HotDudeLife wrote: » The question is by how much, I'm predicting an average of 20% drop across the board by late 2022.
HotDudeLife wrote: » If i had to put my money where my mouth is i think that most 3 bed semis in Dublin that are currently selling for 350k will be going for around 275k by 2023/24. A serious correction is long overdue and anyone buying now (if they absolutely don't have to) is completely mad.
schmittel wrote: » Prices were dropping when the students and tourists were in town, before anybody had ever heard of COViD 19. Seems like Covid is the only thing propping the prices up right now.
schmittel wrote: » Is this because nobody will be able to get a mortgage in 2023/24? Of course the banks will lend less in a recession, but they won’t stop lending completely. If you have good job security, good savings history and qualify within LTV and LTI limits you will no problem accessing a mortgage in 2023/4. Thoroughly disingenuous to suggest otherwise, happens on here a lot.
PropQueries wrote: » It's impossible to back up what comprised of the €200 billion in property and business loans the investment funds purchased between 2012 and 2016 due to the secrecy of those deals. But, it's reasonable to assume that it mostly comprised of property investment and property related loans as the banks weren't exactly eager to sell their performing non-property related loans. Once the investment funds owned the loans, they owned the assets that those same loans were secured on unless of course the developers and other property investors did indeed manage to repay those loans. Maybe all those property developers in rural Ireland did repay all those loans. Entirely possible but not very probable. In relation to the ECB cash finding its way into the mortgage market. It may not have found its way into the mortgage market, but I would guess you would agree that it has found its way into the property market via the back-door?
fliball123 wrote: » Through which back door the guy has put up a graph proving you wrong can you elaborate?
Timing belt wrote: » If you look at the economic data of the last recession you will see that unemployment grew, wage cuts were common and banks reduced their lending. If houses prices were to drop by that much due to a extended recession/depression then the vast majority of workers would be impacted and would not meet the criteria. Yes if you are luck enough to have good job security and are not impacted by a wage cut you will get a mortgage. But if you already meet that criteria you are more than likely on the housing market already and will be reluctant to move house as it will crystallise the negative equity.
PropQueries wrote: » The whole purpose of QE was to make lending to governments less attractive (by forcing down interest rates) and thus encouraging investors to invest in other assets. There's only two other asset classes with scale that normal investors can invest in i.e. shares and property.
awec wrote: » In the space of 1 month you've gone from a 20% drop by 2022, to a 20% drop by 2024. What has changed in those 4 weeks that you now believe the market is more resilient?
Timing belt wrote: » This statement is 100% incorrect QE makes government lending more attractive and hence why vast sums have flowed into the bond market the one asset class that has grown more than any. If yields drop it is because there is demand for bonds so governments have to pay less to entice investors.
schmittel wrote: » The point seems to be to suggest that if prices fall nobody will get a mortgage, which is nonsense. If that is not the point, what is it?
plibige wrote: » Would it be fair to say we are still to close to the event to actually have a good idea where its going? Like on the one hand there is tremendous demand due to lack of supply. Also due to covid people are saving far more so there will inevitably be a lot of ability to buy whenever things do get back to some sort of normality. On the other hand the economy has been put into a semi self induced coma. Some sectors are still doing well, others are close to wiped out. When the government funding does stop these sectors either going to struggle at best, or some businesses will close all together. This will have a knock on affect to other parts of the economy, naturally. Which in turn could affect peoples ability to borrow in the short to medium term. Like I can easily say "I think it could dip by 10% -15%" but it could easily not and just stagnate. Then again it could be far worse. And then there could be no dip at all. Am I wrong in saying "until the government takes the economy off life support, we can't actually predict where this is going" And just FYI I am hoping for a 10-15% dip for selfish reasons
PropQueries wrote: » Less attractive in the sense that the return is reduced so significantly on the so-called risk-free assets (i.e. government bonds), that investors are then enticed into investing in either the stock market or property assets to achieve higher returns. More demand from investors for these asset classes equals higher prices which was the point of QE. But... you know this?
