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
Deub wrote: » Why are you repeating this? Several posters replied to your comments saying it will take months to see something. We have not been living covid reality for 6 month. We are in lockdown for just over 2 months. Jobs have been lost but not a lot due to covid payment. Once the country is fully reopened and the economy restart we will see the impact and then only the property will move.
WeeCuppaCha wrote: » It’s not 6 months. Again, I’d question whether the apparent lack of movement in property asking prices are being maintained by a pre-Covid market. That market, in reality, no longer exists for many. Offers are being made and accepted based on funds which now might never materialise. I would imagine that many of the offers being accepted are fuelled by AIPs and exemptions that will no longer be approved. Anything showing on the PPR at present represents sales closed pre-Covid so you can’t go by those. It’s the next quarter and beyond’s PPR figures that will tell the tale imo.
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.
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.
schmittel wrote: » If FTBs hold off buying for a year or two, then they'll never own their home?!
schmittel wrote: » Nobody least of all I said they thought prices would fall 50% in a year, so I think we are misunderstanding each other. Not for the first time. Probably easier to leave it there.
Marius34 wrote: » Ok that's fine, but how can I understand, when you jumping in discussion each time, from long term to 1/2 years and then back to long term, on the same FTB home ownership issue, for the scenario of price fall by 50%. We agreed that demand of FTB is a big driver on the price. 50% can happen only with very low demand on FTB side, means very low number of new ownership.
schmittel wrote: » 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%
no.8 wrote: » 6 months????? Wait, did time just accelerate and we suddenly skipped 3 months? Covid-19 had minimal affect on Ireland until approx. Mid-march, so 2+ months. Looks like you are gunning for a reaction (or have i missed an obvious p**s-take?
schmittel wrote: » Apologies, I thought the post below was blindingly obvious, but I will explain it better so you can understand. Prices are going to drop when the market gets going again. Personally I think they will drop 20% over the next 18 months. At which stage I think its possible a number of prudent FTBs will hold off for a year or two to see what happens. If enough of them decide to this it will reach a tipping point that push pries down further, possibly to 50%If a 50% drop takes place thus it could take 4 years, just like the last time. And just like the last time society will still function. This could potentially happen and FTBers will not have to give up the smashed avocado for armageddon rations of gruel.
TheSheriff wrote: » So after over 8000 posts on this thread the answer remains....... nobody knows what will happen to the property market In good news I was in Dublin city Centre today for a meeting; town was somewhat busy, like a Sunday afternoon. Coffee shops open (for take out). It was nice to see things getting somewhat back to normality.
Idbatterim wrote: » What are you talking about? Do you have a crystal ball? Nobody knows exactly how all of this pan out. Beside amazing insights like there will likely be a recession...
TheSheriff wrote: » But your theory assumes everything else in the market remains static and the FTB's can just wait it out?
TheSheriff wrote: » What about the availability of housing stock? With a 50% reduction its likely many who bought in the past number of years as FTBs will be in negative equity, so they will be going nowhere as they can't trade up. This will ultimately constrict the supply of entry level homes.
TheSheriff wrote: » Should such an event happen it likely means there'll be large amounts of residential defaults, thereby likely further constricting the supply of credit.
TheSheriff wrote: » I wasn't looking to buy a property after the last crash but if FTB's were all picking up 50% off houses why is it consistently referenced as being so bad?
TheSheriff wrote: » That's an honest question btw, why didn't it happen before? I have friends who were looking in 2007/2008 and they didn't get a chance to purchase until years later. Lost their jobs several times , couldn't get a mortgage etc. They got back on their feet years later with significantly reduced salaries.
schmittel wrote: » My theory assumes everything pans out pretty much as it did last time. Demand falls off a cliff, lending tightened dramatically, transactions still take place as those who wish to buy and sell proceed, prices are set at the margin, there will be a downward trend in house prices. Yes, and we're told that even if they positive equity they wont sell either as they won't take a loss. See point above - a reduced volume of sales will continue to happen, prices are set at the margin, headlines are further price falls. Agreed, see above. They weren't all picking up houses, but there were plenty who still had savings and secure jobs, saw drops of 20%, and thought I'll just wait a while longer and then bought in 2013 - the market then turned quite quickly, as was to be expected. Why didn't what happen before? My whole point is that 50% drops have happened before and as a society we functioned perfectly well with those drops. Sure friends of yours and plenty of others lost their jobs, but society as whole coped perfectly well, and there were individuals who profited handsomely from it. It only happened 7 years ago! Some of the posts on here are suggesting if we see 50% drops post Covid we'll be banished back to the 1950s as a people. That was the only point I took issue with. For the record I am not anticipating 50% drops - I think (without a vaccine) 30-40% is more likely, but who knows!
bubblypop wrote: » There is going to be a massive recession. How anyone thinks house prices won't fall is beyond me! If the recession hits as bad as the predictions, no-one will be buying houses!
Cona wrote: » 50% drop in house prices!?!?!!? Whilst no one owns a crystal ball, if you think the housing market will drop that low you must be dreaming. Irish people and house ownership is such a strong relationship that it would take very very drastic unemployment levels for such a drop off
Idbatterim wrote: » I doubt prices will be driven up , but I'm not expecting fifty percent drops. "My theory assumes everything pans out pretty much as it did last time. Demand falls off a cliff, lending tightened dramatically, transactions still take place as those who wish to buy and sell proceed, prices are set at the margin, there will be a downward trend in house prices." The lending criteria now and during the last boom are poles apart. They couldnt be much more prudent, i doubt they will be changed much if at all
Mic 1972 wrote: » Covid has been a reality for any market since January. Investments don't stop due to lock down, they stop when the risk becomes high. Everybody knew that Covid would have impacted the economy, they have known since the beginning when China was at the peak of the outbreak. it was always going to impact the rest of the world Several people replying that it will take months for the market to decline doesn't make it a truth, nobody has a crystal ball The reality is that, as of now, prices are still the same as 6 months ago, possibly slightly higher. People out there are still bidding and buying. How this is possible I dont know
bubblypop wrote: » And what happened only 10 years ago? House prices dropped over 50% I don't understand how people can't believe it could happen again!
Idbatterim wrote: » What? Hundreds of thousands if not a million plus, will still be in secure well paid employment
stayback wrote: » b) the biggest impact will be more be conservative valuations - banks will instruct valuers to be err on the side of caution. A property they might have valued last year at €400k could easily be €360k now according to their valuer.
Shifting valuations Covid-19 has seen economic prospects plummet in days. But without hard data from sales, it’s hard to see, at least yet, the actual impact on residential property prices. In certain cases, properties are now being valued at up to 10 per cent less than they were four weeks ago, say some brokers.
cnocbui wrote: Feels like 6 months here...
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.
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