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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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MacronvFrugals

Geuze wrote: »

https://twitter.com/seamuscoffey/status/1313515663802195968

In fairness its still among the highest proportion within the EU, albeit with a pretty high MW but transfers are needed to make up the difference in some cases. Those figures do show a good year one year decrease which is good.

CSO have also reported deprivation rates rose from 15% to 18% which even Coffey admitted was really surprising.

Smouse156

Ozark707 wrote: »

Maybe they were trying to give the impression that they were selling like hot cakes when in fact they were not? Otherwise there should be no reason for them not to be on the PPR?

The article was written in 2019 but stated sales launched in 2017 and 88 had gone sale agreed. I could see a few fall through but 78/88 falling through (before pandemic)...something seems just wrong there

Idbatterim

https://en.brinkwire.com/news/irish-economy-to-shrink-by-between-0-4-and-1-1-this-year-says-central-bank/

Read a better article on this yesterday but couldnt find it ...

Geuze

MacronvFrugals wrote: »

The amount of people on minimum wage here as we know is staggering and they're more likely to be affected by Covid while also being the folks that likely cant afford to buy now or before.

https://twitter.com/seamuscoffey/status/1313515663802195968

Geuze

MacronvFrugals wrote: »

The amount of people on minimum wage here as we know is staggering and they're more likely to be affected by Covid while also being the folks that likely cant afford to buy now or before.

https://www.cso.ie/en/releasesandpublications/er/lfsnmw/lfsnationalminimumwageestimatesq42019/

6.4% of workers

- 30% are students
- 55% are under 25
- 60% work part-time
- 45% have been in their current job for less than 12 months
- 43% are in thinly-populated areas

Geuze

MacronvFrugals wrote: »

The amount of people on minimum wage here as we know is staggering and they're more likely to be affected by Covid while also being the folks that likely cant afford to buy now or before.

Approx 5% of workers? I will check.

Idbatterim

"Minister blames Covid as just 725 social housing units built in first half of the year " https://www.thejournal.ie/covid-housing-725-5226332-Oct2020/

Jesus, only roughly half the figure they intended to build, supplied in the first six months. Residential construction is an essential service...

Ozark707

Smouse156 wrote: »

I was wondering if anybody knew if every sale has to go on the PPR?

Just as an example below, Lansdowne Place claim they had 88 sales in 2019, yet on the PPR only 10 results:

https://www.irishtimes.com/life-and-style/homes-and-property/new-to-market/shared-spaces-and-new-units-launch-at-luxury-lansdowne-place-1.4005273

https://www.propertypriceregister.ie/website/npsra/PPR/npsra-ppr.nsf/PPR-By-Date&Start=1&Query=%5Baddress%5D=*Lansdowne%20place*%20AND%20%5Bdc_county%5D=Dublin&County=Dublin&Year=&StartMonth=&EndMonth=&Address=Lansdowne%20place

Am I missing something? Surely 78 sales didn’t fall through? I thought they had to be posted within 4 months or closure?

Maybe they were trying to give the impression that they were selling like hot cakes when in fact they were not? Otherwise there should be no reason for them not to be on the PPR?

Smouse156

I was wondering if anybody knew if every sale has to go on the PPR?

Just as an example below, Lansdowne Place claim they had 88 sales in 2019, yet on the PPR only 10 results:

https://www.irishtimes.com/life-and-style/homes-and-property/new-to-market/shared-spaces-and-new-units-launch-at-luxury-lansdowne-place-1.4005273

https://www.propertypriceregister.ie/website/npsra/PPR/npsra-ppr.nsf/PPR-By-Date&Start=1&Query=%5Baddress%5D=*Lansdowne%20place*%20AND%20%5Bdc_county%5D=Dublin&County=Dublin&Year=&StartMonth=&EndMonth=&Address=Lansdowne%20place

Am I missing something? Surely 78 sales didn’t fall through? I thought they had to be posted within 4 months or closure?

PropQueries

Smouse156 wrote: »

I agree that’s what should be done, however, sadly it won’t be done. It’s unfortunate. In place of this though, they will pin their hopes on the private sector ramping up construction and give them every help they need to get there

Well, I wouldn't be holding out for any progress on the social housing building front as the current minister appears to reverting to the blame everything else but him and his department game.

According to The Journal: "Minister blames Covid as just 725 social housing units built in first half of this year".

I was always in two minds on whether our politicians and senior civil servants were either bought and paid for by certain groups or just plain incompetent.

However, as the top level of the HSE now appear to have been caught completely off guard by the second wave of Covid (to be fair, who could have predicted that?), I'm beginning to believe it's just plain incompetence.

