2021 Irish Property Market chat - *mod warnings post 1*

TheSheriff wrote: »

The WFH effect and its impact on property has come up again - we are none the wiser since it did a few weeks back.

To assess the impact of WFH we should look at industries which have this already; I have mentioned Pharma before, we had 2+ days WFH per week pre-Covid in my particular company. This gives people more scope in the area they can live yes, but geographically, they will still be tied to a region. I suspect if Tech embrace's this model (which is all but certain), you will see an exodus from the city centre and a movement outwards. I would expect previously desirable areas (thinking areas like malahide, wicklow etc.) to become more popular as the work-home balance will be more important.

If I had a house in a desirable south Dublin location I wouldn't be too worried.

If I had a high end apartment in the city centre which was previously bringing in 2k+ per month I would be very worried.

Would be in agreement with this generally. But I do think the ‘desirable’ bit could be really tested (as has been posted by others before). Pseudo ‘nice’ places in South Dublin like Dundrum, Stillorgan, Goatstown etc. could be badly hit. Even within the nice places, there could become bigger distinctions. I.e. ‘Blackrock’ but nearer the N11 than Village which is, when you look past the fancy address, a 40 min walk from anywhere you’d want to spend your day.

I think there will always be a premium to be paid for the truly nice places like Dalkey/Sandycove/Monkstown etc. And indeed I keep them in my filters. But once WfH becomes more widespread, I don’t know why anyone would pay the SCD premium to live in a Dundrum anymore vs an actually nice seaside town on the commuter belt. Just a personal opinion!

schmittel wrote: »

I think you've hit the nail on the head here.

Whilst I suspect city centre apartment rents will fall, they'll still be in demand from young workers and corporate lets. D4 and 6 etc will be fine as will premium sea front.

Long established leafy streets with period houses will hold up well. It's the cookie cutter semi d's that will suffer.

I don't see the logic here; surely within the same local region e.g. South Dublin, the market price of each property will be set by the high end properties in that area.

So, if a period house is for example 1 million and someone pays this in a post-covid world, the price of the semi-D on the street behind this period house will also be influenced by this price.

Are you suggesting people will only buy high end properties in South Dublin and all other demand will fall away?

This is highly unlikely.

TheSheriff wrote: »

I don't see the logic here; surely within the same local region e.g. South Dublin, the market price of each property will be set by the high end properties in that area.

So, if a period house is for example 1 million and someone pays this in a post-covid world, the price of the semi-D on the street behind this period house will also be influenced by this price.

Are you suggesting people will only buy high end properties in South Dublin and all other demand will fall away?

This is highly unlikely.

My take is that there are a spectrum of prices for all properties in a given area that you could probably express as a function of several variables: ease of commute, proximity to other nice areas, schools etc.

I think places like Dalkey, people pay a premium primarily because it is just a lovely place to spend time (my opinion). Sure it’s a reasonable commute but so is Glenageary. Thats a bonus. I believe the prime variable in the Dalkey premium equation is how nice it is. That’s unlikely to change

For Dundrum, although cheaper than Dalkey, it still is much more expensive than your average location. I suspect most people who buy in Dundrum, wanted to live in a Dalkey type location but has to compromise due to price and landed in Dundrum over other places because it still has a reasonable handy commute. I think ‘the commute’ is a likely to be, on average, a bigger factor in the premium Dundrum attracts than the area itself. So for those people compromising on location, if commute is less of an important factor for them personally, I see the number of alternative locations those people look at to compete with the likes of Dundrum being larger, and therefore demand could possibly fall.

My point doesn’t overly matter whether 2 bed or 5 bed. I just think the already existing variations in prices within the South Dublin area could become exaggerated as the second tier of areas struggle to compete with a much bigger radius of towns due to the lower influence of their current trump card (the Luas, or dublin bus etc).

Edit - following on from above I do absolutely see price pressure in outside the current hotspots. I think there’s early evidence of that in rental markets. I’m sure locals will be delighted in the short term when they see their net worth exploding. But do think it’ll cause problems when the locals kids can’t compete with the two accountants heading down from Dublin.

