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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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The_Conductor

landofthetree wrote: »

Income tax will rise plus other taxes.

30 billion deficit for 2020.

It could be even more next year if no vaccine which is highly like.

I'd argue that its more likely that investment and expenditure, both capital and day-to-day expenditure, will fall off a cliff.

Already we have a fresh public sector recruitment ban and a ban on the use of contractors, a ban on increments and promotions and a ban on mobility- all on the table. That is pencilled to save 4 billion.

Its going to be exceptionally hard to justify 'Covid payments' greater than unemployment benefit to recipients- and its going to be exceptionally difficult not to cut social welfare and superannuation- to make a contribution towards bringing the books a small bit closer towards where they need to be.

The EU has formally dropped budget balancing requirements and suspended the rules governing government borrowing for the time being- however, how long will that suspension last?

Ireland could very well have a public sovereign debt of 250 billion by the end of the year- and this could easily be 265-270 billion by the end of 2021.

A certain cohort of people seem to imagine we can simply print money- and refuse to listen to any narrative that involves repaying money that is borrowed, ever.........

Back in the 80s- this might have made sense- when we had rampant inflation and the nominal value of debts fell by 15-20% per annum. We have no such method of inflating away our obligations this time round.

We are in for a tough time- and the sacred cows will get hit this time round- along with everyone else. Anyone who imagines that any category of state expenditure is safe- is going to be in for a shock.

Bubbaclaus

JJJackal wrote: »

At present everyones salary is propped up by the Gov too...

Everyones?

JJJackal

Bubbaclaus wrote: »

Everyones?

Obviously everyone was a bit dramatic. But essentially most

1) Unemployment benefit
2) COVID payments
3) Public sector and semi-state are essentially paid by Government
4) Without 1,2,3 the rest of the economy would not function as there would be a massive shortage of money to buy stuff which helps to pay everyone else

sanfranbest

sanfranbest wrote: »

That shoe box cottage has been on the market for ages, it showed a bid of 485k for weeks, now suddenly they have a bid for 525k,
plus they still have a viewing next Saturday 29th Aug,,,, are they looking for more than 525k,,,,,,,,,

Who in their right mind would pay over a half a million for this cottage is beyond my comprehension,,,,,,,,,,,,,,,,

https://www.auctioneera.ie/property/47-gulistan-cottages-rathmines-dublin-d06-e6c9

Looking forward to seeing the actual selling price on the PPR

It was listed at 450k in 2017 and sold for 520k
here is the Irish Independent article about it

https://www.independent.ie/life/home-garden/homes/inside-this-renovated-cottage-in-rathmines-the-dream-gaff-for-city-dwellers-35902974.html

Its cute and in a great location,,,,But I still cannot see the value in this cottage,,,

sanfranbest

Greedy or clever?

Looks like there was only one cottage on this site,
Developer demolished the cottage and built two cottages on the site,

They are both 80sq m , but with bad natural light and not a great design,

They were first listed for 645k a few months ago, then with no buyers, they dropped the price to 627,500

Should the developer have gone with a really nice bigger house and not tried to squeeze two smaller cottages onto the site???

https://www.myhome.ie/residential/brochure/20-arbutus-place-2-bed-study-portobello-dublin-8/4409698

Your Thoughts???

Donald Trump

Pelezico wrote: »

Why would anyone holiday in Ireland?

No sun, overpriced food, accommodation and eating out is extortionate.

Give me Spain ...even with covid.

If you are implying that people are thick to come to Ireland for a week of their lives for a holiday because it is a shit destination, imagine how thick you must think the people who live in Ireland are!

Have you ever visited Ireland yourself? I'd imagine you aren't one of the thick ones who live there? What with all the other better European options you could freely move to at any stage as an Irish citizen.

Pelezico

Donald Trump wrote: »

If you are implying that people are thick to come to Ireland for a week of their lives for a holiday because it is a shit destination, imagine how thick you must think the people who live in Ireland are!

Have you ever visited Ireland yourself? I'd imagine you aren't one of the thick ones who live there? What with all the other better European options you could freely move to at any stage as an Irish citizen.

I am not sure I implied anything. If you want to holiday in Ireland...if you go.

