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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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[Deleted User]

enricoh wrote: »

. Remember, 17pc of the population is "foreign-born", so immigrants are over-represented in the figures by two to one.

I'm foreign born but I'm not an immigrant.

three putt

PropQueries wrote: »

But, yes, Covid and WFH have accelerated trends that are impacting the property market that might have taken up to 10 years beforehand into a few short months.

You have previously predicted 70+ percent declines in property prices in the next 10 years. Does this now mean that you now expect these 70+ percent declines in a "few short months"? Given the Covid crisis kicked off back in March, how much longer do we have to wait for the 70+% declines?

PropQueries

three putt wrote: »

You have previously predicted 70+ percent declines in property prices in the next 10 years. Does this now mean that you now expect these 70+ percent declines in a "few short months"? Given the Covid crisis kicked off back in March, how much longer do we have to wait for the 70+% declines?

No. But I may reduce the timeframe once the details of the new OECD tax reforms etc. become clearer, how fast Biden will try to encourage pharmaceutical companies etc. back to the states to discourage another Trump in 4 years time and then I’ll have to see if all that chatter about interest rates rising much higher and faster than many currently predict comes true in the next 12 to 24 months.

enricoh

Timing belt wrote: »

With so many Irish living abroad and returning with families the percentage of ‘foreign born’ will always be higher that’s not to say they are not irish.

Eh, it's non Irish eu and non eu nationals -

Last year, I decided to ask the Department of Social Protection what percentage of rent supplement was paid out to non-Irish EU nationals, and non-EU nationals.

As at February of last year, the figure was 35pc

Cyrus

PropQueries wrote: »

No. But I may reduce the timeframe once the details of the new OECD tax reforms etc. become clearer, how fast Biden will try to encourage pharmaceutical companies etc. back to the states to discourage another Trump in 4 years time and then I’ll have to see if all that chatter about interest rates rising much higher and faster than many currently predict comes true in the next 12 to 24 months.

You’ve already reduced it haven’t you ? You recently said 50 percent in next two years .

Timing belt

enricoh wrote: »

Eh, it's non Irish eu and non eu nationals -

Last year, I decided to ask the Department of Social Protection what percentage of rent supplement was paid out to non-Irish EU nationals, and non-EU nationals.

As at February of last year, the figure was 35pc

I was replying to your 17% figure you quoted in previous post which was based on ‘foreign born’ and stating the simple fact that a majority of these would be kids with irish passports since birth but were not born in Ireland as parents immigrated and returned once they had kids which is very common.

PropQueries

Cyrus wrote: »

You’ve already reduced it haven’t you ? You recently said 50 percent in next two years .

Definitely 50% in the next two years. And the Big Bang that causes that. When it becomes abundantly clear that the demand/supply problem never existed. OECD tax reforms, Biden and rising interest rates will just bring the few remaining non-believers into the fold towards the end IMO

Cyrus

PropQueries wrote: »

Definitely 50% in the next two years. And the Big Bang that causes that. When it becomes abundantly clear that the demand/supply problem never existed. OECD tax reforms, Biden and rising interest rates will just bring the few remaining non-believers into the fold towards the end IMO

Cool

And you believe Biden will do more to repatriate American jobs than trump?

And that the country will realise that instead of a shortage of available houses that are actually sitting on a surplus (unbeknownst to anyone except you it seems)?

I’ll confidently predict that house prices won’t have dropped 50 percent in two years but if they do I’ll be sure to pop in say you told me so.

Timing belt

PropQueries wrote: »

Definitely 50% in the next two years. And the Big Bang that causes that. When it becomes abundantly clear that the demand/supply problem never existed. OECD tax reforms, Biden and rising interest rates will just bring the few remaining non-believers into the fold towards the end IMO

You forgot the secret properties that the funds have... I wouldn’t be that concerned on the OECD tax reform as it probably wouldn’t hold water or rate set will have little impact with the exception of online services.

