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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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lomb

Hubertj wrote: »

and what are your thoughts on "higher end" properties €1M ish new or old builds?

Also why would the REITs / investors flee market if they are still getting good return?

Obviously the 1mill market is a rarified market. E
Very few people make 275k so a lot of it is people with 500k equity or cash+ another 500k mortgage.
I would obviously expect this to collapse due to confidence.
Reits have vastly overpayed for new builds off plan and many units are unlet due to higher rents than older apartments so liquidating and recovering half is better than no return at all.

pearcider

guyfawkes5 wrote: »

And the article mentions only the fourth biggest bank in the US is doing this. And it's temporary to "focus on existing customers".

Never mind the banks propaganda. The fact is the most valuable bank in the world is raising lending standards. If you think the other banks are not going to follow them, you’re not paying attention.

Graham

lomb wrote: »

Reits have vastly overpayed for new builds off plan and many units are unlet due to higher rents than older apartments so liquidating and recovering half is better than no return at all.

I don't think that's accurate.

A small number of developments appear to have made a strategic decision to keep rents high at the cost of occupancy but they would be the exception.

lomb

Graham wrote: »

I don't think that's accurate.

A small number of developments appear to have made a strategic decision to keep rents high at the cost of occupancy but they would be the exception.

Half a million for a 2 bed? A few years ago my mate was buying 2 beds for 300. Reits want a 6-7 /. return and the rents aren't competitive with someone else getting 7 on a 300k flat.

fliball123

lomb wrote: »

Obviously the 1mill market is a rarified market. E
Very few people make 275k so a lot of it is people with 500k equity or cash+ another 500k mortgage.
I would obviously expect this to collapse due to confidence.
Reits have vastly overpayed for new builds off plan and many units are unlet due to higher rents than older apartments so liquidating and recovering half is better than no return at all.

Why would they flee I am sure they could drop rents and be making some money for a few years until the market both rental and price have risen. If anything I can see more reits and vulture funds swooping in

awec

Dylan94 wrote: »

We already have a 20% deposit requirement and that article is about the USA.

Not for FTBs.

lomb

fliball123 wrote: »

Why would they flee I am sure they could drop rents and be making some money for a few years until the market both rental and price have risen. If anything I can see more reits and vulture funds swooping in

Confidence gone in REITs + investors pulling out their money yes new REITs could come in but investors once bitten twice shy etc

8-10

TheSheriff wrote: »

A new type of email today

never received one of these before so new to us.

Business as usual.

If something is new to you and you never received it before then that's the opposite of business as usual

TheSheriff

8-10 wrote: »

If something is new to you and you never received it before then that's the opposite of business as usual

That last bit was sarcasm... apologies, it didn't land.

zuhuraswa

awec wrote:

Not for FTBs.

I can bet an arm and leg the Irish government will not allow this to change for FTB through one form or another.
Either extend the current HTB for all types of new or second hand etc.

pearcider

zuhuraswa wrote: »

I can bet an arm and leg the Irish government will not allow this to change for FTB through one form or another.
Either extend the current HTB for all types of new or second hand etc.

200 million down the drain so far. Good money after bad. Although that could be said for a lot of government programs.

Either way boondoggles like this will be the first to the chopping board once the size of the budget deficit becomes clear. The prediction is 19.6 billion deficit this year I reckon we will be lucky to get away with that.

zuhuraswa

Well we'll all just have to wait and see. Just a mere 6 months from now to the new budget

pearcider

zuhuraswa wrote: »

Well we'll all just have to wait and see. Just a mere 6 months from now to the new budget

The budget will be mostly formulated by next month and HTB cost will be Impossible to justify especially when the average property value is going to drop by a lot more than 20 grand anyway.

The_Conductor

pearcider wrote: »

The budget will be mostly formulated by next month and HTB cost will be Impossible to justify especially when the average property value is going to drop by a lot more than 20 grand anyway.

