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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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BillyBiggs

amyed198 wrote: »

It's a nightmare financially, we are not from here but need to live here due to work/hobbies etc.

Paying nearly 2 grand in rent to live in a sh!thole. That's why we need to buy soon, does anyone see prices dropping in Dublin by 10-20% soon or will it take years?

In six months you should get a better deal, if you can wait till then?

0gac3yjefb5sv7

Graham wrote: »

Supply > Demand

Whether that stays the case remains to be seen.

I think you mean the other way around surely

Graham

Adelyn Late Sportsmanship wrote: »

I think you mean the other way around surely

Q what has caused the very noticeable reduction in rent asking prices since mid March?

A Supply > Demand

Donald Trump

Graham wrote: »

Q what has caused the very noticeable reduction in rent asking prices since mid March?

A Supply > Demand

I think that people sometimes forget also that demand is quantity vs. price. They seem to think as "demand" being only a "fixed" quantity irrespective of price.

[Deleted User]

Ozark707 wrote: »

If that is the case what has caused the very noticeable reduction in rent asking prices since mid March?

I doubt it’s short let properties going on the market, there was an article last week which stated only 20 extra properties went up on daft for rental in central Dublin the previous week. This indicates that there isn’t suddenly a mass movement from short let to long term. The price drop has more to do with demand dropping as people stay confined to barracks. It could also reflect the fact that there is an increase in unemployment and likely to be wage stagnation or even reductions. The Government has already said that some public service wage increases which were scheduled for later in the year are unlikely to be implemented.

I think prices for property and rental will fall due to the economic shock, but unlike other bubbles where there was over supply, easy credit and huge debt, those factors just aren’t there. There is a shortage of housing, credit hasn’t been easy for some time and as a result, debt isn’t huge. But unemployment and wages will be a problem, so drops are inevitable, not the drops we saw in 08-12 though.

stinger31

Dav010 wrote: »

I doubt it’s short let properties going on the market, there was an article last week which stated only 20 extra properties went up on daft for rental in central Dublin the previous week. This indicates that there isn’t suddenly a mass movement from short let to long term. The price drop has more to do with demand dropping as people stay confined to barracks. It could also reflect the fact that there is an increase in unemployment and likely to be wage stagnation or even reductions. The Government has already said that some public service wage increases which were scheduled for later in the year are unlikely to be implemented.

Where did they say that?

[Deleted User]

stinger31 wrote: »

Where did they say that?

https://www.google.ie/amp/s/amp.irishexaminer.com/breakingnews/ireland/not-credible-to-consider-public-pay-deal-amid-crisis-warn-ministers-998088.html

Villa05

Dav010 wrote:

The Government has already said that some public service wage increases which were scheduled for later in the year are unlikely to be implemented.

I'd say there is not too many workers expecting a pay rise this year or next. Most would feel fortunate to have a job and would not be too surprised with a pay cut

ittakestwo

Villa05 wrote: »

I'd say there is not too many workers expecting a pay rise this year or next. Most would feel fortunate to have a job and would not be too surprised with a pay cut

Not if your in the PS. Money grows on trees with them.

Annoying reading that article

“What message would that send if we delayed or axed the new deal after the huge effort the public service have made during this crisis. I can’t see us allowing that,” said a senior Fianna Fáil source''

Do Fianna Fail think only the PS has made an effort? And if workers in the private sector are losing jobs the only way to pay for those people on the dole and at the same time increase PS sector pay is increases taxs on the private sector or take it from the capital budget.

Ozark707

Graham wrote: »

Q what has caused the very noticeable reduction in rent asking prices since mid March?

A Supply > Demand

Question is whether this increase in supply is solely as a result of Airbnb's coming on stream or other factor. Some posters are claiming that Airbnb's are not going to move the dial and if that is the case then something else has caused prices to retreat considerably in such a short space of time.

[Deleted User]

Ozark707 wrote: »

Question is whether this increase in supply is solely as a result of Airbnb's coming on stream or other factor. Some posters are claiming that Airbnb's are not going to move the dial and if that is the case then something else has caused prices to retreat considerably in such a short space of time.

Covid-19?

A fraction of 1% of rental properties coming onto the market isn’t going to significantly move any dial, despite some people’s belief that it is. That number would probably be well within a margin of error on any credible analysis/report.

Graham

Ozark707 wrote: »

Question is whether this increase in supply is solely as a result of Airbnb's coming on stream or other factor. Some posters are claiming that Airbnb's are not going to move the dial and if that is the case then something else has caused prices to retreat considerably in such a short space of time.

I doubt it's solely down to ex-STL but the bundles of neatly-rolled towels in the marketing photographs of many freshly listed properties are a fairly good indicator of their rapid return to the residential market.

