Irish Property Market 2020 Part 2

Marius34 wrote: »

I do understand english, and what are you saying. When is not clear I'm adding a question mark.
You are right, my writing skills are not great, and sometimes is not clear what i'm saying, but you are welcome to question it, and I'll try to explain.

But you come up constantly with your interpretation that suits you.
In comments you speak about total/existing demands = number of transactions. I don't think you need to have fluent English, to disagree with it.

You might need fluent English to understand the nuance behind the idiomatic use of 'scream', as in:

"Doesn't exactly scream tight supply."

And the point I was making about the the next year is nothing to do with the supply/demand point.

It is a simple case of replying to your comment "No that's not what I said" with the undeniable fact of actually that's exactly what you said, as in:

"It would make more sense to compare in at least 1 year from lockdown.

beauf wrote: »

There are two issues.

1) The process even for those who get approved is backlogged.

2) Those who have to go through another approval loop due to covid but ultimately still get approved. Also backlogged.

No transaction is not automatically "no or low demand" as your assuming. Its a backlog of demand. Its a bit like the latest iPhone, they run out of stock. Then claim there is no demand for them because the sales figure are zero.

I'm not saying demand isn't falling. I'm just saying the metrics you are using are unreliable. You are obviously free to spin it anyway you want.

Ok, I'll 'spin' it another way for you:

Total number of PPR transactions Q2 2020 down 36% vs Q2 2019
Total number of properties available on myhome Q2 2020 down 15.9% vs Q2 2019

Doesn't exactly scream rocketing demand.

beauf wrote: »

What some are seeing as falling demand is actually the banks backlogged.
Its also lack of supply, there isn't anything to buy that the buyers want.
There maybe supply in other areas, like 1M homes, and penthouses. Those things should not be conflated.

There maybe falling demand, and falling affordability (pre lockdown suggested the market had peaked) its being masked at the moment though.

What backlog? Any links to this?

Pelezico

Cantstandsya wrote: »

What backlog? Any links to this?

The number of sale agreed on myhome has increased significantly.

That may be evidence of a backlog or buyers struggling to get finance.

The number of houses being sold has decreased in the same time period.

Pelezico wrote: »

The number of sale agreed on myhome has increased significantly
That is evidence of a backlog or buyers struggling to get finance.

The number of houses being sold has decreased in the same time period.

Well we know the banks have tightened up on their lending. So which is it more likely to be evidence of?

Marius34

schmittel wrote: »

You might need fluent English to understand the nuance behind the idiomatic use of 'scream', as in:

"Doesn't exactly scream tight supply."

And the point I was making about the the next year is nothing to do with the supply/demand point.

It is a simple case of replying to your comment "No that's not what I said" with the undeniable fact of actually that's exactly what you said, as in:

"It would make more sense to compare in at least 1 year from lockdown.

Do your interpretations as you wish...

But
"It would make more sense to compare in at least 1 year from lockdown."
&
"Marius wants to talk about what will happen over the next year"

Is not exactly same thing as you say.
I had in mind, that it would make some sense as indicator to compare for full year.
It's fine if you understood it differently, as it might be not clear enough, but it's not fine if you call your interpretation as a facts that it's exactly same thing.
Hope we can stop this discussion, and workout to clarify the things.

thefridge2006

I think some people are clinging on with their fingernails that everything will be ok and the economy will be fine and that house prices won't drop significantly etc.

The fact of the matter is -
1)There is a pandemic that has destroyed the global economy for the last 7 months with no sign of a vaccine to put an end to it...
2)We're entering into the winter season with all the problems that brings for hospitals etc... extremely likely there will be another lock down
3)Brexit (hard or Soft,wont make a difference)
4) Local job losses & Global job losses.
5) Trump getting re elected
6) Ireland under the spotlight for our corporate tax rates when other countries are struggling to attract foreign investment.
7)The Gov know that if they don't build houses and sort out the supply issue they'll be out on their ear and Sinn Fein will be in.
8)already told that the CB aren't going to bail out companies that are doing to fold anyway.....(a lot i would imagine)
9)people who moving out of Dublin(either to move back home to their own country or else people who move back to their own county) will hugely increase the amount of stock for rent.
10)bank restrictions (last but not least)

I'm sure there are a lot more that others can add also but thats a very bleak reality for the coming months/years

Cantstandsya wrote: »

What backlog? Any links to this?

