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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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cubatahavana

jill_valentine wrote: »

What if they fear a bigger drop in future? What if they need the liquidity now? What if the rent on that apartment is no longer paying its mortgage and some of your own anymore?

Sure some will have to, but I don’t think as many as to make prices collapse. If a 10-20 per cent reduction in your rent as a landlord makes the whole thing unsustainable, it wasn’t a great investment anyway

jill_valentine

- landlords may want to sell second or third properties, but if you bought them as investment, would it be wise to sell now? Everything is cyclical and property is a long term game (I don’t think many of them will be doing this, so supply won’t grow too much)

What if they fear a bigger drop in future? What if they need the liquidity now? What if the rent on that apartment is no longer paying its mortgage and some of your own anymore?

Springy Turf

CorkRed93 wrote: »

this isnt true no matter how many time you type it out

I think the posters assertion is fair enough? Affordability just isn't there for low income families. With an LTI exemption for 4x, a couple on 50k can only borrow 200k. To buy something in decent nick in Dublin costs 100k+ more than that for the most part. Most of the houses linked in this thread would have been well out of reach before the pandemic.

https://www.irishtimes.com/life-and-style/homes-and-property/the-biggest-reason-why-first-time-buyers-can-t-afford-a-home-1.3815107

Idbatterim

CorkRed93 wrote: »

this isnt true no matter how many time you type it out

they would probably been eligible, but for what? 105k? as a single earner... this lockdown announced now, could go on for ages, just open , lockdown,open, lockdown... I can see absolute carnage down the line, but are people going to wait 18-24 months or more on that MAYBE? maybe...

Leozord

Get Real wrote: »

The banks are still lending, supply hasn't increased, and those waiting are simply building bigger warchests to bid with.

besides, ECB is printing money non-stop

Get Real

thefridge2006 wrote: »

So why didnt everyone buy cheap houses in 2008 then........I'll tell you why, because they didnt have access to credit and had no job.

This is looking a LOT worse than 2008 crash.

People didn't buy cheap houses during the last crash because 1)banks weren't lending and 2)they were saddled with huge personal debts, and the job went on top.

It was literally going in for a 5k car loan, and being convinced to take out a mortgage for an investment property. You might have only been on 30k a year. The view of the bank was 1)profit now and 2)house prices will only go up, so it can't fail.

Now, people who were already searching for homes
1)aren't saddled with unsustainable debt
2)the majority are working, and earning their normal salary (those not in retail/bar/services who, due to their low income, wouldn't have been eligible for mortgages anyway)
3)they're putting away even more savings per month due to not spending on socialising/holidays/commuting.

The banks are still lending, supply hasn't increased, and those waiting are simply building bigger warchests to bid with.

Springy Turf

thefridge2006 wrote: »

So why didnt everyone buy cheap houses in 2008 then........I'll tell you why, because they didnt have access to credit and had no job.

This is looking a LOT worse than 2008 crash.

The price drop was gradual rather than a short sharp drop. This is no doubt entirely different to the 2008 crash - but the difference is undersupply and lots of (so far) unaffected middle class jobs.

Springy Turf

mcsean2163 wrote: »

What about all the unsold luxury apartments around Dublin? e.g islandbridge

Which ones? A quick daft search doesn't show me anything. By far the biggest development there is Clancy Quay which is rental only (or at least it used to be)

fliball123

thefridge2006 wrote: »

So why didnt everyone buy cheap houses in 2008 then........I'll tell you why, because they didnt have access to credit and had no job.

This is looking a LOT worse than 2008 crash.

Why was there no credit because the banks where all banjaxed the banks are in a much better position in 2020 than they were in 2008

fliball123

handlemaster wrote: »

Perhaps. Different cause this time will be a drop.

There was a huge drop in prices back in the crash of 08?

fliball123

combat14 wrote: »

but how long will people be working for .. we will know more after tonight's announcement..

as for money sloshing around again for how long before govt has to up taxes to payback 240+ billion in debt

Well considering that well over 210billion of that was borrowed pre covid I wouldnt be too worried about it

poker--addict

cubatahavana wrote: »

- landlords may want to sell second or third properties, but if you bought them as investment, would it be wise to sell now? Everything is cyclical and property is a long term game (I don’t think many of them will be doing this, so supply won’t grow too much)

Stocks, houses, and human nature. People should ride out the storm and retain long term vision, but historically we dont....

