Dublin and other cities for the remainder of 2020 and likely beyond.

    I do think we'll have a new normal that will be quite different to what came before.

    Hopefully there will be positives also, less cars in the city centre perhaps, more cycling ..... less tourists isn't without benefit to local housing too if AirB&Bs enter the housing stock.


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    #3789
    Cuddlesworth
    Registered Users Posts: 13,981 ✭✭✭✭Cuddlesworth


    About WFH, I know facilities in the company's I support are now pushing the question up the chain, why are we paying this much money for office space globally when the company can clearly function without it.


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    #3790
    LuckyLloyd
    Registered Users Posts: 36,195 ✭✭✭✭LuckyLloyd


    The big thing will be business travel. You can make the argument that co location of teams is beneficial; but the big elephant in the room is going to be the massive business expenditure on travel; when that money can be invested into connectivity tools and fully kitted meeting rooms instead.


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    #3791
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    Cuddlesworth wrote: »
    About WFH, I know facilities in the company's I support are now pushing the question up the chain, why are we paying this much money for office space globally when the company can clearly function without it.

    All the big boys will look at it, and indeed were in many cases doing so anyway.
    Small crowds that like micro managing will prefer teams back in house asap, but that's grand for them too of course.


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    #3792
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    LuckyLloyd wrote: »
    The big thing will be business travel. ..........

    Yeah, I did some work for a crowd once. Had to go to Texas to do a week's testing /inspection before they shipped stuff to the plant here.
    They sent me over for a meet and greet / quick look at the stuff a few weeks prior to the test week. Madness.


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    #3793
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    Augeo wrote: »
    All the big boys will look at it, and indeed were in many cases doing so anyway.
    Small crowds that like micro managing will prefer teams back in house asap, but that's grand for them too of course.

    I think it will be a generational thing my kids will probably be working from home, work / log and web activity can be monitored to make sure the employee isnt sitting there watching porn all day and if the employee gets the work done who cares how long it takes them to do it. More people will be working from home after this


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    #3794
    GreeBo
    Registered Users Posts: 27,114 ✭✭✭✭GreeBo


    MrMusician18 wrote: »
    Because it takes capital to open businesses. The economy will come back, but no one knows how bad the damage will be and the healing time.
    Augeo wrote: »
    Cashflow.

    I know a lad who has a business supplying wine to mainly restaurants and hotels. He doesn't (dunno why) supply off licences. He reckons he quite likely may not be able to reopen. Employs 20/30 people.

    Loads of folk with money can't run businesses to be fair. Wine merchants know SFA about landscaping and landscapers know SFA about running a gym. If you need to employ expertise to run, manage and supply industry expertise you might find the margin is minimal so there's little reward for the risk.

    Bigger operators might well take over the order books of smaller operators that can't get back up and running for whatever reasons. Taking over the orders could be by chance, by agreement or by cold calling.

    I can't explain the specifics but this might be true and it might not just be pubs....... Coronavirus: Publican groups expect some bars will never reopen
    https://www.irishtimes.com/news/health/coronavirus-publican-groups-expect-some-bars-will-never-reopen-1.4203749

    The Covid payments are ok ish for workers, for many self employed folk who previously drew large salaries from their businesses after ploughing in many cases their life into their companies the help simply isn't there. Which is fair enough in the greater scheme of things.

    Forced closure of a business can be very dehabilitating, reopening might not be as simple as a normal Monday morning once this is all over.


    I'm not saying the same owner reopens the same business, but there are plenty of people who have lots of cash, or at worst can get a loan from the bank.

    The demand for these business wont just evaporate over night, I dont see why people are assuming it will?


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    #3795
    Mic 1972
    Registered Users Posts: 3,213 ✭✭✭Mic 1972


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


    You went from saying that very few sales happened in 2013 to saying that 2013 had the lowest amount of sales. These are two completely different things
    2013 was a very busy year for sales and the number of properties on the market was massive, that supplies dried up pretty quickly as soon as banks started lending money to everyone


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    #3796
    Claw Hammer
    Registered Users Posts: 6,164 ✭✭✭Claw Hammer


    GreeBo wrote: »
    I'm not saying the same owner reopens the same business, but there are plenty of people who have lots of cash, or at worst can get a loan from the bank.