The banks were backlogged with forbearance arrangements. So everything else like mortgage approval got delayed. They also are carrying out Covid-19 checks on borrowers even if approved, before drawdown. All the related services required, legal, and Govt offices, searches, Conveyancing, probate, registry of deeds etc. all shut down. Slowly reopened with a backlog.

Consider how all this would appear in stats.

thefridge2006

beauf wrote: »

The banks were backlogged with forbearance arrangements. So everything else like mortgage approval got delayed. They also are carrying out Covid-19 checks on borrowers even if approved, before drawdown. All the related services required, legal, and Govt offices, searches, Conveyancing, probate, registry of deeds etc. all shut down. Slowly reopened with a backlog.

I'd like to see evidence of this also because i'm not hearing anything like this from my friends working in the mortgage sections. also you're wrong about the highlighted. most were working from home in these sectors

beauf wrote: »

The banks were backlogged with forbearance arrangements. So everything else like mortgage approval got delayed. They also are carrying out Covid-19 checks on borrowers even if approved, before drawdown. All the related services required, legal, and Govt offices, searches, Conveyancing, probate, registry of deeds etc. all shut down. Slowly reopened with a backlog.

Doesn't exactly scream bullish for property!

fliball123

thefridge2006 wrote: »

I think some people are clinging on with their fingernails that everything will be ok and the economy will be fine and that house prices won't drop significantly etc.

The fact of the matter is -
1)There is a pandemic that has destroyed the global economy for the last 7 months with no sign of a vaccine to put an end to it...
2)We're entering into the winter season with all the problems that brings for hospitals etc... extremely likely there will be another lock down
3)Brexit (hard or Soft,wont make a difference)
4) Local job losses & Global job losses.
5) Trump getting re elected
6) Ireland under the spotlight for our corporate tax rates when other countries are struggling to attract foreign investment.
7)The Gov know that if they don't build houses and sort out the supply issue they'll be out on their ear and Sinn Fein will be in.
8)already told that the CB aren't going to bail out companies that are doing to fold anyway.....(a lot i would imagine)
9)people who moving out of Dublin(either to move back home to their own country or else people who move back to their own county) will hugely increase the amount of stock for rent.
10)bank restrictions (last but not least)

I'm sure there are a lot more that others can add also but thats a very bleak reality for the coming months/years

ehhh ok

1) There is significant signs of finding a vaccine to say otherwise is false.
2) There will be another lockdown but the government will have to support those who cant work. this recession is about bailing out those who cant work as apposed to banks like last time
3) Brexit has already happened and if anything we look more attractive to the the rest of the world looking for an English speaking base in Europe.
4) Cant deny this
5) We will have to wait and see lets hope Biden gets the swing states
6) They have been looking at our corpo taxes since day dot and they not been able to do anything about it. I would hazard a guess that there would be a huge push to keep the tax rate going within the Irish gov as its one really good revenue source for the country currently.
7) But according to the brain trust on here we have no supply problem and hundreds of thousands of houses lying vacant. The problem is that the cost to build a house and with covid adding extra cost and inflexibility builders are cutting back on new builds
8) This is how it should be
9) That movement is a 2 way street lots of Irish out in the world as well will be looking to come back home
10) Bank restrictions will be here until covid is done and dusted

beauf wrote: »

The banks were backlogged with forbearance arrangements. So everything else like mortgage approval got delayed. They also are carrying out Covid-19 checks on borrowers even if approved, before drawdown. All the related services required, legal, and Govt offices, searches, Conveyancing, probate, registry of deeds etc. all shut down. Slowly reopened with a backlog.

