Irish Property Market 2020 Part 2

JimmyVik wrote: »

What happened with me was that I actually got a very cheap rent for about 3 years, but then as we all know it shot up.
Then of course family issues happened and I ended up single.
So i was paying half the rent on the wife and childs house and plus an apartment for myself.

Had you bought the house in 2007, and then had the family issues, would you not have been stuck with a house in 2010 that you needed to sell but couldn't, and with massive negative equity? You've mentioned a lot of times in the thread that you would've been better off buying in 2007. That's understandable for you but a lot of circumstances have to come together to make that desirable and the vast majority of people who didn't buy pre-crash are delighted they didn't.

If you want to go back to college or lose your job, both of which happened to people in droves 2007-2012, you'd be in a bad place with negative equity. If you had to move due to work, family, emigration etc, you'd again be in a very bad place with negative equity. The people who lost out by not buying were the people who were in full employment from 07-20, who stayed in one place, didnt pull the trigger at any stage and got caught in the 14-20 rent trap. I'd imagine that segment is quite small.

It's completely understandable that people want to make a somewhat educated guess, whether their own or from perceived 'experts', about getting into the market at a good time. It'll make a huge difference to your quality of life. Getting it right is another matter

Augeo wrote: »

If you bought in 2007 then you'd have been paying half the mortgage as the family issues would likely still have happened.

You'd be paying a big mortgage on a home for your ex. Not sure what the positives are there tbh.

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.

Just take an average house price from 2007. Add up the mortgage payments so far to date. And then add up the rent on a similar property to date. And remember you would have 13 years equity in the property too.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.

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?

This is the same as always.
People constantly predicting a crash and adjusting forward as it doesnt happen in their timeline. Some people constantly predicting no crash.
But the real truth is, nobody actually knows the future.
You would think they would have learned that by now.
People need to just get on with their lives and not be listening to what comes out of peoples crystal balls one way or the other.

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

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 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....

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).

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.

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)

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.

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.

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

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.

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.