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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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GreeBo

PokeHerKing wrote: »

Hold the phone, you mean if I zoom out the crash won't look so bad?? Who cares what the trend of 10-100 years looks like, if I buy today and prices fall off a cliff for a decade I'll consider that a bad time to have purchased.

If they fall off a cliff, the worst case scenario is that you have a house to live in, that presumably you liked and is in a suitable location, paying a mortgage that you were happy to pay at the time.

If you dont buy then the worst case scenario is that house prices increase beyond what you can afford and your ability to save is diminished by increasing rents

I know which of the above I consider to be worse.
FWIW I bought a house in 2008, a modest 3 bed semi. It dropped in value, just like everywhere else, but it didnt matter as I could still afford the mortgage, it was still a fine place to live. 10 years later I sold it and made a profit.

Nothing can help you if you buy the wrong house, sure you might get lucky and get caught up in a general up-turn, but thats not a strategy, thats sheer luck.
A desirable house is a desirable house, if you panicked and spent 400K on a semi-d in the back arse of nowhere, that was never going to be a desirable house then thats on you.

GreeBo

schmittel wrote: »

Long term I have no idea. In real terms I suspect it is perfectly possible.

I was just pointing out that your chart actually showed a downward trend and the ftse is at 1998 levels.

and 6 months ago it was at 50% more than that...the point is that, over time, it goes up. It always has and it always will.
It may not go up and down to suit your timing, but as I wrote in my previous post, I'd rather get it wrong by buying than by not buying.

hometruths

GreeBo wrote: »

and 6 months ago it was at 50% more than that...the point is that, over time, it goes up. It always has and it always will.

And my point is that over time it goes down as well. It always has and it always will. So we are basically in agreement.

GreeBo wrote: »

It may not go up and down to suit your timing, but as I wrote in my previous post, I'd rather get it wrong by buying than by not buying.

Fair enough, but hindsight shows your super bullish comments that "chances are in a couple of years prices will be right back where they were when you bought" does not always work out so well.

I just have a different point of view from you that I'd rather not get it spectacularly wrong by buying at the wrong time like those in 2007.

And I think that with the global economy on lockdown and talk of a great depression, never mind a recession now might be a time that represents a higher risk of getting it wrong!

PokeHerKing

GreeBo wrote: »

If they fall off a cliff, the worst case scenario is that you have a house to live in, that presumably you liked and is in a suitable location, paying a mortgage that you were happy to pay at the time.

If you dont buy then the worst case scenario is that house prices increase beyond what you can afford and your ability to save is diminished by increasing rents

I know which of the above I consider to be worse.
FWIW I bought a house in 2008, a modest 3 bed semi. It dropped in value, just like everywhere else, but it didnt matter as I could still afford the mortgage, it was still a fine place to live. 10 years later I sold it and made a profit.

Nothing can help you if you buy the wrong house, sure you might get lucky and get caught up in a general up-turn, but thats not a strategy, thats sheer luck.
A desirable house is a desirable house, if you panicked and spent 400K on a semi-d in the back arse of nowhere, that was never going to be a desirable house then thats on you.

Job losses, divorce and being saddled with debt double the value of an asset you can't sell are the worst case scenarios.

Just because your own personal circumstances meant you could ride out 10 years of negative equity doesn't mean everyone's will.

People can't live in an index linked house that rides out the trend. They buy houses they can afford, some will hope to trade up to a bigger house. 10+ years stuck because you bought before a major crash is a big deal, whether you can wrap your head around it or not.

Graham

PokeHerKing wrote: »

if I buy today and prices fall off a cliff for a decade I'll consider that a bad time to have purchased.

On the other hand you could wait for a decade, keep renting and by 2030 you might be thinking about starting a mortgage rather than being half way through it.

addaword

There are plenty of people in Ireland in negative equity for 13 and 14 years, and who more than likely will be for the next 13 or 14 years too, if not forever.

Graham

addaword wrote: »

There are plenty of people in Ireland in negative equity for 13 and 14 years, and who more than likely will be for the next 13 or 14 years too, if not forever.

run that by me again

GreeBo

addaword wrote: »

There are plenty of people in Ireland in negative equity for 13 and 14 years, and who more than likely will be for the next 13 or 14 years too, if not forever.

