Timing belt wrote: We have not see investors in property chasing capital appreciation yet and hence why I say that there is no bubble in the Irish property prices.
Timing belt wrote: Then their is a school of thought that the stock market and other asset valuations are correct as the world embraces lower yields thanks to higher prices for assets. If this is correct then anyone that is not in a defined benefit pension is going to get totally screwed come retirement. Although I don't think this is the case I can see the logic behind it when it comes to Blue chip companies, property etc. as their is still a basis for the valuation.
Timing belt wrote: Where there is no logic is in relation to the investors moving away from looking at yield and purely looking at capital appreciation such as in IT stocks. We saw this happen in the dot.com era and we are seeing it again. The Financial institutions are delighted to see it as they know what is happening and already have their exit strategy whilst the man on the street comes to the party looking for the 70/80% return like his friends got from investing in the stock.
Villa05 wrote: » Do you believe the rents underlying those returns are sustainable, yes there is wage inflation in specific sectors and people there are doing OK and will probably be able to buy. However at the lower to middle incomes there is downward pressure on wages through privitisation, sub contracting, availability of labour while covid and online sales and high rents and rates may knock out alot of small business. These are the sectors that rental income comes from, will the state have the capacity to meet current rental prices
Villa05 wrote: » It appears to me, investment is being done with 0 thought to risk. All investments carry risk as does cash of course It just seem illogical that someone would invest in an asset that is priced at 70 times earnings when traditionally 20 times earning would be considered expensive
Villa05 wrote: » I've seen alot of this lately in people I know buying stocks amazed at the appreciation their seeing so quickly, You can tell straight away they have no clue what they are doing. Do you think this year will be make or break year for stocks. I don't see how the wider economy including property escapes if this bubble bursts
If Blackstone’s newly published predictions for 2021 end up being proved right, you’re in for a wild ride this year. The investment manager’s feeling optimistic, arguing that US economic growth could top 6% for the year – and kick off the country’s longest-ever period of economic expansion. But it also believes the US stock market could drop as much as 20% in the first half of 2021 – only to be up by 20% from current levels at some point later in the year. And that, Blackstone says, will be down to an unravelling of last year’s trends – with Big Tech doing (relatively) badly and beaten-down sectors like energy and hospitality on the rise. Blackstone’s made forecasts for bonds, gold, and cryptocurrencies, as well as a whole host of other stock predictions too. You can check them all out in today’s Insight.
schmittel wrote: » Sorry if I am being a bit thick but I don't get the point? What is the 40% being non mortgage transactions telling us?
"Pensions adviser Mercer is recommending investors to plump for commercial property and private assets amid the potential for further market volatility from the Covid pandemic and political unrest this year"
MacronvFrugals wrote: » https://www.irishexaminer.com/business/economy/arid-40204313.html
Bass Reeves wrote: » Pre 2008 virtually all houses were bought by borrowings mainly due to 100%+mortgages.
Bass Reeves wrote: » This data would indicate that 15-25% of buyers are not borrowings to buy houses. It a staggering figure. Add in people who have substantial savings and borrowing minimal amounts and it indicates that there is nothing like the equity issue that caused the crash of 2008. Another interesting observation would be that compared to 2008 most ordinary investors now own multiple properties. There is evidence that many of these have gone down the mini REIT route. If they have they have sheltered rental earnings and are probably buying with cash reserves. There is evidence as well that investors will not invest unless the return is 7-10%+. This all indicates that any property crash will not come from the investor side of the market. This has been a opinion of mine for the last while. Any decline in price will be limited. There is indications that if anything prices are rising. Something we could all do without. However we are a distance from bubble territory. Dublin's is an issue but if WFH reduced demand a little bit it may solve that
PommieBast wrote: » I wonder if places like Grafton street tanking 20-30% recently has anything to do with this?
Timing belt wrote: The funds industry have also said that there will be opportunities in commercial property this year.... Just think of bushiness that are struggling that may own commercial property they may be forced to sell the property and lease it back.
Timing belt wrote: » When they talk about commercial property they will be talking about a property that has potential for growth which will is unlikely to include the likes of Grafton street as peoples shopping habits have changed. I suspect they are talking about warehousing and other commercial property use for online. The funds industry have also said that there will be opportunities in commercial property this year.... Just think of bushiness that are struggling that may own commercial property they may be forced to sell the property and lease it back.
Timing belt wrote: When they talk about commercial property they will be talking about a property that has potential for growth which will is unlikely to include the likes of Grafton street as peoples shopping habits have changed. I suspect they are talking about warehousing and other commercial property use for online.
Villa05 wrote: » I think a business that owns its own premises and is struggling would be unviable if they had to lease it in current environment
Timing belt wrote: » When they talk about commercial property they will be talking about a property that has potential for growth which will is unlikely to include the likes of Grafton street as peoples shopping habits have changed. I suspect they are talking about warehousing and other commercial property use for online.
Villa05 wrote: » Most of the successful online retailers are cash rich. In a low interest rate environment, they will be looking after their own property requirements and basing in low cost areas with low property prices and plenty cheap labour Ie low cost cities/countries
PommieBast wrote: » I'd like to know where such commercial property is because it doesn't looks like it gonna be central Dublin. All the Spender Dock stuff that was for the Brexit bonanza that never came springs to mind.
Timing belt wrote: It all depends on why it is struggling... If it is because of Debt and not Turnover/costs then a sale and lease back would be beneficial and prevent the company from going under.... Yes its is at a big cost but is better than closing down.
Villa05 wrote: » Maybe, but still a weak argument for opportunities, growth in the commercial sector
Timing belt wrote: » At the same time look at the delays in delivering online or because of Brexit... there is a demand for more warehousing to hold stock... This is also commercial property.
PommieBast wrote: » That sounds like stuff that would be on the outskirts, if not out in the sticks.
Reversal wrote: » So what do people think will happen as normality returns later in the year. Will we end up with two years worth of second hand supply rushing onto the market at once?
Timing belt wrote: I don't see how it is a weak argument after 2008 their were big opportunities in commercial property and as a result saw significant growth at the time.
Timing belt wrote: » Then their is a school of thought that the stock market and other asset valuations are correct as the world embraces lower yields thanks to higher prices for assets.
fliball123 wrote: » Or will we end up with 2 years worth of demand rushing onto the market?
Reversal wrote: » But the narrative is that the demand has been there all along, only supply has been constrained.
HotDudeLife wrote: » Christ, this thread has gone a bit wayward. Any moderate bear prediction is immediately shot down, albeit not with facts, just statements or fluffy reports from institutions with vested interests predicting a "wild year of growth" , surprised bears haven't been cancelled at this stage. Signing off boards until October this year, i predict second-hand property prices will start dropping by around 10-15% around that time on the condition that the economy reopens around June/July. I also don't think we will see general inflation across the board, there is a reason why we have record low interest rates and in some cases negative rates, it's priced in that there won't be a rate raise anytime soon as the slightest indication of a rate rise would send the markets into turmoil. Whatever happens, this property market is currently a disaster whichever way you look at it. Hope you have great health/wealth in 2021 and hold yourself accountable to your habits.