Has this been reported anywhere?

nerrad01

I applied for an uplift in my mortgage approval yesterday, which has almost turned into a new application as more than 3 months has elapsed since the last one. I was told current turn around time is 2-4 weeks for AIP and possibly longer. So thats the current turnaround time

thefridge2006 wrote: »

I think some people are clinging on with their fingernails that everything will be ok and the economy will be fine and that house prices won't drop significantly etc.
...

I don't think anyone thinks that.

Market had already peaked before Covid. Covid has just paused everything.

nerrad01 wrote: »

I applied for an uplift in my mortgage approval yesterday, which has almost turned into a new application as more than 3 months has elapsed since the last one. I was told current turn around time is 2-4 weeks for AIP and possibly longer. So thats the current turnaround time

Hence the stats.

It added that the value of mortgage approvals in July rose by 51.2% month-on-month but fell by 30.2% year-on-year.

Dr Ali Ugur, the BPFI's chief economist, said the reopening of the economy after Covid-19 enforced restrictions has resulted in a significant increase in mortgage approval numbers in July compared to the previous month.

beauf wrote: »

Hence the stats.

One anecdote doesn't show anything. And not that it proves anything the other way but I've received AIP from two banks since lockdown ended and didn't notice any difference than before lockdown.

I haven't seen any reference to bank backlogs anywhere outside of this thread.

Hubertj

Cantstandsya wrote: »

One anecdote doesn't show anything. And not that it proves anything the other way but I've received AIP from two banks since lockdown ended and didn't notice any difference than before lockdown.

I haven't seen any reference to bank backlogs anywhere outside of this thread.

i think you will read a lot of things in this thread that you will not see or hear anywhere else.

HotDudeLife

thefridge2006 wrote: »

I think some people are clinging on with their fingernails that everything will be ok and the economy will be fine and that house prices won't drop significantly etc.

The fact of the matter is -
1)There is a pandemic that has destroyed the global economy for the last 7 months with no sign of a vaccine to put an end to it...
2)We're entering into the winter season with all the problems that brings for hospitals etc... extremely likely there will be another lock down
3)Brexit (hard or Soft,wont make a difference)
4) Local job losses & Global job losses.
5) Trump getting re elected
6) Ireland under the spotlight for our corporate tax rates when other countries are struggling to attract foreign investment.
7)The Gov know that if they don't build houses and sort out the supply issue they'll be out on their ear and Sinn Fein will be in.
8)already told that the CB aren't going to bail out companies that are doing to fold anyway.....(a lot i would imagine)
9)people who moving out of Dublin(either to move back home to their own country or else people who move back to their own county) will hugely increase the amount of stock for rent.
10)bank restrictions (last but not least)

I'm sure there are a lot more that others can add also but thats a very bleak reality for the coming months/years

This post should be stickied/pinned for everyone.

Anyone who is thinking of buying or is in denial of a property crash should logically digest each point and not let emotions get the better, if any person disagrees with you on more than 7 of those points i'm sure they would start an argument in an empty room.

Quality post and sums up our grim short/medium term economic outlook.

javaboy

HotDudeLife wrote: »

This post should be stickied/pinned for everyone.

Anyone who is thinking of buying or is in denial of a property crash should logically digest each point and not let emotions get the better, if any person disagrees with you on more than 7 of those points i'm sure they would start an argument in an empty room.

Quality post and sums up our grim short/medium term economic outlook.

Out of curiosity what do people think would happen economically if everybody took a super cautious approach and there were no residential property sales for a period of, say, 6 months.

javaboy wrote: »

Out of curiosity what do people think would happen economically if everybody took a super cautious approach and there were no residential property sales for a period of, say, 6 months.

In 6 months and 1 day there would be exceptional demand which will prop prices up.