I know Facebook had talked about indexing salary based on what country the employee based themselves in. Is it ridiculous to suggest there might need to be a more local approach and index salary based on what county you’re in?!

Speaking from a personal perspective I think represents a decent number of people - if I could WFH 2-3 days a week, I could buy somewhere this instant. I wouldn't be looking at Dublin, I could be looking at Louth, Westmeath, Longford, Offaly. And the difference isn't just location or commutability, it's what's available.

As a single professional, I can only hope to afford a single apartment in Dublin, but they're like gold dust, which limits supply (and limits your mortgage options). If I could buy further out, for the far less money I could have a 2-3 bed with a garden. If WFH becomes established, those houses could go up in value a bit, but not enough to shut me back out.

awec wrote: »

I've never met anyone who'd go to Blackrock for a night out either, doesn't mean it's not a nice place to live.

I'm not really defending Dundrum here, I don't live there (though I did rent there for a number of years). Just pointing out that the corridor along the green luas from Stephens Green to Balally is like the holy-grail of "normal" people south-side living. The well off who aren't quite well off enough to buy a big gaff in D4.

Despite renting in Blackrock for a while, mostly been because I fell into it. Wouldn’t pay the premium to buy there personally. Although it’s improved as of late with the one way and quality in the Blackrock market, there’s only so nice a place can be when it has an Eddie Rockets beside a Wetherspoons. But anyway, I know that wasn’t your point!

Having read back I probably should have been clearer. I’m using examples of the “A-“ places in SCD vs the “A+” places. I’m not throwing Dundrum in with Tallaght or something, I’m particularly focusing on the ‘next best (and most expensive) thing’ after the really top spots. I’m not familiar with prices in Tallaght but I suspect they don’t have anywhere near as far to fall.

Every place will have those who want to live there because they grew up/have family there. But the buyers I’m focusing on are the young high earning blow-ins who haven’t a major affinity to any particular area. As someone in that category, I would have initially looked at Sandymount, Dalkey, Ranleagh etc. Struggled to stomach the prices, where to next?

A year ago if we decided to settle a bit on location we would have 100% have ended up in a slightly less nice area in roughly the same vicinity (e.g. Goatstown/Dundrum). Now there’s no chance we’ll do that. We might still push ourselves to buy in Dalkey. But if we do settle and accept we can’t have our dream location, we’ll settle for somewhere further out because we can now. Hence my supposition that the current differentials between those areas might stretch a bit.

How crucial to the very high prices in these “A-“ areas are my demographic and how representative am I (and a few of my friends in very similar boats) of that demographic? Not sure! Wouldn’t be unusual for someone to overestimate the prevalence of something because they experienced it themselves so I am very open to the fact I’m completely wrong!

Timing belt wrote: »

On daft at the moment about 80% of the properties advertised are 450k or less and this is where you are more likely to see the movements as people who have been renting in Dublin move out to rent/buy elsewhere in the country. I would not be one bit surprised if we see 10% prices rises outside Dublin while house prices in Dublin remain static due to demand and the fact that the people moving were already priced out of buying in Dublin anyway.

On the other end of the scale in DLR where people already maxed out property prices (based on median wage for a median house) they will not be able to afford to buy there so are more likely to look further afield to get more bang for their buck. At the end of the day it will be different for everyone but it only takes a small amount of people to move to cause issues in local housing markets outside of Dublin.

Good point. But I had the thought a while ago that if many of the houses outside Dublin are unoccupied because they were rundown etc. due to their owners not investing in their upkeep due to the belief there would be little demand if they did invest, if suddenly there’s demand, it may incentivise existing owners to refurbish them quickly as there’s now a real market.

These homes can be refurbished and brought to market a lot quicker than a developer applying for planning permission and getting new homes built.

In other words, the supply of homes re-entering the market in areas outside Dublin may happen a lot quicker than people realise which would dampen the impact of potential price rises achievable outside Dublin while prices in Dublin do fall.