KennisWhale

Timing belt wrote: »

As long as the EU are keeping the cost of government borrowing low with the QE program there will be no tax rises. Once the economy gets back on its feet and there is inflation/GDP growth the cost of the government borrowing will rise inline with this and that is when we will see additional taxes.

Spending cuts will follow before tax increases. All the social welfare this year needs to be unwound and, dare I say it, they'll need to carry out a serious assessment of the value in the health service if the lockdown of the country for flu season is anything to go by.

cnocbui

handlemaster wrote: »

What are you doing here then .. strange

Not really, I'm currently contemplating selling property, so I have a very relevant interest in the current state of the market.

cubatahavana

Probably I will be called an idiot, but why would prices fall so much?
- if you own your home, with the help for the mortgage, there’s no need for you to sell it, no increase for supply
- if you’re renting, probably you’ll be looking to buy, increasing demand
- if you want to upgrade, you sell one and buy another, demand stays stable
- landlords may want to sell second or third properties, but if you bought them as investment, would it be wise to sell now? Everything is cyclical and property is a long term game (I don’t think many of them will be doing this, so supply won’t grow too much)

I don’t see the huge urge to sell property, that would increase supply dramatically and drive prices down. I see an increase in demand, though.

Affordability could be a factor, but if I’m selling, I don’t think most sellers would want a bad deal. I don’t think there’s the huge need to sell at all costs that would bring property prices as low as some expect.

I’m trading up, found a good deal and I’m going with it. It may drop, it may not, but I don’t care too much about it as I am not thinking about selling my new purchase

Bubbaclaus

thefridge2006 wrote: »

This is looking a LOT worse than 2008 crash.

In what way?

thefridge2006

fliball123 wrote: »

Eh no we had an oversupply in 2008 the same is not the case now

So why didnt everyone buy cheap houses in 2008 then........I'll tell you why, because they didnt have access to credit and had no job.

This is looking a LOT worse than 2008 crash.

mcsean2163

handlemaster wrote: »

Perhaps. Different cause this time will be a drop.

What about all the unsold luxury apartments around Dublin? e.g islandbridge

handlemaster

fliball123 wrote: »

Eh no we had an oversupply in 2008 the same is not the case now

Perhaps. Different cause this time will be a drop.

Timing belt

combat14 wrote: »

but how long will people be working for .. we will know more after tonight's announcement..

as for money sloshing around again for how long before govt has to up taxes to payback 240+ billion in debt

As long as the EU are keeping the cost of government borrowing low with the QE program there will be no tax rises. Once the economy gets back on its feet and there is inflation/GDP growth the cost of the government borrowing will rise inline with this and that is when we will see additional taxes.

handlemaster

cnocbui wrote: »

I owned a house for years prior to 2007, so I wasn't interested in the topic and wasn't on this or similar threads, if that is what you meant (hard to tell 'herebinn'?)

What are you doing here then .. strange

TheSheriff

combat14 wrote: »

but how long will people be working for .. we will know more after tonight's announcement..

as for money sloshing around again for how long before govt has to up taxes to payback 240+ billion in debt

I would expect those who done well in the previous lockdown (pharma, grocery, healthcare, some tech) to also do well in this lockdown...

No idea re the taxes bit, anyone's guess. Could be a spring emergency budget, it could be like many predictions on here, sometime between 2020-2023.

combat14

TheSheriff wrote: »

I think it's all a bit more simple than perhaps we all think, all trying to extrapolate based on WFH, Brexit, some have been comparing houses to chicken rolls, a cordless drill comparison was made at one point and many many comments back in Feb that we'd all have left Dublin to live on the beach in Wexford by now.....

Could it be as simple as Covid has caused people to reevaluate their living conditions , those in apartments want a house, those in house shares want their own space so are looking at apartments etc. despite all the uncertainty the world hasn't ended and we all still want to get on with our lives. Could there just be more demand out their now, with plenty of money still sloshing about by those who are still working, coupled with the same lack of supply we've had for years ? (Lack of supply in desirable locations I mean, before PropQueries quotes some figures at me )

but how long will people be working for .. we will know more after tonight's announcement..

as for money sloshing around again for how long before govt has to up taxes to payback 240+ billion in debt

TheSheriff

I think it's all a bit more simple than perhaps we all think, all trying to extrapolate based on WFH, Brexit, some have been comparing houses to chicken rolls, a cordless drill comparison was made at one point

and many many comments back in Feb that we'd all have left Dublin to live on the beach in Wexford by now.....

