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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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SozBbz

eagle eye wrote: »

You know I just thought about what the future holds for all of us and we can expect hefty austerity measures and that might include taxes on savings. I'd be watching out for something like that if I was in the market to buy.

What are you basing this on? Our govt and others internationally have said austerity is not the answer.

TheSheriff

I think it is really wishful thinking to assume that this lockdown will suddenly create a new wave of buyers, thereby keeping things afloat. People who were planning on buying this year have likely been saving for such already; it may accelerate a minority having their deposit together, but I know we were saving well before we even started looking at properties.

On another, more realistic note, I have already stated in this thread we are sale agreed at >10% under asking, a reduction of nearly 50k under the asking price.

I was speaking with a good friend today and they have negotiated 40k under asking on a property in D6. They had previously pulled out of the sale at the start of this, and the vendor came back to them last week and told them make an offer.

This "positive spin" EAs are trying to put on this is laughable; who in their right mind is going to buy from a virtual viewing? I actually think if I could stay at home on a sat and just do virtual viewings all the better, I can whittle down the houses I actually want to see in person.... I would see it causing less footfall for properties during any subsequent open viewings (if these go ahead again), less stress of rocking up to somewhere and seeing 50 other young couples there.

eagle eye

You know I just thought about what the future holds for all of us and we can expect hefty austerity measures and that might include taxes on savings. I'd be watching out for something like that if I was in the market to buy.

Claw Hammer

GreeBo wrote: »

The people with money before covid-19 will have more after it.
The people withouth money before covid-19 will have less after it.

That is not corect. Some people who had a lot of money before covid 19 may have lost a lot or all of it. Take for example, people in the hospitality industry with high rental costs. They may be personally liable for the rent and have no income to pay it and the business might fail, meanig they will have no way to make back the money they lost.
Some people who had little money before covid may be involved in one of the industries which is busier as a result of covid and can now earn more and also save more.

For the many whose income has remained constant they are almost invariably spending less.

What I think is that people of house buying age are more exposed to the covid downturn that generation x and y.

GreeBo

SozBbz wrote: »

Not everyone of a certain age buys cars on PCP. I'm in my early 30's and always buy my cars based on a trade in and cash top up.

Also, I don't think the "savings" are going to be limited to just these few months. Already I've had to cancel 2 holidays, I'd say thats probably €3/4000 I would have spent but haven't been able to. Its unlikely I'll be able to go on much of a holiday this year at any point, and in normal circumstances I would have gone somewhere sunny for a week in Sept/October and maybe a city break coming up to christmas. So, thats maybe another €1500? Not to mention I won't be spending any money on concert or festival tickets this year. I'm sure there are plenty more like me out there.

I'm trying not to hoard the cash, I've bought things during lockdown and have tried to look at Irish retailers first. I've bought from some local restaurants that are doing take out as I want to support them. But still there are big ticket items like holidays that probably just won't happen at all this year and I'd want to be doing a lot of online shopping to cancel out those savings.

Add in people not paying a couple of grand a month in creche fees and it really adds up.

GreeBo

combat14 wrote: »

28.2% unemployed in April.. wonder how many are really saving tons of money

The people with money before covid-19 will have more after it.
The people withouth money before covid-19 will have less after it.

What this will do to the property market in general, or more importantly to the house you want to buy/sell is anyones guess.

Bass Reeves

SozBbz wrote: »

Not everyone of a certain age buys cars on PCP. I'm in my early 30's and always buy my cars based on a trade in and cash top up.

Also, I don't think the "savings" are going to be limited to just these few months. Already I've had to cancel 2 holidays, I'd say thats probably €3/4000 I would have spent but haven't been able to. Its unlikely I'll be able to go on much of a holiday this year at any point, and in normal circumstances I would have gone somewhere sunny for a week in Sept/October and maybe a city break coming up to christmas. So, thats maybe another €1500? Not to mention I won't be spending any money on concert or festival tickets this year. I'm sure there are plenty more like me out there.

I'm trying not to hoard the cash, I've bought things during lockdown and have tried to look at Irish retailers first. I've bought from some local restaurants that are doing take out as I want to support them. But still there are big ticket items like holidays that probably just won't happen at all this year and I'd want to be doing a lot of online shopping to cancel out those savings.

I have to agree, I am on my late 50' normal spend /week is 200 ISH on day to day spending. Diesel bill has gone from 65/week to 50/fortnight. No pub so 50ish/ week saved there. No odd sandwich or scone. Herself is similar and no large tickets items over the last 6-8 weeks. Only bought 2 icecreams over the last 4-5 weeks in weather like this I would normally buy 3-4/week. Day to day spending is 50ish/ week so 250/ week saved.

