Marius34 wrote: » What do you mean by "always"?
awec wrote: » Covid19 and social distancing is going to drive up costs for almost every sector of the economy, I'm not sure why some think construction will be immune from this. Whether this translates to higher prices, or to developers scaling back on their plans as they struggle to make margins (more likely) is another thing.
addaword wrote: » In a recession, prices always drop 20% minimum. I heard that in 2006 and like most people did not believe that fully then, I swolled the 10 to 15% soft landing theory advocated by all the vested interests. "Ah, but this time its different".
GreeBo wrote: » At a minimum it will take them longer to build things, which will likely increase their costs so they will pass them on to buyers.
Auctioneera wrote: » Thought this chart might be of interest.https://drive.google.com/file/d/1xlY6Xw7oCZ8yIVdq1g07-h854xb9rg0Z/view?usp=sharing It's our daily website traffic during the pandemic. Yesterday was our best day since this all kicked off, with 832 users. This is down from a high of a high of 1280 users on February 18th but up from the bottom of just 331 on April 11th. We're trying to decide if it looks more like a U shape or a V shaped recovery! Definite uptick of late though - hopefully confidence slowly coming back into the market!
awec wrote: » They can try pass them on to buyers but they may not be successful if the money isn't there. It's far more likely that they scale back plans to drive down costs. Reduce the number of houses being built and lower the spec of new houses to get cost savings. For anything that they've already started building and sold they'll have to eat the cost themselves. But they aren't idiots, they aren't going to continue to absorb costs indefinitely.
GreeBo wrote: » I'm just not sure scaling back will help their costs, if it takes them longer to build a house because they have 25% fewer builders, then it takes 25% longer (lets say). I dont think their costs will drop proportionally, since only potentially wages will decrease.
Claw Hammer wrote: » There will be rolling interest charges on top of labour costs. The longer it takes to get to market, the more capital is tied up. Most of the time it will be at high interest rates.
Canyon86 wrote: » I m based in East Cork, FTB currently looking, I have noticed sellers willing to lower prices during these times, at the same time I ve noticed a complete deadlock with no new properties appearing on daft etc etc,
Tallback wrote: » My situation is that we are sale agreed on a property since Jan and likely to proceed. I'm fully aware of the macro economic situation etc but for the non economic factors i.e need to get on with life, need space with kids, jobs secure we'll prob proceed with our eyes open. If prices drop (an I think that's more likely than not) to my thinking they'll take a while to do so. We've been looking for the last couple of years (South Dublin area houses circa €600-850k asking price) and in order to get my own sense of price trends in the market I've been keeping a database of pretty much every property that comes on in that search and then tracking through to when they sell and for how much. Looking at that today, I see that there are 46 properties in that cohort that have SOLD in March/April/May i.e. these are properties that completed in full knowledge of Covid. This is not scientific but gives some sense of the trends - 46 Properties sold. All came on the market in Jan or earlier - 23 went for at or above asking. 23 went for below asking - Average sold price vs asking was -1%, the range was 23% below asking to 16% above asking - There was a slight trend (r2 0.28) between the length of time they were on the market (i.e. first seen to sold date) and the price change i.e. the longer they were on the market the more likely they sold below asking - There was a very mild trend (r2 0.08) of the house condition ranked by me vs the price change. i.e. the better condition a house was in the more likely it would go for above asking - No trend between changes in price and asking price of houses - There are a further 75 houses in this search criteria that have gone "Sale Agreed" as marked by Daft/Myhome in March/April/May. 55 of these are since Mar 12 (first lockdown announcement) i.e. Sales activity is continuing at some reasonable level As I said, this is not scientific but gives some sense of houses that have actually sold and market activity. To my mind - there doesn't seem to be much impact to date on sold prices from Covid but I wouldn't expect there to be at this stage either.
awec wrote: Covid19 and social distancing is going to drive up costs for almost every sector of the economy, I'm not sure why some think construction will be immune from this.
