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Irish Property Market 2020 Part 2

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    #1202
    hometruths
    Registered Users, Subscribers Posts: 5,798 ✭✭✭hometruths


    fliball123 wrote: »
    It will without a doubt but when it comes to mortgages the option that would impact on them most when leveraging inflation or deflation would be by using interest rates and I cannot see them touched for a long time and when they are going up it will be very very slowly. Its all to do with timing and with a pandemic ongoing right now it is not the time to be bringing up interest rates

    Again I am in agreement with you - the money printing and QE will have some effect for sure, whether that is deflationary or inflationary remains to be seen.

    Consider both in theory in an Irish property context (so I don't fall foul of the no global macro discussion mod warning!).

    If it is deflationary prices will fall, as will wages, unemployment will rise etc and it will spiral until CBs can get a handle on the deflation.

    But how will they do that? They have no room to drop interest rates further without going negative?

    And if it is inflationary, sure property prices will rise, as will the cost of living whilst wages will not keep pace in real terms. This will disproportionately affect the poorest and our housing crisis will get worse.

    How will we fight inflation? Very difficult to do it without increasing interest rates. If CBs refuse to increase interest rates, or raise them too slowly, we'll end up with hyperinflation.

    Which brings me back to Bass Reeves repeated point. Be careful what you wish for.


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    #1203
    BEdS_83
    Registered Users Posts: 58 ✭✭BEdS_83


    fliball123 wrote: »
    I said there is feck all decent supply you can buy a load of properties in the back a$$ of Leitrim if you want or a shed in Dublin for 250k. Supply is down 10% on myhome anyways within 3 months. Before covid there was a selection of over 21k properties today its about 18.5k.

    As for banks I have just yesterday got the mortgage I want and proceeding with buying at asking and I am selling and I have got an over of 9k over the asking so it looks like banks are open for business. Remember they are getting money at nearly 0 interest rates off the ECB it would be a good move for them to be lending especially non first time buyers who have at least 20% deposit meaning a 20% drop in house prices and someone is forced to sell they are still breaking even on top of interest being paid.

    All of the properties above the only 2 that matter are supply and demand if a person cant afford a house he or she must either rent or go homeless (where they can still get a hous) which means supply stays the same as in thats one less house for others so have.

    I have said this before the left leaning nature of this country as in "everyone is entitled to a house" means a lot of property that should be for sale is set aside for those on the dole and then you have right right leaning nature of giving vulture funds the economic basis to come in and buy full apartment blocks that dont even hit the market.

    Currently if you had the cash say 250k you could buy a 3 bed in Clondalkin which current has a ROI of 10% give it to the government for 20 years at a rate of 85% of the ROI you would after tax (on the higher tax rate) clear over 200k and still have a property that most likely after 20 years have gone up in value. That is why REITS and vulture funds are snapping things up they would not get the same return and backed by a government for 20 years + ..So if you had money and you were an invester would you chance the stock market or look at this and go ok good government backed returns

    If this was a race and it was just people in Ireland buying and selling then prices would come down a lot more than they could but as you can see the race is rigged

    this is a good example of what you said, initial price there was something around 580, and then 560 you could see 540 few months ago and even 530 as the prints showed, so what happened?
    did the market set the price? as people were not buying?
    no, REIT went there and bought what was left there, 8,257,500.00 and I am pretty sure that they didn't even pay 500k for each house, now? they are renting them out at 2775 for the 4 bed and 3115 the 5 bed option..


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    #1204
    Iceman29
    Site Banned Posts: 149 ✭✭Iceman29


    "Bank of Ireland to cut 1,400 jobs as Covid-19 drives €937m loans charge"

    For the people who are saying its doomsday stuff, these are actual headlines and real world situations. All it is is copy and paste. If you don't like the news, complain to them.

    All I'm trying to do is put up things that are actually happening... unlike others who are just talking about how little of an effect this Covid will have on the economy and housing market without any evidence .