We cancelled a week in Spain and a weekend in Paris 1500-2k saved. There would have been a car due to be serviced over the last 6 weeks but all have not hit the milage and will not for another 4-6 weeks. We do not eat out much but would have expected to have eaten out at least once in the six weeks and maybe a takeaway as well..

Over the last 8 weeks that amounts to 1.2k on day to day for me probably similar for the better half. Add in holidays and other larger ticket items and we have about 5k less spend than normal. In the next 8 weeks will another 3-4 k be added to that.

Pivot Eoin

BillyBiggs wrote: »

That’s definitely overblown about people saving mad. Before the pandemic there was more a culture of buying a new car on p.c.p., paying extortionate rent and buying small houses for mad money. Who actually had the money to save mad before the pandemic? So two/ three months of extensive lockdown forced people (in most cases), to reduce their spending. But for a couple in their twenties/ thirties what would two three months translate into €5000? Not like you’ll have loads of cash buyers for houses because people were mainly at home for three months. There will be people who’ll have blown their money on online purchases too, not like spending has stopped completely.

Myself and my GF have been saving over €4500 per month, paying €600 Rent also. Our take home is about €6k all said and done, slightly above median but nothing crazy.

So I wouldn't underestimate the amount of people who are putting away 70%+ of take home especially those who moved back in with Parents.

Hubertj

BillyBiggs wrote: »

That’s definitely overblown about people saving mad. Before the pandemic there was more a culture of buying a new car on p.c.p., paying extortionate rent and buying small houses for mad money. Who actually had the money to save mad before the pandemic? So two/ three months of extensive lockdown forced people (in most cases), to reduce their spending. But for a couple in their twenties/ thirties what would two three months translate into €5000? Not like you’ll have loads of cash buyers for houses because people were mainly at home for three months. There will be people who’ll have blown their money on online purchases too, not like spending has stopped completely.

i tohught people are saving more than ever.... i believe there is over €100bn on deposit in banks?

Melanchthon

c.p.w.g.w wrote: »

Seen 2 house listed near mine, for 180k & 205k both smaller than mine and in worse areas(IMO)...I paid in the region of 100k-110k for mine 3 years ago...I realise I got a great deal on mine, but looking at those other houses has left me wondering what is my place worth now

Don't trust the optimistic prices being put up recently on DAFT and MyHome.ie, have seen places that appear to be relisted ads set to a higher price and seen at least one place that sold for considerably less than current price last year, a year in which even before now prices hadn't increased significantly.

I think sellers are trying to get the pre-Covid price even with giving a hefty "discount" on the advertised price so if you look at the price at face value it seems completely unrealistic even if you ignore the possible recession etc.

SozBbz

BillyBiggs wrote: »

That’s definitely overblown about people saving mad. Before the pandemic there was more a culture of buying a new car on p.c.p., paying extortionate rent and buying small houses for mad money. Who actually had the money to save mad before the pandemic? So two/ three months of extensive lockdown forced people (in most cases), to reduce their spending. But for a couple in their twenties/ thirties what would two three months translate into €5000? Not like you’ll have loads of cash buyers for houses because people were mainly at home for three months. There will be people who’ll have blown their money on online purchases too, not like spending has stopped completely.

Not everyone of a certain age buys cars on PCP. I'm in my early 30's and always buy my cars based on a trade in and cash top up.

Also, I don't think the "savings" are going to be limited to just these few months. Already I've had to cancel 2 holidays, I'd say thats probably €3/4000 I would have spent but haven't been able to. Its unlikely I'll be able to go on much of a holiday this year at any point, and in normal circumstances I would have gone somewhere sunny for a week in Sept/October and maybe a city break coming up to christmas. So, thats maybe another €1500? Not to mention I won't be spending any money on concert or festival tickets this year. I'm sure there are plenty more like me out there.

I'm trying not to hoard the cash, I've bought things during lockdown and have tried to look at Irish retailers first. I've bought from some local restaurants that are doing take out as I want to support them. But still there are big ticket items like holidays that probably just won't happen at all this year and I'd want to be doing a lot of online shopping to cancel out those savings.

BillyBiggs

combat14 wrote: »

28.2% unemployed in April.. wonder how many are really saving tons of money

True and Ireland is all about impressing neighbours and family members with your new car/ house/ holiday. Not really a nation of savers to begin with. Employed people spending 3 months at home, will not have increased their bank balances hugely.

BillyBiggs

amyed198 wrote: »

A family member who is good with this kind of stuff sent me this recent article on the Irish times. I can't copy but if you Google the title "what-will-people-do-with-their-lockdown-savings- "

The article states that a huge amount of people will have tonnes of cash savings in a few months, couple this with reduced supply. Prices may inflate.