Hope many of them bought a stupid house that was never a sound investment though?

GreeBo

PokeHerKing wrote: »

Job losses, divorce and being saddled with debt double the value of an asset you can't sell are the worst case scenarios.

.

So job losses and divorce are better with neither party having somewhere to live? If you think paying a mortgage on one salary is bad, try paying two rents!

addaword

GreeBo wrote: »

Hope many of them bought a stupid house that was never a sound investment though?

At the time practically everyone thought it was a sound investment.

Hindsight is wonderful.

In 3 years people will see it was mad to buy in May or summer 2020.

GreeBo

PokeHerKing wrote: »

Job losses, divorce and being saddled with debt double the value of an asset you can't sell are the worst case scenarios.

Just because your own personal circumstances meant you could ride out 10 years of negative equity doesn't mean everyone's will.

People can't live in an index linked house that rides out the trend. They buy houses they can afford, some will hope to trade up to a bigger house. 10+ years stuck because you bought before a major crash is a big deal, whether you can wrap your head around it or not.

I'm not saying 10 years stuck isn't a big deal, I'm saying that it's still better than being wrong in the other direction and being stuck renting for 10 years without a deposit or a house to show for it at the end.

I think it's the difference between trying to minimize losses versus maximise gains.

I'd much rather buy something now, that I am happy with and can afford rather than risk waiting on a uncertain future. The only thing you have full knowledge of is right now, sure maybe you could have gotten a better deal in 6 months, but you can use that argument to never buy. What if prices start to sky rocket due to some economic stimulus and we are actually in a trough? Then you are screwed and can do nothing about it. At least if you bought now you knew what you were getting yourself into.
Obviously you should only buy now if you can afford it and find somewhere that you are happy to be "stuck" for maybe 10 years, that's why it's so important to buy sensibly.

GreeBo

addaword wrote: »

At the time practically everyone thought it was a sound investment.

Hindsight is wonderful.

In 3 years people will see it was mad to buy in May or summer 2020.

I don't think anyone thought buying a semi d in naas for 500k was a sound investment, it was panic buying. It was never going to be a long term home or a desirable location likely to have long term demand.

addaword

Not just Naas, it applies countrywide

hometruths

GreeBo wrote: »

Hope many of them bought a stupid house that was never a sound investment though?

Clearly none of the purchases were a sound investment!

But there were plenty people who bought decent properties in desirable parts of Dublin in 2007 with 110% mortgages, still deep in negative equity now with prices about 20% shy of what they were then.

But on the plus side they've saved a fortune in rent. It's dead money you know. Unlike mortgage interest.

The real winners are the ones who thought "feck that, mortgage interest in negative equity is a lot like dead money, I'll just stop paying it."

Most of them are still living in their houses!

The Belly

GreeBo wrote: »

Everyone says that about everything though. The irony here is that we have people laughing at others for saying that this recession will be different than the last one. Yet you are doing *exactly* that yourself. We recovered from the last one, we will recover from this one.

How many depressions or "this has never happened before, it will never recover!" has the stock market been through?

Depressions, great depressions, .com boom to bust, 9/11, covid19
They always bounce back, this time wont be any different, unless you think people are going to fundamentally change how they have behaved.

Well ive been through a few and as bad as they were business did not come to a abrupt halt.And on the fundamentally change i hope not but its very possible.
Nobodys laughing btw well if they are they wont be soon.

OttoPilot

schmittel wrote: »

If your focus is too narrow you'll just end up seeing what you want to see.

Given that the highs in 19 are lower than the highs in 07 that chart is showing a downward trend.

And the FTSE 100 today is at the same level it was in 1998.

The FTSE has not increased much because a lot of gains are paid out as dividends. Dividend yields are higher than the US.

Bass Reeves

It's interesting to see the amount of people cheering on looking for a rehash of 2008-2014. They consider that it will be an opportunity. However in Chinese opportunity and danger are the same word. I remember lads pre 2008 waiting for it to happen, sort the men out from the boys, show who wearing no clothes.

Recession's have to be survived. I have seen two really bad one's in my life. If a third happens I imagine I will get through it as well. But many will not.