Hubertj

sanfranbest wrote: »

Greedy or clever?

Looks like there was only one cottage on this site,
Developer demolished the cottage and built two cottages on the site,

They are both 80sq m , but with bad natural light and not a great design,

They were first listed for 645k a few months ago, then with no buyers, they dropped the price to 627,500

Should the developer have gone with a really nice bigger house and not tried to squeeze two smaller cottages onto the site???

https://www.myhome.ie/residential/brochure/20-arbutus-place-2-bed-study-portobello-dublin-8/4409698

Your Thoughts???

Sounds like a lot of money for what is basically a biggish 2 bed apartment? Do you know how much they paid for the original cottage? Or the site it was built on? Maybe they paid a high price and thought they needed to make 2 units for a proper return?

Mic 1972

Ok, now that's an interesting price drop for a 1bed apt in Smithfield
Similar apartments in the same area have much higher asking prices.

https://www.myhome.ie/residential/brochure/apartment-155-the-spinnaker-smithfield-dublin-7/4432825

Springy Turf

Mic 1972 wrote: »

Ok, now that's an interesting price drop for a 1bed apt in Smithfield
Similar apartments in the same area have much higher asking prices.

https://www.myhome.ie/residential/brochure/apartment-155-the-spinnaker-smithfield-dublin-7/4432825

500m² in Smithfield for 185k? Wow the market really has tanked.

TheSheriff

sanfranbest wrote: »

Greedy or clever?

Looks like there was only one cottage on this site,
Developer demolished the cottage and built two cottages on the site,

They are both 80sq m , but with bad natural light and not a great design,

They were first listed for 645k a few months ago, then with no buyers, they dropped the price to 627,500

Should the developer have gone with a really nice bigger house and not tried to squeeze two smaller cottages onto the site???

https://www.myhome.ie/residential/brochure/20-arbutus-place-2-bed-study-portobello-dublin-8/4409698

Your Thoughts???

Wow, we used to rent in that area. Its nice.

Im speechless at that price to be honest; they look nice inside, but wow!

Mic 1972

TheSheriff wrote: »

Wow, we used to rent in that area. Its nice.

Im speechless at that price to be honest; they look nice inside, but wow!

i checked the video too, there is something odd about the layout and also the bathroom needs to be redone but for that price it would still be worthy.
Not sure if this is a sign of anything, as anything else in the area is still super expensive

Bass Reeves

sanfranbest wrote: »

Greedy or clever?

Looks like there was only one cottage on this site,
Developer demolished the cottage and built two cottages on the site,

They are both 80sq m , but with bad natural light and not a great design,

They were first listed for 645k a few months ago, then with no buyers, they dropped the price to 627,500

Should the developer have gone with a really nice bigger house and not tried to squeeze two smaller cottages onto the site???

https://www.myhome.ie/residential/brochure/20-arbutus-place-2-bed-study-portobello-dublin-8/4409698

Your Thoughts???

Unless he acquired the original cottage at a rock bottom price he was loopy. This kind of development was common in the noughties where small builders/developers bought a house(often detached or corner site) and knocked it and build again. If that builder needs 600k+ to make a margin.on this development he made a bad development decision. They should be well sub 500k but I am not familiar with portbello prices

Pelezico

Springy Turf wrote: »

500m² in Smithfield for 185k? Wow the market really has tanked.

Not sure about that....at least not yet. One bedroom is a bad investment.

[Deleted User]

JJJackal wrote: »

At present everyones salary is propped up by the Gov too...

Some of the private sector is pottering away without any props.

brisan

sanfranbest wrote: »

That shoe box cottage has been on the market for ages, it showed a bid of 485k for weeks, now suddenly they have a bid for 525k,
plus they still have a viewing next Saturday 29th Aug,,,, are they looking for more than 525k,,,,,,,,,

Who in their right mind would pay over a half a million for this cottage is beyond my comprehension,,,,,,,,,,,,,,,,

https://www.auctioneera.ie/property/47-gulistan-cottages-rathmines-dublin-d06-e6c9

Looking forward to seeing the actual selling price on the PPR

People seem to think Auctioneera are open and transparent.
I have seen a couple of issues with them and they are EAs at the end of the day.
I would not be sure of those bids

Springy Turf

brisan wrote: »

People seem to think Auctioneera are open and transparent.
I have seen a couple of issues with them and they are EAs at the end of the day.
I would not be sure of those bids

What are the issues you have seen? They do seem to provide more information about the properties up front - and a clear closing deadline is a good think in my view.