Could it be as simple as Covid has caused people to reevaluate their living conditions , those in apartments want a house, those in house shares want their own space so are looking at apartments etc. despite all the uncertainty the world hasn't ended and we all still want to get on with our lives. Could there just be more demand out their now, with plenty of money still sloshing about by those who are still working, coupled with the same lack of supply we've had for years ? (Lack of supply in desirable locations I mean, before PropQueries quotes some figures at me

)

Marius34

schmittel wrote: »

No issue with daft stats which I presume are beyond reproach.

A poster earlier said he found the fact some reports focused on asking and others on sales prices to be misleading. I replied saying I agreed, it can be misleading here too, pointing out that some posters place a different weight on the value of asking prices depending on the point they are making or refuting.

I said this because I recall an occasion when a poster used asking prices to suggest prices were falling. He was criticized by many, including Marius, who said asking prices are fairly meaningless.

Hence I quoted Marius’s post highlighting increased asking prices. Perfectly valid point.

Right some do that, and use actual and asking price interchangeably, which I really dislike. But in my case I clearly specified.
And asking price doesn't tell much for a single quarter to me, it would be fairly meaningful if the trends occurs for multiple quarters.

Why I posted it?
Because almost identical post was maybe most favorite post on Property Market of the year, and poster was not even telling that its asking price. But since it showed price decrease so many loved it.
https://www.boards.ie/vbulletin/showpost.php?p=113052417&postcount=3529

Timing belt

Marius34 wrote: »

It appears, this is raw median price, without adjustments

.

Yes that is correct

Marius34 wrote: »

I have my own calculation on Median prices with adjustment, Cork prices looks fairly stable.

I agree and it what you would expect when the main industry's are pharm and IT

jill_valentine

PropQueries wrote: »

Can people have a look at p. 12 of the Daft report (link below).

Prices of 1-bed apartments appear to have the biggest increases in asking prices.

How does this align with what the estate agents have been stating that people are looking to get out of one-bed 'cramped' apartments in order to move to large homes in the suburbs?

Link to latest Daft report here: https://www.daft.ie/report/2020-Q3-houseprice-daftreport.pdf

Q3 was pre the studentpocalypse, when it was still just possible to believe apartments would regain their status as an earnings engine soon. So there was low supply because people holding them weren't selling, while demand was at least steady if not increased.

October is the first month accommodation that would have been used by students will actually be sitting empty without any rent or deposit against it, and the new lockdown news makes it clear that this situation is not going away for a long time.

I would say the next month (I know, I know...) will be the litmus test of how true the estate agent rumblings are. What I will say is that the folks I was speaking to are friends of mine who were chit chatting casually, rather than trying to sell me anything, so at the very least they believe it too.

Marius34

Timing belt wrote: »

Here is an example of the house prices in cork based on the CSO data

https://www.boards.ie/vbulletin/attachment.php?attachmentid=529842&stc=1&d=1603122215

It appears, this is raw median price, without adjustments.
Ideally we should have CSO index for Cork, to see the actual change in the price. I'm not sure if such exist.

I have my own calculation on Median prices with adjustment, Cork prices looks fairly stable.

PropQueries

lalababa wrote: »

Jeepers , what's happening in Waterford & Clare?....

Maybe they're the smart ones...

hometruths

Graham wrote: »

Mod Note

schmittel, knock it off. If you have an issue with the statistics DAFT collate, take it up with them.

No issue with daft stats which I presume are beyond reproach.

A poster earlier said he found the fact some reports focused on asking and others on sales prices to be misleading. I replied saying I agreed, it can be misleading here too, pointing out that some posters place a different weight on the value of asking prices depending on the point they are making or refuting.

I said this because I recall an occasion when a poster used asking prices to suggest prices were falling. He was criticized by many, including Marius, who said asking prices are fairly meaningless.

Hence I quoted Marius’s post highlighting increased asking prices. Perfectly valid point.