2021 Irish Property Market chat - mod warnings post 1

DataDude · 12-02-2021 07:05PM

HansKroenke wrote: »

The big question will be how those €1m+ houses shift in the next 5/10/15 years when those under the age of 40, barely able to get a place worth 600k, are looking to upgrade and the houses of those in their 50s/60s now are sold. Even with the equity of their FTB property, they will not be able to get a mortgage for these houses. For me, the longer term trend is a fairly significant reduction in house prices at the premium price range, purely due to affordability and the obliteration of the number of homeowners among the next generation, lost to the Great Recession, that would typically upgrade to these types of houses.

Have thought about this an incredible amount. The only obvious answer I have is inheritance - and the Irish attitude to inheritance is the only thing that frustrates me more than housing (I say this as someone who will inherit a significant sum of money before I’m called a begrudger). If asset/house price inflation continues to outstrip wages in the long term it may just become that social class gets increasingly locked in and not something you can work your way between.
But that’s a discussion too political for this forum!

Hubertj · 12-02-2021 07:09PM

cnocbui wrote: »

Are you sure? I'll throw in a couple of lakes for free.

Is there any fish in the lake?

Cyrus · 12-02-2021 07:14PM

DataDude wrote: »

Maybe you’re correct (I hope you are on the political bit!) but when I look at what two 35 year old teachers with kids working in a school in South Dublin can afford to purchase, it makes me a little uneasy. Agreed it is an issue around Europe, but it doesn’t make it desirable and it certainly offers scant consolation to said teachers!

It’ll be an interesting dynamic in the future , parents in Dublin won’t be encouraging their kids into teaching I wouldn’t have thought , where do we go then.

hometruths · 12-02-2021 07:21PM

DataDude wrote: »

Of course agree with above but I do think the primary reason younger people are disillusioned an feel house prices need to fall in price is they compare themselves to what their equivalent in the prior generation could have done. This is why McWilliams etc. views resonate with so many.

I know (and am related to) so many people in their 50s/60s who had incredibly average careers with limited educations, never earning above today's equivalent of €150k living in €2m+ houses in Dalkey. The reality is were they the exact same person, exact same career a few decades later they'd be potentially looking for social housing. It's that dramatic mismatch in the inflation of property prices vs wages that drives the undercurrent of discontent.

I'm incredibly fortunate to be in a very top percentile of earners but it drives me up the wall hearing my parents/aunts/uncles talk in a sympathetic (but really condescending) tone about cousin x who's "35 and still can't afford his/her own home" as if it's some sort of failing on their behalf. Then often use my position as proof that "it's still possible today, nothing wrong with house prices". The reality is cousin X is doing absolutely fine and their career is on a par with their parents before them, but "average earnings" don't really get you a whole lot anymore.

I might not fit the description of young locked out buyer, but I can clearly see their plight and do think you need to be a little bit blinkered to not do so.

It's scares the life out of me, but I truly think it's the mindset/denial above that's going to lead to fairly radical political reform in the not too distant future. Prices falls will come with that overhaul I'm sure, unfortunately so will after tax incomes...(as a side note to anyone disillusioned as I have described above feeling locked out, the reality is our "extreme left" parties are actually bizarrely anti-young people in many ways and will staunchly defend the "poor old person" in their €4m house in Colimore Road which they can barely heat because "The home isn't an asset (LOL)"

Great post, I'm a little older than you but can relate to the parents/aunts/uncles comments. Yes they had high interest rates and no smashed avocado but whatever way you cut it in a property ladder context, they had it easier than today's FTB.

I'm in my mid 40s and I think myself and a decent cohort group/peers got phenomenally lucky as well.

I know so many people who more through luck than judgment avoided the buying in the last boom, they had cheap rents, and bought when they were ready in the years 2010-2015. Most managed to time it spectacularly well in 2012/3, picking up period houses in prime D4, D6, SCD.

Like my parents generation, very few of them pause to think how lucky they were or are overly concerned about govt housing policy etc.

I also know people who bought 2016 onwards and I get the sense that they think about it a lot, and are cheering things like shared equity schemes to the rafters. They don't have the buffer that the 2012/3 crowd have, and they see it could go either way from here.

The few people I know in the FTB bracket are in utter despair and I truly feel sorry for them.

cnocbui · 12-02-2021 07:22PM

One of the biggest problems is the mis-match between expectations and income.

When I bought my first house, It was very cheap, and cheap for a reason. I was prepared to put up with it's shortcomings for affordability, but judging by people's reactions to my earlier posts on the topic, no one on who posts regularly on this thread would have been prepared to put up with it.

On the currently buying thread, I have lost count of the number of people who complain about the number of properties requiring renovation and the lack of turn-keys in their price range.

I need to send out a search party to find my sympathy for FTBs who want a nice new home that's up to the second in modernity and features, but complain of being unable to afford one.

This belief in a golden past where home affordability was easy is a mystery to me.

