Property Market 2020

neutral guy · 19-06-2020 5:39pm

Finally guys.When you talking about property prices Dublin is not mirror of the Ireland and Ireland is not the mirror of the Dublin.County Louth,2 beds house price in 2005 was 145K,during the recession 70K,now the same house for sale at 125K and its there for sale about 1 year.Inflation ? My friend bought fresh 3 beds house for 220K in 2005 when now new built 3 beds houses cost 220K.Finally,after all Dublin parking/childcare/transport /rent/mortgage expenses,working for wage in Dublin,you are working for same money as for minimum wage in County Louth.The only advantage is that you live in Dublin were is "plenty opportunity" .I will not talking about quality of live,the Dublin will loose against country side.I know some people who moved from Dublin renting property to own property in Drogheda and they are very happy.You know how much I pay for my child after school ? 20 euros per week.I do not need travel,my work place 15 minutes walk from house.Lets start think about that.All the Best.

Deub · 19-06-2020 6:26pm

IsErik wrote: »

Do people foresee a drop in prices within the next 2 years? Purely word of mouth and no data to back it up but i know of a few people who fear they may not have a job within the next couple of months but are currently AIP with and without exemptions and are pushing ahead with their purchase, solely due to the fact they may not be able to buy the house they want within the next few years. All are mid thirties and want to buy as soon as they can. I wonder if this could cause a spike in activity and eventual sale prices in the short term and then when the true impact of this recession hits we may see a downturn, who knows. Interested to hear other peoples take on the matter

And that’s where you see the housing market is dysfunctional. Some people are afraid of losing their job in the coming months and what do they do? Make the biggest purchase of their lives.

Padre_Pio · 19-06-2020 6:28pm

Deub wrote: »

And that’s where you see the housing market is dysfunctional. Some people are afraid of losing their job in the coming months and what do they do? Make the biggest purchase of their lives.

There are zero consequences if you fail to pay your mortgage.

The bank cannot evict people.

IsErik · 19-06-2020 7:28pm

JimmyVik wrote: »

I cant help but think there is going to be a drop.
But Im always wrong when I try to predict anything to do with property.

Likewise, initially i thought that the lack of supply would offset any significant drop in prices, however, the more i've read on economics, the current market, how this type of recession is unprecedented and knowing how most of my friends/family are impacted financially by this both short term and long term (even those in the tech game), i can't fathom how prices will NOT drop by at least double digit percentage points.

I mean the global economy is going to take a hammering for the next few years due to this and it already was overheated.

alias no.9 · 19-06-2020 7:48pm

All rational indicators say property prices should fall but this will only happen as reflection of the reduction in buying power of the prospective buyers. So even if prices fall, unless your personal circumstances mean you're less impacted by the prevailing economic woes than the typical house buyer, it won't make a house purchase more attainable.

The Irish property market is anything but rational, so **** knows what will actually happen.

thomasdylan · 19-06-2020 8:00pm

There will be a drop due to the loss of exemptions if nothing else.

Not many are going to want to sell their houses now and there are no consequences if you don't pay your full mortagage so there will be few houses going on the market.

I work with a few people who would have been planning to buy. They'd have not suffered financially in the last few months. If anything they've been making more money through overtime. None of them are getting exemptions now and they would all have been expecting them. Overtime isn't being factored in either. Their buying power has reduced and they're probably in as good as situation as possible.

For a combined 120k salary accounting for an increased deposit but reduced multiple:
120k x 3.5= 420k (+60k deposit is 480k)
120k x 4+ 480k (+45k deposit is 525k)

That's a 45k drop in spending power

Hollybeg · 19-06-2020 10:40pm

The 'resurgent' market has been f**ked up for over 3 years IMO. As someone who bought and sold houses during good times and who currently rents out a portfolio of property in Dublin; the rent being achieved for certain types of property is astounding. Forget about anyone who is single and on the average wage being even able to rent a 1 bed apt (comfortably) on their own. At least current mortgage lending rules keeps property affordable for owner occupiers from a mortgage vs income perspective (whilst not perfect - am thinking of second time buyers particularily). But when its significantly cheaper to buy than rent that's a serious problem (in some instances I've looked by 50%!). Obviously high rents are good for landlords but ultimately it's not really sustainable.

Villa05 · 19-06-2020 11:06pm

Hollybeg wrote:

But when its significantly cheaper to buy than rent that's a serious problem (in some instances I've looked by 50%!). Obviously high rents are good for landlords but ultimately it's not really sustainable.

Good analysis
Basically driving price up to increase supply cannot work as both house prices and rents are unsustainable and will eventually leas to houses being built in the wrong location and a price crash

TheSheriff · 20-06-2020 1:19am

thomasdylan wrote: »

There will be a drop due to the loss of exemptions if nothing else.

