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House Prices 2021

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    #32
    JJJackal
    Registered Users Posts: 1,016 ✭✭✭JJJackal


    I have three observations.

    1) People who are lucky enough to still be working are saving a bomb (even if you got a 10% pay cut) - working from home is definitely cheaper than going to office - food, transport etc

    2) People on lower paid jobs got 350/week if let go. Some paid more than prior - estimated 5% less on average (i thought i read that somewhere).

    3) ECB about to flood Europe with 500 billion plus of funds. There are about 450 million people in EU - thats over a billion per million. Suggesting Ireland gets north of 5 billion. We are borrowing a ton of money at 0% interest

    Not sure what this means for property market.


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    #33
    Darc19
    Registered Users Posts: 3,817 ✭✭✭Darc19


    Likely that prices will drop as people become realistic that there are things outside of their control in the world and will not extend themselves

    Prices in many areas had gone too high, so my opinion is that prices will fall back, but not alarmingly so.

    And that is good for the market. We need to get away from "making a profit" on home ownership


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    #34
    Geuze
    Registered Users Posts: 13,092 ✭✭✭✭Geuze


    JJJackal wrote: »
    I have three observations.

    3) ECB about to flood Europe with 500 billion plus of funds. There are about 450 million people in EU - thats over a billion per million. Suggesting Ireland gets north of 5 billion. We are borrowing a ton of money at 0% interest

    Are you referring to the PEPP?

    https://www.ecb.europa.eu/mopo/implement/pepp/html/index.en.html

    The PEPP is 750bn, and this new money is used by the ECB to buy financial assets.

    It is not "given to Ireland".

    It is being used to buy Govt bonds, and other financial assets.

    It is helping to reduce Govt bond yields.


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    #35
    Dav010
    Registered Users Posts: 14,037 ✭✭✭✭Dav010


    Villa05 wrote: »
    There is more than one source of new houses. As stated the state can build houses without many of the costs private developers incur with a much lower cost of capital and with potentially lower labour and land costs

    I think the National Maternity Hospital and the issues with the construction company who the Government employed to build schools proves that the State is neither capable of building cheaper nor efficiently. The construction company involved in the NMH told the Government they were happy to walk away and Western Building Systems said they worked to the plans and spec given to them by the Dept of Education.

    You think a construction worker is going to accept a lower wage just because the State is the developer? Besides which, where would the money come from to build these State sponsored properties?


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    #36
    HamSarris
    Registered Users Posts: 109 ✭✭HamSarris


    House prices in Dublin could lose up to 50% relative to gold – negative sentiment preventing people from taking on loans, work insecurity, hedge funds pulling out of the market, more working from home means less people willing to pay 2 grand a month for a mouldy kip in Dublin.

    House prices could conceivably go up in Euro terms but would be lower than inflation and a lot lower than increases in most other assets.

    House prices around the country should show a more modest decline, with some scenic areas possibly seeing a rise due to high salary, work from home individuals moving there.


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    #37
    OttoPilot
    Registered Users Posts: 540 ✭✭✭OttoPilot


    JJJackal wrote: »
    I have three observations.

    1) People who are lucky enough to still be working are saving a bomb (even if you got a 10% pay cut) - working from home is definitely cheaper than going to office - food, transport etc

    2) People on lower paid jobs got 350/week if let go. Some paid more than prior - estimated 5% less on average (i thought i read that somewhere).

    3) ECB about to flood Europe with 500 billion plus of funds. There are about 450 million people in EU - thats over a billion per million. Suggesting Ireland gets north of 5 billion. We are borrowing a ton of money at 0% interest

    Not sure what this means for property market.

    A billion per million? So €1,000 per person? Hardly earth shattering


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    #38
    farmerval
    Registered Users Posts: 653 ✭✭✭farmerval


    I suspect that there could be a drop in the number of new houses coming oto the market next year.
    Right now the only thing that developers are interested in is finishing developments already started.
    They may thread softly about opening new sites until they see what way the wind is blowing. Both Cairn and Glenveigh have said they are not starting new sites for the near term. They want to complete already started sites and assess the Covid implications first.
    Whether the large funds forward buying developments for long term rental will continue doing so at the moment or not will also be a factor. Their forward purchasing is a big factor in driving output in the market in the last two years.
    There are quite a lot of social housing initiatives on site too, one of the reasons Fine Gael wanted to stave off an election for as long as possible, smiling cutting the ribbon on lots of developments of social housing would have been great PR. These will presumably help in the rental sector somewhat.