[Deleted User]

Graham wrote: »

I doubt it's solely down to ex-STL but the bundles of neatly-rolled towels in the marketing photographs of many freshly listed properties are a fairly good indicator of their rapid return to the residential market.

Quite possibly, but the numbers don’t support that. 170 extra properties advertised on daft in central Dublin the week the lockdown started, this slowed to 20 two weeks ago. So depends on your definition of “rapid”.

Graham

Dav010 wrote: »

170 extra properties advertised on daft in central Dublin the week the lockdown started, this slowed to 20 two weeks ago

Not unsurprising considering nobody is moving anywhere at the moment.

You only have to look at AirBnB themselves to see the impact.

I do find it hard to swallow the idea that the complete and almost instant implosion of the STL market is unnoticeable.

Villa05

Ozark707 wrote:

Question is whether this increase in supply is solely as a result of Airbnb's coming on stream or other factor. Some posters are claiming that Airbnb's are not going to move the dial and if that is the case then something else has caused prices to retreat considerably in such a short space of time.

Dav010 wrote:

A fraction of 1% of rental properties coming onto the market isnâ€™t going to significantly move any dial, despite some peopleâ€™s belief that it is. That number would probably be well within a margin of error on any credible analysis/report.

The property market is defined by what happens on the margins. Only a small percentage of stock is available to buy or rent at any one time

Ozark707 wrote:

Question is whether this increase in supply is solely as a result of Airbnb's coming on stream or other factor. Some posters are claiming that Airbnb's are not going to move the dial and if that is the case then something else has caused prices to retreat considerably in such a short space of time.

Foreign Workers/students returning home.
Early end to academic year
Work from home may have resulted in workers from other counties returning

[Deleted User]

Graham wrote: »

Not unsurprising considering nobody is moving anywhere at the moment.

You only have to look at AirBnB themselves to see the impact.

I do find it hard to swallow the idea that the complete and almost instant implosion of the STL market is unnoticeable.

I don’t know if you have experience of advertising properties on daft and/or Airbnb. It is all done from the comfort of your kitchen table. If you advertise on Airbnb, you have the property photos already. Putting the property on daft for rental takes about 20 mins and is not dependent on people moving. If there was a sudden, rapid increase, it would be noticeable in the numbers on daft, they just aren’t there. That is not my opinion, that is daft.ie’s own statistics.

Airbnb operations have crashed, If people can’t travel, the crash is inevitable. But as someone who has both rental and Airbnb properties, the prospect of long term renting is also bleak. With most Airbnb customers coming from the domestic market and the packing of events cancelled this year into available dates when restrictions lifted, I can see why many STL owners may be holding off making a decision on what to do, or renting short term (<6mths) with a view to going back to STL or selling as soon as possible.

But who knows, STL could collapse completely, or boom if people prefer the isolation of apartments/houses to hotels when travelling. But either way, the STL market is such a tiny fraction of letting market, photos of properties with folded towels is unlikely to make a difference.

Graham

Dav010 wrote: »

But who knows, STL could collapse completely

could?

[Deleted User]

Graham wrote: »

could?

Could Graham, as opposed to will, unless you have a crystal ball. The reasons for Airbnb being popular will still be there, weddings, stag parties, concerts etc will still be there, but international tourists will be down. So, no doubt there will be change, will it collapse? Hardly.

Graham

Dav010 wrote: »

Could Graham, as opposed to will, unless you have a crystal ball.

Sorry, I wasn't suggesting the STL market will implode.

It already has, and it's likely to remain that way for the near-term.

GreeBo

Graham wrote: »

Sorry, I wasn't suggesting the STL market will implode.

It already has, and it's likely to remain that way for the near-term.

I guess the point is... So what?
There was an initial dump of new properties for rent, but considering the size of the market, it is not going to be a continuing thing.

Graham

GreeBo wrote: »

I guess the point is... So what?
There was an initial dump of new properties for rent, but considering the size of the market, it is not going to be a continuing thing.

Once the initial wave of returning residential properties has passed, so too will any downward pressure on rents.

On the other hand, the removal of the financial incentive to convert residential property to STLs will reduce upward pressure on both rents and property prices.

I'm not for a minute suggesting this is somehow going to 'fix' the property market but it's certainly not a bad thing to remove a broken part of it.

[Deleted User]

Graham wrote: »

Sorry, I wasn't suggesting the STL market will implode.

It already has, and it's likely to remain that way for the near-term.

Graham, in that sense, most industries have imploded. It’s what happens when restrictions are lifted that will be telling, just like all other industries. As I said on another thread, STLs are open for bookings right now, hotels aren’t. I’ve gotten bookings during the lockdown for the last quarter of the year and into next year, many hotels can’t do that at the moment.

I really don’t get this fixation with STLs, it’s a minuscule percentage of the rental/sales market and gets a disproportionate amount of importance in conversations about both. It’s not a broken part, it’s just a part.

amyed198

BillyBiggs wrote: »

In six months you should get a better deal, if you can wait till then?