    If you cant see whats coming down the line, god help you


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    #1205
    combat14
    Registered Users Posts: 2,092 ✭✭✭combat14


    Bank of Ireland said on Wednesday it will cut 1,400 jobs in the coming years to rein in costs as the lender posted a loss for the first half of the year after taking a €937 million charge to cover an expected spike in bad debts resulting from the coronavirus crisis

    Group warns full-year loan-loss charge is expected to fall between €1.1bn and €1.3bn

    https://www.irishtimes.com/business/financial-services/bank-of-ireland-to-cut-1-400-jobs-as-covid-19-drives-937m-loans-charge-1.4322469?mode=amp

    looks like the banks are starting to look a bit wobbly already and we are only barely 6 months into this


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    #1206
    landofthetree
    Registered Users Posts: 2,303 ✭✭✭landofthetree


    Sinn Fein were going to use the tax on banks to build 100k homes.

    :D


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    #1207
    Iceman29
    Site Banned Posts: 149 ✭✭Iceman29


    combat14 wrote: »
    Bank of Ireland said on Wednesday it will cut 1,400 jobs in the coming years to rein in costs as the lender posted a loss for the first half of the year after taking a €937 million charge to cover an expected spike in bad debts resulting from the coronavirus crisis

    Group warns full-year loan-loss charge is expected to fall between €1.1bn and €1.3bn

    https://www.irishtimes.com/business/financial-services/bank-of-ireland-to-cut-1-400-jobs-as-covid-19-drives-937m-loans-charge-1.4322469?mode=amp

    looks like the banks are starting to look a bit wobbly already and we are only barely 6 months into this

    Careful now, providing evidence gets you labelled as a doomsayer around here Combat.

    Some people just don't want to listen


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    #1208
    Cyrus
    Registered Users Posts: 19,702 ✭✭✭✭Cyrus


    Iceman29 wrote: »
    "Bank of Ireland to cut 1,400 jobs as Covid-19 drives €937m loans charge"

    For the people who are saying its doomsday stuff, these are actual headlines and real world situations. All it is is copy and paste. If you don't like the news, complain to them.

    All I'm trying to do is put up things that are actually happening... unlike others who are just talking about how little of an effect this Covid will have on the economy and housing market without any evidence .

    If you cant see whats coming down the line, god help you

    im still not sure what point you are making, what exactly are you getting at?

    House prices are going to fall by huge amounts? Maybe, but despite your protests it hasnt happened yet.

    also if you read the BOI statement its a voluntary redundancy scheme over the next few years, it likely would have come anyway, most that will take it will be approaching retirement and wont be backfilled,

    but that wont suit your narrative.

    god help us indeed :rolleyes:


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    #1209
    Cyrus
    Registered Users Posts: 19,702 ✭✭✭✭Cyrus


    Iceman29 wrote: »
    Careful now, providing evidence gets you labelled as a doomsayer around here Combat.

    Some people just don't want to listen

    whatever you do, dont actually read the statement. just the headline :pac:


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    #1210
    landofthetree
    Registered Users Posts: 2,303 ✭✭✭landofthetree


    People seem to think that its low paid workers who are losing their jobs.

    But its middle class jobs that are being lost as well. Like in the banks,airlines,hotel management etc

    Also anybody who was on contract work and looking for new work is seeing huge cuts in their hourly rate. We have an ever increasing national debt plus we have to pay the EU 15billion over the next few years.

    House prices will fall significantly.


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    #1211
    Aron722
    Banned (with Prison Access) Posts: 50 ✭✭Aron722


    Banks are still giving out mortgages , not only if you have a solid job, friend of my parents son is an pilot only in the business 2 years and has got a mortgage by themselves.

    I wouldn't call that a very secure job at the moment and dont no what the future holds for them after paying over 100k for training


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    #1212
    Mr Hindley
    Registered Users Posts: 210 ✭✭Mr Hindley


    BEdS_83 wrote: »
    one thing that I read here, and it does make sense for me now, is the fact that people are accepting to live in a NE home rather that wait and bet against the market, I started to save the deposit in 2018, in 2019 I started to look around for house, prices seemed me pretty much impossible for my AIP, 2020 is here, lockdown almost over, prices are still impossible the same and the REIT that I live just sent me this year increase..
    I guess I would be one of those people that I find a house just lock that up, live there and didn't carry about market as long as I'm managing to pay the mortgage, it's sad to say that I know, but getting almost at 37 leaves me worried about if I'm waiting too much.. =/

    sorry about the whining


    It's not crazy thinking. I'm moving back to Ireland after 25 years in the UK, 18 years of being a home-owner, and while it feels very wrong to go from owning back to renting, I'm wondering if I should rent for a year rather than rush to buy now, given the huge uncertainty about what might happen.



