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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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Hubertj

schmittel wrote: »

There will always be demand for new build houses in a growing population, hence there will always be construction.

My point is I believe the current discourse is flawed and if it leads to building 35,000+ per annum units, majority of which are 3/4 bed family homes in the suburbs/commuter belts it will lead to a massive oversupply in the relatively near future.

I believe Manchester United were the best team in England last season and will win the league next season. Both of those beliefs are bollo*x as they are not supported by fact. I have a vested interest in that I support United.
I read articles by the toss*er hearne and he said the type of units being delivered has to be correct so there could of be a point there.

hometruths

Hubertj wrote: »

I believe Manchester United were the best team in England last season and will win the league next season. Both of those beliefs are bollo*x as they are not supported by fact. I have a vested interest in that I support United.
I read articles by the toss*er hearne and he said the type of units being delivered has to be correct so there could of be a point there.

My belief is based on facts.

Though plenty of posters have told me that those facts are from discredited data sources.

Like the CSO.

I’m yet to hear an intelligent argument that has persuaded me otherwise.

JamesMason

schmittel wrote: »

My belief is based on facts.

Though plenty of posters have told me that those facts are from discredited data sources.

Like the CSO.

I’m yet to hear an intelligent argument that has persuaded me otherwise.

The US economy is in tatters...the UK economy has fell into the deepest recession in living memory. However, in Ireland sure it's grand..quick buy a house now...demand is high ...get in now before it's too late.
It's like CoVid never happened. Bat**** crazy behaviour. When the penny drops in the autumn the SWHTF.

PropQueries

Hubertj wrote: »

There are also some such as yourself who say there is no housing shortage. If so why should there be any construction?
Whatever about demand or availability of credit, there looks to me like a requirement of accommodation. This will have to be provided by the government in some form. There are some idiots that believe the waven pipe spouted out by Sinn Fein.
Irrespective of what policy you have there is a finite number of construction operatives in this country which determines the number of units that can be delivered. You could always increase the number of migrants to work in construction that could magically build the houses they will live in as well as the houses they will build for commercial purposes.
The rest is just noise.
To add, only an idiot would think that prices won’t be adversely affected by current economic issues.

I don't think there is a shortage of construction workers in Ireland at the moment or for the foreseeable future.

The latest Build 2020 Report in July 2020 from the Department of Public Expenditure and Reform states: "that while construction sector employment in 2019 exceeded the level of employment in the year 2000, the number of new dwellings completed in 2019 is estimated to be approximately 60 percent, or over 30,000 units, lower than in the year 2000. This suggests that there is easily enough construction labour in Ireland to meet the housing demand."

You can read it here: https://www.gov.ie/en/publication/c19a5-build-2020-construction-sector-performance-and-capacity/

Cyrus

JamesMason wrote: »

The US economy is in tatters...the UK economy has fell into the deepest recession in living memory. However, in Ireland sure it's grand..quick buy a house now...demand is high ...get in now before it's too late.
It's like CoVid never happened. Bat**** crazy behaviour. When the penny drops in the autumn the SWHTF.

It’s autumn now is it ? And when it doesn’t happen in autumn it’ll be q1 next year and so on

Eventually you will be right like a stopped clock

wassie

schmittel wrote: »

Ok, so why in your opinion will the availability of property go down?

Availability of property has already gone down.

PropQueries

A few years ago, they changed their measurement of counting new homes entering the market from ESB connections to actual new builds. The ESB measurement used up to then was only counted if the home had been disconnected for at least 2 years previously and then re-connected, which signaled that it was now being used as a home.

I'm sure people will say it's insane logic, but have we actually been under-counting the supply of homes entering the market over the past few years.

Surely, if a house was previously vacant for two years and then re-enters the market, that's the equivalent of a new home entering the market (new build or not), but we have only been counting new builds and may have being significantly under-counting the actual true number of homes entering the market by just concentrating on new builds.

Graham

PropQueries wrote: »

Surely, if a house was previously vacant for two years and then re-enters the market, that's the equivalent of a new home entering the market

that could mean a single property is counted as a 'new build' multiple times.

Probably better that we don't start double counting properties.

PropQueries

Graham wrote: »

that could mean a single property is counted as a 'new build' multiple times.