    The big unknown will be what effect the Covid will have on the market, presumably a large proportion of the jobs affected will be in the lower end of the jobs market, pubs, hotels, shops etc.

    Right now the sun is shining, we should be in absolute peak house sales season, the Covid is going as good as we could probably hope for, so naturally we think about how quickly things will get back to where they were, however if we get a second Covid wave next winter then all bets are off.


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    #39
    OttoPilot
    Registered Users Posts: 540 ✭✭✭OttoPilot


    farmerval wrote: »
    I suspect that there could be a drop in the number of new houses coming oto the market next year.
    Right now the only thing that developers are interested in is finishing developments already started.
    They may thread softly about opening new sites until they see what way the wind is blowing. Both Cairn and Glenveigh have said they are not starting new sites for the near term. They want to complete already started sites and assess the Covid implications first.
    Whether the large funds forward buying developments for long term rental will continue doing so at the moment or not will also be a factor. Their forward purchasing is a big factor in driving output in the market in the last two years.
    There are quite a lot of social housing initiatives on site too, one of the reasons Fine Gael wanted to stave off an election for as long as possible, smiling cutting the ribbon on lots of developments of social housing would have been great PR. These will presumably help in the rental sector somewhat.

    The big unknown will be what effect the Covid will have on the market, presumably a large proportion of the jobs affected will be in the lower end of the jobs market, pubs, hotels, shops etc.

    Right now the sun is shining, we should be in absolute peak house sales season, the Covid is going as good as we could probably hope for, so naturally we think about how quickly things will get back to where they were, however if we get a second Covid wave next winter then all bets are off.

    Whatever the drop off in residential building, I imagine there will be an even bigger drop off in office building. I think investors will be even more wary of covids impact on office development. Could there be an oversupply of labour i wonder, leading to downward cost pressure?


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    #40
    addaword
    Registered Users Posts: 671 ✭✭✭addaword


    she32 wrote: »
    Hi there,

    Currently saving as a FIrst time buyer. What are your thoughts on the housing market over the next 12 months.

    Due to the current global pandemic ... Do you think it will become a buyers market and house prices are likely to drop significantly?

    As Ben Dunne said on the tv last night, the coming recession is going to make 2008 look like a picnic, or words to that effect. Of course property prices are going to fall significantly.


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    #41
    emancip87
    Closed Accounts Posts: 2 ✭emancip87


    They would need to drop by 70% to reflect the realistic value considering the quality of build, the overall infrastructure and the level of life quality whic is non existent overall.


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    #42
    Dav010
    Registered Users Posts: 14,037 ✭✭✭✭Dav010


    emancip87 wrote: »
    They would need to drop by 70% to reflect the realistic value considering the quality of build, the overall infrastructure and the level of life quality whic is non existent overall.

    The value, realistic or otherwise, of a house is what someone is willing to pay for it at any particular time.


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    #43
    Villa05
    Registered Users Posts: 4,509 ✭✭✭Villa05


    DubCount wrote:
    The government has been reluctant to directly enter the house building game. With increased borrowings already, I'm not sure where the money would come from for the government to start building now - even if they wanted to.

    Governments change

    We are currently paying 1 billion per year in subsidising private rents, this is by a government that was the owner of the largest real estate portfolio in the world

    I'm sure that the EU would listen diligently to projects that stimulate economies, take workers off welfare, and provide much needed housing for workers who may be living in overcrowded accommodation aiding the spread of covid 19 and be self financing

    DubCount wrote:
    I don't believe developers are making sufficient profits to just be able to absorb the higher costs coming their way.

    A number of developers have claimed they can. The person that claimed they can't is someone who has made a career out extorting the maximumum out of the taxpayers for infrastructure projects
    DubCount wrote:
    I think you're trying to have it all ways here. If there is a supply/demand imbalance, then the rules will likely be kept in place. But if there is a supply/demand imbalance, this will put upward pressure on house prices. If the supply/demand imbalance is corrected, then much of the rationale for having the rules in the first place goes away, and they could easily be relaxed if house prices start to fall.

    Fair point, but the fact that 8 years after the biggest property crash in the world, we are in position that housing has become unaffordable for so many displays how little has been learned from the last crash.

    The supply demand imbalance is at a level that private sector can't/won't meet and can only be met by Gov intervention.
    If the government intervenes and allows funding to housing associations it can be done at a cost neutral or even at a profit.
    If its left to private sector rentals the cost will be enormous.