This family member is trusted and states we would be mad to wait as there will be huge competition for little stock

That’s definitely overblown about people saving mad. Before the pandemic there was more a culture of buying a new car on p.c.p., paying extortionate rent and buying small houses for mad money. Who actually had the money to save mad before the pandemic? So two/ three months of extensive lockdown forced people (in most cases), to reduce their spending. But for a couple in their twenties/ thirties what would two three months translate into €5000? Not like you’ll have loads of cash buyers for houses because people were mainly at home for three months. There will be people who’ll have blown their money on online purchases too, not like spending has stopped completely.

Durtburd

what_traffic wrote: »

That would be John FitzGerald ESRI (his brother Mark owns a good chunk of Sherry FitzGerald Estate Agents, he is currently the Non-Executive Chairman of Sherry FitzGerald.)

Article does not paint a black and white picture of what is going to occur.
John does finish article with the following.
"
Much will depend on how rapidly the economy returns to a normal level of activity. The Department of Finance Stability Programme Update, published last month, envisages a substantial recovery by the end of the year. Nonetheless this would still see unemployment remaining well above 10 per cent in December, and unemployment levels would still be a problem at the end of 2021.
"

He seems to ignore the fact that the increased welfare payments will come to an end in the near future.
I can't understand how he thinks welfare payments and staying under the higher tax band will reduce the loss of income to approx 25% for those who are unemployed? This doesnt hold true for anyone who was taking home over 2.5k a month (roughly the median wage).
No mention of the devastating impact to the SME sector resulting in reduced wages for a significant chunk of our workforce. Some people who are saving more now may also opt to use that money to start a business rather than buy a house. Those who are currently self employed will probably find it harder to get a mortgage for the foreseeable future.
I would also have thought that those who are aiming at a property purchase in the next 2 years were not spending a lot on holidays, drinking and dining out to begin with.

There might be a surge in potential buyers who have saved enough to put down a deposit, but if banks are being more restrictive with lending, it's hard to say what difference that will make.

BillyBiggs

Billythekid19 wrote: »

Fully agree with the cork rental sector. I see on daft that a double room in a shared house in ballincollig is 1100 per month. Thats the price of a monthly mortgage repayment for most people!

One plus of the pandemic is that the greedy will be left waiting for their exorbitant prices.

what_traffic

combat14 wrote: »

28.2% unemployed in April.. wonder how many are really saving tons of money

Certain people will be saving, many more going into debt. To many unknown unkowns - Brexit has not gone away either but no mention of that in the article. He uses WW2 as an example of pent up demand of saving during that time but no spending - but economy now is so different to the Irish econonmy then, does it add up really as a useful comparison? There was no mass tourisim back in 1944.

combat14

28.2% unemployed in April.. wonder how many are really saving tons of money

what_traffic

amyed198 wrote: »

A family member who is good with this kind of stuff sent me this recent article on the Irish times. I can't copy but if you Google the title "what-will-people-do-with-their-lockdown-savings- "

The article states that a huge amount of people will have tonnes of cash savings in a few months, couple this with reduced supply. Prices may inflate.

This family member is trusted and states we would be mad to wait as there will be huge competition for little stock

That would be John FitzGerald ESRI (his brother Mark owns a good chunk of Sherry FitzGerald Estate Agents, he is currently the Non-Executive Chairman of Sherry FitzGerald.)

Article does not paint a black and white picture of what is going to occur.
John does finish article with the following.
"
Much will depend on how rapidly the economy returns to a normal level of activity. The Department of Finance Stability Programme Update, published last month, envisages a substantial recovery by the end of the year. Nonetheless this would still see unemployment remaining well above 10 per cent in December, and unemployment levels would still be a problem at the end of 2021.
"

Claw Hammer

lalababa wrote: »

Just looking at the sharing accommodation in Cork on daft. Some have copped on a bit re asking prices..like there are a few that would have been 600/month down to 400. But most are still head in the sand with supply increasing big time. There has been a newish trend of trying to get in early to the new college year as opposed to milking it over the summer. ie advertising the room for the year trying to intice next year's students but still on the same &#55357;&#56496; money. But overall yeah..head in the sand. Can't believe people asking 900 /month for a double in Cork!
My God if you had 3 free doubles in the house you'd be getting close to 30k pa with 14k tax free. Madness.