Link to the article in The Journal here: https://www.thejournal.ie/covid-housing-725-5226332-Oct2020/

[Deleted User]

Bass Reeves wrote: »

..........If they go on a new building program they will suck labour, expertise and materials from the private builders

Indeed, the various LA have no resources to project manage or build anything of note. They likely don't have the design hours/resources either.

And if folk reckon the private sector is slow at building houses see how it goes if you have to get swathes of COs and EOs involved.

Bass Reeves

Smouse156 wrote: »

I agree that’s what should be done, however, sadly it won’t be done. It’s unfortunate. In place of this though, they will pin their hopes on the private sector ramping up construction and give them every help they need to get there

The problem with LA starting to build specific LA estates is it leads to gettoization. You are again back to you he Ballymun's, the Moyross'es and the Knocknaheen'ies of this world.

In fact the LA have not build there own houses since the 1950's and 60's. They generally subcontracted the work to private builders but in general.over spececified the product. If they go on a new building program they will suck labour, expertise and materials from the private builders

Smouse156

ELM327 wrote: »

I've hired 2 people on my team since this emergency started.
Most of my team and myself are late 20's to late 30's. These are the white collar jobs that are not affected.

As alluded to above, the jobs that are decimated are in service industry jobs like retail and hospitality. With the possible exception of management jobs, most jobs in these sectors are 25k/pa max, and most a lot below. No one on that money is going to be able to buy a house. Especially if its irregular hourly pay as opposed to salaried. Most people here will work in a different industry for more money in a couple of years ago. 15 years ago I worked in the service industry for 8-10 euro per hour.

The population of those realistically looking to buy a house probably has very little intersection with those in the retail or hospitality sectors.

Consider those married! If you have one partner on 80k and the other on 25k they can get a mortgage of 367.5k and buy a house around 408k.

If the partner on the lower wage is on the Govt support, then they can only get a mortgage based on the higher earners of 280k and buy a house of 311k (10% deposit).

That’s a significant difference and that’s working on the assumption of 3.5 times income. Remember pre Covid a few people could get 4 and even 4.5 times earnings but these exemptions are gone as well.

Bottom line, those people on low wages do have an effect on the housing market!

These people who would have bought might just wait until lower earning partner is eligible for mortgage again rather than accept a cheaper house. This effect is them multiplied along the chain (400k house seller has lost a buyer, 400k house seller now can’t move house to say trade up to 600k etc etc etc). Creates stagnation

Smouse156

The_Conductor wrote: »

If there was a proper restructuring of the sector- with local authorities forbidden to buy or rent from the private sector and forced to construct their own units- as they historically have done- and if it were managed in a logical manner with a detailed roadmap on a multi-year basis, it could very easily be sold to the public as in the public's best interests.

Even Eoin O'Broin is on the record supporting a ramp up of building public housing units- and moving away from the current model (which pushes out FTBs and inflates prices from the sector)- I don't see how Sinn Féin would not applaud such an approach.

It does require multi-year planning, alongside an orderly exit of the local authorities from their current private sector purchasing and rentals.

I agree that’s what should be done, however, sadly it won’t be done. It’s unfortunate. In place of this though, they will pin their hopes on the private sector ramping up construction and give them every help they need to get there

Timing belt

Extract from the Central Bank Q3 report
source: https://www.centralbank.ie/publication/quarterly-bulletins/quarterly-bulletin-q4-2020?utm_medium=website&utm_source=CBI-homepage&utm_campaign=qb4&utm_content=44110

Construction sector activity is expected to decline by approximately 30
per cent in 2020. The sector bounced back well from the closures in April
and May, with most sites re-opening in mid-June. Indications are that he
sector is running at approximately 85 per cent capacity. However, the
latest construction PMI reported that the recovery faltered somewhat in
August, with the overall index falling from 53.2 (expansion) in July to 44
(contraction) in August. All three housing, commercial and civil engineering
sectors recorded a contraction in activity in the month of August.

House completions are expected to decline to approximately 17,500
units in 2020, down from 21,000 units in 2019. More recent data indicate
that housing commencements and registrations have held up better than
expected during Q2 2020, with over 3,000 new housing units commenced,
although considerable uncertainty around demand, prices and financing
remains. Current expectations are for approximately 22,000 and 27,400
units in 2021 and 2022, respectively.