Not many are going to want to sell their houses now and there are no consequences if you don't pay your full mortagage so there will be few houses going on the market.

I work with a few people who would have been planning to buy. They'd have not suffered financially in the last few months. If anything they've been making more money through overtime. None of them are getting exemptions now and they would all have been expecting them. Overtime isn't being factored in either. Their buying power has reduced and they're probably in as good as situation as possible.

For a combined 120k salary accounting for an increased deposit but reduced multiple:
120k x 3.5= 420k (+60k deposit is 480k)
120k x 4+ 480k (+45k deposit is 525k)

That's a 45k drop in spending power

Is there an argument here that with exemptions gone we will see more competition in the lower price ranges i.e 300-400k

cnocbui · 20-06-2020 2:31am

Look on the bright side, if prices stay up, building houses will remain profitable and so more are likely to be built, increasing supply, than if prices fell back to levels where they were unprofitable.

theballz · 20-06-2020 6:48am

Viewed an apartment in earlier in week. It was okay but nothing special, the confusing thing for me is the owner purchased it in 2017 and listed it for sale now for €100k more.

They have done nothing with the place. A few questions:
1. What was the market like 2017? Good? Bad?
2. The same apartment in that building sold a month ago for 150k short of their asking price - do I tell them to do one?

Thanks

kippy · 20-06-2020 9:03am

theballz wrote: »

Viewed an apartment in earlier in week. It was okay but nothing special, the confusing thing for me is the owner purchased it in 2017 and listed it for sale now for €100k more.

They have done nothing with the place. A few questions:
1. What was the market like 2017? Good? Bad?
2. The same apartment in that building sold a month ago for 150k short of their asking price - do I tell them to do one?

Thanks

You can ask for what you want but the market decides what you'll get.

appledrop · 20-06-2020 9:16am

theballz wrote: »

Viewed an apartment in earlier in week. It was okay but nothing special, the confusing thing for me is the owner purchased it in 2017 and listed it for sale now for €100k more.

They have done nothing with the place. A few questions:
1. What was the market like 2017? Good? Bad?
2. The same apartment in that building sold a month ago for 150k short of their asking price - do I tell them to do one?

Thanks

Going by details you have supplied they are dreaming + I woukdnt touch it with a barge pole. No way an apt increases by 100k from 2017. Not like say an old house that might have been totally revamped. You even have proof another apt sold for much less so why would you be even considering this?

Paul_Mc1988 · 20-06-2020 9:27am

Hollybeg wrote: »

The 'resurgent' market has been f**ked up for over 3 years IMO. As someone who bought and sold houses during good times and who currently rents out a portfolio of property in Dublin; the rent being achieved for certain types of property is astounding. Forget about anyone who is single and on the average wage being even able to rent a 1 bed apt (comfortably) on their own. At least current mortgage lending rules keeps property affordable for owner occupiers from a mortgage vs income perspective (whilst not perfect - am thinking of second time buyers particularily). But when its significantly cheaper to buy than rent that's a serious problem (in some instances I've looked by 50%!). Obviously high rents are good for landlords but ultimately it's not really sustainable.

I cant get over how much some of the people I know are paying on rent. Two lads i work with are paying 1700 for a two bed apartment in maynooth and 1700 for a two bed in santry. I'm paying 1300 on a mortgage on a three bed semi in a nice part of south county Dublin. Of the 1300 per month I pay over the life of the mortgage 1/4 will be on the interest and the other 3/4 will be off the the sum. In reality I pay someone else €325 per month to live in my house. They are paying 5 times that!!!

IsErik · 20-06-2020 10:07am

Paul_Mc1988 wrote: »

I cant get over how much some of the people I know are paying on rent. Two lads i work with are paying 1700 for a two bed apartment in maynooth and 1700 for a two bed in santry. I'm paying 1300 on a mortgage on a three bed semi in a nice part of south county Dublin. Of the 1300 per month I pay over the life of the mortgage 1/4 will be on the interest and the other 3/4 will be off the the sum. In reality I pay someone else €325 per month to live in my house. They are paying 5 times that!!!

They could be saving a hefty deposit simultaneously, if prices do in fact drop and they have a big deposit they will not have to borrow as much and likely capitalize in the drop in interest rates, it is expected that some mortgage rates in Ireland may drop to 1.6-1.8% to combat the recession.

1300 is a crazy high mortgage imo.

mcbert · 20-06-2020 10:16am

IsErik wrote: »

it is expected that some mortgage rates in Ireland may drop to 1.6-1.8% to combat the recession.