The thing that is constantly misunderstood on here, over and over again, is that if everyone waits to buy then demand is remaining constant. If people wait, and then people start to buy, the brakes will be put on any price reductions super fast.

awec wrote: »

In 6 months and 1 day there would be exceptional demand which will prop prices up.

The thing that is constantly misunderstood on here, over and over again, is that if everyone waits to buy then demand is remaining constant. If people wait, and then people start to buy, the brakes will be put on any price reductions super fast.

For there to be significant drops in prices you need people taken out of the market completely. This does not mean people thinking they'll wait until next summer and pick up a bargain, it is people being told to sling their hooks by banks because they are no longer interested in lending them money.

Which seems likely.

And if enough people wait prices will drop. Unless of course I am misunderstanding that.

https://www.irishtimes.com/business/financial-services/aib-u-turn-on-mortgage-block-for-those-on-covid-wage-subsidy-1.4293709

Hubertj wrote: »

i think you will read a lot of things in this thread that you will not see or hear anywhere else.

AIB has announced a policy U-turn that will see it accepting mortgage applications from those on the State’s Covid-19 wage subsidy from next week.

However, such customers may still face significant hurdles in drawing down mortgages if they are in receipt of the subsidy. AIB’s previous policy, which was reported by The Irish Times earlier this week, had been to pause all applications from those in receipt of the subsidy.

In a statement, the lender said that “as the Irish economy reopens and increasing numbers return to work, AIB will from next week commence accepting new mortgage applications from customers who are on the State’s Covid-19 supports”.

It follows pressure on the lender after The Irish Times revealed a policy of putting the brakes on all applications from those on the wage subsidy scheme.

https://www.rdj.ie/insights/difficulties-facing-banking-practitioners-as-a-result-of-covid-19?s=0.940121871691

https://irishtechnews.ie/banks-clarify-position-on-mortgage-application/

However, some delay may occur due to factors beyond the lender’s control: for example, the ability of valuers to conduct a full inspection of a property or of legal practitioners to access everything that is required for them to complete all steps.

https://www.independent.ie/business/personal-finance/property-mortgages/lenders-pledge-flexibility-over-new-mortgages-39140261.html

https://www.rte.ie/news/business/2020/0420/1132531-mortgage-approved-given-more-time-to-find-home/

https://www.irishexaminer.com/news/arid-30996027.html

Same in other countries...

https://www.ftadviser.com/mortgages/2020/08/19/brokers-upbeat-about-mortgage-market-despite-issues/

: “Lenders already faced a backlog of applications when the housing market reopened in May and this, combined with high levels of new demand from buyers is adding to operational pressures.

“In some cases, applications are being delayed as lenders continue to adapt to the new normal, while supporting existing customers, in particular those who have come or are coming to the end of payment deferral periods.”

But Aly Kassam, director at Easier Finances, said backlogs were clearing up. He said: “We have seen remortgage activity remain strong since the beginning of the pandemic with what feels like an explosion of purchase activity since the start of the stamp duty holiday. Lender backlogs are beginning to clear and valuations are happening in a sensible timeframe.

But you are probably right its just that there is zero demand. That's really the only reason transactions dropped.

schmittel wrote: »

Which seems likely.

It does.

But there is some bizarre notion on here that Ireland is absolutely fcuked. Every bad thing that could possibly happen is going to happen, if you think otherwise you're an estate agent. The Brits are coming for us, the EU is coming for us, we'll all be eating the goo out of each others heads.

But among all this unprecedented misery people will have no bother buying houses. Every sector of the economy, every corner of the country is absolutely screwed, except for buying houses.

schmittel wrote: »

Which seems likely.

And if enough people wait prices will drop. Unless of course I am misunderstanding that.

Yes, they will. But as soon as people start buying again, they'll rise again. The point is that waiting is not a reduction in demand.

His question was what happens if everyone waits six months. Let's imagine that demand for houses grows at roughly 100 buyers per month, supply grows at 50 per month. Let's say the current demand is 500.

