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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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thefridge2006

Hubertj wrote: »

Good summary. Only other thing to consider is that while immigration will fall there will likely be an increase in returning emigrants due to a global recession, Brexit etc. Will be interesting to see where the net figure lands.

In fairness, why would you come back here ? we'll be in the sh1t too. a lot nicer places to go than here . i understand that some will be coming back for family or whatever but a lot that have gone have gone for a reason and set up a new life there

[Deleted User]

JimmyVik wrote: »

For my child actually.

Fair enough, even with a separation where im paying half the rent at the moment, I would be paying half a mortgage on it which would be far less than im paying now for half the rent.

Not really sure where all the hate is coming from guys.
Its easy to work out for yourselves if someone is better off now having rented since 2007 or having bought a house in 2007.................

No hate, I was simply querying how you reckon you'd be much better off if you bought in 2007 ........... I'd understand if you lamented not buying in 2011/2012

Prices were nuts in 2007 ...... they were 50% up on 2005 prices in lots of places.

JimmyVik wrote: »

............Now im only taking 2007 as the worst possible scenario. You could take any other year you want, but it would be even better off for someone who bought.

Yes, we all know that.

JimmyVik

Augeo wrote: »

No hate, I was simply querying how you reckon you'd be much better off if you bought in 2007 ........... I'd understand if you lamented not buying in 2011/2012

Prices were nuts in 2007 ...... they were 50% up on 2005 prices in lots of places.

Oh, I do lament not buying in 2011/2012.
I wish id bought several houses then to be fair.
But even if id bought in 2007 id still be better off than renting since.

And this doesnt apply to me, but there are people who are hitting an age now where they wont get a mortgage in a few years.
If they wait, they will have more problems getting a mortgage.
And then if people end up going on covid payment or losing their jobs, thats them put back a few years, and they are only getting older.
If I was in my 30s I might wait to see what happens, but the older I get the more the market is running away from me.
After much thought I think its time for me to buy somewhere to live.

thefridge2006

Marius34 wrote: »

One of them is me, and it's based on fundamental reasons discussed before, why the price won't fall significantly (it may crash in 5 years or so, to far to be able to predict, but unlikely in the next 2 years).
The ones who say price crash are coming, from what I see looking mainly at the previous 2008 credit crisis, and only at the inputs that negatively affects property price, avoiding/misinterpreting other side of equation.

Hate to break it to you but you're not a seasoned poster (neither am I for that matter)

Hubertj

thefridge2006 wrote: »

In fairness, why would you come back here ? we'll be in the sh1t too. a lot nicer places to go than here . i understand that some will be coming back for family or whatever but a lot that have gone have gone for a reason and set up a new life there

I agree with you but I’m sure some people will prefer to be at home. It could be slightly less sh*t here than elsewhere......Also, in some countries your visa is dependent on having a job so if you become unemployed and are unable to find alternative work you have to leave....

Marius34

thefridge2006 wrote: »

Hate to break it to you but you're not a seasoned poster (neither am I for that matter)

You might be right, but what makes seasoned poster for Property Market group?

Paddigol

thefridge2006 wrote: »

Hate to break it to you but you're not a seasoned poster (neither am I for that matter)

He looks fairly seasoned to me.

I'm not looking to start an internet debate over who is more seasoned than who. If I wanted 100% uninformed opinion on the property market I could ask anyone of my social circle - we all have views, just most are based on little other than newspaper headlines, internal prejudices, fears and hopes.

I was just looking to gauge where people who have a specific (albeit not necessarily professional) interest in the property market, and who have followed the debate on this thread over the past 6 months, think the market is heading in the next year.

In March in appeared that there were a lot of people stridently of the view that we were heading for immediate and sharp drops in prices. A few people disagreed but their reasons were often dismissed. We haven't experienced the predicted drop, and I'm just wondering how people's views have shifted in the intervening period (if at all).

Cyrus

thefridge2006 wrote: »

Hate to break it to you but you're not a seasoned poster (neither am I for that matter)

in the context of this thread and quality of posting, i would suggest that he is.

cnocbui

Paddigol wrote: »

Getting away from the micro and looking at the macro... At this point is it fair to say that the projected big dip in property prices predicted in mid March never came around?