    However, I'm also pondering going ahead and buying something, but cut back my planned spend significantly, with a smaller mortgage and leaving myself some cash reserves; accept something that will do for a few years, and scout out something that needs mild but not major fixing up, as those properties do seem to be sitting there without bids and might(?) represent a bargain. As someone commented above, properties that need any kind of work - even just new carpets and kitchen units - seem to get relatively ignored.


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    #1213
    SteelyDanJalapeno
    Registered Users Posts: 14,240 ✭✭✭✭SteelyDanJalapeno


    Cyrus wrote: »
    im still not sure what point you are making, what exactly are you getting at?

    House prices are going to fall by huge amounts? Maybe, but despite your protests it hasnt happened yet.

    also if you read the BOI statement its a voluntary redundancy scheme over the next few years, it likely would have come anyway, most that will take it will be approaching retirement and wont be backfilled,

    but that wont suit your narrative.

    god help us indeed :rolleyes:

    Lol

    They had planned for the 1.3bn deficit all along?


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    #1214
    Wanderer78
    Registered Users Posts: 28,826 ✭✭✭✭Wanderer78


    landofthetree wrote: »
    People seem to think that its low paid workers who are losing their jobs.

    But its middle class jobs that are being lost as well. Like in the banks,airlines,hotel management etc

    Also anybody who was on contract work and looking for new work is seeing huge cuts in their hourly rate. We have an ever increasing national debt plus we have to pay the EU 15billion over the next few years.

    House prices will fall significantly.

    rising public debt has rarely caused major recessions, its been primarily rising private dept that has caused most problems, as we seen only a few years ago


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    #1215
    0gac3yjefb5sv7
    Closed Accounts Posts: 3,948 ✭✭✭0gac3yjefb5sv7


    Breaking News: Renters expecting prices to fall so they can all get a property for 10 quid. Meanwhile, homeowners say prices will rise by 10pc a year in bad recession.


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    #1216
    hometruths
    Registered Users, Subscribers Posts: 5,798 ✭✭✭hometruths


    Wanderer78 wrote: »
    rising public debt has rarely caused major recessions, its been primarily rising private dept that has caused most problems, as we seen only a few years ago

    And has private debt been rising or falling?


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    #1217
    Cyrus
    Registered Users Posts: 19,702 ✭✭✭✭Cyrus


    SteelyDanJalapeno wrote: »
    Lol

    They had planned for the 1.3bn deficit all along?

    Lol? are we in a teenage girl group chat?

    anything else you want to attribute to me that i didnt say?


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    #1218
    hometruths
    Registered Users, Subscribers Posts: 5,798 ✭✭✭hometruths


    combat14 wrote: »
    Bank of Ireland said on Wednesday it will cut 1,400 jobs in the coming years to rein in costs as the lender posted a loss for the first half of the year after taking a €937 million charge to cover an expected spike in bad debts resulting from the coronavirus crisis

    Group warns full-year loan-loss charge is expected to fall between €1.1bn and €1.3bn

    https://www.irishtimes.com/business/financial-services/bank-of-ireland-to-cut-1-400-jobs-as-covid-19-drives-937m-loans-charge-1.4322469?mode=amp

    looks like the banks are starting to look a bit wobbly already and we are only barely 6 months into this

    According to some on here the banks are in rude health compared to 2008 and that is why we won't see a repeat of 2008.

    It's not a financial crisis apparently, it's a healthcare crisis. This time it is different.

    Very little thought seems to have been given to how quickly a healthcare crisis that shuts down the global economy can become a financial crisis.


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    #1219
    Wanderer78
    Registered Users Posts: 28,826 ✭✭✭✭Wanderer78


    schmittel wrote: »
    And has private debt been rising or falling?

    id imagine is rapidly falling, and we seen this the last time also, as soon as the private sectors ability to produce money or credit, significantly falls, and the likelihood of an increase in defaults and non performing loans occurs, the financial sector wobbles. rising public debt is a red herring, governments have the ability to create long term bonds, which can be pushed out for many decades, without it having significant negative effects on economies, in fact, if used correctly, can be a life safer and a lifeline to falling economies, i.e. in current situations, its largely a good thing, and nothing much to worry about


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    #1220
    Cyrus
    Registered Users Posts: 19,702 ✭✭✭✭Cyrus


    schmittel wrote: »
    According to some on here the banks are in rude health compared to 2008 and that is why we won't see a repeat of 2008.

