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Property Market 2020

Bigmac1euro

Maybe an article for “Property Market 2020”
Anyhow looks like developers are going to start strangling supply in order to keep prices in check.

Worth a read anyway.

https://www.independent.ie/business/personal-finance/property-mortgages/developers-now-fear-flooding-market-as-house-prices-in-decline-38820967.html

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IsErik

kippy wrote: »

You'd want to be an eejit not to think there are extremely hard times ahead for many. It is unfortunately a given.

In relation to increased prices and questionable ability of people to pay. The state have to step in an fix the clusterfcuks that are the insurance industry and in general the costs to do business in the country.

This. The global economy is going to fall off a cliff, there is not a chance the Irish property market will not be impacted to some extent, the only stumbling block i see preventing a drop of 20% or more is lack of supply. I think 15% is reasonable and no recovery to begin until atleast late 2023.

neutral guy

In my country we dont have any bids on property price.The price on estate agency website is solid and that how much property cost.If I see the property for 100K that how much property cost I leave deposit to property owner and in number of days we go to solicitor were sale/ownership of the property take couple days on cash sale basis when in Ireland this take months ! If property owner got better offer before sale he must pay me my deposit back with same amount on top depends on contract of pre sale he signed on .There is no jocks like sorry but price is higher than you see.I heard one story from guy ( from Eastern Europe ) who bought house in Ireland when he been told that property at 160 000 actually cost 175 000.He simply left his phone nr to agency and told them he offering them 160 000 and they has 2 weeks for thinking.He bought this house for 160 000 and sale / ownership took 8 months ! Which he spent in property renting when he bought a house already ! The guy in Finland bought house trough the bank / mortgage and he was a house owner in 2 days ! How I gonna buy house in Ireland ? I gonna make offer and give agency couple weeks for thinking before I did not find another I not gonna play any bids.

kippy

You'd want to be an eejit not to think there are extremely hard times ahead for many. It is unfortunately a given.

In relation to increased prices and questionable ability of people to pay. The state have to step in an fix the clusterfcuks that are the insurance industry and in general the costs to do business in the country.

kippy

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.

Well that's a nonsense statement.
Without knowing the context, type of house, location, term, interest rate, income you can never make that.
Taking it in isolation I'd say that is close enough to average mortgage repayments in any of the major cities.
It's roughly 310k at 3 percent over 30 years or 190k at 3 percent over 15 years.

IsErik

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.

combat14

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 ...

neutral guy

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.

JJJackal

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

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.

christin

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...

Irish_peppa

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.

[Deleted User]

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.

guyfawkes5

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.

combat14

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 ......

alias no.9

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.

guyfawkes5

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.

neutral guy

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.

Springy Turf

IsErik wrote: »

1300 is a crazy high mortgage imo.

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

mcbert

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?

IsErik

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.

Paul_Mc1988

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!!!

appledrop

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?

kippy

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.

theballz

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

cnocbui

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.

TheSheriff

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

Villa05

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

Hollybeg

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.

thomasdylan

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

alias no.9

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.