And people are now predicting a big dip in the next 12 months based on the unknown impact of Covid in the immediate short term?

Are there many seasoned posters on here that believe there will be minimal change in prices in the next couple of years?

I don't know about seasoned poster, but I have owned five properties and currently have two. I think it comes down to supply and demand.

Is there a huge building program going on at the moment, with houses popping up all over the place and tradesmen working 7 days a week till 11pm flat out?

No.

Is demand going away?

20% unemployment means 80% of people who want a job, have one. Given the numbers of employed adults living at home with their parents, I think there is demand. The currently buying/selling thread shows there is demand and prices are not falling.

So no, again.

If I wanted a house, I wouldn't be hanging around hoping for a fall in prices, demand outstrips supply and there is no movement on the supply side to even meet current demand so prices could well rise.

Think I'm mad? Well what about this pandemic has met expectations? Prices haven't fallen, as expected, quite the reverse. Who predicted the pandemic would lead to surge in demand, particularly for larger family home type properties? It's focused peoples minds - world wide, not just here - on the benefits and desirability of non cramped living conditions. There is the greatest demand for houses on record, in the US, with sales going mental. To a lesser extent the same is going on in Oz: People who can now work from home are leaving cities and moving to rural towns, reversing the long running trend of the last century, and a good thing too, I say.

While I don't lay claim to a crystal ball, I think things have gone so much against prevailing expectations, much of it from seasoned professionals, that I think expecting the opposite of what has been conventional wisdom might be the best strategy.

fliball123

Paddigol wrote: »

Getting away from the micro and looking at the macro... At this point is it fair to say that the projected big dip in property prices predicted in mid March never came around?

And people are now predicting a big dip in the next 12 months based on the unknown impact of Covid in the immediate short term?

Are there many seasoned posters on here that believe there will be minimal change in prices in the next couple of years?

I am not seasoned or an expert but I reckon < 5% over the next 12-18 months but I would never in a million years suggest to anyone to buy or sell everyone's situation is unique and whatever is going on covid, brexit, prices going up , prices coming down, how safe your job is, a cure found for covid, etc this will all build into that individuals strategy

hometruths

Marius34 wrote: »

One of them is me, and it's based on fundamental reasons discussed before, why the price won't fall significantly (it may crash in 5 years or so, to far to be able to predict, but unlikely in the next 2 years).
The ones who say price crash are coming, from what I see looking mainly at the previous 2008 credit crisis, and only at the inputs that negatively affects property price, avoiding/misinterpreting other side of equation.

Apart from tight supply, what are the other fundamental reasons that make you think significant price drops are unlikely in the next 2 years?

i.e what are factors in the other side of the equation that posters like me are avoiding/misinterpreting?

fliball123

Marius34 wrote: »

One of them is me, and it's based on fundamental reasons discussed before, why the price won't fall significantly (it may crash in 5 years or so, to far to be able to predict, but unlikely in the next 2 years).
The ones who say price crash are coming, from what I see looking mainly at the previous 2008 credit crisis, and only at the inputs that negatively affects property price, avoiding/misinterpreting other side of equation.

And it has been done to death that nearly all the fundamentals are different in 2020 than 2008 I am not going to go back through all of the differences but the 2 cannot be compared. Same way the crash in 1920 that went on to be the great depression or the recession back in the 80s cannot be compared to 2020 they were all different, all did different amount of damage to the economy and all had different effects on house prices.

thefridge2006

Hubertj wrote: »

I agree with you but I’m sure some people will prefer to be at home. It could be slightly less sh*t here than elsewhere......Also, in some countries your visa is dependent on having a job so if you become unemployed and are unable to find alternative work you have to leave....

I accept that some will come home for various reasons but I would imagine the majority of people who live abroad currently and have lost there jobs wouldn't be in any major rush coming back to this mess (unless you could work for the Googles or Facebooks etc)

lalababa

I find the rental market for house shares in Cork City very strange. For the last 10+ years when they were like hens teeth to find around start of college, maybe 30 places on Daft. Now there's like 280, and yet you have people asking last year's prices and in some cases more! Fair enough some are a bit cheaper than normal, but the overall picture is very weird.

fliball123

schmittel wrote: »

Apart from tight supply, what are the other fundamental reasons that make you think significant price drops are unlikely in the next 2 years?

i.e what are factors in the other side of the equation that posters like me are avoiding/misinterpreting?