Of course, my theory depends upon a significant amount of these type of properties already being there. I think they are.

DataDude wrote: »

Despite renting in Blackrock for a while, mostly been because I fell into it. Wouldn’t pay the premium to buy there personally. Although it’s improved as of late with the one way and quality in the Blackrock market, there’s only so nice a place can be when it has an Eddie Rockets beside a Wetherspoons. But anyway, I know that wasn’t your point!

Having read back I probably should have been clearer. I’m using examples of the “A-“ places in SCD vs the “A+” places. I’m not throwing Dundrum in with Tallaght or something, I’m particularly focusing on the ‘next best (and most expensive) thing’ after the really top spots. I’m not familiar with prices in Tallaght but I suspect they don’t have anywhere near as far to fall.

Every place will have those who want to live there because they grew up/have family there. But the buyers I’m focusing on are the young high earning blow-ins who haven’t a major affinity to any particular area. As someone in that category, I would have initially looked at Sandymount, Dalkey, Ranleagh etc. Struggled to stomach the prices, where to next?

A year ago if we decided to settle a bit on location we would have 100% have ended up in a slightly less nice area in roughly the same vicinity (e.g. Goatstown/Dundrum). Now there’s no chance we’ll do that. We might still push ourselves to buy in Dalkey. But if we do settle and accept we can’t have our dream location, we’ll settle for somewhere further out because we can now. Hence my supposition that the current differentials between those areas might stretch a bit.

How crucial to the very high prices in these “A-“ areas are my demographic and how representative am I (and a few of my friends in very similar boats) of that demographic? Not sure! Wouldn’t be unusual for someone to overestimate the prevalence of something because they experienced it themselves so I am very open to the fact I’m completely wrong!

Ive never real seen the attraction of Dalkey. The village is fine. Dalkey has the DART but I don’t find it accessible. Friends grew up there so I have spent time in Dalkey over the last 30 years. Some nice big houses and all that but I think it is an overpriced area.

schmittel wrote: »

A lot of comment on WFH is "It's a flash in the pan, my coworkers and I are gagging to get back to the office, it wont have any meaningful effect on anything" etc etc.

This is looking at it from an employees point of view, I think uptake of WFH will be driven from an employers point of view, and by embrace I mean they will try and restructure working practices to take as much advantage of the WFH situation as possible.

Obviously how each company does this depends on industry/function etc but I think it will boil down to them using it as a way to cut significant property and human resources costs.

I suspect younger workers will be encouraged into the office, and probably these are the workers who most want to be in there anyway. I suspect middle management will be culled/put out to grass.

Or to quote the Mazars guy:



Using the office in a slightly different way going forward will mean mean cutting down on its use simply to keep an eye of everybody and making sure they're putting the hours in, far better to have smaller offices for meetings/training/clients etc and make sure to hire employees that we don't need to keep an eye on.

If you're in a job whose primary function is to keep an eye on your coworkers I'd say the impact of WFH on Dublin property prices is the least of your worries!

I don’t disagree with most of this but I disagree with how impactful it will be, people that are career focused (int the main ) will still spend more of their time in the office than at home, they will still need to be commutable and will in the main be the higher earners who will dictate the prices for houses in desirable areas commutable to wherever their office is.

And this boards notion of some imbecilic middle manager who just monitors everyone all day and has now been found out is a straw man that disappeared from the work place decades ago I literally have never come across someone like that .

Hubertj wrote: »

Ive never real seen the attraction of Dalkey. The village is fine. Dalkey has the DART but I don’t find it accessible. Friends grew up there so I have spent time in Dalkey over the last 30 years. Some nice big houses and all that but I think it is an overpriced area.

If you don’t like the sea, probably the most beautiful coastline in Dublin , a vibrant little town with some amazing restaurants and decent bars and proximity to other similar places like glasthule and monkstown , aswell as having the dart for commuting then yeah I suppose it’s not for everyone