Probably better that we don't start double counting properties.

I don't think so as it had to be disconnected for at least two years previously before being counted.

Graham

PropQueries wrote: »

I don't think so as it had to be disconnected for at least two years previously before being counted.

which implies it was previously connected and the second connection would be when the house was sold as a second hand house.

I don't see any benefit at all to adding second-hand houses into the new build counts.

There are many counties where your suggested approach would leave the impression there had been enormous amounts of construction activity over the last 10 years when there has in fact been none.

PropQueries

Graham wrote: »

which implies it was previously connected and the second connection would be when the house was sold as a second hand house.

I don't see any benefit at all to adding second-hand houses into the new build counts.

There are many counties where your suggested approach would leave the impression there had been enormous amounts of construction activity over the last 10 years when there has in fact been none.

Good point. But it would also provide reliable data on the number of vacant homes coming back into use. Maybe they should re-introduce the ESB connections data alongside the new build data to give us a picture of both new builds and previously vacant homes re-entering the market.

Graham

PropQueries wrote: »

Good point. But it would also provide reliable data on the number of vacant homes coming back into use. Maybe they should re-introduce the ESB connections data alongside the new build data to give us a picture of both new builds and previously vacant homes re-entering the market.

Would also need to be balanced with the number of properties leaving the market.

Not a bad idea but that's probably a topic for another thread.

Hubertj

PropQueries wrote: »

I don't think there is a shortage of construction workers in Ireland at the moment or for the foreseeable future.

The latest Build 2020 Report in July 2020 from the Department of Public Expenditure and Reform states: "that while construction sector employment in 2019 exceeded the level of employment in the year 2000, the number of new dwellings completed in 2019 is estimated to be approximately 60 percent, or over 30,000 units, lower than in the year 2000. This suggests that there is easily enough construction labour in Ireland to meet the housing demand."

You can read it here: https://www.gov.ie/en/publication/c19a5-build-2020-construction-sector-performance-and-capacity/

Thank you, will take a look - productivity summary gives a couple of interesting highlights. If employment levels are high why has productivity fallen so much.

PropQueries

Hubertj wrote: »

Thank you, will take a look - productivity summary gives a couple of interesting highlights. If employment levels are high why has productivity fallen so much.

I would assume they were employed in office and student accommodation developments. They can probably now hopefully easily move over to residential development.

fliball123

schmittel wrote: »

Is this the wait and see argument? I.e if you don’t have to sell you would be better off staying put to see how all this plays out?

Well it would make sense I mean we are in an unprecedented situation of a pandemic never seen before but you also have to weigh up that some people have been waiting for prices to drop from the day the term Brexit was coined so there is a lot of pent up demand as well

PropQueries

Not sure if this is a good example, but asking prices in this estate in South Dublin are now back at the prices they sold for in 2014.

This is the house on MyHome.ie: https://www.myhome.ie/residential/brochure/11-glenbourne-grove-leopardstown-dublin-18/4447555

These are the actual selling prices on the same road in the estate according to the Property Price Register over the past number of years: https://www.propertypriceregister.ie/website/npsra/PPR/npsra-ppr.nsf/PPR-By-Date&Start=1&Query=[address]=Glenbourne%20Grove%20AND%20%5Bdc_county%5D=Dublin&County=Dublin&Year=&StartMonth=&EndMonth=&Address=Glenbourne%20Grove

*You may have to copy and paste the link for the Property Price Register page to go to the page for that estate.

accensi0n

I'd be willing to bet €100 that sells for more than 450K if anyone wants to take me up on it.

An Ri rua

Cyrus wrote: »

It’s autumn now is it ? And when it doesn’t happen in autumn it’ll be q1 next year and so on

Eventually you will be right like a stopped clock

He can't tell you when the radical State interventions will end but it's soon after that. Wake up.

[Deleted User]

accensi0n wrote: »

I'd be willing to bet €100 that sells for more than 450K if anyone wants to take me up on it.

i sold on this road in 2016, for 455k, which was over asking, so I reckon it's about right.

Shelga

My limited, tiny experience of looking to buy is that apartments are going for under asking; houses are not. I think because of the pandemic, people want access to outside space even more than before. It's certainly true for me. I would now prefer a house to an apartment, even if it's in a worse area.