    Can we afford not to do it? Are we comfortable with paying higher taxes to pay higher rents?
    Would a housing policy that generates revenue for the state be much better than a policy that drains the state resources

    These are all choices that are in our own hands


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    #44
    Villa05
    Registered Users Posts: 4,509 ✭✭✭Villa05


    Dav010 wrote:
    I think the National Maternity Hospital and the issues with the construction company who the Government employed to build schools proves that the State is neither capable of building cheaper nor efficiently. The construction company involved in the NMH told the Government they were happy to walk away and Western Building Systems said they worked to the plans and spec given to them by the Dept of Education.

    There are numerous case studies of housing associations that have provided affordable housing at affordable prices, they just need to be funded

    Dav010 wrote:
    You think a construction worker is going to accept a lower wage just because the State is the developer? Besides which, where would the money come from to build these State sponsored properties?

    I have lost my job on a number of occasions, I have never returned to work on a salary that was at or above my previous salary

    Builders salaries are not a barrier to affordable housing, so the point may be mute, Thanks for pointing it out


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    #45
    Hubertj
    Registered Users Posts: 2,000 ✭✭✭Hubertj


    Villa05 wrote: »
    Governments change

    We are currently paying 1 billion per year in subsidising private rents, this is by a government that was the owner of the largest real estate portfolio in the world

    I'm sure that the EU would listen diligently to projects that stimulate economies, take workers off welfare, and provide much needed housing for workers who may be living in overcrowded accommodation aiding the spread of covid 19 and be self financing




    A number of developers have claimed they can. The person that claimed they can't is someone who has made a career out extorting the maximumum out of the taxpayers for infrastructure projects



    Fair point, but the fact that 8 years after the biggest property crash in the world, we are in position that housing has become unaffordable for so many displays how little has been learned from the last crash.

    The supply demand imbalance is at a level that private sector can't/won't meet and can only be met by Gov intervention.
    If the government intervenes and allows funding to housing associations it can be done at a cost neutral or even at a profit.
    If its left to private sector rentals the cost will be enormous.

    Can we afford not to do it? Are we comfortable with paying higher taxes to pay higher rents?
    Would a housing policy that generates revenue for the state be much better than a policy that drains the state resources

    These are all choices that are in our own hands

    it doesn't matter who is in government - the relevant departments don't have the capability or competence to manage large infrastructure projects. Institutionalized incompetence due to poor government, poor management and unions. You think the likes of SF could change that?


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    #46
    OwlsZat
    Registered Users Posts: 1,510 ✭✭✭OwlsZat


    shenanagans wrote: »
    If prices fall significantly won't developers stop building. Given the impact social distancing is predicted to have on the cost of building.

    New builds on offer will dry up pretty quick. No point building houses to sell them below cost.

    Thanks for regurgitating an old boards mistruth. The vast majority of builders will keeping building in spite of some downward price pressure. Provided they can keep themselves and others in the job they will do so. Making themselves and their friends unemployed isn't hugely appealing to most.

    Edit missed you said Developers. Developers this time around come in the form of PLCs. The likes of Cairn, Glenveagh etc., I don't think their shareholders would l be to impressed if they were to stop building. If they did the shareprice would crash as people head for the extit. Management rely on share price related bonus's so don't see it happening. Simply put less building eqauls less profits, if anything it would make more sense for them to build more if margins were down so they could maintain their current revenue.


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    #47
    Idbatterim
    Registered Users Posts: 17,839 ✭✭✭✭Idbatterim


    addaword wrote: »
    As Ben Dunne said on the tv last night, the coming recession is going to make 2008 look like a picnic, or words to that effect. Of course property prices are going to fall significantly.

    All speculation. This isnt like 2008 where we were largely at fault. They have no more of a clue what will happen, than the rest of us. This scaremongering, becomes a self fulfilling prophecy. Anyway, this awful rat race, many people I know are worse off financially but happier overall, than when this started. Nobody will be thrown out of their home here or die of hunger, regardless if there is another recession. I hope there isnt , but probably seems likely.

    Youd swear average joe soap was going.g from wolf of wall street to a bum on the street. When the vast majority of people have never had anything other than a very basic lifestyle, this bull**** scaremongering does my head in ...


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    #48
    Pablo_Flox
    Registered Users Posts: 585 ✭✭✭Pablo_Flox


    OwlsZat wrote: »
    Thanks for regurgitating an old boards mistruth. The vast majority of builders will keeping building in spite of some downward price pressure. Provided they can keep themselves and others in the job they will do so. Making themselves and their friends unemployed isn't hugely appetising to most.