I predict massive increases in the cost of ownership- via a range of enhanced direct and indirect taxation. So- in addition to property tax, there could be a new residential tax due to local authorities from residents. Property tax itself- could be increased greatly (as in the percentages). The likes of the hated USC- would be reformed- to apply to all income, and percentages on higher earners would be further raised, possibly to punitive levels (at the moment you could in theory have a marginal tax rate of up to 58%- this will further increase).

On the brightside- in an era of a severe constriction in take-home pay, it would make sense that utilities and other services could fall- possibly dragging inflation rates into negative territory- however, this would further discourage consumption- as why buy today, when there is an expectation that something will be cheaper tomorrow.........

Thats the worse case scenario. Plausible- is a further roll-out of the USC- specifically to pay for Corona costs (if we're adding another 40 billion to our national debt- we have to pay for it somehow).

We're actually being lumped with the prudent northern Europeans- that is the financially prudent Northern Europeans- there is an expectation that anything we borrow will be repaid in a defined manner (as opposed to simply rolled over).

We were due to start making significant repayments on our national debt from 2021 onwards- as opposed to simply continue reducing our GDP:Debt ratio. This is probably out the window- however, if we're borrowing- solely to pay interest on outstanding debt- which we will be doing this year- something has got to give.

Ireland has an eyewatering level of national debt- its the elephant in the corner that no-one has wanted to discuss. Up until now- we had a roadmap for slowly addressing it- but this is now out the window.

So- while there may be a pact that income tax doesn't get hiked and entitlements don't get cut- nonetheless, be prepared for a world of pain...........

[Deleted User]

The_Conductor wrote: »

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

Ireland has an eyewatering level of national debt- its the elephant in the corner that no-one has wanted to discuss. Up until now- we had a roadmap for slowly addressing it- but this is now out the window.

So- while there may be a pact that income tax doesn't get hiked and entitlements don't get cut- nonetheless, be prepared for a world of pain...........

If the debt is refinanced at lower interest rates you can repay the same amount per annum but more is effectively paid off.

Increases in USC I can't really see happening, "One thing that I'm absolutely sure of, something that we definitely don't need in the next couple of years, is pay cuts - or welfare cuts or increases in income tax" ............ when speaking to the great unwashed it'd be political suicide to say that and roll out increases in USC. I know USC isn't income tax but anything that reduces the take home pay is considered income tax by loads of folk.

The_Conductor wrote: »

......

So- while there may be a pact that income tax doesn't get hiked and entitlements don't get cut- nonetheless, be prepared for a world of pain...........

You really aren't the most optimistic of chaps.

Zenify

Augeo wrote: »

You really aren't the most optimistic of chaps.

A global pandemic bringing devastating health and economic circumstances tends to take away optimism
I did for me anyway.

The_Conductor

We borrowed a little over 6 billion last week at a rate of 0.25%- which is reflective of investors sentiment towards Ireland and an expectation that Irish sovereign debt is rock solid. We expect to borrow a further 30-35 billion associated with the Covid crisis- and repay 7-8 billion in interest on pre-existing debt.

We have a debt crunch- the only thing keeping us swimming is market sentiment- which is with us, as we have done everything short of sacrificing our children to pay our debts.

Our income this year is going to crunch- who knows by how much- at a time during which there is a lot of debt repayments coming up- and all the other sovereigns (well most of them) are flooding the market with bonds.

We're not going to get away with offloading paper at 0.25% for much longer- we got in ahead of the posse last week- if the NTMA manages to get a few more placings out in a rapid quick fire fashion- that is probably as good as it gets.

[Deleted User]

Zenify wrote: »

A global pandemic bringing devastating health and economic circumstances tends to take away optimism
I did for me anyway.

Economic forecasts for 2021 aren't too bad.
Devastating economic circumstance is OTT imo.