    The demand for these business wont just evaporate over night, I dont see why people are assuming it will?

    Will the banks be lending money for business purposes after this? How many restaurants will re-open?Of those, how many will achieve their previous level of sales.
    There will be a folk memory of social distancing lingering long after the lockdown ends. People will not want to pack themselves into a room with strangers as before. Restaurants may have to create more space between tables. Add that to the fact that restaurant sales are one of the first things to decline in a recession. It is mostly discretionary spending and is generally one of the easiest for people to cut back on.


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    #3797
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    Augeo wrote: »
    ............

    Bigger operators might well take over the order books of smaller operators that can't get back up and running for whatever reasons. Taking over the orders could be by chance, by agreement or by cold calling.
    ..............

    Forced closure of a business can be very dehabilitating, reopening might not be as simple as a normal Monday morning once this is all over.
    GreeBo wrote: »
    I'm not saying the same owner reopens the same business, but there are plenty of people who have lots of cash, or at worst can get a loan from the bank.

    The demand for these business wont just evaporate over night, I dont see why people are assuming it will?

    I'm not suggesting the demand goes away, someone will take money, provide the service, sell the goods. It might well be a surviving business rival in many cases.


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    #3798
    Cyrus
    Registered Users Posts: 19,801 ✭✭✭✭Cyrus


    Mic 1972 wrote: »
    You went from saying that very few sales happened in 2013 to saying that 2013 had the lowest amount of sales. These are two completely different things
    2013 was a very busy year for sales and the number of properties on the market was massive, that supplies dried up pretty quickly as soon as banks started lending money to everyone

    er what, they are the same thing.

    2013 was patently not a very busy year for sales compared to other 16 years around it.


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    #3799
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    schmittel wrote: »
    I get that nobody knows whats going to happen and I'm no expert but even to a layman it seems plausible that higher property prices in Dublin are function of rental yield and demand: .....

    ....
    I'll reiterate I am no expert but all of the above seems likely, the only question is how long it lasts and by how much prices drop before they bounce again as they surely will.

    I agree with your summary, if not the specifics.

    There are few more aspects to this.

    AirBnB is a small % of the overall market, its highly concentrated in certain areas. Its impact is constantly over stated. It may have a much bigger effect in concentrated locations, only. If the Govt announces a crackdown on them, why would it be any more effective than their previous crackdowns.

    There are different types of property and occupiers in different locations. Which is why you don't have massive concentrations of student accommodation in the middle of the country and you don't have vast housing estates in the middle of the city. There are also wide regional differences. So whats happens in one place may not be mirrored in another.

    You can't sell if there's no one buying, and you can't buy if there no one selling. If someone is not paying rent, they won't move. The is a cost in wear and tear and maintenance of keeping a place occupied. Far less if its empty. If the odds of not getting any rent are high, and you have no means to deal with a non paying or over-holding tenant. Some might decided to leave places empty until the business returns, and they can change the rent.

    One of the effects of RPZ was that people moved a lot less. If they had low rent they were reluctant to move from it. If people don't move out. People can't move in.

    The ability to buy can change. What you can afford now, might be less, later if the rules change, or the banks don't want the risk. Also the supply that is there now, might reduce if building stops and doesn't restart to the same level. So even if you can buy, there may be nothing to buy.

    Lot of possibilities.


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    #3800
    0gac3yjefb5sv7
    Closed Accounts Posts: 3,948 ✭✭✭0gac3yjefb5sv7


    With AirBnB, it may temporarily take a hit for a year but it will be back...it's not going to disappear.


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    #3801
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    beauf wrote: »
    I agree with your summary, if not the specifics.

    There are few more aspects to this.

    AirBnB is a small % of the overall market, its highly concentrated in certain areas. Its impact is constantly over stated. It may have a much bigger effect in concentrated locations, only. If the Govt announces a crackdown on them, why would it be any more effective than their previous crackdowns.

