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2021 Irish Property Market chat - mod warnings post 1

hometruths

Happy new year to all.

2020 was the year of pent up demand. I think 2021 will be the year the pent up supply comes to market.

I think the pent up supply will exceed the pent up demand and prices will fall. By how much I have no idea!

edit: Mod Warnings

This thread is about the Irish Property Market, it is not about:
* Immigration
* Refugees
* Welfare recipients
* Welfare rates
* General Irish politics beyond its impact on property
* General Irish economy beyond its impact on property
* How wonderful Country X is to buy in

Additionally, the specific issue of Geodirectory vacancy figures has been done to death and is not to be discussed again.

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Timing belt

combat14 wrote: »

i dont want to bring the guy in the big house on the hill back down but neither do we want to see everyone at the bottom of the hill end up in the gutter drowning in debt - there are still a significant number of people in this country still in negative equity from the last crash which 12 years later is hard to believe

I don't see how wishing a economic collapse would help all these people..

combat14

Timing belt wrote: »

I don't see how wishing a economic collapse would help all these people..

nobody is wishing for an economic collapse and it doesnt look like we will have one either if we manage our national debt repayments well which we have so far

but house prices utimately feed into national competitiveness and wage demands so it is not in the national interest to see a repeat of 2008 bubble level prices

Cyrus

PropQueries wrote: »

Nothing wrong with “crystal ball gazing”. That’s the whole idea of this particular forum. Taking all available information and making guesses on where it will lead.

I assume someone buying Alphabet’s (Google’s) stock today is “crystal ball gazing” on both their revenues/profits over the next 20 years, interest rate movements etc. etc.

Well I would expect you to be of that opinion , of course there is taking available information and then there is making up that information to support your own hypothesis .

Cyrus

combat14 wrote: »

i dont want to bring the guy in the big house on the hill back down but neither do we want to see everyone at the bottom of the hill end up in the gutter drowning in debt - there are still a significant number of people in this country still in negative equity from the last crash which 12 years later is hard to believe

Are there reputable figures on number of home owners still in negative equity ? If they have been paying their mortgage I can’t see that it would be a massively high number .

Timing belt

combat14 wrote: »

nobody is wishing for an economic collapse and it doesnt look like we will have one either if we manage our national debt repayments well which we have so far

but house prices utimately feed into national competitiveness and wage demands so it is not in the national interest to see a repeat of 2008 bubble level prices

I agree the situation we are in at the moment is not good for national competitiveness and hence why I have been advocating building more house and increasing supply as this will lead to lower rent and house prices if a sufficient supply is delivered.

Wishing prices to just drop or to give out about people immigrating here that help grow the economy and wishing lower immigration numbers or an economic collapse is just stupid and short sighted and not looking at what is best for the majority of people.

combat14

Cyrus wrote: »

Are there reputable figures on number of home owners still in negative equity ? If they have been paying their mortgage I can’t see that it would be a massively high number .

not sure where you could get those numbers just know genuine people never missed or reduced a payment who bought for nothing mad 260k in 2008 who are still in negative equity about 70k 12 years later despite paying about 1200 a month or more on there mortgage all that time

there must be more people out there probably outside dublin

would be interesting to see the numbers even if greatly reduced from 8 years ago

Cyrus

combat14 wrote: »

not sure where you could get those numbers just know genuine people never missed or reduced a payment who bought for nothing mad 260k in 2008 who are still in negative equity about 70k 12 years later despite paying about 1200 a month or more on there mortgage all that time

there must be more people out there probably outside dublin

would be interesting to see the numbers even if greatly reduced from 8 years ago

So are you saying a house that was 260k in 2008 is only worth 80k today ? Because on a 260k mortgage with those kind of repayments (assuming it was 100 percent ) there should only be circa 150k left on the principal after 12 years .

combat14

Cyrus wrote: »

So are you saying a house that was 260k in 2008 is only worth 80k today ? Because on a 260k mortgage with those kind of repayments (assuming it was 100 percent ) there should only be circa 150k left on the principal after 12 years .

about 190k in value and about 200k left in payments apparently

Timing belt

combat14 wrote: »

about 190k in value and about 200k left in payments apparently

So in 12 years the repaid 172k on a property the bought for 260k and have 200k principal left and the property is only worth 190k. Have I got the facts right. They have paid 112k in i interest in 12years

combat14

Timing belt wrote: »