    It's not a financial crisis apparently, it's a healthcare crisis. This time it is different.

    Very little thought seems to have been given to how quickly a healthcare crisis that shuts down the global economy can become a financial crisis.

    they are in much better shape than they were in 2008, im sure they could do without this but they can survive it.

    i dont doubt the new CEO of BOI was waiting for an opportunity to cut headcount either, and this is that opportunity.


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    #1221
    Iceman29
    Site Banned Posts: 149 ✭✭Iceman29


    Cyrus wrote: »
    im still not sure what point you are making, what exactly are you getting at?

    House prices are going to fall by huge amounts? Maybe, but despite your protests it hasnt happened yet.

    also if you read the BOI statement its a voluntary redundancy scheme over the next few years, it likely would have come anyway, most that will take it will be approaching retirement and wont be backfilled,

    but that wont suit your narrative.

    god help us indeed :rolleyes:

    HaHaHa this is more of it. A fairy tale answer for everything. Where is you're evidence that will prove that it'll mostly be taken by people heading out the door anyway.

    Any healthy place I've worked never offered "Voluntary redundancies " but a few unhealthy places I've working in have.....then, unfortunately they weren't voluntary and people let go.

    But you must be right this time, I'm sure they were going to get rid of 1400 people just randomly.....haha


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    #1222
    Cyrus
    Registered Users Posts: 19,702 ✭✭✭✭Cyrus


    Iceman29 wrote: »
    HaHaHa this is more of it. A fairy tale answer for everything. Where is you're evidence that will prove that it'll mostly be taken by people heading out the door anyway.

    Any healthy place I've worked never offered "Voluntary redundancies " but a few unhealthy places I've working in have.....then, unfortunately they weren't voluntary and people let go.

    But you must be right this time, I'm sure they were going to get rid of 1400 people just randomly.....haha


    Think about it, if you have a few years left are you more or less likely to take a voluntary redunancy package? and why the inverted commas?

    I would suggest, that cutting headcount has been on the cards since the new CEO was appointed, this is an opportune time to announce it.

    and i dont deal in fairy tales, just facts, you are the one projecting your beliefs in how things will turn out, i am just dealing with the actual facts available. But you arent that interested in that for some reason.


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    #1223
    hometruths
    Registered Users, Subscribers Posts: 5,798 ✭✭✭hometruths


    Wanderer78 wrote: »
    id imagine is rapidly falling, and we seen this the last time also, as soon as the private sectors ability to produce money or credit, significantly falls, and the likelihood of an increase in defaults and non performing loans occurs, the financial sector wobbles. rising public debt is a red herring, governments have the ability to create long term bonds, which can be pushed out for many decades, without it having significant negative effects on economies, in fact, if used correctly, can be a life safer and a lifeline to falling economies, i.e. in current situations, its largely a good thing, and nothing much to worry about

    It seems like most people think levels of private debt are currently lower than they were in 07/08.

    I posted this in the last thread in response to a number of banks are better capitalised, CB lending limits, all fine on that front comments, but I got no response from any of the posters who say private debt is not a problem. I'll make the point again:

    The idea that all is well because this time high levels of debt are not a problem is a recurring theme on this thread, and like a lot of the other recurring themes, does not really stand up to scrutiny.

    Whilst a pandemic is not a financial crisis caused by debt, locking down economies will inevitably trigger a recessionary environment where debt repayments come under pressure.

    Which can quite quickly become a financial crisis caused by debt.

    The global economy is drowning in debt, way more so than in 2008. Anybody who thinks Ireland is different because our CB imposed income limits on Paddy's mortgage has their head stuck in the sand.

    Private Debt to GDP in Ireland increased from 257.2 percent in 2007 to 374.1 percent in 2018.

    Screenshot-2020-06-10-at-09-35-18.png


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    #1224
    LawBoy2018
    Registered Users Posts: 1,162 ✭✭✭LawBoy2018


    I worked in BOI last summer and it was obvious that management wanted to cut overheads considerably. I was earning 40K + essentially doing sweet f all. They needed a serious cull, imo. That being said, any increase in unemployment has the potential to rattle consumer confidence which will obviously have a negative impact on the economy.


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    #1225
    Wanderer78
    Registered Users Posts: 28,826 ✭✭✭✭Wanderer78


    schmittel wrote: »
    It seems like most people think levels of private debt are currently lower than they were in 07/08.