This. Im curious about rates. Is this a given? Or who is saying this? In the next 12 months?

Springy Turf · 20-06-2020 10:46am

IsErik wrote: »

1300 is a crazy high mortgage imo.

A 1300+ mortgage is a reality for most people buying in Dublin.

neutral guy · 20-06-2020 11:24am

I was working in building industry pretty long time and I heard how ex big man from NAMA said the prices of land which builders bought was at sky high prices and I wish them Best Of Luck make a profit on it.The company were I was working was dealing with builders on very small margin and mostly employed young 17-20 years old boys at industrial minimum wage.

Most of the country are on wage subsidy or Covid payment.In September Ireland will stand on end of the cliff.Bussines will not back to normal as usual ( Dublin port loads statistic is perfect indicator of the economy ).AirBnB and other booking short rents are moving on long term market already.The owners of the property pay mortgages as well.

Lets start think what gonna happen when mortgage holidays,wage subsidies and Covid payment will go to the end.Banks will be in big trouble on mortgages due with unemployment.

Guys,forget about economy will back to normal in 2 years,the economy still did not recover from 2008 recession and Germany same as Italy and some other countries was already on technical recession before Covid.Dont forget about Brexit and many other things which pushed economy down already before Covid because they still here.

guyfawkes5 · 20-06-2020 11:30am

IsErik wrote: »

1300 is a crazy high mortgage imo.

As long as a mortgage is 25-30% of your take home, it's perfectly manageable.

alias no.9 · 20-06-2020 11:52am

theballz wrote: »

Viewed an apartment in earlier in week. It was okay but nothing special, the confusing thing for me is the owner purchased it in 2017 and listed it for sale now for €100k more.

They have done nothing with the place. A few questions:
1. What was the market like 2017? Good? Bad?
2. The same apartment in that building sold a month ago for 150k short of their asking price - do I tell them to do one?

Thanks

Either bid an amount that you would be happy to pay for the apartment or don't bid. Not sure I'd have bothered to even view it if I knew how it was priced.

combat14 · 20-06-2020 11:53am

neutral guy wrote: »

I was working in building industry pretty long time and I heard how ex big man from NAMA said the prices of land which builders bought was at sky high prices and I wish them Best Of Luck make a profit on it.The company were I was working was dealing with builders on very small margin and mostly employed young 17-20 years old boys at industrial minimum wage.

Most of the country are on wage subsidy or Covid payment.In September Ireland will stand on end of the cliff.Bussines will not back to normal as usual ( Dublin port loads statistic is perfect indicator of the economy ).AirBnB and other booking short rents are moving on long term market already.The owners of the property pay mortgages as well.

Lets start think what gonna happen when mortgage holidays,wage subsidies and Covid payment will go to the end.Banks will be in big trouble on mortgages due with unemployment.

Guys,forget about economy will back to normal in 2 years,the economy still did not recover from 2008 recession and Germany same as Italy and some other countries was already on technical recession before Covid.Dont forget about Brexit and many other things which pushed economy down already before Covid because they still here.

Angela Merkel today warning about biggest european recession since WW2 and talk of all the hotels, bars, restaurants, cinemas, hairdressers etc. putting up their prices here doesnt bode well either when in many cases they are over priced already ......

guyfawkes5 · 20-06-2020 11:57am

theballz wrote: »

Viewed an apartment in earlier in week. It was okay but nothing special, the confusing thing for me is the owner purchased it in 2017 and listed it for sale now for €100k more.

They have done nothing with the place. A few questions:
1. What was the market like 2017? Good? Bad?
2. The same apartment in that building sold a month ago for 150k short of their asking price - do I tell them to do one?

Thanks

You'll drive yourself crazy thinking of what people paid for a property and then sold it on with little or no work in a few years for a huge profit. It's quite common and doesn't make it any more or less likely you can purchase it.

20-06-2020 12:08pm

Springy Turf wrote: »

A 1300+ mortgage is a reality for most people buying in Dublin.

1300 is about 320k over 30 years at 3%.....crude figures as I've not checked a calculator...... That's not at all a big mortgage.

Irish_peppa · 20-06-2020 12:09pm

IsErik wrote: »

1300 is a crazy high mortgage imo.

Lol i used to pay 450 euro a month for a rented filthy bed sit you couldnt swing a cat in.
1300 a month I would say is the average irish house mortgage if not much more.

christin · 20-06-2020 12:45pm

This is a good article explaining the global economic outlook. He says a V shaped recovery is a fallacy.

www.spiegel.de/international/business/nouriel-roubini-the-stock-market-is-deluding-itself-a-a9d3ab21-cfea-4220-8727-5b59105d0858-amp

"Roubini: On Wall Street, big corporations set the tone, banks and technology companies in particular. They will survive the crisis because the state will never let them go under. They will kick people out, cut costs and in the end, they will have even more market power than before. But what we here call Main Street, small- and medium-sized companies, can't do that.