JimmyVik

The_Conductor wrote: »

We borrowed a little over 6 billion last week at a rate of 0.25%- which is reflective of investors sentiment towards Ireland and an expectation that Irish sovereign debt is rock solid. We expect to borrow a further 30-35 billion associated with the Covid crisis- and repay 7-8 billion in interest on pre-existing debt.

We have a debt crunch- the only thing keeping us swimming is market sentiment- which is with us, as we have done everything short of sacrificing our children to pay our debts.

Our income this year is going to crunch- who knows by how much- at a time during which there is a lot of debt repayments coming up- and all the other sovereigns (well most of them) are flooding the market with bonds.

We're not going to get away with offloading paper at 0.25% for much longer- we got in ahead of the posse last week- if the NTMA manages to get a few more placings out in a rapid quick fire fashion- that is probably as good as it gets.

I predict another levy, to stay forever along with all the other ones. And then they pretend its not income tax. I also predict that the squeezed middle will be squeezed even more than they thought possible. Even to the point they would be better off just giving up work.

My choice would be add some sort of levy onto corporation tax. Also have a council tax, payable by even people renting. You live in a council area, you pay them tax whether you own the property or not. Just like in the UK. No social welfare raises, no pension raises, no christmas bonuses for god knows how long.

Its going to be painful.

riddles

it is also unknown how people’s socialising and associated purchasing habits will change also. The great pandemic will be replaced with the great shakedown.

The_Conductor

Augeo wrote: »

Economic forecasts for 2021 aren't too bad.
Devastating economic circumstance is OTT imo.

Forecasts are all over the shop- even the best economists can't come up with consensus as to what they predict might happen.

In general- the agreement is that bad as things may be in Ireland- that it is likely to be better here than elsewhere, because we entered the crisis from a good position.

Who knows whats going to happen though.

The_Conductor

JimmyVik wrote: »

I predict another levy, to stay forever along with all the other ones. And then they pretend its not income tax. I also predict that the squeezed middle will be squeezed even more than they thought possible. Even to the point they would be better off just giving up work.

My choice would be add some sort of levy onto corporation tax. Also have a council tax, payable by even people renting. You live in a council area, you pay them tax whether you own the property or not. Just like in the UK. No social welfare raises, no pension raises, no christmas bonuses for god knows how long.

Its going to be painful.

We're already at a peak marginal rate of 58%
Its very close to not being worth people's while seeking additional financial gain- why bother when the lions share is going to taxman in one form or another. Even before this mess- a lot of employees were negotiating enhanced non-financial remuneration, such as additional annual leave entitlements (this was highlighted by American Chamber of Commerce in its January breakfast meeting- the manner in which it was increasingly difficult to financially recompense Irish based staff).

Its hard to get blood from a stone- and while many people don't like to admit it- the middle classes were hurting a lot more than most would like to admit- before we ever got into this mess- now I would guess than many of them will simply sidestep any financial recompense- the same as at the multinationals.

As for a tax on residents. Why in god's name the property tax wasn't structured in this manner from the get-go is beyond me. Ok- its a tax on asset ownership- however, if you want to fund local authority activities surely the sanest manner of doing so, is by charging those availing of these activities for doing so. I'd be shocked if this tax were not introduced.

And then we have all the REITs and others taking the piss by loading up on debt so they don't trigger any taxable income- well, it'll take international tax treaty changes to chase them properly- but where there is a will there is a way- and the will certainly will be there, when all the other sovereigns are hurting too.

We've put the heavy lifting portion of our tax burden on our ordinary tax payers for too long- we need to look elsewhere to pay for this.

kala85

The_Conductor wrote: »

And then we have all the REITs and others taking the piss by loading up on debt so they don't trigger any taxable income- well, it'll take international tax treaty changes to chase them properly- but where there is a will there is a way- and the will certainly will be there, when all the other sovereigns are hurting too.

We've put the heavy lifting portion of our tax burden on our ordinary tax payers for too long- we need to look elsewhere to pay for this.