Not really, it is significantly hampering our saving and realistically we should only really purchase a property for around the 300,000 mark but due to dropping into that range we predict we may face increased competition which will lead to bidding wars.

We still think prices may rise due to limited supply and inflation so we need to get something ASAP but we are priced out of the property we want.

Bass Reeves

pearcider wrote: »

The wishful thinking in here is absolutely astonishing. I keep thinking back to all the big boys bailing out of the Aviva property fund back in January. The horse of course had bolted way back in September 2019 but the small time investor in here is still trying to say it will all be ok, it’s just covid 19, we will bounce back. Wrong. This is the credit bubble of 2008 revisited, with a vengeance and the debt never went away you know.

You are making one presumption that small time investors are exposed. I have two properties both with a 15%return on investment. Even if both were purchased with 100% borrowings the return would have to drop in half to stress such a loan. But for the last 5 years investors had to have 30% equity to buy investment properties.

You need a combination of factors to stress Investors. In 2008 we got them all together. A long recession, poor rental returns viv a vie original investment, massive excess of property coming onto the market. As well you need s perception that houses will remain cheap for 10+ years.

You other presumption is that just because a house drops in value that an investor is stressed. It immaterial to him as long as he can service the loan. I see nothing to indicate the amount of Investors that could have the effects some expect are present in the system. This time the shoeshine boy has not invested

Graham

Dav010 wrote: »

I really don’t get this fixation with STLs, it’s a minuscule percentage of the rental/sales market and gets a disproportionate amount of importance in conversations about both. It’s not a broken part, it’s just a part.

I can't say I lose any sleep over it, or even think about it outside of the times it appears in discussion here but then I have no particular vested interest either.

I don't think it shouldn't be a part of the residential property market though. I think for the the most part its operating contrary to the current planning regs.

I am optimistic that the fallout from the current situation will make enforcement much easier against the remaining property investors that chose to continue to try and flout the planning regs chasing what remains of the STL market.

Anyway, getting back to the property market.

The returning AirBnBs will apply short-term downward pressure on rents, particularly around Dublin city centre and probably Galway.

Longer term I expect some of the upward pressure caused by BTLs will be eradicated.

smurgen

Bass Reeves wrote: »

You are making one presumption that small time investors are exposed. I have two properties both with a 15%return on investment. Even if both were purchased with 100% borrowings the return would have to drop in half to stress such a loan. But for the last 5 years investors had to have 30% equity to buy investment properties.

You need a combination of factors to stress Investors. In 2008 we got them all together. A long recession, poor rental returns viv a vie original investment, massive excess of property coming onto the market. As well you need s perception that houses will remain cheap for 10+ years.

You other presumption is that just because a house drops in value that an investor is stressed. It immaterial to him as long as he can service the loan. I see nothing to indicate the amount of Investors that could have the effects some expect are present in the system. This time the shoeshine boy has not invested

There are a mass of factors to stress investors coming. Some are here and some are coming.i reckon prices will fall for the next ten years btw.

[Deleted User]

Graham wrote: »

I can't say I lose any sleep over it, or even think about it outside of the times it appears in discussion here but then I have no particular vested interest either.

I don't think it shouldn't be a part of the residential property market though. I think for the the most part its operating contrary to the current planning regs.

I am optimistic that the fallout from the current situation will make enforcement much easier against the remaining property investors that chose to continue to try and flout the planning regs chasing what remains of the STL market.

Anyway, getting back to the property market.

The returning AirBnBs will apply short-term downward pressure on rents, particularly around Dublin city centre and probably Galway.

Longer term I expect some of the upward pressure caused by BTLs will be eradicated.

Considering the numbers of units involved, and in particular the stats on daft, what are you basing this on? There will be far more important downward pressure on rents, like unemployment and wages, yet you are still sure returning STLs units will apply downward pressure? I think you are giving STLs far more importance than they deserve.

Hubertj

smurgen wrote: »

There are a mass of factors to stress investors coming. Some are here and some are coming.i reckon prices will fall for the next ten years btw.

I would be interested to hear what would cause prices to fall for 10 years? Other clowns on here said prices will have dropped by 30% by end of summer.

Bass Reeves

smurgen wrote: »

There are a mass of factors to stress investors coming. Some are here and some are coming.i reckon prices will fall for the next ten years btw.

In a way I hope you are right. I be able to buy another 1-2 rental properties

Cyrus

smurgen wrote: »

There are a mass of factors to stress investors coming. Some are here and some are coming.i reckon prices will fall for the next ten years btw.

prices will fall for the next 10 years ? Sorry it's never going to happen . Humour me, a 1m euro house in Dublin what do you think it'll be worth in 10 years time given these price drops