Auctioneera wrote: You've answered your own question here. There is an proportional relationship between price and supply. As price goes down, so does supply ie if potential vendors fear prices going down, they decide "now is not the time to sell". Builders behave similarly. The constrained supply means more buyers fighting over fewer properties which over time pushes price up, which generates more supply until market finds an equilibrium. Low prices aren't as good for buyers as they think as it means less properties to choose from - as you are seeing first hand.
DM1983 wrote: » Amazing to find such a brilliant post among all the **** conjecture and opinions. Well done Sir.
Villa05 wrote: » Outside of critical services and products. Construction is the first sector back, this would imply least risk and consequently cost. If costs are driven up elsewhere, there will be less profit, less wages and a higher cost of living. As house prices/rent appear to be calculated as a percentage of income and Ireland is at the max level of that percentage then a significant fall in rent and prices would be inevitable I hear Mcwilliams consistently arguing the opposite. Why would I sell while prices are rising also people are sitting on development land doing nothing with it. Inaction leads to undersupply leads to increase in price of development land. This is why we need intervention from Government to aide the process Ie zone elsewhere where there is appetite to build and remove development status on land where the owner is sitting on it Seperatly If "Now is not the time to sell as prices are falling" AND "Now is the time to buy because prices are falling" If both statements are true, do they cancel each other out and people who are up sizing/downsizing carry on in the market as normal as they are both buyers and sellers Will these people lead the market downwards, your thoughts as a market participant would be greatly appreciated
Auctioneera wrote: » We just had an offer of the guide price on a 3 bed apartment we are selling. Our socially distanced, very careful viewings are being well attended. Vendors are not entertaining lowball offers as they aren't distressed and can always fall back on the strong rental market if buyers won't step up. Full details here: Thought this might be of interest to this forum. One swallow doesn't make a summer and one offer of the guide doesn't mean prices won't drop but it's an encouraging sign for us in any case. Thoughts welcome.
bubblypop wrote: » Auctionera is an estate agent
Blueshoe wrote: » The discussion is being affected. It's become more of a q+a
Auctioneera wrote: » We just had an offer of the guide price on a 3 bed apartment we are selling. Our socially distanced, very careful viewings are being well attended. Vendors are not entertaining lowball offers as they aren't distressed and can always fall back on the strong rental market if buyers won't step up. Full details here:https://www.auctioneera.ie/property/61-blackrock-grove-eden-blackrock-cork-t12-h424 Thought this might be of interest to this forum. One swallow doesn't make a summer and one offer of the guide doesn't mean prices won't drop but it's an encouraging sign for us in any case. Thoughts welcome.
Mic 1972 wrote: » You have a very good website there showing asking price and highest offer, it's very helpful as I would imagine the most frequently asked questions is whether there is currently an offer and how much. I wish more agents did the same I disagree with your comment about having a strong rental market to go back to as this isn't the case at the moment, rent have plummeted. Also a vendor may not be interested in renting out a property, in many cases LLs are selling specifically to move out of the rental market
Auctioneera wrote: I heard the McWilliams podcast on this and he was just plain wrong in our view. Just follow the data. When prices rocketed in the mid 2000's, everyone decided to become a property developer. Prices soared and supply followed until we got to over 90,000 units of supply at the peak. Then prices collapsed as we know and and supply followed prices downward. Then as we started to see prices pick up again from around 2015 onwards, supply again started to pick up. So he's just factually wrong when he says high prices don't stimulate supply - they do! And as we enter this new cycle, if prices drop, supply will follow prices downward.
Blueshoe wrote: » Any dip will be temporary. Central Banks are filling government coffers with low cost cash which is then being handed out in the form of subsidies and grants in an effort to keep things ticking over until economies get back on track. In the Us the federal reserve are specifically targeting markets that ran into liquidity shortages during the 08 collapse. They are being pumped with low cost cash. There will be stagnation but no deep recession. It won't be allowed happen. The Eu are keen to try and reintroduce much needed inflation. The best way to achieve this is to keep the money coming. Expect a massive low cost or no cost deal to be signed.
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