. All those reits need to be taxed

The_Conductor

riddles wrote: »

it is also unknown how people’s socialising and associated purchasing habits will change also. The great pandemic will be replaced with the great shakedown.

I know we haven't bought any take-away or celebrated any of 4 birthdays in our house here over the last 5-6 weeks. We will probably have a big bash for everyone together when this madness dies down- a nice meal out perhaps- but thats it- we don't go to the pub or cafés under normal circumstances, we don't smoke, we don't have Sky TV, gym memberships or other expenditure.

Lots of middleclass workers- had hollowed out their spending over the past decade, as it was the only financially prudent thing to do.

There may be some people who were getting lots of take-out, coffees, meals out etc- but that cohort are not reflective of what the majority of people were doing.

We've taken up lots of little niche things to keep us busy during the lockdown- be it gardening, baking or whatever. Those bits and bods will most probably end up on the scrap heap- but it doesn't mean that they're going to translate into expensive social outings in their stead.

The Irish workers were under an incredible tax burden- *before* any of this manure hit the fan. Any heavy lifting or expectation that Irish workers are going to magic up a recovery when this is over- will have to be tempered by the simple fact- most people were living from paycheck to paycheck- and don't have the means to splurge- and the prospect of tighter finances isn't exactly an invitation for people to go wild.

Assetbacked

I don't think it's outrageous to think the EU or at least the Euro gets abandoned by some participants, with the pandemic being the straw that breaks the camel's back. The stability and peace in the EU has lasted a significant amount of time relatively speaking, one would be a fool to think something couldn't throw the whole project in the bin given human nature to forget past mistakes where they are not corrected. Bringing this back to property, this could result in great changes to the way society looks at wealth and the human impact on the world. A preference for flexibility (long term renting) and not taking on a mountain of debt (mortgage) could certainly happen in Ireland with the younger generations.

JimmyVik

The_Conductor wrote: »

We're already at a peak marginal rate of 58%
Its very close to not being worth people's while seeking additional financial gain- why bother when the lions share is going to taxman in one form or another. Even before this mess- a lot of employees were negotiating enhanced non-financial remuneration, such as additional annual leave entitlements (this was highlighted by American Chamber of Commerce in its January breakfast meeting- the manner in which it was increasingly difficult to financially recompense Irish based staff).

Its hard to get blood from a stone- and while many people don't like to admit it- the middle classes were hurting a lot more than most would like to admit- before we ever got into this mess- now I would guess than many of them will simply sidestep any financial recompense- the same as at the multinationals.

Bang on. I would consider myself squeezed middle.
For a couple of years now I have been taking TOIL instead of the extra money for any extra work I do. Waste of time working extra hours and then over half of the pay going to the tax man. Id rather have time off and do something productive with it.

[Deleted User]

58% is paid only on the amount earned in excess of €70,044.01.
Anyone remotely sane is making decent pension contributions/AVCs if they earn over €70k.
Lots of folk who consider themselves the squeezed middle don't earn €70k.

Idbatterim

That tiny house in churchrown up to 450k now!!! And look at this COMEDY below!!!!

https://touch.daft.ie/for-sale/terraced-house-64-saint-columbanus-road-windy-arbour-co-dublin/1517536

JimmyVik

Augeo wrote: »

58% is paid only on the amount earned in excess of €70,044.01.
Anyone remotely sane is making decent pension contributions/AVCs if they earn over €70k.
Lots of folk who consider themselves the squeezed middle don't earn €70k.

Oh, nearly forgot. Pension levy. FG will be in to rob our pensions AGAIN.

Zenify

Augeo wrote: »

Economic forecasts for 2021 aren't too bad.
Devastating economic circumstance is OTT imo.

I suppose it's all relevant to what you consider devastating. I would have said the financial crises of 2008 was devastating and the IMF said this will be worse. That's where I'm coming from with this.