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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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beauf

schmittel wrote: »

...I 100% agree with you that it will be "like the last time supply and credit will also be a problem when that happens" which translated into a buyers market and an inevitable fall in prices.....

A buyers market generally means there are few buyers able to buy anything, regardless of price.

But there again there are substantial people (and companies) this time, who are actually a lot better off after the lock down than they were before it. They've been waiting to buy for years. That's quite different to a normal recession. That's why its likely to be similar, but definitely not the same.

hometruths

cnocbui wrote: »

Hope springs eternal.

By the time your buyers market arrives, there might be a vaccine, in which case it will be on for young and old, with a dearth of available properties leading to a sellers market..

There might be a vaccine. Let's hope so, and ideally before the schools go back.

Hope springs eternal indeed.

hometruths

beauf wrote: »

Never to zero. But we have a massive shortfall going back decades. It's why people aren't moving out till much older. All building has stopped for 3-4 months and it's only back at greatly reduced output. In a recession or a crash building output reduces massively. That's before you get into the abysmal delivery on social and affordable housing. That's assuming you believe the creative reporting on that.

Sure building will cease, and solvent people with the nicest properties in the best locations will hold them from the market. But there will still be properties for sale and transactions will take place.

The difference will be the balance of power has shifted from seller to buyer because you have the weakest sellers and the strongest buyers are the ones transacting.

And from your own quoted definition of a buyers market:

In a real estate buyer's market, houses tend to sell for less and sit on the market for a longer period of time before receiving an offer. The competition in the marketplace exists between sellers, who often must engage in a price war to entice buyers to make offers on their homes.

Sure posters like cnocbui etc will say "Good luck trying to find your trophy home for 200k, and be careful what you wish for etc" but I am not trying to buy a trophy home or wishing for anything other than a massive melt up.

I just don't see that as likely.

I 100% agree with you that it will be "like the last time supply and credit will also be a problem when that happens" which translated into a buyers market and an inevitable fall in prices.

It just seems the most likely outcome, and short of a wonder drug appearing in the next couple of months, I haven't heard any convincing arguments to the contrary.

Pelezico

Now where did you get number of sales of 43k between Jan and May 2020? More like 17k

beauf

schmittel wrote: »

What will be the problem with supply? You mentioned yourself that demand will never drop to zero. Surely the same is equally true for supply.

Never to zero. But we have a massive shortfall going back decades. It's why people aren't moving out till much older. All building has stopped for 3-4 months and it's only back at greatly reduced output. In a recession or a crash building output reduces massively. That's before you get into the abysmal delivery on social and affordable housing. That's assuming you believe the creative reporting on that.

There's a reason they mainly report on year to year % differences on supply and not the actual numbers.

beauf

cnocbui wrote: »

Hope springs eternal.

By the time your buyers market arrives, there might be a vaccine, in which case it will be on for young and old, with a dearth of available properties leading to a sellers market..

A vaccine will not save a lot of business or jobs or the massive hole in public finances. Then again there is still shortage of supply.

So I think we might see a shallower but more drawn out version of the last crash. But who knows.

hometruths

beauf wrote: »

Probably but like the last time supply and credit will also be a problem when that happens. The buyers ability to buy and find anything to buy will be a problem.

What will be the problem with supply? You mentioned yourself that demand will never drop to zero. Surely the same is equally true for supply.

beauf

Probably but like the last time supply and credit will also be a problem when that happens. The buyers ability to buy and find anything to buy will be a problem.

cnocbui

schmittel wrote: »

Clearly that is not the case right now. I agree with you that the current covid effect needs to wash through, but when that happens I believe we’ll be in a buyers market.

Hope springs eternal.

By the time your buyers market arrives, there might be a vaccine, in which case it will be on for young and old, with a dearth of available properties leading to a sellers market..

hometruths

beauf wrote: »

"..an economic situation in which goods or shares are plentiful and buyers can keep prices down.."

So you reckon supply is plentiful and prices are being kept down.

You might want to tell the people being outbid on the other thread they are only imagining it.

Clearly that is not the case right now. I agree with you that the current covid effect needs to wash through, but when that happens I believe we’ll be in a buyers market.

beauf

"..an economic situation in which goods or shares are plentiful and buyers can keep prices down.."

So you reckon supply is plentiful and prices are being kept down.

You might want to tell the people being outbid on the other thread they are only imagining it.

hometruths

beauf wrote: »

TBH I was just being devils advocate I suspect many will never buy, they'll sit on the fence for years.

There is always demand the market almost never falls to zero. From Jan to May 2020 there were 43,127 property purchases.

Of course it will never go to zero. But in a market characterised by falling demand, it is the weakest buyers that are removed, leaving only the strong hands.

Hence the phrase 'buyers market'.

JJJackal

PropQueries wrote: »

Good point. But, if they thought they would only be in their home country for a few months, I don't think they would have terminated their leases given the reported difficulties in leasing new accommodation.

I could be wrong, but if those 7% terminated their leases, I'd assume many of those are not coming back, for whatever reason. I could be wrong though.

Lets say 7% terminated lease and 66% of the 7% don't come back - thats still over 95% of tenants remain...

beauf

TBH I was just being devils advocate I suspect many will never buy, they'll sit on the fence for years.

There is always demand the market almost never falls to zero. From Jan to May 2020 there were 43,127 property purchases.

hometruths

beauf wrote: »

I'll take that to mean you won't be backing that up.

In which case I'll suggest that demand is probably been hugely understated.

Most of the people hoping prices will fall, are actually looking to buy.
Which is why they are so interested in it. They are the demand they say doesn't exist.

In terms of backing it up, have done so on many posts to date, but there's no point in rehashing the same old arguments, they are well trodden at this stage.

This demand you say exists from people hoping prices will fall - are you sure about that?