Raising rates would impact the housing market but that is highly unlikely to come without economic growth and as previously stated central banks will use quantitative tightening before raising rates.

P.s. if the market expects higher rates then banks share prices are the first sign and they are not that healthy at the moment as the banks can’t make money in the low interest rate environment

mcsean2163

Propquery outlines well the downside risk.

Emigration increase.
Immigration decrease.
Tax harmonisation.
Companies moving to low cost locations.

I'd add peak oil, Iran and dollar inflation to the list.

Back in the real world the house in Kildare we were looking at has multiple bidders and despite being able to go €70k above asking we're outbid with the price still rising. I'd say it's a sellers market for good houses at the moment. What'll happen next year? Vaccine and businesses recover or a mega recession. If prop is correct there'll be a lot of bargains this time next year, if he's wrong it'll be much the same.

Seems there are EAs here taking it personally, no idea why prop keeps posting, anyway....

Cyrus

mcsean2163 wrote: »

Propquery outlines well the downside risk.

Emigration increase.
Immigration decrease.
Tax harmonisation.
Companies moving to low cost locations.

I'd add peak oil, Iran and dollar inflation to the list.

Back in the real world the house in Kildare we were looking at has multiple bidders and despite being able to go €70k above asking we're outbid with the price still rising. I'd say it's a sellers market for good houses at the moment. What'll happen next year? Vaccine and businesses recover or a mega recession. If prop is correct there'll be a lot of bargains this time next year, if he's wrong it'll be much the same.

Seems there are EAs here taking it personally, no idea why prop keeps posting, anyway....

If you think I’m an EA you’re very much mistaken , it’s ok to disagree with someone who believes property prices will decrease 75 percent in the near future and 50 percent in the next 2 years

Wanderer78

Cyrus wrote:

If you think Iâ€™m an EA youâ€™re very much mistaken , itâ€™s ok to disagree with someone who believes property prices will decrease 75 percent in the near future and 50 percent in the next 2 years

I seriously doubt that, I'm expecting them to significantly rise in my locality, largely due to the influx of credit from major developments just announced, I'd imagine speculation on property and land in the region has already begun also, so win win for owners

combat14

house prices to double next year as country absolutely awash with money, full employment, unlimited credit as country booms next year despite brexit

banks have also decided to secretly ditch central bank lending limits and lend to everyone on covid payments - ireland set to be a house sellers paradise

https://m.independent.ie/irish-news/savings-made-during-covid-19-crisis-will-help-fuel-price-rises-in-housing-market-39820630.html

TheSheriff

combat14 wrote: »

house prices to double next year as country absolutely awash with money, full employment, unlimited credit as country booms next year despite brexit

banks have also decided to secretly ditch central bank lending limits and lend to everyone on covid payments - ireland set to be a house sellers paradise

https://m.independent.ie/irish-news/savings-made-during-covid-19-crisis-will-help-fuel-price-rises-in-housing-market-39820630.html

This is certainly the case with friends I know anyway.

They have all put away serious money since all of this started; those who were planning on getting married have ditched the wedding in favour of a house. Those who were renting and quite content to rent now want a house with a garden...

For who who were thinking about a house it's completely focused the mind.

And shock horror, they are not fleeing the capital to pick up a bargain in Cavan.

tigger123

Not sure if it was posted here or not:

'Surge in mortgage approvals in October driven by first-time buyers'

https://www.rte.ie/news/business/2020/1201/1181589-bpfi-mortgage-figures/

Puts the bed the idea the PUP is propping up the housing market. If banks won't lend to people on PUP, and mortgage approvals are surging, it probably follows that mortgages (and the housing market) is being driven by people less affected (or completely unaffected) by Covid 19.

Could well be evidence of the K shaped recovery that's being talked about.