If you go over the 14k the whole lot is taxed. The 14k only applies if the owner is living in the house as well. how many home owners would want to share their home with 6 people?

lalababa

Just looking at the sharing accommodation in Cork on daft. Some have copped on a bit re asking prices..like there are a few that would have been 600/month down to 400. But most are still head in the sand with supply increasing big time. There has been a newish trend of trying to get in early to the new college year as opposed to milking it over the summer. ie advertising the room for the year trying to intice next year's students but still on the same ðŸ’° money. But overall yeah..head in the sand. Can't believe people asking 900 /month for a double in Cork!
My God if you had 3 free doubles in the house you'd be getting close to 30k pa with 14k tax free. Madness.

amyed198

A family member who is good with this kind of stuff sent me this recent article on the Irish times. I can't copy but if you Google the title "what-will-people-do-with-their-lockdown-savings- "

The article states that a huge amount of people will have tonnes of cash savings in a few months, couple this with reduced supply. Prices may inflate.

This family member is trusted and states we would be mad to wait as there will be huge competition for little stock

Bass Reeves

OttoPilot wrote: »

Yeah banks are not just going to let developers sit on land. It didnt happen last time with Nama and it wont happen this time. They are better capitalized now so we shouldn't need Nama.

Investors will want their money. Sitting there doing nothing while your developer goes bust? Meanwhile you are missing out on buying at the bottom?

First off most developments are in limited companies. Take it that an average new house is selling at 350k. Prices take a 10% bath that is 35k builder may continue to build and sell and cut costs to factor such a loss in. But day housing take a 15-20% bath then it is 50-70k. Even at 10% it is likely that builders will only finish houses that are first fix ready. If houses are only at block stage builder will concentrate on houses further along the construction stage.

Just like banks may reduce lending for mortgages they will also reduce lending to developers. Therefore development will slow down at 10% and stop at 20%. Remember lads in the trade learned from last recession.

Sub contractors will not let bills mount, neither will suppliers to the industry. In other words no mun no fun. As well subbies will also lay off staff faster. There is a perception that all work is done by subbies. Most are mid sized outfits with maybe 8-10+ workers. In 2008 lads wanted to keep crews together, it broke many of them. Most will lay off faster than 2008.

Wages have not climbed hugely to have reductions significant enough to allow costs to be cut for to counteract 30k+ on a house

Durtburd

eagle eye wrote: »

What you're suggesting will drive up the price of property in rural Ireland.

If I were a gambler I'd wager that will happen to some extent - relative to prices nationwide. i.e. the dip that is likely coming will not hit rural property as hard as it will hit urban centres. I still believe prices will drop nationwide.

PatrickSmithUS

Villa05 wrote: »

Google and Facebook allowing workers to work from home for the remainder of the year and will be increasingly flexible to the practice into the future

The IDA and Regional bodies should be all over this and look to move people away from Dublin to regional hubs.

There's plenty of potential remote office space in the likes of Letterkenny, Clonmel, Tuam, even Cavan, to be taken advantage of once there's enough other resources available such as accommodation.

Mic 1972

bubblypop wrote: »

Firstly, the 2km limit was for exercise. It has been increased to 5km. For your exercise.
So nothing to do with driving anywhere.
The law states that you should stay at home except in certain circumstances, which are listed.
Fairly certain that viewing a house is not in that list.

Thanks, i'll probably take my chances

eagle eye

Durtburd wrote:

I am gobsmacked at the amount of people recommending cracking on with a property purchase when absolutely no one can predict with any certainty where our economy is headed.

What you're suggesting will drive up the price of property in rural Ireland.

Villa05

duplicate

GreeBo

Billythekid19 wrote: »

You can claim around 3 euro a day from revenue for heat and electricity when wfh, it can be claimed at the end of the tax year. Also people will save thousands of euro in the year not having to commute to work.

Thousands which could go towards savings/deposit/mortgages.

Hubertj

Villa05 wrote: »

Google and Facebook allowing workers to work from home for the remainder of the year and will be increasingly flexible to the practice into the future

Obviously. Companies have to evaluate office layouts to comply with social distancing. They have to ensure air filtration is sufficient. They have to consider staff concerns. We have 1000+ across our offices and will likely be at home rest of year if we want. However, about 45% want to be back in office once they can - some home set ups are not conducive to work and collaboration etc. Many people want social interaction.

Added to that things are constantly evolving so companies need more certainty about next steps.

Also, wfh in own country is ok short term due to travel restrictions but it will be wfh in Ireland once some level of normality returns.

td2008

Billythekid19 wrote: »

You can claim around 3 euro a day from revenue for heat and electricity when wfh, it can be claimed at the end of the tax year. Also people will save thousands of euro in the year not having to commute to work.

The 3 euro a day is a payment your employer can choose to pay to you for WFH.