If they are hoping prices will fall because they want to buy, then it follows they are not buyers at current prices.

i.e they don't represent existing demand any more than somebody who is hoping prices rise so they can sell a property, represents existing supply.

And we're constantly told supply will dry up if prices fall by posters who forget that works both ways.

So I'd actually say those hoping for price falls are the demand that does not exist, but other posters insist does exist and is going to prop up prices.

As I said earlier, some people estimate demand more accurately than others.

beauf

Marius34 wrote: »

Mostly I mean by bad interpretation from media and posters on here on actual reports(not media articles) and data.

I like your thread, btw.

Though I think at lot of the predictions are largely irrelevant now.

I think the short term market is one thing, and be largely unrepresentative of the long term trends. But its interesting to follow.
https://www.boards.ie/vbulletin/showthread.php?p=114420349&utm_source=notification&utm_medium=email&utm_campaign=notification#post114420349

beauf

schmittel wrote: »

From a combination of sources, all of which have been similiarly rubbished on here!

I'll take that to mean you won't be backing that up.

In which case I'll suggest that demand is probably been hugely understated.

Most of the people hoping prices will fall, are actually looking to buy.
Which is why they are so interested in it. They are the demand they say doesn't exist.

hometruths

Marius34 wrote: »

Mostly I mean by bad interpretation from media and posters on here on actual reports and data.

I'd agree with that.

Marius34

schmittel wrote: »

Do you mean a wrong interpretation of the data by the reports author or by posters on here?

Mostly I mean by bad interpretation from media and posters on here on actual reports(not media articles) and data.

hometruths

beauf wrote: »

Like what?

Something less fluff than that IT article hopefully.

From a combination of sources, all of which have been similiarly rubbished on here!

hometruths

Marius34 wrote: »

From what I have seen in this group, in many cases is not that the data/reports are wrong, but rather a wrong interpretation of data/reports.

Do you mean a wrong interpretation of the data by the reports author or by posters on here?

Marius34

schmittel wrote: »

I'm not just talking about you and the census; last week I quoted the numbers from the recent Ronan Lyons report, and another poster dismissed the numbers because they were based on the perceived requirement but the perception was wrong!

This sort of thing is exactly why I found the IT article interesting.

From what I have seen in this group, in many cases is not that the data/reports are wrong, but rather a wrong interpretation of data/reports.

beauf

schmittel wrote: »

I am not saying there is very little demand full stop. I am saying that current demand is not as strong as many claim it to be.

There is plenty to back this view up (in my humble opinion).

Like what?

Something less fluff than that IT article hopefully.

hometruths

beauf wrote: »

Well in this thread your suggesting that there really isn't that much demand. In another thread people are suggesting they all bid 10% under asking. But in another thread people are complaining they are being outbid with prices going well over asking, and that people won't drop their prices.

One side seem to be broadly in line with the stats, depending on how out of context they are taken, of selectively quoted.

I am not saying there is very little demand full stop. I am saying that current demand is not as strong as many claim it to be.

There is plenty to back this view up (in my humble opinion).

beauf

schmittel wrote: »

Of course you can say it. That's the beauty of this thread, all sorts of stuff is said that doesn't really add up. You have to sift through what actually makes sense.

Well in this thread your suggesting that there really isn't that much demand. In another thread people are suggesting they all bid 10% under asking. But in another thread people are complaining they are being outbid with prices going well over asking, and that people won't drop their prices.

One side seem to be broadly in line with the stats, depending on how out of context they are taken, of selectively quoted.

hometruths

beauf wrote: »

Well if we don't need to restort to stats or facts.

Then I can say the developers unsold stock isn't with in the budget of most FTBs. So it has no bearing on FTB demand at all. Its about affordability and that was the issue pre covid.

Of course you can say it. That's the beauty of this thread, all sorts of stuff is said that doesn't really add up. You have to sift through what actually makes sense.

beauf

schmittel wrote: »

I'm not just talking about you and the census; last week I quoted the numbers from the recent Ronan Lyons report, and another poster dismissed the numbers because they were based on the perceived requirement but the perception was wrong!

This sort of thing is exactly why I found the IT article interesting.

Well you can't accept data, or reports at face value. You have to interpret them.

Its like quoted % rise in supply. Its a big increase from a very low level. But its still low relative to overall demand. Context is everything.

beauf

PropQueries wrote: »

Good point. But, if they thought they would only be in their home country for a few months, I don't think they would have terminated their leases given the reported difficulties in leasing new accommodation.

I could be wrong, but if those 7% terminated their leases, I'd assume many of those are not coming back, for whatever reason. I could be wrong though.

They may have assumed they would be able to WFH and WFH in another country. Seems now that WFH in another country has tax implications. They may also have assumed due to peoples hysteria they would return and supply would be plentiful and rents down by 40~50%.

hometruths

Hubertj wrote: »

lets not go down that rabbit hole again!!!!!

I'm not just talking about you and the census; last week I quoted the numbers from the recent Ronan Lyons report, and another poster dismissed the numbers because they were based on the perceived requirement but the perception was wrong!

This sort of thing is exactly why I found the IT article interesting.

beauf

schmittel wrote: »

I don't have any stats to hand but I don't need them to consider the point I am trying to get at;
FTBs are a critical demand component of the market.

People believe that FTB demand is drawn from approx 50% of the adult population.

The reality is that FTB demand is drawn from only 30% of the population.

Thus it is possible that if people are overestimating the size of the current potential pool of buyers then maybe people are overestimating the current levels of demand.

Developers rising levels of unsold stock would also suggest so.

Well if we don't need to restort to stats or facts.

Then I can say the developers unsold stock isn't with in the budget of most FTBs. So it has no bearing on FTB demand at all. Its about affordability and that was the issue pre covid.