fliball123 wrote: » I am not saying prices wont fall. I am saying that supply side will be starved and prices may well fall but it will be like picking the best out of a bad bunch. People are going on about all the ills that are going to see demand drop and forgetting about supply side. As I see it the following will feed into supply dropping New builds stopped at present no building site activity - this will probably be one of the first things turned back on. Builders not getting profit on building (why would you risk building for little or no profit) People who were selling and can afford to keep their house off the market will as once they sell their loss is crystallized and we all know how long it takes to sell so if prices are less in 2 months time than now your always chasing your tail when selling. People who are under pressure to sell as in no job and cant afford the mortgage can limp on in their property for years without paying as can be seen from cases from the previous crash, some people are still in their property and not paying anything. I have been saying from the start of corona that supply will start to dry up and I have been keeping en eye on my home properties available, just before corona came in there were over 21000 properties available for sale now there are just above 19000. If this continues not many will get a property where they want and whats the 3 magic words in property , location location location.
schmittel wrote: » If the assumption is that people who are saying they think prices will fall are motivated by a desire to buy a property at lower prices can you shed some light on the motivations of those saying prices won't fall because supply exceeds demand?
Assetbacked wrote: » While supply may be restricted for purchasers as a consequence of BTRs, my point was that demand could be reduced. This is due to two things; renting being a more appealing option and the fact many people who have been renting due to the 08 crash will be too old to get a mortgage or will be unable to secure a large mortgage. Both of these things will pull people out of the market of potential buyers. It's important to remember that the property market has so many different components and moving parts with different variables, so it is difficult to generalise and this is very much a general observation on certain aspects of it.
GreeBo wrote: That's still only 12% of Dublin 3 beds in arrears, and I'd wager they make up more then half of private dwellings, probably more like 75%+, which gets you around 8%. So 92% of Dublin 3 bed owners are not in arrears.
Hubertj wrote: You think price decreases will glide down over 5 years? Why over such a long period vs the massive crash others have been spouting on about - 30% by end of year and all that.... and I thought tenants had plenty of protection now anyway?
GreeBo wrote: tbf it seems like you were trying to imply that the market is massively overpriced and that effectively no one can afford to buy a 3 bed in Dublin...
GreeBo wrote: Its percentages that move the market though, not single figures. Saying "80K people cannot afford their mortgage" is sensationalist if that number represents less than 10% of the population.
fliball123 wrote: » Supply is falling day by day if you look at my home over the last month every day there is less available than the day before ..yesterday there was 19036 today 19013 this is going on daily. There is also no one building at the moment further denting supply. As I say a lot of vultures on here waiting to capatalise on lower prices might be in for a shock as supply seems to be going down at the same rate or quicker than people wanting to buy. The vultures might get a cheaper house but will have to accept it in the back a$$ of no where or somewhere in the Wild west areas or Dublin.
Fol20 wrote: » I do think prices for selling will fall if we are heading into a recession but based on your reasoning. They are falling as more houses being built are BTR rather than buy to own. Normally more supply and equal demand = cheaper housing. Based on your explanation though. Supply is either neutral or decreasing due to BTR so how does this explain the decline of house prices.
LuckyLloyd wrote: » Sure, but the pool of people who can pay that premium is ever declining. We’re going through a generation with lowest house purchase percentages in the history of the state. That doesn’t affect purchasing price in higher brackets now, but in 10 years it will. Which is the point he’s making, I believe. There are seeds being down over the past half decade - that Covid 19 will massively exacerbate - which will only start to develop in time. How long and to what extent? A matter of debate and people will be bullish on one side or the other. But in my view we should not underestimate the societal and political effects of a large portion of educated working people from a generation missing the property boat. That’s a large cohort of people in their 40’s and 50’s in a decade or so time who will not have the relationship to property previous generations their age did. It doesn’t effect the property market in 2020, but it seems obvious to me to have an impact in time.
Fol20 wrote: » If houses are in the pipelines for BTR, do you really think they will still be built if we’re going into a recession? I suspect. Some will continue to be built but a lot of pension companies etc will tighten their wallets and supply will not increase to the levels you say. At the same time people may continue to rent as they are unsure if buying a house now is a good time with house prices falling thus there is a chance that demand for renting might actually increase. Hard to know but this could happen.
Assetbacked wrote: » Tenants have plenty of protection as a result of measures implemented the past few years, so it is not as precarious an existence as it once was, especially if we got to a situation where you're not paying a lot of your salary in rent. Lots of protection + not costing a huge chunk of your salary = appealing to rent. Ten years of minimal housebuilding resulting in a massive imbalance between supply and demand, salaries not being aligned with house prices and leverage not being available to make up the difference, large institutionals elbowing into the market to compete for the cash of workers by building dwellings to rent to them at the expense of those who seek to sell dwellings to these workers. These things all contribute to a medium to long term view that prices for purchasing houses would fall, as they seem to have started to do last year, before this covid19 pandemic.