PropQueries wrote: » The whole purpose of QE was to make lending to governments less attractive (by forcing down interest rates) and thus encouraging investors to invest in other assets. There's only two other asset classes with scale that normal investors can invest in i.e. shares and property. By encouraging investors back into the property market, this resulted in a back-door bailout of the retail banks whose assets were primarily comprised of property related loans e.g. mortgages etc. It worked. But, too well. In relation to Ireland, the investment funds bought €200 billion in property and business loans from Irish banks between 2012 and 2016. Even if only 50% of those purchases related to property in Ireland, that would mean they control a minimum of c. €50 billion in property (residential and commercial) in Ireland today, allowing for an average 50% discount on the purchase price. Say even, they control c. €25 billion of property in Ireland if allowing for a 75% discount on the purchase price of the original loans. I believe this is significant market power over the property market in such a small country. Another poster says this is not true and says he can prove it. Maybe he can and well done to him if he can.
Timing belt wrote: » My point was that it will be as difficult for the vast majority to get onto the housing market as it is today if prices fall due to a recession as house prices are not the only thing impacted. (e.g. wages are impacted)
Timing belt wrote: » Unless you are a 100% cash buyer it will be as difficult to buy a 275k house in 2023/24 as it is to buy a 350k house today if your prediction is correct.
schmittel wrote: » I don’t need to look at the economic data to know how it is happened in the past. It follows a fairly simple path. 1) recession hits 2) unemployment rises and earnings fall 3) less demand for and supply of credit 4) less confidence and credit in the market 5) prices fall. Most people predicting 5 (prices fall) are doing so because they think 1-4 will happen. They think prices will fall precisely because of the fact that there will be less mortgage credit available. But time and again posters reply to a post about falling prices to point out that mortgages will be harder to get. Er, yes, exactly, that was my point, what’s yours? The point seems to be to suggest that if prices fall nobody will get a mortgage, which is nonsense. If that is not the point, what is it? Banks will still lend to people with secure jobs and incomes who can comfortably afford the mortgage. That’s what happened in the last recession.
HotDudeLife wrote: » I like how selective you are in choosing 2024 (in an attempt to undermine my contribution to this thread) when my post stated late 2022 and 2023/24. Newsflash, there is not much time between late 2022 and 2023. May i ask how exactly are you a mod? All you seem to do is try embarrass and vilify posters who expect property prices to drop.
schmittel wrote: » Fair enough, that's obviously true. But not quite the same as the sweeping generalization:
Mad_maxx wrote: » thought it somewhat interesting that the IRES reit fell 4% today and is still lower than it was three and a half years ago , dividend is almost 4.5% are institutions bearish ?
Hubertj wrote: » So am I going to get the house in rathgar with a lift for €500k?
Timing belt wrote: » I don't see any sweeping generalization as I said it will be as hard to buy as today unless you are a 100% cash buyer.
Marius34 wrote: » It didn't follow last time, most of it started around 2008 Q1/Q2
fliball123 wrote: » 2 of them just ask Santa
Hubertj wrote: » question for the experts. Please can someone answer the following: Banks will only provide a mortgage on an investment property if there is vacant possession? Therefore, if an owner attempts to sell with tenants in situ, they are confined to cash buyers? This must negatively impact the potential sale price the property if the number of potential buyers is significantly reduced? The potential of a tenant not paying rent would also increase risk which a cash buyer would also factor into a bid?
Timing belt wrote: » The risk has increased the passed few days of another extended lockdown which if happens will lead to a slower economic recovery.
fliball123 wrote: » You will find that people will ad with tennant in situ or will give notice I think the longest someone can stay in a rental is 8 months sure your a fair chunk into that by the time the sale has completed
schmittel wrote: » Last time we ran out of greater fools. Plenty of evidence to suggest we have not reached that point yet.