    I posted this in the last thread in response to a number of banks are better capitalised, CB lending limits, all fine on that front comments, but I got no response from any of the posters who say private debt is not a problem. I'll make the point again:

    The idea that all is well because this time high levels of debt are not a problem is a recurring theme on this thread, and like a lot of the other recurring themes, does not really stand up to scrutiny.

    Whilst a pandemic is not a financial crisis caused by debt, locking down economies will inevitably trigger a recessionary environment where debt repayments come under pressure.

    Which can quite quickly become a financial crisis caused by debt.

    The global economy is drowning in debt, way more so than in 2008. Anybody who thinks Ireland is different because our CB imposed income limits on Paddy's mortgage has their head stuck in the sand.

    Private Debt to GDP in Ireland increased from 257.2 percent in 2007 to 374.1 percent in 2018.

    Screenshot-2020-06-10-at-09-35-18.png

    apologies, i meant the demand of private debt will be rapidly falling, otherwise i completely agree with you, but it is important to note that the amount of private debt has been rapidly falling in ireland, since the last crash, as debts having being serviced


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    #1226
    Cyrus
    Registered Users Posts: 19,702 ✭✭✭✭Cyrus


    LawBoy2018 wrote: »
    I worked in BOI last summer and it was obvious that management wanted to cut overheads considerably. I was earning 40K + essentially doing sweet f all. They needed a serious cull, imo.

    id imagine AIB is the same to be honest.


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    #1227
    MacronvFrugals
    Registered Users Posts: 1,014 ✭✭✭MacronvFrugals


    Cyrus wrote: »
    id imagine AIB is the same to be honest.

    AIB have very little else to outsource at this stage.


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    #1228
    hometruths
    Registered Users, Subscribers Posts: 5,798 ✭✭✭hometruths


    Wanderer78 wrote: »
    apologies, i meant the demand of private debt will be rapidly falling, otherwise i completely agree with you, but it is important to note that the amount of private debt has been rapidly falling in ireland, since the last crash, as debts having being serviced

    I am not sure the demand for private debt will be rapidly falling - all those taking mortgage payment breaks is demand for new debt. And whilst they might not wish to take on further debt a lot of businesses will face the stark choice of whether to increase borrowings or close down.

    Or are you just talking about in a private mortgage context that the demand will be rapidly falling?

    Re private debt having rapidly fallen since the last crash, where are you getting those figures from? Most stats I have seen indicate the opposite.


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    #1229
    Marius34
    Registered Users Posts: 1,173 ✭✭✭Marius34


    schmittel wrote: »
    It seems like most people think levels of private debt are currently lower than they were in 07/08.

    I posted this in the last thread in response to a number of banks are better capitalised, CB lending limits, all fine on that front comments, but I got no response from any of the posters who say private debt is not a problem. I'll make the point again:

    The idea that all is well because this time high levels of debt are not a problem is a recurring theme on this thread, and like a lot of the other recurring themes, does not really stand up to scrutiny.

    Whilst a pandemic is not a financial crisis caused by debt, locking down economies will inevitably trigger a recessionary environment where debt repayments come under pressure.

    Which can quite quickly become a financial crisis caused by debt.

    The global economy is drowning in debt, way more so than in 2008. Anybody who thinks Ireland is different because our CB imposed income limits on Paddy's mortgage has their head stuck in the sand.

    Private Debt to GDP in Ireland increased from 257.2 percent in 2007 to 374.1 percent in 2018.

    When we speak about private debt, we normally think about Private Household debt, which has fallen significantly.
    Overall Private Debt, yes it has increased, since many multinationals moved their balance sheets to Ireland, most significant I think it was Apple in 2015.

    522164.JPG


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    #1230
    fliball123
    Registered Users Posts: 7,445 ✭✭✭fliball123


    Iceman29 wrote: »
    Careful now, providing evidence gets you labelled as a doomsayer around here Combat.

    Some people just don't want to listen

    And for every opportunity lost there is one gained.

    https://www.irishtimes.com/business/commercial-property/new-lender-enters-the-market-mortgage-default-risks-and-italian-market-woes-1.3513066


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    #1231
    landofthetree
    Registered Users Posts: 2,303 ✭✭✭landofthetree


    100,000 mortgages with BOI are on a Covid break till Sep.

    Not many will be able to resume payments in Sep.


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