Unfortunately Sale Agreed is just as meaningless with them as it is with any other deal, but that's not Auctioneera's fault.

brisan

Springy Turf wrote: »

What are the issues you have seen? They do seem to provide more information about the properties up front - and a clear closing deadline is a good think in my view.

Unfortunately Sale Agreed is just as meaningless with them as it is with any other deal, but that's not Auctioneera's fault.

Dodgy BER
Wrong date of construction ,plus I am not sure all bids are genuine ,but that applies to all EAs

cnocbui

Mic 1972 wrote: »

i checked the video too, there is something odd about the layout and also the bathroom needs to be redone but for that price it would still be worthy.
Not sure if this is a sign of anything, as anything else in the area is still super expensive

Why does the bathroom 'need' to be redone?

Sweet.Science

Im selling mine with auctioneera . I dont seem to be getting any fake bids on my house

JohnnyChimpo

Springy Turf wrote: »

500m² in Smithfield for 185k? Wow the market really has tanked.

Decent price for an apt the size of a Tesco Express :pac:

Mic 1972

cnocbui wrote: »

Why does the bathroom 'need' to be redone?

that bathroom looks nasty, it's probably perfectly functioning but still

Billythekid19

Still waiting on the 10%+ price crash predicted by many on here for this year. 'The prices of many homes are unchanged despite the huge economic uncertainty caused by Covid-19 but a significant number of tenants are struggling to pay their rents, according to a survey of estate agents.' https://www.irishexaminer.com/business/economy/arid-40036574.html

Assetbacked

https://www.irishtimes.com/culture/books/housing-shock-is-a-valuable-book-buy-read-and-share-it-1.4324088

A book to have on the kindle for those autumn, tax-rebated staycations, called "Housing Shock" by Rory Hearne (Maynooth University social policy lecturer). The IT article is a review by Eoin O'Broin. It appears that O'Broin agrees with the author which is why he talks up the book so much, but I don't think anyone would disagree that the housing market needs a dramatic reboot. The book also offers some solutions to the housing crisis apparently.

Villa05

JJJackal wrote:

There are many differences but most importantly all first time buyers have 10% deposit and could only borrow 3.5 times salary, 2nd time buyers 20%. Thus negative equity less likely and loan more likely to be affordable.

All irrelevant if you loose your job, that was the biggest cause of declines from 08 to 12.

JJJackal wrote:

Also fundamentally economic imprudence did not drive this recession

We are after 8 years of economic growth. In that time there has been 0 effort in reducing state debt. This is despite Nama selling of most of their assets. Instead the mantra has been pay restoration and a litany of over spends on state projects multiples of there original budgets

In effect nothing learnt and any gains pi**ed away on poorly managed projects and reccurring spending

Prudence is not something you could associate with Governments of the last 8 years or 30 years for that matter

beauf

"Pay restoration" suggests that indeed some savings were made and are still being made.

Other than that though we do indeed consistently seem to spend vastly more than other countries in delivering similar projects.

jesus_thats_gre

Billythekid19 wrote: »

Still waiting on the 10%+ price crash predicted by many on here for this year. 'The prices of many homes are unchanged despite the huge economic uncertainty caused by Covid-19 but a significant number of tenants are struggling to pay their rents, according to a survey of estate agents.' https://www.irishexaminer.com/business/economy/arid-40036574.html

First time posting on this topic. And posting as a FTB that is majorly conflicted between purchasing now (and accepting what I feel are inevitable price drops) or waiting (on the basis that those price drops may be significant). At risk of being accused of sitting on the fence, I missed out on a property last week to a cash buyer (matched my offer - which was the highest, but was paying in cash and able to leverage that position).

In terms of where we are now. There appears to be a cohort of individuals who haven't been impacted overly by Covid. I am going to suggest that they were ready to buy, or certainly well into the planning process, when Covid hit. Covid has probably solidified their desire to purchase a property - whether it be to escape the rental market, to get a bigger place that better suits home working or whatever else.