Wanderer78

tigger123 wrote: »

Not sure if it was posted here or not:

'Surge in mortgage approvals in October driven by first-time buyers'

https://www.rte.ie/news/business/2020/1201/1181589-bpfi-mortgage-figures/

Puts the bed the idea the PUP is propping up the housing market. If banks won't lend to people on PUP, and mortgage approvals are surging, it probably follows that mortgages (and the housing market) is being driven by people less affected (or completely unaffected) by Covid 19.

Could well be evidence of the K shaped recovery that's being talked about.

lending restrictions only truly apply to those that cant afford it

thefridge2006

tigger123 wrote: »

Not sure if it was posted here or not:

'Surge in mortgage approvals in October driven by first-time buyers'

https://www.rte.ie/news/business/2020/1201/1181589-bpfi-mortgage-figures/

Puts the bed the idea the PUP is propping up the housing market. If banks won't lend to people on PUP, and mortgage approvals are surging, it probably follows that mortgages (and the housing market) is being driven by people less affected (or completely unaffected) by Covid 19.

Could well be evidence of the K shaped recovery that's being talked about.

Approvals are different to drawing down....Its the sold data that i'd be looking at

TheSheriff

thefridge2006 wrote: »

Approvals are different to drawing down....Its the sold data that i'd be looking at

Agree, the draw down data is all that matters.

But, there was much fanfare on here a few months back when the news broke that banks were clamping down on approvals due to the pandemic. This appears to now have been reversed.

While draw downs are all that matter I think one could logically assume an increase in approvals will result in an increase in drawn downs.......obviously lots of obstacles to get to draw down, but it means more people in the potential pool of buyers.

tigger123

thefridge2006 wrote: »

Approvals are different to drawing down....Its the sold data that i'd be looking at

TheSheriff wrote: »

Agree, the draw down data is all that matters.

But, there was much fanfare on here a few months back when the news broke that banks were clamping down on approvals due to the pandemic. This appears to now have been reversed.

While draw downs are all that matter I think one could logically assume an increase in approvals will result in an increase in drawn downs.......obviously lots of obstacles to get to draw down, but it means more people in the potential pool of buyers.

Correct me if I'm wrong (genuinely), but wasn't mortgage approval for people on the PUP suspended?

And, not only that, even of you're not on the PUP yourself, if the company you work for is receiving any State assistance due to Covid, you won't qualify either.

So while the drawdown is what matters, an increase in mortgage approvals is significant in of itself.

TheSheriff

tigger123 wrote: »

Correct me if I'm wrong (genuinely), but wasn't mortgage approval for people on the PUP suspended?

And, not only that, even of you're not on the PUP yourself, if the company you work for is receiving any State assistance due to Covid, you won't qualify either.

So while the drawdown is what matters, an increase in mortgage approvals is significant in of itself.

Yes, it most definitely is.(more potential buyers floating about, possibly more bidding etc)...whether it translates to drawdowns is another thing

awec

What it tells us is there is still a lot of people out there who plan on buying a house in the near future, and that it seems people have not been put off buying by the events of the past year.

You could argue that this is because there's a huge cohort of people that haven't really been impacted financially to any serious degree yet. How many of these will ever be hit in a major way remains to be seen.

It does seem though, barring some sort of catastrophic economic event that sets off a chain reaction, that demand is going to remain theoretically strong in the near term at least.

Pelezico

Main issue is lack of supply which must be at a low now. Myhome property search yields only 14.800 properties nationwide.

Will it fall to 10,000? That would be extraordinary

fliball123

Pelezico wrote: »

Main issue is lack of supply which must be at a low now. Myhome property search yields only 14.800 properties nationwide.

Will it fall to 10,000? That would be extraordinary

Well considering at the start of the year that figure was up over 21K so its about 1/3rd of the amount properties available now as apposed to the start of the year. I had flagged this as early as May this year that supply was being strangled and I was told repeatedly that it wouldn't matter as demand is being strangled as well which judging by Octobers mortgage approvals is not the case.