    There are different types of property and occupiers in different locations. Which is why you don't have massive concentrations of student accommodation in the middle of the country and you don't have vast housing estates in the middle of the city. There are also wide regional differences. So whats happens in one place may not be mirrored in another.

    You can't sell if there's no one buying, and you can't buy if there no one selling. If someone is not paying rent, they won't move. The is a cost in wear and tear and maintenance of keeping a place occupied. Far less if its empty. If the odds of not getting any rent are high, and you have no means to deal with a non paying or over-holding tenant. Some might decided to leave places empty until the business returns, and they can change the rent.

    One of the effects of RPZ was that people moved a lot less. If they had low rent they were reluctant to move from it. If people don't move out. People can't move in.

    The ability to buy can change. What you can afford now, might be less, later if the rules change, or the banks don't want the risk. Also the supply that is there now, might reduce if building stops and doesn't restart to the same level. So even if you can buy, there may be nothing to buy.

    Lot of possibilities.

    I think I heard the word paralysis used for the property market and its appropriate for how things are now. Supply as we speak is being taken off sites like my home and daft and even with some new properties coming onto the market there are less properties available now than there was 2 weeks ago. Demand will go down due to people not getting lending from the banks and not wanting to risk the chance of their new property going into negative equity. So it will be a stalemate until corona is gone. There will be a tiny fraction of people who have to sell and a tiny fraction of people will want to buy at this time. I cant see 30% drops and think of the lift there will be once we get back to normal. I can see us being back to where we were in about 18 months to 2 years.


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    #3802
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    Adelyn Late Sportsmanship wrote: »
    With AirBnB, it may temporarily take a hit for a year but it will be back...it's not going to disappear.

    At some point tourism will return. People talk as if its gone forever.


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    #3803
    beauf
    Closed Accounts Posts: 22,651 ✭✭✭✭beauf


    fliball123 wrote: »
    I think I heard the word paralysis used for the property market and its appropriate for how things are now. Supply as we speak is being taken off sites like my home and daft and even with some new properties coming onto the market there are less properties available now than there was 2 weeks ago. Demand will go down due to people not getting lending from the banks and not wanting to risk the chance of their new property going into negative equity. So it will be a stalemate until corona is gone. There will be a tiny fraction of people who have to sell and a tiny fraction of people will want to buy at this time. I cant see 30% drops and think of the lift there will be once we get back to normal. I can see us being back to where we were in about 18 months to 2 years.

    That was what happened last time. Everything slowed down. But it didn't happen quickly. It took years to fall, and then years to come back. I think supply will continue to be a problem in the long term. The biggest issue is the massive hole thats been blown through public (and private) finances world wide. The scale to which people and business will be effected by this is going to vary enormously. Some people and businesses are having their busiest periods ever, a lot more though are out of work and the business'es are gone.

    Unlike the last time there is a group/community consideration. Last time banks twisted the knife. This time, they seem to bending over backward to facilitate people. That is very different.


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    #3804
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    beauf wrote: »
    That was what happened last time. Everything slowed down. But it didn't happen quickly. It took years to fall, and then years to come back. I think supply will continue to be a problem in the long term. The biggest issue is the massive hole thats been blown through public (and private) finances world wide. The scale to which people and business will be effected by this is going to vary enormously. Some people and businesses are having their busiest periods ever, a lot more though are out of work and the business'es are gone.

    Unlike the last time there is a group/community consideration. Last time banks twisted the knife. This time, they seem to bending over backward to facilitate people. That is very different.

    Banks will not lend recklessly all they have to do is stop all exemptions and a high % of lending will stop without them having to explain themselves. Already UB, BOI have said they are not entertaining new mortgage apps that is the start of it


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    #3805
    Hubertj
    Registered Users Posts: 2,000 ✭✭✭Hubertj


    beauf wrote: »
    At some point tourism will return. People talk as if its gone forever.

    Ryanair will test consumer confidence/behavior once travel restrictions are lifted. Massive sale with cheap seats supported by cheap hotel deals.....