So in 12 years the repaid 172k on a property the bought for 260k and have 200k principal left and the property is only worth 190k. Have I got the facts right. They have paid 112k in i interest in 12years

about 102k interest from those numbers - 100% mortgage and interest rate is a bit higher as a result, but thats only one celtic tiger 100% mortgage would be interested if anyone else had latest figures on negative equity appreciate it has thankfully dropped in last 3 years more than likely (fingers crossed)

Ursabear

combat14 wrote: »

about 102k interest from those numbers - 100% mortgage and interest rate is a bit higher as a result, but thats only one celtic tiger 100% mortgage would be interested if anyone else had latest figures on negative equity appreciate it has thankfully dropped in last 3 years more than likely (fingers crossed)

It's a pretty horrible situation to be in . The situation that plenty of people now in there mid- late 30s,early forties , find themselves in where they have paid a lot more then 102k in rent over the past 12 years and can't get a foot on the ladder is also pretty awful.

Timing belt

combat14 wrote: »

about 102k interest from those numbers - 100% mortgage and interest rate is a bit higher as a result, but thats only one celtic tiger 100% mortgage would be interested if anyone else had latest figures on negative equity appreciate it has thankfully dropped in last 3 years more than likely (fingers crossed)

I am surprised that a 260k property is only worth 73% of its value from 2008 considering that house prices are 20% bellow there peak according to the NTMA investor presentation. But then again that is only 18k of a difference in valuation but would make the difference of not being in negative equity.

Based on my calculation's and assuming that the NTMA presentation is correct and house price are now 20% of there peak it would mean that:

Anyone that took out a 100% mortgage for 20 yrs would only be in negative equity if they had a mortgage rate of over 20%
Anyone that took out a 100% mortgage for 30 years would only be in negative equity if they had a mortgage rate of over 6.5%

Obviously anyone that feel into arears will have a different story and likewise as in your example there will be places where property values have not risen in line with the average but these will all be exceptions.

The other think to consider is that the above calculations are based on a Fixed term interest rate for the whole period. The majority would have been on a variable rate so would be considerably better off.

So I think it is safe to say that 95% of people that were in negative equity that never missed payments are no longer in negative equity.

At least they had the opportunity to get on the property ladder unlike a lot of the younger generation today.

Timing belt

combat14 wrote: »

about 102k interest from those numbers - 100% mortgage and interest rate is a bit higher as a result, but thats only one celtic tiger 100% mortgage would be interested if anyone else had latest figures on negative equity appreciate it has thankfully dropped in last 3 years more than likely (fingers crossed)

Just to be clear can you explain where the 70k negative equity comes from because you are saying that the property is worth 190k they paid 260k for it and have 200k left on the mortgage. Unless I am mistaken they are 10k in negative equity and the value of the property is 70k lower that what they paid for it.

combat14

Timing belt wrote: »

Just to be clear can you explain where the 70k negative equity comes from because you are saying that the property is worth 190k they paid 260k for it and have 200k left on the mortgage. Unless I am mistaken they are 10k in negative equity and the value of the property is 70k lower that what they paid for it.

you are right the house (not in dublin, but a nice house in a nice estate in another irish city outside the capital) is only down about 26.9% in value 12 years later - i.e. 70k down in value but in terms of negative equity at this stage only approx. 10k in negative equity but still this is an issue in terms of getting a better interest rate deal on the mortgage - but hopefully for them not too much longer

luckily we dont seem to have 100% mortgages over 30-35 years any longer just shows how crazy the celtic tiger bubble was hopefully wont be repeated again

Timing belt

On the topic of Mortgage drawdowns.... This is the latest data from the CBI
(Still missing dec figures)

What is interesting is the no of mortgages for house purchases are down but no drop on people switching mortgages to get better terms.

Villa05

Timing belt wrote:

The idea of wanting the economy to collapse so that prices fall would only benefit someone who was shielded from a loss in income and on a guaranteed job for life.

combat14 wrote:

but house prices utimately feed into national competitiveness and wage demands so it is not in the national interest to see a repeat of 2008 bubble level prices

Just a thought
In an effort generate inflation, money is created/printed and enters the system at the top and expected to trickle down. The trickle down effect is not happening and instead asset prices are in a bubble spiral creating greater risk of a mega crash in the future

Why not print the money in smaller amounts and let it pay for an after school care scheme for the EU for example
Why
Use existing schools to deliver the care
Employ qualified childcare specialists at reasonable rate. Current rates are a joke
Saves young families 100euro per week per child.
Young families spend all their income as it is a high cost period of a person's life
The money gets recycled within the economy spurring growth, employment and tax generation
EU has serious demographic issues, schemes that incentivse having children would benefit the area greatly.

