Mic 1972 wrote: » In theory the market drop prediction makes sense but the reality is telling another story. it's just not happening. We have been living in the Covid reality for 6 months, jobs have been lost, public debt through the roof. But the market isn't moving
Marius34 wrote: » 1) Property prices is not as dynamic, you can't get 50% discount in a year. 2) Those who presumably would buy 50% cheaper, would be a cash buyers, so FTB would not get much out of the cheap properties, once FTB are back, prices are back. 3) With 50% crash, you kill residential construction projects, construction is a long process to recover, so you probably take out around 40.000 of new private houses, that would fall to FTB hands over ~5 years period, if there are no property price crash.
TheSheriff wrote: » All you are doing here is pushing the problem onto the next generation, as inevitably, when prices bottom there will come an inflection point where people start competing for properties in good locations...hence starting the process of prices increases again.
schmittel wrote: » If FTBs hold off buying for a year or two, then they'll never own their home?! Even if that extreme outcome is the case, which I doubt, then if the price of that is that the current homeless situation is solved then I think that's a price worth paying. i.e there would be some positives if the government acted for the good of all society rather than just a few key voting demographics.
Marius34 wrote: » And that's what I mentioned that I don't see how it positive, if there are no FTB in the market, and without new private residential construction supply. In such scenario, if that's a lost decade in property market, vast majority who are now in their 30's, basically would never own their home.
Wellboy36 wrote: » I'm in Cork but had a similar experience today. Was speaking to the estate agent who said that there will be no drop in the house price as they fully expect to sell them at original asking price. He even said that 2 more people have put deposits down this week but you can't help but wonder whether he made this up to avoid any discussion on a lower price.
schmittel wrote: » Fair enough, apologies I misread your comment. So we agree that FTB demand will be a significant driver of house prices. If house prices fall 20%, and rents fall too, unemployment rises to levels higher than 2013, banks are very strict lending etc etc. I don’t think it is beyond the bounds of possibility that FTBs will hold off buying (thus reducing demand) in the interests of prudent financial decision making, not because they’re being forced to eat gruel. It won’t take very many of them to hold off to reach a tipping point that will see prices drop way past 20%, maybe as much as 50%
Wellboy36 wrote: He even said that 2 more people have put deposits down this week but you can't help but wonder whether he made this up to avoid any discussion on a lower price.
Marius34 wrote: » Where did I ignore demand? I always speak on both side demand/supply side, as this is at the end what dictates the price for private residential market. Which i did in my comment, that there should be lower demands for FTB even than in previous crisis, to reduce it to 50%. Which would probably result in higher proportion for Cash buyers.
doogie! wrote: » I am interested in the new build in Clonsilla, St. Joseph’s. Asking price on the 2 bed is 315k. Took a spin there today and got talking to the foreman who stated they were nearly sold out and people have bought through lockdown. Is this a tactic does anyone think or are new estates actually selling out still. Not sure what interest a Foreman would have in whether the houses sell or not. Does anyone have any similar experience, I would have presumed new estates would have stalled sale wise during lockdown,
schmittel wrote: » Everybody keeps going on about the supply problem - i.e shortage of supply is what has been pushing up prices in the last few years and until this supply issue is addressed prices won't fall. I think that view is nonsense because it completely ignores the demand effect on supply. The "supply problem" will be solved overnight if demand drops - ie. supply is obviously only an issue if demand outweighs it.
Marius34 wrote: » No, 50% fall is not positive at all, in current environment. To drop 50%, that would mean House price should get lower than in 2013. We have much lower supply than we had in previous crisis, this means to keep price that low, we should get much lower demands than previous crisis, thus the crisis should be deeper and longer. In long term: 1) 50% drop, would kill the private residential construction, reducing already low supply. 2) 50% drop, would reduce average property price in Ireland from around 240K to 120K. There are more people having bigger saving in bank than in previous crisis, some of them, in particular older generation would be able to get property as a Cash buyer, weather for their kids, or for renting. Reducing supplies for FTB. 3) If price fall 50%, but rents fall less, REITs and BTL cash buyers may find as opportunity. Meaning 50% drop could happen if FTB buyers are totally screwed... which is bad for long term economy and stability. All in all 50%, is possible only in total collapse of Irish economy, due to current Supply/Demand issue, which we had quite different in previous crisis.
Marius34 wrote: » All in all 50%, is possible only in total collapse of Irish economy, due to current Supply/Demand issue, which we had quite different in previous crisis.
schmittel wrote: » The economy is screwed one way or another, but we won't be all be eating gruel. On balance if prices drop 50% one way or another I think the long term positives outweigh the negatives.
Cyrus wrote: » anyone hoping for a > 15-20% decrease in house prices in the near term is thinking only of their own desire to buy, it would be a bad thing for the majority (not in and of it self but again the prevailing conditions that would give rise to such a scenario)
Zenify wrote: I remember the esri predicting a soft landing for property in 2007/2008. I'm not sure why but they seem to always talk up the economy and property market.
FVP3 wrote: » And not high house prices? The housing stock is fine, the prices are not.
schmittel wrote: » For sure but obviously falling property prices did not cause Average Joe to lose his job. That will be the deepest recession in Irish history according to today's Irish Times.
TheSheriff wrote: » But if 'not all of us are eating gruel' why would proeprty be down 50% ?? I can't equate these two: either we are all fecked and the market tanks, taxes increase etc. Or, a certain cohort of society are fecked , the rest get on with it, prices drop maybe 5-20% to around for this bottom ring being knocked off and the cycle starts again. Anyway all speculation now ! Nobody knows what'll happen.
Hubertj wrote: » The ESRI numbers say this will be the worst recession in history as per this morning. However, last week their view on property was a 12% ish decrease? Why the disconnect? Is it because they estimate the recession will not last as long as previous recessions?
Hubertj wrote: i still don't follow. So the ESRI economic forecast is acceptable but the property market forecast is not? I don't know what happened last time but i find it difficult to accept the ESRI will compromise its integrity to such an extent..... you're saying they did in the past and are doing so again?