TheSheriff

fliball123 wrote: »

Well considering at the start of the year that figure was up over 21K so its about 1/3rd of the amount properties available now as apposed to the start of the year. I had flagged this as early as May this year that supply was being strangled and I was told repeatedly that it wouldn't matter as demand is being strangled as well which judging by Octobers mortgage approvals is not the case.

Most definitely the demand supply dynamic does not appear to be going in favour of house buyers hoping for a crash.

The one relief may be the WFH , while I don't agree that it'll cause people to flee Dublin, it might release the pressure valve as such, we'll consequently see a stagnation of prices in Dublin as we are likely at peak affordability, while we may see rises to meet the CB limits in the greater Dublin region/commuter towns.

Far more likely a scenario than all multi nationals pulling out and us reverting to -75% valuations.

Cyrus

TheSheriff wrote: »

Most definitely the demand supply dynamic does not appear to be going in favour of house buyers hoping for a crash.

The one relief may be the WFH , while I don't agree that it'll cause people to flee Dublin, it might release the pressure valve as such, we'll consequently see a stagnation of prices in Dublin as we are likely at peak affordability, while we may see rises to meet the CB limits in the greater Dublin region/commuter towns.

Far more likely a scenario than all multi nationals pulling out and us reverting to -75% valuations.

id agree with this, parts of the dublin market have been at peak affordability for the past few years (id say the 850 - 1.1/1.2m range) and that will probably happen at the other levels with people more likely to seek value further out, thus pushing those prices up.

the one issue is an actual lack of quality homes outside the main cities as there are very few quality developments and a lot of poor one off builds.

tigger123

TheSheriff wrote: »

Most definitely the demand supply dynamic does not appear to be going in favour of house buyers hoping for a crash.

The one relief may be the WFH , while I don't agree that it'll cause people to flee Dublin, it might release the pressure valve as such, we'll consequently see a stagnation of prices in Dublin as we are likely at peak affordability, while we may see rises to meet the CB limits in the greater Dublin region/commuter towns.

Far more likely a scenario than all multi nationals pulling out and us reverting to -75% valuations.

Could definitely see this happening. Have worked with people pushed out of Dublin and have bought in Meath/Kildare, only to have to make long commutes every day in and out of work. It's a tough existence.

Much more palatable though if its only for one or two days a week under a blended WFH approach.

donnaille

Cyrus wrote: »

If you think I’m an EA you’re very much mistaken , it’s ok to disagree with someone who believes property prices will decrease 75 percent in the near future and 50 percent in the next 2 years

Disagreeing is fine, it's about how you do it and a number of posters on this thread don't cover themselves in glory.

Cyrus

donnaille wrote: »

Disagreeing is fine, it's about how you do it and a number of posters on this thread don't cover themselves in glory.

thank you for your input, but im happy with my contributions all the same, if there is anything you find disagreeable feel free to report it.

Unfortunately the responses need to be taken in the context of what is being responded to.

Graham

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PropQueries

fliball123 wrote: »

Well considering at the start of the year that figure was up over 21K so its about 1/3rd of the amount properties available now as apposed to the start of the year. I had flagged this as early as May this year that supply was being strangled and I was told repeatedly that it wouldn't matter as demand is being strangled as well which judging by Octobers mortgage approvals is not the case.

But if there were 21k homes for sale at the start of the year and transactions are down and construction didn't fall off a cliff, net inward migration must be well down on 2019 levels and people are still dying (non-covid related probate sales), how can that translate into less supply?

In other words, if units weren't selling this year but supply coming on stream is the same as last year, where have all the houses on MyHome gone as according to the transaction statistics, they definitely weren't sold?

Also, according to TheJournal.ie in July "a number of mortgage applicants who had received approval before the Covid-19 crisis have had this approval pulled".

Is the increase in approvals reported in October, in many cases, just approvals that were pulled a few months back being re-approved?