Much more reasons too numerous to mention, but the underlying point if you wanted to generate inflation, this would be a no brainer and if you wanted to cool inflation, you start charging for the service, it would still be considerably cheaper than the current child care system in Ireland

Timing belt

Villa05 wrote: »

Just a thought
In an effort generate inflation, money is created/printed and enters the system at the top and expected to trickle down. The trickle down effect is not happening and instead asset prices are in a bubble spiral creating greater risk of a mega crash in the future

Why not print the money in smaller amounts and let it pay for an after school care scheme for the EU for example
Why
Use existing schools to deliver the care
Employ qualified childcare specialists at reasonable rate. Current rates are a joke
Saves young families 100euro per week per child.
Young families spend all their income as it is a high cost period of a person's life
The money gets recycled within the economy spurring growth, employment and tax generation
EU has serious demographic issues, schemes that incentivse having children would benefit the area greatly.

Much more reasons too numerous to mention, but the underlying point if you wanted to generate inflation, this would be a no brainer and if you wanted to cool inflation, you start charging for the service, it would still be considerably cheaper than the current child care system in Ireland

If the government spend they need to borrow and that would increase debt to gdp. So will leave ok for one-off spending as opposed to reoccurring expenditure.

Childcare is a major expense unless you have family to help out. I remember at one stage paying close to 2.5k a month. It cost us to go to work as would have been cheaper to quit work but then it would have been difficult to find similar just job

Villa05

Timing belt wrote:

If the government spend they need to borrow and that would increase debt to gdp. So will leave ok for one-off spending as opposed to reoccurring expenditure.

I will be the first to admit that I am a bit out of my depth on these macro economic issues, however no matter how technical a subject is an injection of logic and common sense can resolve alot of issues.

If the institutions of the western world are trying to generate inflation and printing truckloads of money to do so. Can those various institutions bang heads together and devise solutions that target that money for projects that benefit society as a whole.

The current system which has been in operation for over a decade is not working and is creating new records in asset price bubbles

Timing belt

Villa05 wrote: »

I will be the first to admit that I am a bit out of my depth on these macro economic issues, however no matter how technical a subject is an injection of logic and common sense can resolve alot of issues.

If the institutions of the western world are trying to generate inflation and printing truckloads of money to do so. Can those various institutions bang heads together and devise solutions that target that money for projects that benefit society as a whole.

The current system which has been in operation for over a decade is not working and is creating new records in asset price bubbles

Fully agree...I think we will see it happen in relation to environment spending

Villa05

Timing belt wrote:

Fully agree...I think we will see it happen in relation to environment spending

Could you see a debt forgiveness program for spending related to spending on covid fight

Marius34

https://www.boards.ie/vbulletin/showpost.php?p=115260157&postcount=8731

Early Prediction: CSO Property Price Index to turn positive for 2020 Q4.

https://www.boards.ie/vbulletin/showpost.php?p=115420662&postcount=9652

Update 2
So most of the 2020 Q4 has been added on PPR (~90%), it appears transaction level is back to Pre-Crisis level.
There are no big change over December, slight decrease on Median price in Dublin, and slight increase outside Dublin, when comparing to my last post in November, on PPR data, but still well above 2019.
The CSO Price Index is scheduled for Tuesday. I expect it will be the month when negative to turn positive Nationally, it probably still will appear negative on report for Dublin due to Data Smoothing, thus Dublin Co. may turn positive a month later.

Dublin:

Ireland(ex-Dublin):

mcsean2163

I've been bewildered by the amount of new builds where we live in Dublin 8.

This helps to explain what's going on

https://outline.com/q7fqAJ

A detailed analysis of the Residential Tenancies Board (RTB) register by the Business Post has shown nearly four-fifths of the 246 apartments in phase three of Clancy Quay in Dublin 8 are empty.

This is what we've been seeing for ages, empty apartments all around Dublin. I guess when covid19 is over they'll fill up fast?

Amazed small landlords haven't been selling. If I had a few apartments, I'd definitely be letting go some....

PropQueries

mcsean2163 wrote: »

I've been bewildered by the amount of new builds where we live in Dublin 8.

This helps to explain what's going on

https://outline.com/q7fqAJ

A detailed analysis of the Residential Tenancies Board (RTB) register by the Business Post has shown nearly four-fifths of the 246 apartments in phase three of Clancy Quay in Dublin 8 are empty.