"The economy has fallen so steeply that it is practically inevitable that it will pick up again at some point. But that won't compensate for the crash in any way. Even at the end of 2021, the U.S. economy will still be below the level of early 2020; too much has broken down."

He is the same economist who warned about the last recession when others were downplaying how serious it was going to get...

neutral guy · 20-06-2020 1:58pm

Manageable mortgage is when you are in good health and have additional income to fully cover it.
Otherwise it is well manageable only until you have job.If I get mortgage I will push same hard to pay it back asap,lets say in 10 years.Because only God knows what gonna be after.
If you are 35 single and you can save good bit of money then continue do that because mortgage is anchor .
If you have family and not gonna change your address to address in different country then go for it.
Does not matter when you will buy your house the final price will be when you will sell it during the recession or during the boom.

JJJackal · 20-06-2020 3:40pm

IsErik wrote: »

They could be saving a hefty deposit simultaneously, if prices do in fact drop and they have a big deposit they will not have to borrow as much and likely capitalize in the drop in interest rates, it is expected that some mortgage rates in Ireland may drop to 1.6-1.8% to combat the recession.

1300 is a crazy high mortgage imo.

If indeed mortgage rates drop to 1.6%, its likely the person paying 1300 can transfer to this rate either at the end of their fixed term (or pay the fee to transfer as dropping >1% would be worth it e.g. its 1,000 euro a year on a mortgage with approx 100,000 euro remaining)

neutral guy · 20-06-2020 3:53pm

The property prices will holds as long banks will give mortgage holidays.
After when mortgage holidays will over houses from renting industry will falling on market as apples during the night storm
The biggest bubble is the renting market.Due with shortage many "leverage" businesmans was taking mortgages to buy property for renting.The bigger was the prices the less people had saved.
Now guy Patrick will loose job in closed down restouraunt and because no job will back home to parents house in County Mayo.Patrick paid rent with Paul and Maria 1800 euros,600 per head .Because Patrick left,Paul and Maria will have pay bigger 900 per head rent.Paul and Maria already on wage subsidy and Covid payment and it is matther of time when they will lose jobs or payment.Bussines in Dublin dead,guys will come back home or emigrating.Property owner will have dealing with bank.
Same story on AirBNB or short term rents,no tourists and will not be this year ,the property owners will survive only until mortgage holiday will ends.
This is only my fantasies but it how will happen.There was too much people was involved in renting bubble,too much people does not have savings because spent too much for rent.
Hotels,restaurants,SME will be closing once wage subsidy ,mortgage holiday will be ended.Then you will see the Real Show.

combat14 · 20-06-2020 3:57pm

neutral guy wrote: »

The property prices will holds as long banks will give mortgage holidays.
After when mortgage holidays will over houses from renting industry will falling on market as apples during the night storm
The biggest bubble is the renting market.Due with shortage many "leverage" businesmans was taking mortgages to buy property for renting.The bigger was the prices the less people had saved.
Now guy Patrick will loose job in closed down restouraunt and because no job will back home to parents house in County Mayo.Patrick paid rent with Paul and Maria 1800 euros,600 per head .Because Patrick left,Paul and Maria will have pay bigger 900 per head rent.Paul and Maria already on wage subsidy and Covid payment and it is matther of time when they will lose jobs or payment.Bussines in Dublin dead,guys will come back home or emigrating.Property owner will have dealing with bank.
Same story on AirBNB or short term rents,no tourists and will not be this year ,the property owners will survive only until mortgage holiday will ends.
This is only my fantasies but it how will happen.There was too much people was involved in renting bubble,too much people does not have savings because spent too much for rent.
Hotels,restaurants,SME will be closing once wage subsidy ,mortgage holiday will be ended.Then you will see the Real Show.

exactly it is still very early days .. it sounds like places opening up again.. but in reality workers are being told to take 20+% pay cuts and business is still very quiet

remains to be seen will customers baulk when asked to pay extra prices for covid related expenses ...

IsErik · 20-06-2020 4:02pm

combat14 wrote: »

exactly it is still very early days .. it sounds like places opening up again.. but in reality workers are being told to take 20+% pay cuts and business is still very quiet

remains to be seen will customers baulk when asked to pay extra prices for covid related expenses ...

This right here.

I will be very surprised if business activity returns to even 50% of that pre-Covid before the end of 2021.

Property Market 2020

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