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Irish Property Market 2020 Part 2

Graham

Continued from here:

https://www.boards.ie/vbulletin/showthread.php?t=2058041687

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Springy Turf

GreeBo wrote: »

How about mortgage applications?

Are these mortgage approvals in principals, or drawdowns?

From this report: https://www.bpfi.ie/wp-content/uploads/2020/06/BPFI-Mortgage-Approvals-Report-May-2020.pdf it says its an offer on a specific property - I guess this would be after the sale agreed stage?

awec

Applications and AIPs are meaningless figures. Anyone can apply, and AIP is a zero-risk thing for a bank.

Springy Turf

awec wrote: »

Applications and AIPs are meaningless figures. Anyone can apply, and AIP is a zero-risk thing for a bank.

Well, if there are less AIPs issued, it means there will be less people with AIP in hand looking at houses - so I don't think it's meaningless.

awec

Springy Turf wrote: »

Well, if there are less AIPs issued, it means there will be less people with AIP in hand looking at houses - so I don't think it's meaningless.

Fair point, but I'd still view it as a somewhat dodgy data point.

Cantstandsya

GreeBo wrote: »

How about mortgage applications?

According to recent article, both applications and approvals are down record levels:

https://www.independent.ie/business/personal-finance/property-mortgages/house-prices-rose-slightly-in-may-despite-lockdown-limiting-sales-39372057.html

"The survey shows demand for loans for house purchase and consumer lending fell at the fastest rate in the history of the series and is the first marked decline in demand since the last quarter of 2011."

"The tightening of credit standards in the April to June period was coupled with the largest increase in rejected loan applications since the question was first asked in the survey at the start of 2015."

fliball123

Springy Turf wrote: »

Well, if there are less AIPs issued, it means there will be less people with AIP in hand looking at houses - so I don't think it's meaningless.

I am keeping an eye on available property on myhome and daft and day on day the supply seems to be going down. People who are selling in a lot of cases are pulling back and will wait until they get the price they want. There will be some having to sell. So both supply and access to credit is going down, I would not say demand is as there seems to be a lot of people not getting the credit they need to purchase. If and when the pandemic is over and things go back to normal I can see prices rocketing up.

hometruths

Straying into realms of the conspiracy theorist here, but have long suspected the banks use AIPs to move the market. First thought this back in 2012 due to a large volumes of AIPs being refused at drawdown - though all those AIPers had happily bid up the sales prices.

Suspect we might see something similiar again.

awec

fliball123 wrote: »

I am keeping an eye on available property on myhome and daft and day on day the supply seems to be going down. People who are selling in a lot of cases are pulling back and will wait until they get the price they want. There will be some having to sell. So both supply and access to credit is going down, I would not say demand is as there seems to be a lot of people not getting the credit they need to purchase. If and when the pandemic is over and things go back to normal I can see prices rocketing up.

Well in June supply was at it's lowest level for 14 years according to the Daft report.

fliball123

awec wrote: »

Well in June supply was at it's lowest level for 14 years according to the Daft report.

If it keeps dwindling the relationship between supply and demand will remain and price will be a product of such. I can understand a lot of sellers just taking their fingers off the trigger and thinking wait a year or 2 the virus could be gone and we can get what we are looking for

Cantstandsya

fliball123 wrote: »

If it keeps dwindling the relationship between supply and demand will remain and price will be a product of such. I can understand a lot of sellers just taking their fingers off the trigger and thinking wait a year or 2 the virus could be gone and we can get what we are looking for

I don't really follow this logic. Surely most sellers are also buyers so what difference does it make to them if the house they want is also cheaper?

I think the bigger issue is that people wanting to trade up are themselves on the covid payment and so frozen out of the market.

fliball123

Cantstandsya wrote: »

I don't really follow this logic. Surely most sellers are also buyers so what difference does it make to them if the house they want is also cheaper?

I think the bigger issue is that people wanting to trade up are themselves on the covid payment and so frozen out of the market.

I think its a psychological thing most people will have a figure in mind and will not want to go below that figure no matter what.

Shelga

Supply is dire, from what I can see. I’m a little surprised as I thought it would be a good time to sell, if there’s a recession coming. Is mid-summer usually a sluggish time of year?

Melanchthon

Shelga wrote: »

Supply is dire, from what I can see. I’m a little surprised as I thought it would be a good time to sell, if there’s a recession coming. Is mid-summer usually a sluggish time of year?

Yep suprised as well and will say I was wrong with earlier predictions.
I don't get why people wouldn't try sell now, prices might have a small haircut but would still be higher than 2018 at least and despite being wrong before there is still a relatively decent chance of recession.

Iceman29

errlloyd wrote: »

I think the media is resisting reporting job losses right now, probably for the good of the mental health of the nation.

LinkedIn will lay off quite a lot of Irish staff. I know a large multinational engineering firm with a significant Irish operation is about to do the same. I think we're at the beginning of the financial ramifications, not the end.

Agree with this. i think a lot of businesses are trying to give it a real go and will ultimately go to the wall. People will be let go unfortunately as part of this but i fully agree we are only at the beginning.

This is the biggest thing to hit this country since the civil war and Big companies are trying to balance the books by using up the rainy day fund before they start cutting.