Assetbacked wrote: » Unlike with the crash in 2008, this time there is a whole generation caught in the rental market. They have not purchased homes where they may be in a position to upgrade to those €750k houses in a few years. This will drag down prices down for such properties over the next 5 years (unless the lending restrictions are eased - they should not be eased) not insubstantially. With the heap of BTRs in the pipeline, in the next five years the rental market is looking to climb down from its inflated levels currently (covid19 is just moving the speed of the drop up a gear or two). The '08 crash generation will be in a more stable rental market with plenty of tenancy protection and with not much motivation to take on a massive, more expensive mortgage. Outside of talk of price increases and decreases for purchasing houses, I think it will be fascinating to see how the relationship which the older generations have with property contrasts with this generation.
awec wrote: » AIP is a very fluffy thing, especially these days. Many banks have moved to a fast-track system where AIP is given very quickly with almost no due-diligence and no underwriters involved. For a bank, granting AIP is super low risk, since it's pretty much nothing more than giving someone an estimate of an amount they might be eligible for. Unless you had to submit payslips, bank statements and all that jazz, and your application went through the underwriters, don't put too much faith in your AIP figure.
LuckyLloyd wrote: » ......... But in my view we should not underestimate the societal and political effects of a large portion of educated working people from a generation missing the property boat. That’s a large cohort of people in their 40’s and 50’s in a decade or so time who will not have the relationship to property previous generations their age did. .........
GreeBo wrote: » I still dont see it to be honest. Sure, lots of less desirable houses and areas will drop, but as I've said before, if you want to live in Donnybrook or Rathmines or Sutton then there are a predefined number of houses to choose from. There aren't too many greenfield 3-4 beds being built in those areas so they will attract a premium IMO.
schmittel wrote: » No, I wasn't implying that no one can afford to buy a 3 bed in Dublin, I was stating that not everybody who owns a 3 bed in Dublin can afford it. I think the market is artificially overpriced due to this fact, I have no idea if that is massive or not. It's hardly sensationalist if it is true. This backs up my point that the wide acceptance that these arrears figures are no big deal - sure it is only 10% - is (in my humble opinion), one of the big reasons that we have such a dysfunctional market. €2.4 billion and 89% of arrears balances outstanding are over 720 days - i.e 2 years, some of these people have not paid their mortgage in nearly 10 years. These are sensational figures. We cannot even try to compare them to other countries because most of the rest of worlds arrears stop at 180 days. i.e if you don't pay your mortgage for 6 months you lose the house. But yes, Ireland is different. And so is our property market. And oddly enough our interest rates.
GreeBo wrote: » tbf it seems like you were trying to imply that the market is massively overpriced and that effectively no one can afford to buy a 3 bed in Dublin...
GreeBo wrote: » Ok, lets say its 10%...so? Its percentages that move the market though, not single figures. Saying "80K people cannot afford their mortgage" is sensationalist if that number represents less than 10% of the population.
schmittel wrote: » My initial comment was a merely flippant one to suggest that clearly not all Dublin 3 bed owners cannot afford the house they live in. Having said that happy to dive into the figures a bit more.
schmittel wrote: » Some of the 3 beds in your 600,000 will be buy to lets which are separate to the 60k arrears figures I quoted so I'd guess more than 8% of Dublin 3 bed PDHs are in arrears.
schmittel wrote: » On top of the current PDH arrears figures there are 85,000 mortgages that have been restructured (arrears capitilisation, split mortage, move to interest only etc). Fair to say these people cannot afford their houses either. Applying your assumptions to these suggests there are a further 48,000 Dublin 3 bed owners who cannot afford them. Personally I think that 81,000 figure is huge no matter what percentage it represents of the total 3 bed stock.
schmittel wrote: » One of the reasons the property market in Ireland is so dysfunctional is not only the sheer number of people who are not servicing their mortgages, but the sheer number of people who seem to think it is no big deal.
Hubertj wrote: » Yes the apartments on the site of the Berkeley court hotel started at €900k i think. I’m sure they are lovely with concierge service and all that but 900k! You can get small 3 bed houses in that part of ballsbridge for less..
Ozark707 wrote: » Even in Ballsbridge some new places which were looking for that sort of money are now for rent as presumably there were no takers. That market has now dwindled and with high end rents plummeting it is not likely to recover for a long long time.
Hubertj wrote: » You think price decreases will glide down over 5 years? Why over such a long period vs the massive crash others have been spouting on about - 30% by end of year and all that.... and I thought tenants had plenty of protection now anyway?
Assetbacked wrote: » Outside of talk of price increases and decreases for purchasing houses, I think it will be fascinating to see how the relationship which the older generations have with property contrasts with this generation.
seasidedub wrote: » "There are definitely people out there thinking there is still money to be spent on property, especially for those trading down I'd guess, judging by these new homes just launched in Mount Merrion. I used to live in the area until recently and saw these being built. They knocked what was either a single house or a pair of semis (can't remember) but have fitted 7 units on the site.https://turkingtonrock...-park-mount-merrion/ The smallest unit is a 3 Bed Duplex / 122 sq m. Prices starting at €775k." These may not sell. I've been looking at apartments in this end of the market and a lot of developments which were "launched" with "private viewings by invitation only", coffee vans on site on viewing days etc, just have not sold. Prospect House Blackrock - 1 apartment sold. Marina Village Greystones - nosed around and an owner occupier told me 6 sold to owner occupiers, the others are for rent as they didn't sell. These are just 2 examples. 700k for a two bed is steep... buyers are looking, but not buying.
seasidedub wrote: » 700k for a two bed is steep... buyers are looking, but not buying.
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