September: 500 buyers, 300 houses, Price Index 1
October: 0 buyers (everyone waiting), 350 houses, Price index 0.9
Fast forward
March: 0 buyers, 600 houses, Price index 0.4
April: 1100 buyers, 650 houses, Price Index = ?

In April, the 500 originals see all those lovely houses on daft for 40% of what they were a few months ago and they all go shopping. Add on all those who started looking in the meantime and you suddenly have a surge.

Whereas if the 500 are removed permanently, you are looking at 650 houses for 500 buyers. People waiting does not cut it, you need buyers out of the market completely.

We have literally seen a version of this play out the past few months. Even with total lockdown, unprecedented unemployment, banks reducing valuations and cutting exemptions etc, price drops were in insignificant figures. ~1%. One percent. They ROSE outside of Dublin by 0.2%.

PropQueries

awec wrote: »

It does.

But there is some bizarre notion on here that Ireland is absolutely fcuked. Every bad thing that could possibly happen is going to happen, if you think otherwise you're an estate agent. The Brits are coming for us, the EU is coming for us, we'll all be eating the goo out of each others heads.

But among all this unprecedented misery people will have no bother buying houses. Every sector of the economy, every corner of the country is absolutely screwed, except for buying houses.

You're right. I remember they were saying much the same back in 2008. Their opponents also used the phrase "a stopped clock is right twice a day" etc. to cover themselves and we all remember what Bertie said about what all those sitting on the "sidelines, cribbing and moaning" should do...

Unfortunately, last time, they were proved right.

Hubertj

beauf wrote: »

https://www.irishtimes.com/business/financial-services/aib-u-turn-on-mortgage-block-for-those-on-covid-wage-subsidy-1.4293709

https://www.rdj.ie/insights/difficulties-facing-banking-practitioners-as-a-result-of-covid-19?s=0.940121871691

https://irishtechnews.ie/banks-clarify-position-on-mortgage-application/

https://www.independent.ie/business/personal-finance/property-mortgages/lenders-pledge-flexibility-over-new-mortgages-39140261.html

https://www.rte.ie/news/business/2020/0420/1132531-mortgage-approved-given-more-time-to-find-home/

https://www.irishexaminer.com/news/arid-30996027.html

Same in other countries...

https://www.ftadviser.com/mortgages/2020/08/19/brokers-upbeat-about-mortgage-market-despite-issues/

But you are probably right its just that there is zero demand. That's really the only reason transactions dropped.

i was making a general statement and not specifically what you said. i was making the point that people say all sorts in here.

I agree with you without knowing facts but given what has gone on i cant see how there wouldn't be delays in banks processing applications, additional checks etc.

PropQueries wrote: »

You're right. I remember they were saying much the same back in 2008. Their opponents also used the phrase "a stopped clock is right twice a day" etc. to cover themselves and we all remember what Bertie said about what all those sitting on the "sidelines, cribbing and moaning" should do...

Unfortunately, last time, they were proved right.

They were also saying it in 2012.

PropQueries wrote: »

You're right. I remember they were saying much the same back in 2008. Their opponents also used the phrase "a stopped clock is right twice a day" etc. to cover themselves and we all remember what Bertie said about what all those sitting on the "sidelines, cribbing and moaning" should do...

Unfortunately, last time, they were proved right.

To be honest people say both things every year. They've been predicting carnage and increases every month since January this year also.

PropQueries

awec wrote: »

We have literally seen a version of this play out the past few months. Even with total lockdown, unprecedented unemployment, banks reducing valuations and cutting exemptions etc, price drops were in insignificant figures. ~1%. One percent. They ROSE outside of Dublin by 0.2%.

I think that's why we need to be very careful. If something doesn't add up, there's generally something else going on and it's generally bad. Cairn Homes said recently their construction levels are back to 85% pre-covid levels so construction (from the big developers anyway) has held up remarkably well.