I genuinely cant see this being a happy ever after ending, more like mass redundancies and well known companies hitting the wall

OwlsZat

fliball123 wrote: »

I think its a psychological thing most people will have a figure in mind and will not want to go below that figure no matter what.

If your not getting the right price after the largest economic expansion in the history of the state and herd mentality lemmings queuing up to outbid each other on overpriced assets you should reevaluate your figure.

Sweet.Science

OwlsZat wrote: »

If your not getting the right price after the largest economic expansion in the history of the state and herd mentality lemmings queuing up to outbid each other on overpriced assets you should reevaluate your figure.

Ah ok . So whats the alternative . Never get on the property ladder?

Graham

Sweet.Science wrote: »

Ah ok . So whats the alternative . Never get on the property ladder?

Wait for the next global financial crash appears to be the common approach

SozBbz

Graham wrote: »

Wait for the next global financial crash appears to be the common approach

Also, don't give any thought to the fact that you might be impacted by said global financial crash and have your ability to buy scuppered. Fully push that thought from your mind.

fliball123

OwlsZat wrote: »

If your not getting the right price after the largest economic expansion in the history of the state and herd mentality lemmings queuing up to outbid each other on overpriced assets you should reevaluate your figure.

As long as their as demand is high and supply low its not overpriced

Dolbhad

Stock levels are poor at the moment. Houses seem to be going sale agreed quickly enough in Cork - even houses that have been up a few months. And I do think there are increases in price.

i had hope to sit it out for a few months to see how the market goes and because I lost my exemption worth 50k but I am under pressure in the place I rent to find somewhere else. And I say it’s more difficult to find rented accommodation.

But I think purchasers are more under pressure to buy now - if you think your job could be at risk with a recession you will get a mortgage now in case you can’t next year.

Though if I had a property to sell I would be offloading it now.

JamesMason

Iceman29 wrote: »

Agree with this. i think a lot of businesses are trying to give it a real go and will ultimately go to the wall. People will be let go unfortunately as part of this but i fully agree we are only at the beginning.

This is the biggest thing to hit this country since the civil war and Big companies are trying to balance the books by using up the rainy day fund before they start cutting.

I genuinely cant see this being a happy ever after ending, more like mass redundancies and well known companies hitting the wall

This is the largest hit to the global economy since 1929, maybe worse. CoVid caused the bang...we have yet to feel the shockwave. But it's coming. Will Irish property prices hold up during a long recession? I don't think so.

OwlsZat

Sweet.Science wrote: »

Ah ok . So whats the alternative . Never get on the property ladder?

The person is talking about sellers holding off selling until they get "their price". So the alternative is not to sell. Which we are currently seeing loads of. Personally I think it's great. Hopefully property becomes totally illiquid.

OwlsZat

Graham wrote: »

Wait for the next global financial crash appears to be the common approach

People queuing up to thank you for misunderstanding the post.

GreeBo

awec wrote: »

Applications and AIPs are meaningless figures. Anyone can apply, and AIP is a zero-risk thing for a bank.

My question was more about the implications of "lower approvals" meaning banks are tightening up...but if applications are down 25% then it's not surprising to see approvals also down 25%

Cantstandsya

GreeBo wrote: »

My question was more about the implications of "lower approvals" meaning banks are tightening up...but if applications are down 25% then it's not surprising to see approvals also down 25%

It's both. Applications are down and fewer of those already reduced applications are being approved.

Graham

Cantstandsya wrote: »

It's both. Applications are down and fewer of those already reduced applications are being approved.

Anecdotally I don't think we're seeing a surge of posts from people not getting approval.

Where are you getting the current approval statistics/rates?

Cantstandsya

Graham wrote: »

Anecdotally I don't think we're seeing a surge of posts from people not getting approval.

Where are you getting the current approval statistics/rates?

https://www.independent.ie/business/personal-finance/property-mortgages/house-prices-rose-slightly-in-may-despite-lockdown-limiting-sales-39372057.html

"The survey shows demand for loans for house purchase and consumer lending fell at the fastest rate in the history of the series and is the first marked decline in demand since the last quarter of 2011."

And then later:

"The tightening of credit standards in the April to June period was coupled with the largest increase in rejected loan applications since the question was first asked in the survey at the start of 2015."

c.p.w.g.w

Hearing lots of different stories with regards new builds...

One in particular in Limerick, where phase 1 was 10%(Social/Affordable Housing) but that Phase 2 will now be 50%(Social/Affordable Housing)...It was listed as a reason for a friend pulling out of the purchase

Has anyone heard any similar stories, and are they true?

awec

Iceman29 wrote: »

Agree with this. i think a lot of businesses are trying to give it a real go and will ultimately go to the wall. People will be let go unfortunately as part of this but i fully agree we are only at the beginning.

This is the biggest thing to hit this country since the civil war and Big companies are trying to balance the books by using up the rainy day fund before they start cutting.

I genuinely cant see this being a happy ever after ending, more like mass redundancies and well known companies hitting the wall

Amazon announced yesterday they are building a new building in D2 and creating another 1000 jobs here.

The post-covid world is not going to be as straightforward as you think.

The_Brood

Was seemingly close to having an offer accepted, then investor came in with straight up cash and delivered the knockout blow.

It seems that everything is stacked against first time buyers.