This is what we've been seeing for ages, empty apartments all around Dublin. I guess when covid19 is over they'll fill up fast?

Amazed small landlords haven't been selling. If I had a few apartments, I'd definitely be letting go some....

Here’s the link to the article you refer to in the SBP today:

“Hundreds of luxury apartments lie vacant at two of Dublin’s most prominent rental blocks controlled by a billion-dollar US fund.

A detailed analysis of the Residential Tenancies Board (RTB) register by the Business Post has shown nearly four-fifths of the 246 apartments in phase three of Clancy Quay in Dublin 8 are empty.

Nearly half of the apartments in Capital Dock, a 190-apartment, 22-storey built-to-let tower in Dublin’s Docklands are also vacant.”

Link to SBP article here: https://www.businesspost.ie/houses/hundreds-of-luxury-apartments-controlled-by-us-fund-lie-vacant-in-capital-7993e066

Bass Reeves

mcsean2163 wrote: »

Amazed small landlords haven't been selling. If I had a few apartments, I'd definitely be letting go some....

That why you haven't

MacronvFrugals

PropQueries wrote: »

Here’s the link to the article you refer to in the SBP today:

“Hundreds of luxury apartments lie vacant at two of Dublin’s most prominent rental blocks controlled by a billion-dollar US fund.

A detailed analysis of the Residential Tenancies Board (RTB) register by the Business Post has shown nearly four-fifths of the 246 apartments in phase three of Clancy Quay in Dublin 8 are empty.

Nearly half of the apartments in Capital Dock, a 190-apartment, 22-storey built-to-let tower in Dublin’s Docklands are also vacant.”

Link to SBP article here: https://www.businesspost.ie/houses/hundreds-of-luxury-apartments-controlled-by-us-fund-lie-vacant-in-capital-7993e066

Isnt this article from February 2020 about the exact same site? If so thats 2 years of vacancies

100 luxury apartments in Capital Dock are vacant one year on

https://www.businesspost.ie/residential/100-luxury-apartments-in-capital-dock-are-vacant-one-year-on-a44265c4

MacronvFrugals

Councillors to Dig Deeper into Bills for Building Social Homes

Architect and housing commentator Mel Reynolds says the council is paying way over the odds for basic two-bedroom homes.

“You can build a passive plus” – meaning really well-insulated – “detached, four to five bedroom house, A rated and your tender price would be under €300,000,” he says.

That house would be in Dublin in a built-up area and would include several bathrooms and kitting out a “five-star kitchen with Miele appliances”, he says.

The Department of Public Expenditure and Reform should carry out a review of the council’s procurement and tender practices, says Reynolds, the architect.

“Given that current spend levels are being quoted as justification for elevated purchase prices in PPP [public private partnership] arrangements this review is urgently needed before any large scale commitments are entered into,” he says.

https://www.dublininquirer.com/2020/12/16/councillors-to-dig-deeper-into-bills-for-building-social-homes

Knex*

I really hope we see something done to disincentivize mass vacancies like this.

Timing belt

MacronvFrugals wrote: »

Isnt this article from February 2020 about the exact same site? If so thats 2 years of vacancies

100 luxury apartments in Capital Dock are vacant one year on

https://www.businesspost.ie/residential/100-luxury-apartments-in-capital-dock-are-vacant-one-year-on-a44265c4

All European cities have this issue....

Paris dealt with it via property tax
https://www.fastcompany.com/3067918/paris-has-some-bad-news-for-people-who-keep-a-second-home-in-the-city

MacronvFrugals

Knex* wrote: »

I really hope we see something done to disincentivize mass vacancies like this.

Barcelona: Fill vacant rental units with tenants or we will take over your properties, the city is warning landlords.

https://www.bloomberg.com/news/articles/2020-07-16/to-fill-vacant-units-barcelona-seizes-apartments

Is vacant property an issue in Dublin? We only ever hear of these high end sites, it would be different if a normal block of apartments was lying empty but i don't think that's the case.

Knex*

MacronvFrugals wrote: »

Barcelona: Fill vacant rental units with tenants or we will take over your properties, the city is warning landlords.

https://www.bloomberg.com/news/articles/2020-07-16/to-fill-vacant-units-barcelona-seizes-apartments

Is vacant property an issue in Dublin? We only ever hear of these high end sites, it would be different if a normal block of apartments was lying empty but i don't think that's the case.

I believe it is an issue with REITS deliberately restricting supply to keep yields high