There are countless examples on this thread of properties selling 5-15% above asking. My own personal experience is closer to 15% so I have no reason to dispute those assertions. There also appears to be a lot of evidence that house sales, mortgage approval, and mortgage drawdowns are way down in terms of volumes. We can also see from posts in this forum that people are being materially impacted by the Covid payment.

Referring back the article (headline more than anything) posted by the OP. House prices remaining unchanged in the environment I have just described doesn't feel like a reason to be joyful about in terms of the future market. You can't help but feel that the cohort of people that are ready to buy will start to dry up soon enough. The properties which they are buying at 5-15% above asking are probably skewing the statistics on sales values upwards too - the volume of sales has fallen significantly after all. That puts that article into context somewhat for me.

Given all of that, it feels inevitable that prices will start to tail off. I will spare you of my guess on by how much they will fall.

Villa05

JJJackal wrote:

Why do you think this is easy? I would love examples of countries where you think housing is not an issue at all

The state controls or has greater access to the key inputs required to deliver housing

To Rob one of your points on tourism - low density population. The state has control over what gets built and where. Has ownership of land in Key areas where housing shortage exists
Has access to long term finance at near negative rates

Had a large demographic of construction workers looking for work in the last recession, this will be the case again in the coming recession with a fall off in commercial development expected

I never said that housing is not problematic rater that we have many positive aspects that make it easily resolvable

Take for instance Holland which is one of the most densely populated countries in Europe and they can deliver affordable housing in an environment where they have to create the land for building.
That gives us a significant advantage over them yet our performance in delivering affordable housing has been miserable in comparison to them

IAmTheReign

Billythekid19 wrote: »

Still waiting on the 10%+ price crash predicted by many on here for this year. 'The prices of many homes are unchanged despite the huge economic uncertainty caused by Covid-19 but a significant number of tenants are struggling to pay their rents, according to a survey of estate agents.' https://www.irishexaminer.com/business/economy/arid-40036574.html

The article hardly paints a rosy picture of the market though. Over a quarter of EAs reporting that house prices are down, 10% of sales with renegotiated prices, new mortgage approvals and drawdowns down?

The logical thing to assume is that the people buying now are the ones who were ready to buy pre COVID and who's situations haven't changed. Once those sales dry up it could be very different. Or, it might not! Nothing particularly logical about the Irish housing market after all. I wouldn't be in a hurry to buy though from that report.

The_Conductor

beauf wrote: »

"Pay restoration" suggests that indeed some savings were made and are still being made.

Other than that though we do indeed consistently seem to spend vastly more than other countries in delivering similar projects.

Correct on both counts. Most public sector employees are on NET pay akin to 2005-2006 levels- some restoration did take place- the proposals are to put all further restoration on hold, completely ban recruitment, overtime, promotions etc etc (other than in exceptional circumstances which will have to be sanctioned by DPER on a case-by-case basis).

With respect of public projects- the number of high profile projects that have gone stratospherically over-budget just isn't funny. Look at the Children's Hospital. An appallingly sited hospital with what is going to be the most expensive cost per bed of any hospital in the whole world. Its going to cost north of 2 billion before its finished- and it had an original price tag of 300m - remember Brendan Howlin crowing about how selling the National Lottery was going to be enough to pay for it, and return a balance to the exchequer for investment in the schools building programme? Its laughable how far out of kilter that particular project went.

But- we have all manner of other projects- including PPP projects (look at all the toll roads) that are hemorrhaging cash- as traffic volumes have fallen. You couldn't make it up- if not enough people use the M50 or the other toll roads- the government subvents the companies running the franchises. In the era of a roll-out of WFH - such blatant subsidies run entirely counter to public health guidance etc etc

The one thing that can be assured- is a lack of anyone willing to put their hands up and accept responsibility for their errors- and say mea culpa. They always have a scapegoat lined up in the wings- whether its the evil landlords- to explain away the bill for HAP and other schemes, teachers emigrating- to explain our class sizes, the cost of construction projects- to explain the childrens hospital- etc etc etc There is always some excuse that will get trotted out.