    You think that builders will keep building houses at little / no profit margins so they can keep their friends in a job? Sorry to piss on your parade, but business is not the warm fuzzy world you seem to think it is... Developers are not charities and won't be building anything just to keep a few people off the dole.


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    #49
    Idbatterim
    Registered Users Posts: 17,839 ✭✭✭✭Idbatterim


    I can see the government doing some scheme to keep building going for several reasons , if developers start pulling plug due to falling prices. On schemes where ground has not yet been broken ...


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    #50
    FVP3
    Closed Accounts Posts: 1,187 ✭✭✭FVP3


    I don't understand exactly why building costs ( particularly labour costs) wouldn't fall in a recession. Materials cost too if the demand is lower. And the government could reduce some taxes somewhere. 2008 was driven by a credit crunch. We haven't had that yet, and hopefully we wont.


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    #51
    TheSheriff
    Registered Users Posts: 1,108 ✭✭✭TheSheriff


    Back to the office fully in July, got the email today. No WFH happening here :(

    I am starting to think less and less there will be a "big" drop; I think everyone I know is gearing up to buy in Dublin. A few months ago it was all about moving out of Dublin......strange its taken a pandemic to changes peoples minds. They now think they'll get a discount on a house. None have been impacted by CV-19.


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    #52
    OwlsZat
    Registered Users Posts: 1,510 ✭✭✭OwlsZat


    Hubertj wrote: »
    it doesn't matter who is in government - the relevant departments don't have the capability or competence to manage large infrastructure projects. Institutionalized incompetence due to poor government, poor management and unions. You think the likes of SF could change that?

    It has been mentioned many times but we need to setup a department of capital expenditure. To develop the skills to manage large scale building projects.


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    #53
    c.p.w.g.w
    Registered Users Posts: 4,994 ✭✭✭c.p.w.g.w


    FVP3 wrote: »
    I don't understand exactly why building costs ( particularly labour costs) wouldn't fall in a recession. Materials cost too if the demand is lower. And the government could reduce some taxes somewhere. 2008 was driven by a credit crunch. We haven't had that yet, and hopefully we wont.

    Is timber going to get much cheaper?
    Is insurance for gas installers going to reduce?
    Are folks sitting on plots valued at €100,000 going to sell it at a reduced price(unless they are in a destrssed financial state)
    Are the ESB going to reduce the costs of connection?


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    #54
    Dav010
    Registered Users Posts: 14,037 ✭✭✭✭Dav010


    c.p.w.g.w wrote: »
    Is timber going to get much cheaper?
    Is insurance for gas installers going to reduce?
    Are folks sitting on plots valued at €100,000 going to sell it at a reduced price(unless they are in a destrssed financial state)
    Are the ESB going to reduce the costs of connection?

    Toss in unionised labour on the State building sites and you can be sure that labour costs will not drop too much.


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    #55
    Idbatterim
    Registered Users Posts: 17,839 ✭✭✭✭Idbatterim


    Large amounts who would have been in a position to buy , havent lost their jobs and are currently likely to be able to save substantially more than pre virus.


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    #56
    OwlsZat
    Registered Users Posts: 1,510 ✭✭✭OwlsZat


    Dav010 wrote: »
    I think the National Maternity Hospital and the issues with the construction company who the Government employed to build schools proves that the State is neither capable of building cheaper nor efficiently. The construction company involved in the NMH told the Government they were happy to walk away and Western Building Systems said they worked to the plans and spec given to them by the Dept of Education.

    You think a construction worker is going to accept a lower wage just because the State is the developer? Besides which, where would the money come from to build these State sponsored properties?

    You're quite correct that went the Governement let the HSE build their own hospital it was a disaster. However, as the population continues to grow we will have more capital expenditure projects. We need to build the team and the skills. The problem can't be outsourced.

    The point Villa05 makes is correct. A construction worker doesn't have to accept lower wafers. As the state can accept not taxing them. Building costs rougly 1/3 materials, 1/3 wages, 1/3 land and other taxes. If the state stops taxing housing to the hilt the costs would half overnight. I believe they will only do it if they have to (ie., construction sector going to fall flat on face) because it will bring down the price of housing which Government have been actively trying to avoid as they believe it's electorate suicide.


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    #57
    Villa05
    Registered Users Posts: 4,509 ✭✭✭Villa05


    Hubertj wrote:
    it doesn't matter who is in government - the relevant departments don't have the capability or competence to manage large infrastructure projects. Institutionalized incompetence due to poor government, poor management and unions. You think the likes of SF could change that?