Well what I took from the last lockdown was I wanted a bigger space, nothing worse than being able to hear you neighbors riding and shouting at each other or the kids lashing the footballs off your windows and cars. I wonder how many other people felt the same. At least I had a front and back garden I felt sorry for anyone in an appartment.

fliball123

thefridge2006 wrote: »

I accept that some will come home for various reasons but I would imagine the majority of people who live abroad currently and have lost there jobs wouldn't be in any major rush coming back to this mess (unless you could work for the Googles or Facebooks etc)

What and miss out on a chance to get our way above the norm social welfare rates and houses for everyone culture in this country I believe this is a unique situation only afforded to Ireland I may be wrong in that there would be other countries that offer the same but that would be a major factor in coming back

Marius34

schmittel wrote: »

Apart from tight supply, what are the other fundamental reasons that make you think significant price drops are unlikely in the next 2 years?

i.e what are factors in the other side of the equation that posters like me are avoiding/misinterpreting?

Apart from tight supplies side reasons, some of other fundamental reasons for demands:
Big increase in household savings.
Population growth. (you may think otherwise, but it's not the fact)
WFH - which means there is more needs of Residential space (like office room, etc). While it may affect negatively Dublin City Center, and other expensive Dublin areas, it may increase price for other areas.

snotboogie

lalababa wrote: »

I find the rental market for house shares in Cork City very strange. For the last 10+ years when they were like hens teeth to find around start of college, maybe 30 places on Daft. Now there's like 280, and yet you have people asking last year's prices and in some cases more! Fair enough some are a bit cheaper than normal, but the overall picture is very weird.

My friend rents out bedrooms in a house he owns in Carrigaline. He has had some turnover in the last few months but said its as easy as ever to fill the rooms.

PropQueries

Marius34 wrote: »

Apart from tight supplies side reasons, some of other fundamental reasons for demands:
Big increase in household savings.
Population growth. (you may think otherwise, but it's not the fact)
WFH - which means there is more needs of Residential space (like office room, etc). While it may affect negatively Dublin City Center, and other expensive Dublin areas, it may increase price for other areas.

In relation to a "big increase in household savings", I would presume the majority of people who would be buying are already renting so if they buy, that will just free up their exiting rented home into the market once they buy and move out so I don't believe any increases in household savings should have a significant impact on net housing demand going forward.

In relation to "population growth" supporting demand etc. the population of 0-34 year olds in Ireland actually declined by 72,000 between 2011 and 2016 so I don't see where the demand will come from without continued mass immigration.

According to the Central Bank last December: "The paper finds that around 34,000 dwellings would be required per year until the end of the next decade assuming unchanged household formation rates. This scenario is based on net inward migration of 30,000 per annum, a figure in line with the levels of inward migration observed in 2017 and 2018. Assuming a lower level of net inward migration of 10,000 per annum, annual average housing demand is estimated at around 26,500 per annum out to 2030."

I think we can reliably predict that the projected levels of net migration of c. 30,000 (that's the amount of immigration exceeding emigration each year) in the Central Bank report above won't be anywhere near this higher figure for many years to come and we're still continuing to build plenty of homes. We also had c.90,000 vacant livable homes in Ireland pre-covid as per the GeoDirectory Survey Q2 2020. That's three years housing supply right there even at the higher projections for housing demand.

Never mind all those student accommodation units (about an extra 15,000 bed spaces built or already now under construction in Dublin over the past few years) that will need people to fill them over the next two years as the international students aren't coming back next year either as they would have to decide to come here from next January and we will still be in lockdown at that stage. The Point Campus in Dublin has already requested permission to convert 600 of their units to residential permanently.