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    #3806
    PommieBast
    Registered Users Posts: 2,600 ✭✭✭PommieBast


    fliball123 wrote: »
    I think it will be a generational thing my kids will probably be working from home, work / log and web activity can be monitored to make sure the employee isnt sitting there watching porn all day and if the employee gets the work done who cares how long it takes them to do it. More people will be working from home after this
    I think more companies will allow some form of WFH but I don't think full-time WFH will become a thing.
    https://www.alexcartoon.com/index.cfm?cartoon_num=7623


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    #3807
    Claw Hammer
    Registered Users Posts: 6,164 ✭✭✭Claw Hammer


    Hubertj wrote: »
    Ryanair will test consumer confidence/behavior once travel restrictions are lifted. Massive sale with cheap seats supported by cheap hotel deals.....

    It may be difficult to persuade people to travel after the restrictions are lifted. Many people will be willing to crowd into a bus on their way to the airport, queue up in a crowd at the baggage drop-off, queue through security and sit in a crowd at the departure gate before getting onto a full plane? Are people going to be willing to cram into café's and restaurants? Are people going to be willing to take their chances with accommodation? How will they know it is been cleaned fully? A number of airlines will probably be gone bankrupt before the crisis passes. When flights resume, will have to be social distancing on board? How will that impact on prices?


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    #3808
    Villa05
    Registered Users Posts: 4,513 ✭✭✭Villa05


    Dwarf.Shortage wrote:
    What happened the property market after the last global pandemic during which we put the economy into an induced coma? and you don't get to know how long the coma lasts yet.
    Global pandemic leads to recession which have occurred before

    Cyrus wrote:
    2013 was patently not a very busy year for sales compared to other 16 years around it.

    During 2012,13,14
    There was plenty of stock, banks were lending and prices were substantially below there 2007 peak.
    This means for those that were financially disciplined, patient and in secure employment there were plenty of much cheaper housing options than there was in 2007.

    For those buying a doer upper there was plenty of trades people available and materials were much cheaper. Additionally there were grants to refurbish homes and a property tax holiday which unbelievably is still in place today

    As you can see those that chose to wait and see how the market panned out suffered a lot


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    #3809
    Cyrus
    Registered Users Posts: 19,801 ✭✭✭✭Cyrus


    Villa05 wrote: »
    Global pandemic leads to recession which have occurred before




    During 2012,13,14
    There was plenty of stock, banks were lending and prices were substantially below there 2007 peak.
    This means for those that were financially disciplined, patient and in secure employment there were plenty of much cheaper housing options than there was in 2007.

    For those buying a doer upper there was plenty of trades people available and materials were much cheaper. Additionally there were grants to refurbish homes and a property tax holiday which unbelievably is still in place today

    As you can see those that chose to wait and see how the market panned out suffered a lot

    sorry i dont follow your argument?

    whats your point exactly?


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    #3810
    snotboogie
    Registered Users Posts: 3,569 ✭✭✭snotboogie


    Claw Hammer wrote: »
    It may be difficult to persuade people to travel after the restrictions are lifted. Many people will be willing to crowd into a bus on their way to the airport, queue up in a crowd at the baggage drop-off, queue through security and sit in a crowd at the departure gate before getting onto a full plane? Are people going to be willing to cram into café's and restaurants? Are people going to be willing to take their chances with accommodation? How will they know it is been cleaned fully? A number of airlines will probably be gone bankrupt before the crisis passes. When flights resume, will have to be social distancing on board? How will that impact on prices?

    There will be very little traveling while social distancing remains in place. Once social distancing is lifted people will go back to their old habits withing a few months. The question is when it will be lifted.


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    #3811
    Cuddlesworth
    Registered Users Posts: 13,981 ✭✭✭✭Cuddlesworth


    Adelyn Late Sportsmanship wrote: »
    With AirBnB, it may temporarily take a hit for a year but it will be back...it's not going to disappear.

    In Ireland I can't see it happening. Remember, there is a team of people out there hunting and shutting them down. What might have seemed like it was a couple of years worth of work disappeared overnight.

    When they start to trickle back onto the market, they will be quickly located and shut down. It's like a reset for the that team, they can catch it at the start again.


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