Be careful what you wish for. If what some here expect to happen actually takes place, this could turn out like the great depression. I am not sure if what they perceive as an opportunity will not turn out to be very dangerous for them.

Just as an aside about so called expensive houses pre 2008. Many of these were bought with trackers as low as 0.75%above the ECB rate. Unless you bought at the very bottom of the cycle you may not be much better off than some of these people especially if you ended up renting 3-4 years extra waiting to buy. There are still people who did not buy in that period waiting to buy

pearcider

Bass Reeves wrote: »

It's interesting to see the amount of people cheering on looking for a rehash of 2008-2014. They consider that it will be an opportunity. However in Chinese opportunity and danger are the same word. I remember lads pre 2008 waiting for it to happen, sort the men out from the boys, show who wearing no clothes.

Recession's have to be survived. I have seen two really bad one's in my life. If a third happens I imagine I will get through it as well. But many will not.

Be careful what you wish for. If what some here expect to happen actually takes place, this could turn out like the great depression. I am not sure if what they perceive as an opportunity will not turn out to be very dangerous for them.

Just as an aside about so called expensive houses pre 2008. Many of these were bought with trackers as low as 0.75%above the ECB rate. Unless you bought at the very bottom of the cycle you may not be much better off than some of these people especially if you ended up renting 3-4 years extra waiting to buy. There are still people who did not buy in that period waiting to buy

Recessions are both a necessary and welcome correction to the capital structure. A recession ensures all the misallocation of capital and investments of the boom are flushed out of the system. Companies that are no longer needed or that are inefficient go bankrupt and new companies form. It can be viewed like a forest fire in nature...a clearing of the dead wood so new life can emerge.

Recessions are also great times to set up new businesses as land prices and rent fall which should make labour relatively more valuable by lowering fixed overheads. I’m sure there are many people including small business owners who will look forward to paying cheaper rent. This recession can be viewed as an attempt by the system (and I’m talking the invisible hand here not the perverted global system that we have at the moment) to reallocate resources away from the rentier class who have monopolized the low interest rate era for their own benefit.

This ZIRP and NIRP has led to an increasingly unequal society due to increasing corporate power who not only have preferential access to cheap capital via the primary dealers at the expense of the ordinary saver but also the ability to avoid paying taxes. This has led to the destruction of smaller businesses as their competitive advantage is eroded. Concentration of corporate power is extremely dangerous for the cohesion and path of society...the only real way to turn back the phenomenon of rentier capitalism and to limit global corporatism is with a severe recession.

Unfortunately the over reaction (due to regulatory capture) to the past few recessions by the central planners (ie the banking elite) has over stimulated demand with fiscal and monetary levers. This has made the ordinary person poorer by removing their ability to save and by increasing their tax burden. The elite of course can and do avoid taxes.

All this meddling by the central banks have made this essential restructuring of western capitalism about 30 years overdue. Of course they have not only enriched their banking buddies who are closest to the money trough but they have also made the worlds capital and financial structure extremely fragile and prone to collapse.

Indeed this collapse has been predicted by the Austrian economists in particular Ludwig von Mises. In fact there is compelling evidence that we may now be entering what von Mises called the “crack up boom” which will result in the destruction of the global reserve currency and the foundation of a new monetary system.

Villa05

I think that anyone considering buying should wait, one thing that can be nearly guaranteed for the short term is that house prices will not be rising and most likely fall. This gives potential buyers the opportunity to

Improve their financial position
Potentially buy better house or location
See where the land lies in the future and make better informed decisions on the biggest purchase of your lives

Some of the advise on here is crazy stuff

Buy you can strategically default if you don't like it
Buy before you loose your job

The Irish property market is extremely dysfunctional, timing is key in boom bust cycles, you may not buy at the absolute bottom but better to catch a rising tide than a falling knife

Protect yourself and your families from extortionate rents and property prices

BillyBiggs

addaword wrote: »

In other recessions Irish people could emigrate to USA, UK, Oz wherever. This time that option will not be there. The Irish economy will have to sustain them. Taxes will go up, public sector wages will go down. It is inevitable house prices will crash too.

I’m beginning to think buying a house will be the least of people’s worries. Buying food will be more of a priority.