    I take your point,
    Maybe a better statement might be that policies change.

    Thats why I advocate letting housing associations do it through Gov funding and try not to get in their way


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    #58
    FVP3
    Closed Accounts Posts: 1,187 ✭✭✭FVP3


    c.p.w.g.w wrote: »
    Is timber going to get much cheaper?
    Is insurance for gas installers going to reduce?
    Are folks sitting on plots valued at €100,000 going to sell it at a reduced price(unless they are in a destrssed financial state)
    Are the ESB going to reduce the costs of connection?

    I hate this kind of answer, a non answer really, just a series of questions.

    Of the two things I asked for ( labour and materials) you only "answered" one, where that answer was itself a question.

    As for whether timber is going to get cheaper, I suppose so.

    The rest probably won't get cheaper but how significant are they ( except land costs which do in fact fall in recessions).


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    #59
    FVP3
    Closed Accounts Posts: 1,187 ✭✭✭FVP3


    OwlsZat wrote: »
    The point Villa05 makes is correct. A construction worker doesn't have to accept lower wafers. As the state can accept not taxing them. Building costs rougly 1/3 materials, 1/3 wages, 1/3 land and other taxes. If the state stops taxing housing to the hilt the costs would half overnight. I believe they will only do it if they have to (ie., construction sector going to fall flat on face) because it will bring down the price of housing which Government have been actively trying to avoid as they believe it's electorate suicide.

    This is a standard fallacy on taxes. The government tax is adding to the costs of development but not the final prices ( except for the stamp duty). If a house is going to sell for 300K that's the market price regardless of taxes.

    Only if lower taxes encourage more development would this not be the case. However they could just as easily encourage higher profits.


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    #60
    c.p.w.g.w
    Registered Users Posts: 4,994 ✭✭✭c.p.w.g.w


    FVP3 wrote: »
    I hate this kind of answer, a non answer really, just a series of questions.

    Of the two things I asked for ( labour and materials) you only "answered" one, where that answer was itself a question.

    As for whether timber is going to get cheaper, I suppose so.

    The rest probably won't get cheaper but how significant are they ( except land costs which do in fact fall in recessions).

    The questions I asked are likely to be answered in the negative, so prices for those will likely remain the same.

    If you own land currently worth 1 million are you really going to sell it for significantly loss unless you need cash urgently.

    Certain types of labour might reduce in cost, but trades require certification (gas & sparks) they are very unlikely to reduce. I know insurance for gas installers is quiet high, so you might see lads leaving the gas game, thus reducing supply most likely in line with demand


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    #61
    Snow Garden
    Banned (with Prison Access) Posts: 3,126 ✭✭✭Snow Garden


    Idbatterim wrote: »
    All speculation. This isnt like 2008 where we were largely at fault. They have no more of a clue what will happen, than the rest of us. This scaremongering, becomes a self fulfilling prophecy. Anyway, this awful rat race, many people I know are worse off financially but happier overall, than when this started. Nobody will be thrown out of their home here or die of hunger, regardless if there is another recession. I hope there isnt , but probably seems likely.

    Youd swear average joe soap was going.g from wolf of wall street to a bum on the street. When the vast majority of people have never had anything other than a very basic lifestyle, this bull**** scaremongering does my head in ...

    I would not write off Dunne's opinion so quickly. He has a lot of experience. A recession is not likely, it's guaranteed.
    Straight off the bat this is worse then 2008 in one very important data point - the government are projecting a budget deficit of 30 billion this year alone. I expect that figure to be higher and it has already been revised upward considerably. What will it be during the full 12 months of 2021?

    Back in the 2008 crash I believe the worst budget deficit we hit was 24 billion during 2009 with 19 billion the following year.
    From 2008 to 2014 the recovery was down to (a) Tourism (b) Agri-food (c) FDI/Multinationals and (d) Emigration. Demand and spend on a/b/c will decrease due to the global downturn and restrictions. Is (d) much of an option soon? We also have Brexit and a collapsing US economy to consider.
    Where do you see the economic recovery coming from?

    Personally I think the people on this thread suggesting house prices will stay the same or even increase are being deliberately misleading or refuse to grasp what is going on around them. I wont even hazard a guess on what will happen this year because I am not sure there'll be enough transactions to gauge from....but next year I expect house prices to drop by over 20%. Again it's speculation and I hope I am wrong - for the record, I am not buying or selling.


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