0gac3yjefb5sv7

Shelga wrote: »

My limited, tiny experience of looking to buy is that apartments are going for under asking; houses are not. I think because of the pandemic, people want access to outside space even more than before. It's certainly true for me. I would now prefer a house to an apartment, even if it's in a worse area.

Not in my experience. Area is always the most important factor.

Iceman29

https://www.irishtimes.com/business/economy/mortgage-approvals-down-31-in-june-but-rates-remain-high-1.4330259?mode=amp

Mortgage approvals down 31% in June but rates remain high

Springy Turf

Iceman29 wrote: »

https://www.irishtimes.com/business/economy/mortgage-approvals-down-31-in-june-but-rates-remain-high-1.4330259?mode=amp

Mortgage approvals down 31% in June but rates remain high

Those approvals are for final approval I believe, not AIP, in case anyone reads into it as a leading indicator. It would correlate closely with the number of transactions completed.

Shelga

MattS1 wrote: »

Not in my experience. Area is always the most important factor.

Oh I agree that an apartment in a desirable area will be priced higher than a house in a less desirable area, but I suppose what I mean is, apartments don't seem to be shifting as quickly.

There have been bids coming in steadily for houses I've looked at, but not apartments. Could be that the owner is pricing too high, though.

Thierry12

Springy Turf wrote: »

Those approvals are for final approval I believe, not AIP, in case anyone reads into it as a leading indicator. It would correlate closely with the number of transactions completed.

Isn't that the important one?

AIP can be done online in 2 mins

Iceman29

Springy Turf wrote: »

Those approvals are for final approval I believe, not AIP, in case anyone reads into it as a leading indicator. It would correlate closely with the number of transactions completed.

So basically there's been a 31% reduction in final approvals
ie banks tightening the rules.
31% less people able to draw down.
31% less demand
31% less people able to borrow
31% that will will grow as more job losses happen

This is pretty massive of everyone is being honest here

Thierry12

Iceman29 wrote: »

So basically there's been a 31% reduction in final approvals
ie banks tightening the rules.
31% less people able to draw down.
31% less demand
31% less people able to borrow
31% that will will grow as more job losses happen

This is pretty massive of everyone is being honest here

It's more than I thought we would see

People bidding on properties that they won't be able to draw down and buy is surely an issue now?

Would love to see sale agreed stat's

Guessing a load of people have agreed to buy houses, they won't be able to buy

Browney7

Thierry12 wrote: »

It's more than I thought we would see

People bidding on properties that they won't be able to draw down and buy is surely an issue now?

Would love to see sale agreed stat's

Guessing a load of people have agreed to buy houses, they won't be able to buy

I would have thought it would have been much worse. Lockdown was what, end of March? Any mortgages being drawn down in june to transact are sales negotiated probably from March. Considering we were shut down for 2 months it looks high. It's also consistent with the level of total sales in June 20 Vs June 19 (PPR raw data) so it's not the case that cash sales have fallen off a cliff either.

I'm in the camp of forecasting 5-10% falls just on the basis that the market was stagnant pre Covid let alone what it could look like in the short term once the post economic reopening flurry has died down.

Iceman29

Thierry12 wrote: »

It's more than I thought we would see

People bidding on properties that they won't be able to draw down and buy is surely an issue now?

Would love to see sale agreed stat's

Guessing a load of people have agreed to buy houses, they won't be able to buy

Yeah I didn't expect such a big number. 31% is huge and you're dead right about people with AIP bidding on houses. If I was buying a house I'd be putting a low ball offer and leave it there. Wouldn't get involved with a bidding war with someone who can't actually buy it.

Something should be done about this type of bidding

Hubertj

Iceman29 wrote: »

So basically there's been a 31% reduction in final approvals
ie banks tightening the rules.
31% less people able to draw down.
31% less demand
31% less people able to borrow
31% that will will grow as more job losses happen

This is pretty massive of everyone is being honest here

Was there also a reduction in applications? Is the reduction in final approvals due to increased rejections or a smaller number of applications? Or due to a significantly reduced number of transactions compared to a year earlier?
I would have thought I t would be a lot more than a 31% reduction given all that is going on.