BillyBiggs

Just took a look at rental properties on Daft in both Cork and Dublin. Sweet Jesus, reality hasn’t hit the rental market at all. Who do they think is going to rent these places for such extortionate rents? Do letting agents not watch the news, or read newspapers?

Hubertj

Villa05 wrote: »

I think that anyone considering buying should wait, one thing that can be nearly guaranteed for the short term is that house prices will not be rising and most likely fall. This gives potential buyers the opportunity to

Improve their financial position
Potentially buy better house or location
See where the land lies in the future and make better informed decisions on the biggest purchase of your lives

Some of the advise on here is crazy stuff

Buy you can strategically default if you don't like it
Buy before you loose your job

The Irish property market is extremely dysfunctional, timing is key in boom bust cycles, you may not buy at the absolute bottom but better to catch a rising tide than a falling knife

Protect yourself and your families from extortionate rents and property prices

I think anyone coming in here looking for advice on whether to buy should not proceed. If someone comes looking for advice here they are not ready to make such a big decision. As you said some crqzy advice here on both sides of argument while some people do try to provide balanced opinions.

Mad_maxx

OttoPilot wrote: »

The FTSE has not increased much because a lot of gains are paid out as dividends. Dividend yields are higher than the US.

No, it's because the index is disproportionately impacted by energy and financials, both of which have been awful for more than a decade

GreeBo

schmittel wrote: »

Clearly none of the purchases were a sound investment!

Well thats just not true. I gave my own example where it was a sound investment. But you cant use only the poor decisions to make a judgement.

But there were plenty people who bought decent properties in desirable parts of Dublin in 2007 with 110% mortgages, still deep in negative equity now with prices about 20% shy of what they were then.

When would borrowing 110% of an assets value seem like a good idea?
Can you give an example of such a property?

But on the plus side they've saved a fortune in rent. It's dead money you know. Unlike mortgage interest.

Mortgage interest gets you a house at the end of the term. What does rent get you at the end of the term?

The real winners are the ones who thought "feck that, mortgage interest in negative equity is a lot like dead money, I'll just stop paying it."

Most of them are still living in their houses!

Neither you nor I can do anything about that unfortunately.

GreeBo

BillyBiggs wrote: »

Just took a look at rental properties on Daft in both Cork and Dublin. Sweet Jesus, reality hasn’t hit the rental market at all. Who do they think is going to rent these places for such extortionate rents? Do letting agents not watch the news, or read newspapers?

People who need somewhere to live I guess.

hometruths

GreeBo wrote: »

Well thats just not true. I gave my own example where it was a sound investment. But you cant use only the poor decisions to make a judgement.

Let me guess, you bought your property 2004 or earlier?

combat14

BillyBiggs wrote: »

Just took a look at rental properties on Daft in both Cork and Dublin. Sweet Jesus, reality hasn’t hit the rental market at all. Who do they think is going to rent these places for such extortionate rents? Do letting agents not watch the news, or read newspapers?

Same can be said for hotel room prices in cork and Dublin too absolutely insane

GreeBo

schmittel wrote: »

Let me guess, you bought your property 2004 or earlier?

2008

fliball123

ittakestwo wrote: »

But they never went to those places, even long before brexit.

There is denial if people think MNC's would be here if we didn't have a 13% corporation tax.

Ahh the corpo rate has a lot to do with it. The good thing for Ireland is that it has now proven itself as an effective base for MNCs in Europe and with the UK heading out the EU door they are the only country with English as its first language in the EU. It means that Ireland will remain an attractive option for MNCs. If they ever get the infrastructure right in the country we could really be on the pigs back

Ozark707

BillyBiggs wrote: »

Just took a look at rental properties on Daft in both Cork and Dublin. Sweet Jesus, reality hasn’t hit the rental market at all. Who do they think is going to rent these places for such extortionate rents? Do letting agents not watch the news, or read newspapers?

Well anyone who is looking now should be treating these prices as aspirational and trying to secure a reduction. Up until a few months ago that would not have been possible but now asking prices for 1 or 2 bed apts in Dublin are back at levels last seen 2 years ago, and given 2 years ago you would have been highly unlikely to secure somewhere under asking now you probably can so in effect prices are probably back to levels of 2.5/3 years ago.