And, we're still expected to have house completions hit 18,000 this year despite the covid restrictions: Irish Times link here: https://www.irishtimes.com/business/construction/house-completions-to-hit-18-000-despite-construction-shutdown-1.4356648

hometruths

Marius34 wrote: »

Apart from tight supplies side reasons, some of other fundamental reasons for demands:
Big increase in household savings.
Population growth. (you may think otherwise, but it's not the fact)
WFH - which means there is more needs of Residential space (like office room, etc). While it may affect negatively Dublin City Center, and other expensive Dublin areas, it may increase price for other areas.

I may have misinterpreted them, but I haven't avoided these fundamentals. I have commented on all these before:

Big increase in household savings. - could be a factor to support prices, particularly if there is a fear of inflation. Having said that there is some evidence that proportion of cash buyers is falling, and proportion of FTBers is rising.

Population growth - will not make the slightest bit of difference in the next two years.

WFH - it may affect negatively Dublin City Center, and other expensive Dublin areas, it may increase price for other areas - I have been consistent on this. It will hit expensive areas of Dublin hardest, as you point out, and thus bring down the overall average.

PropQueries

schmittel wrote: »

I may have misinterpreted them, but I haven't avoided these fundamentals. I have commented on all these before:

Big increase in household savings. - could be a factor to support prices, particularly if there is a fear of inflation. Having said that there is some evidence that proportion of cash buyers is falling, and proportion of FTBers is rising.

Population growth - will not make the slightest bit of difference in the next two years.

WFH - it may affect negatively Dublin City Center, and other expensive Dublin areas, it may increase price for other areas - I have been consistent on this. It will hit expensive areas of Dublin hardest, as you point out, and thus bring down the overall average.

As many posters have commented on the number of vacant homes being in rural areas and therefore can't impact on house prices in Dublin, if they are now saying that the WFH is going to increase prices of rural homes, they're not being consistent as they have already pointed out on many many occasions there is a massive oversupply of housing in rural areas and no, they're not all in Longford.

So, the WFH phenomenon should not have any impact on the price of rural homes but should just have a negative impact on city home prices going forward.

I believe WFH would actually have a negative impact on rural homes as many owners may now complete minor refurbishments and bring them to the market. Before, they have not bothered refurbishing them or marketing them as they would have believed there was no market anyway. If they believe there's a market now, they may start to bring them back into the market in significant quantities and very quickly.

[Deleted User]

Marius34 wrote: »

...........While it may affect negatively Dublin City Center, and other expensive Dublin areas, it may increase price for other areas.

schmittel wrote: »

......... It will hit expensive areas of Dublin hardest, as you point out, and thus bring down the overall average.

PropQueries wrote: »

...........

So, the WFH phenomenon should not have any impact on the price of rural homes but should just have a negative impact on city home prices going forward.............

Surely the supply of homes in expensive areas in Dublin is really constrained so demand would have to fall off a cliff to impact the prices significantly?

A relatively small number of homes in expensive areas changing hands at low ish prices won't have any impact on anything surely?

Cyrus

PropQueries wrote: »

As many posters have commented on the number of vacant homes being in rural areas and therefore can't impact on house prices in Dublin, if they are now saying that the WFH is going to increase prices of rural homes, they're not being consistent as they have already pointed out on many many occasions there is a massive oversupply of housing in rural areas and no, they're not all in Longford.

So, the WFH phenomenon should not have any impact on the price of rural homes but should just have a negative impact on city home prices going forward.

I believe WFH would actually have a negative impact on rural homes as many owners may now complete minor refurbishments and bring them to the market. Before, they have not bothered refurbishing them or marketing them as they would have believed there was no market anyway. If they believe there's a market now, they may start to bring them back into the market in significant quantities and very quickly.

the stock of good quality homes rurally isnt great, and people that are seeking to move out of cities will have a big wish list of what they want if they are moving out. A vacant house in a ghost estate isnt going to cut the mustard.

for someone who professes not to have an opinion one way or the other you come down on large price decreases 100% of the time.

PropQueries

Cyrus wrote: »

the stock of good quality homes rurally isnt great, and people that are seeking to move out of cities will have a big wish list of what they want if they are moving out. A vacant house in a ghost estate isnt going to cut the mustard.

for someone who professes not to have an opinion one way or the other you come down on large price decreases 100% of the time.