Non-residential investment is projected to fall sharply in 2020 and
recovery only gradually thereafter. The most recent CSO Business Impact
of COVID Survey indicated that 57.7 per cent of office-based staff were
still working remotely as of August 2020. Moreover, a recent survey by
Moody’s Analytics reported that the number of international businesses
indicating that they would be adding to office space declined from 50 per
cent in 2019 to zero percent in 2020, while those pointing to a decline in
office space requirements increased to 35 per cent in 2020.

Knex*

beauf wrote: »

You need to look at what happened last time. Then see how much happening now is similar and how much is different. Because its a mixed bag so far, some things the same some different. Some people are only looking at the bits that suit their argument. People shouldn't give their own situation, as unreasonable people will use that to dismiss any rational discussion.

If you are in a rock steady financial position, and see your one in a lifetime opportunity then I would buy. But knowing it will probable drop in price at some point. Anyone else should probably wait and see what happens.

Though life doesn't always give you opportunities when you want or need them. It usually gives them at the worst time possible. Most things end up being a compromise as a result.

"There are no solutions. There are only trade-offs."

IAmTheReign

PropQueries wrote: »

Thanks for the link, but that is for the four quarters up to Q2 2016. Here's the breakdown of new residential unit completions over each of the following four years and this excludes the significant amount of office, hotel and student accommodation development also undertaken over the past 4 years:

Q2 2015 - Q1 2016: 7,826 residential units
Q2 2016 - Q1 2017: 10,672 residential units
Q2 2017 - Q1 2018: 15,056 residential units
Q2 2018 - Q1 2019: 18,730 residential units
Q2 2019 - Q1 2020: 21,848 residential units

Residential property accounts for the vast majority of construction work in Ireland. See here.

Is your point that the increase in new residential units had a corresponding increase in construction workers? Because if it is you'd be wrong. From 2017 - 2018 the number of construction sector workers only increased by 8%, despite the fact that there was a 28% increase in new unit commencement. See here.

Timing belt

ELM327 wrote: »

I've hired 2 people on my team since this emergency started.
Most of my team and myself are late 20's to late 30's. These are the white collar jobs that are not affected.

As alluded to above, the jobs that are decimated are in service industry jobs like retail and hospitality. With the possible exception of management jobs, most jobs in these sectors are 25k/pa max, and most a lot below. No one on that money is going to be able to buy a house. Especially if its irregular hourly pay as opposed to salaried. Most people here will work in a different industry for more money in a couple of years ago. 15 years ago I worked in the service industry for 8-10 euro per hour.

The population of those realistically looking to buy a house probably has very little intersection with those in the retail or hospitality sectors.

The impact on the economy is very different by sector but from looking at CBI report yesterday Brexit will add to the uncertainty and will most likely impact on jobs in other sectors such as agri/food leading to 8% unemployment or 12% in there severe stress. With all the uncertainty people will sit tight so there will be less supply on the market. Yes there is still strong demand but this will be stronger in the FTB market as people are desperate to get out of renting at any cost. But i think demand in the higher end bracket will be impacted as bonuses and pay increases will be impacted with companies tightening their belt and these individuals are not as desperate to move and will sit it out until more certainty comes.

Personally I don’t see a collapse on the housing market unless a crisis hits the financial markets which at the moment seem to be avoided thanks to the intervention of central banks/governments. Yes there will be fluctuations in price and property prices may drop 5% but don’t see a collapse.

ELM327

I've hired 2 people on my team since this emergency started.
Most of my team and myself are late 20's to late 30's. These are the white collar jobs that are not affected.

As alluded to above, the jobs that are decimated are in service industry jobs like retail and hospitality. With the possible exception of management jobs, most jobs in these sectors are 25k/pa max, and most a lot below. No one on that money is going to be able to buy a house. Especially if its irregular hourly pay as opposed to salaried. Most people here will work in a different industry for more money in a couple of years ago. 15 years ago I worked in the service industry for 8-10 euro per hour.

The population of those realistically looking to buy a house probably has very little intersection with those in the retail or hospitality sectors.

MacronvFrugals

Interested Observer wrote: »

I reckon the same, though obviously could be completely wrong. I really don't want to come across as a snob here or looking down at anyone, but a lot of the economic hardship is being borne by younger people who possibly aren't in the market to buy a house at the moment, who mightn't have reached their max earnings yet and mightn't have a deposit together, etc. From what I can gather most white collar workers are still just going as they were, who are more likely to be in the market for a house.

Tax take has pretty much held up with little blips kind of highlighting the sheer number of people still getting their normal wages and probably still looking to buy a property.

The amount of people on minimum wage here as we know is staggering and they're more likely to be affected by Covid while also being the folks that likely cant afford to buy now or before.

Taking these things into account i'm not surprised the market is holding up

As a mid 20s guy myself both my friends and i are desperate to get the deposit and buy, anything to escape the rental market.

[Deleted User]

Idbatterim wrote: »

Im starting to think, there wont be any meaningful fall, without economic collapse. Say 20,000 units built this year... how many re social housing bought by the state, to be given away free... as long as there are large numbers employed in very secure and mid to high paying jobs, and there are in ps, cs and loads of tech, finance, pharma jobs etc. Theyll be buying the relatively small number of units that come to the market...

Nothing happens quickly with the property market...

I reckon the same, though obviously could be completely wrong. I really don't want to come across as a snob here or looking down at anyone, but a lot of the economic hardship is being borne by younger people who possibly aren't in the market to buy a house at the moment, who mightn't have reached their max earnings yet and mightn't have a deposit together, etc. From what I can gather most white collar workers are still just going as they were, who are more likely to be in the market for a house.

hometruths

beauf wrote: »

Well its not the only reason, not even the main reason.

True, but it is the most easily fixed.

Marius34

awec wrote: »

I predict we'll see a sharp fall in transactions for the next 3-4 months.

The combination of lockdown, Christmas and New Year is going to make house hunting unappealing.

I doubt it.
I don't expect previous year level. But I do expect 2020 Q4 to see definitely higher than 2020 Q2/Q3 transaction level.
It seems current property market is relatively active, especially FTB.

beauf

Inthemarketfor wrote: »

House hunting in Limerick myself, a bit of desperation going on and bidding wars happening with houses going for far more than they're worth. People appear to be panicking as there's very little of quality coming to market and the threat of job losses is real for many.

Also, from my experience so far, a lot of bidders aren't doing their homework or are starting the bidding too high and creating a false floor for everyone else. In one old and established estate, there are houses still listed on Daft for an asking price of 40-60k above what they actually went sale agreed on a couple of months ago. So, when another one comes up people are under the false impression that the asking price is realistically what they need to pay. I find it very shady that the EA has left up the ads even though they are sale agreed and are closed to new offers. When they finally hit the PPR there's going to be serious differences in the sale prices.

I think its a mixed bad. I know of some places sold for over asking. But they tend to be in the more affordable places. But its not consistent. Lots of places sitting for a long time also.

beauf

td2008 wrote: »

Yeah I wonder are many people breaking the travel restrictions to view places - would be a bit of a pain for first time buyers if the HTB grant is only valid until December but they can't view anywhere

There will be a limited amount of people who will buy in their local area.
If the property is vacant it makes it easier to show a house.
But otherwise yeah its going to have a significant effect.

Inthemarketfor

Mad_maxx wrote: »

limerick city appears not to have dropped at all price wise , granted it was still about 15% lower than galway pre covid 19 but id have thought it would have slipped a little

supply is chronic so that might be the one reason ?

havent been following cork ?

House hunting in Limerick myself, a bit of desperation going on and bidding wars happening with houses going for far more than they're worth. People appear to be panicking as there's very little of quality coming to market and the threat of job losses is real for many.

Also, from my experience so far, a lot of bidders aren't doing their homework or are starting the bidding too high and creating a false floor for everyone else. In one old and established estate, there are houses still listed on Daft for an asking price of 40-60k above what they actually went sale agreed on a couple of months ago. So, when another one comes up people are under the false impression that the asking price is realistically what they need to pay. I find it very shady that the EA has left up the ads even though they are sale agreed and are closed to new offers. When they finally hit the PPR there's going to be serious differences in the sale prices.

awec

td2008 wrote: »

Yeah I wonder are many people breaking the travel restrictions to view places - would be a bit of a pain for first time buyers if the HTB grant is only valid until December but they can't view anywhere

The HTB will almost certainly be extended.

td2008

Yeah I wonder are many people breaking the travel restrictions to view places - would be a bit of a pain for first time buyers if the HTB grant is only valid until December but they can't view anywhere

PropQueries

awec wrote: »

I predict we'll see a sharp fall in transactions for the next 3-4 months.

The combination of lockdown, Christmas and New Year is going to make house hunting unappealing.

I would agree with you on that but most likely for different reasons. All the while new built stock and potential probate sales continue to build up silently in the background.

awec

beauf wrote: »

..and there is more than one reason for the drop in transactions, and that is changing over time, as the lock down ebbs and flows. It also hasn't always been downward either, even if thats the general trend.

I predict we'll see a sharp fall in transactions for the next 3-4 months.

The combination of lockdown, Christmas and New Year is going to make house hunting unappealing.