I'm only going by what the data is telling me. I will gladly change my opinion in the opposite direction very very quickly if the data shows otherwise.

Hubertj

PropQueries wrote: »

I'm only going by what the data is telling me. I will gladly change my opinion in the opposite direction very very quickly if the data shows otherwise.

your problem is you mix fact with fiction a lot. And mix in some lies.

Prices will obviously fall but you feel the need to make up "facts" to support your narrative and constantly post the same "facts" over and over and over again.

Cyrus

PropQueries wrote: »

I'm only going by what the data is telling me. I will gladly change my opinion in the opposite direction very very quickly if the data shows otherwise.

you ignore the data that tells you one thing and repeat stuff that supports your position ad nauseum across a couple of forums.

PropQueries

Hubertj wrote: »

your problem is you mix fact with fiction a lot. And mix in some lies.

Prices will obviously fall but you feel the need to make up "facts" to support your narrative and constantly post the same "facts" over and over and over again.

I believe I've backed up my facts from legitimate and reliable sources. I also think you know I have been scolded on several occasions for reposting the sources to my data from the Central Bank, CSO etc. when making a point. Just let me know of the facts I made that you believe are wrong and I will gladly re-post the links to the relevant sources again.

hometruths

Hubertj wrote: »

your problem is you mix fact with fiction a lot. And mix in some lies.

Source?

Marius34

PropQueries wrote: »

In relation to a "big increase in household savings", I would presume the majority of people who would be buying are already renting so if they buy, that will just free up their exiting rented home into the market once they buy and move out so I don't believe any increases in household savings should have a significant impact on net housing demand going forward.

In relation to "population growth" supporting demand etc. the population of 0-34 year olds in Ireland actually declined by 72,000 between 2011 and 2016 so I don't see where the demand will come from without continued mass immigration.

According to the Central Bank last December: "The paper finds that around 34,000 dwellings would be required per year until the end of the next decade assuming unchanged household formation rates. This scenario is based on net inward migration of 30,000 per annum, a figure in line with the levels of inward migration observed in 2017 and 2018. Assuming a lower level of net inward migration of 10,000 per annum, annual average housing demand is estimated at around 26,500 per annum out to 2030."

I think we can reliably predict that the projected levels of net migration of c. 30,000 (that's the amount of immigration exceeding emigration each year) in the Central Bank report above won't be anywhere near this higher figure for many years to come and we're still continuing to build plenty of homes. We also had c.90,000 vacant livable homes in Ireland pre-covid as per the GeoDirectory Survey Q2 2020. That's three years housing supply right there even at the higher projections for housing demand.

Never mind all those student accommodation units (about an extra 15,000 bed spaces built or already now under construction in Dublin over the past few years) that will need people to fill them over the next two years as the international students aren't coming back next year either as they would have to decide to come here from next January and we will still be in lockdown at that stage. The Point Campus in Dublin has already requested permission to convert 600 of their units to residential permanently.

And, we're still expected to have house completions hit 18,000 this year despite the covid restrictions: Irish Times link here: https://www.irishtimes.com/business/construction/house-completions-to-hit-18-000-despite-construction-shutdown-1.4356648

1) The fact that savings are growing across all sectors for potential buyers. You can find many reasons why it has no impact, but it's just a believes.

2) Population is growing even excluding migration. I can equally say that we have now higher number of teenagers than in 2011, and big portion of them will be leaving their parents home after highschool. There is no much point to look at this, its enough to check if naturally population is growing or going down.

PropQueries

Marius34 wrote: »

1) The fact that savings are growing across all sectors for potential buyers. You can find many reasons why it has no impact, but it's just a believes.

2) Population is growing even excluding migration. I can equally say that we have now higher number of teenagers than in 2011, and big portion of them will be leaving their parents home after highschool. There is no much point to look at this, its enough to check if naturally population is growing or going down.

Not in the house buying demographic.

Total increase in population 2011 – 2016 was 173,613 as per Census 2016:

0 - 34 Years: -72,493 (yes, minus)
35 - 64 Years: +143,932
65 - 85+ Years: +102,174