I sure couldn't afford such a thing when I bought my first home. Even my third one didn't qualify, either.

cnocbui · 12-02-2021 07:29PM

Hubertj wrote: »

Is there any fish in the lake?

'Lakes' - yes, small brown trout.

Hubertj · 12-02-2021 08:03PM

cnocbui wrote: »

'Lakes' - yes, small brown trout.

Nice work to have that on your property. I used to go fishing quite a lot, find it very relaxing.

decreds · 12-02-2021 08:55PM

It's probably worth noting that mass immigration was a big factor in price rises over the past few years. With mass immigration now halted for at least the next 3 years and coupled with supply coming on board + economic fallout, we will see modest drops by around 2023.

I don't predict it to be a huge crash so it's probably not worth waiting around for if you're currently paying high rent. Needless to say, if it's your forever home and currently paying rent but in a position to buy you might as well go for it now instead of waiting for 10-20% drops in 3 years or so.

jill_valentine · 12-02-2021 09:07PM

cnocbui wrote: »

One of the biggest problems is the mis-match between expectations and income.

When I bought my first house, It was very cheap, and cheap for a reason. I was prepared to put up with it's shortcomings for affordability, but judging by people's reactions to my earlier posts on the topic, no one on who posts regularly on this thread would have been prepared to put up with it.

Banks will now refuse you a mortgage for a property they decide you do not have the means to do up to standard in short order because your house is their collateral. If you're already stretching for the mortgage in the first place, which you will be, buying a fixer upper is literally not an option. They will take a look at it, and you, and decline. It's become quite a strict thing after the recession, because the issue of houses as collateral became suddenly very topical.

It's why ads for mortgages used to show trusty have-a-go handymen doing plumbing or woodwork, and now the plucky young couple is only ever painting.

I did some maths on the subject of house prices in Dublin county in October of last year, so when prices were actually not too far off what we consider normal -

125k is roughly the salary capped mortgage limit in the ballpark of what we've established are the averagish salaries in Dublin.

As of this moment, Daft has a grand total of 7 properties in this bracket. 5 are green field sites. 1 is an apartment in Balbriggan I'm pretty sure is sold this months, and 1 is an auction for an apartment the roof peeled off during a mild storm a few years ago.

So, nothing. There is literally nothing the average worker can buy to live in, in the entire county.

Now lets imagine our worker has eaten nothing for five years and sat indoors with the lights off until they managed to save the €37500 - more than a year of their salary - to bring his buying power all the way to the next bracket of 150k.

Excluding sites, he has 20 properties available - but not so fast.

At least 7 of these are Bidx1 style Auctions, which he can't buy. Two more are covered above. Of the eleven remaining, I know myself at least two are already sold and aren't marked off. Of the nine remaining, one is listed twice and is a shell, one of the others would need major work. So... 6.

There are currently 6 properties available in the county of Dublin to somebody on the average wage with nearly 40 grand in their pocket, assuming nobody bids one penny over asking.

The properties did not exist to be bought within the range of the average earner.

I would propose then that the mismatch is in the kinds of properties we were building and what the majority actually need and can afford.

Cyrus · 12-02-2021 09:45PM

jill_valentine wrote: »

Banks will now refuse you a mortgage for a property they decide you do not have the means to do up to standard in short order because your house is their collateral. If you're already stretching for the mortgage in the first place, which you will be, buying a fixer upper is literally not an option. They will take a look at it, and you, and decline. It's become quite a strict thing after the recession, because the issue of houses as collateral became suddenly very topical.

It's why ads for mortgages used to show trusty have-a-go handymen doing plumbing or woodwork, and now the plucky young couple is only ever painting.

I did some maths on the subject of house prices in Dublin county in October of last year, so when prices were actually not too far off what we consider normal -

The properties did not exist to be bought within the range of the average earner.

I would propose then that the mismatch is in the kinds of properties we were building and what the majority actually need and can afford.

Isn’t the annual average full time salary 49k

https://www.google.co.uk/amp/s/www.irishtimes.com/business/economy/average-full-time-salary-in-republic-nearly-49-000-1.4289348%3fmode=amp

And if that’s the country average the Dublin average is higher than that I’m sure.

Your figures seem to be off a much lower salary level.

MacronvFrugals · 12-02-2021 10:13PM

Cyrus wrote: »

Isn’t the annual average full time salary 49k

https://www.google.co.uk/amp/s/www.irishtimes.com/business/economy/average-full-time-salary-in-republic-nearly-49-000-1.4289348%3fmode=amp

And if that’s the country average the Dublin average is higher than that I’m sure.

Your figures seem to be off a much lower salary level.

Using the median 35k is correct

Median household gross income is 47k

https://www.irishtimes.com/news/politics/election-2020-fact-check-is-the-average-income-really-47-000-1.4155272

Cyrus · 12-02-2021 10:49PM

MacronvFrugals wrote: »

Using the median 35k is correct

Median household gross income is 47k

https://www.irishtimes.com/news/politics/election-2020-fact-check-is-the-average-income-really-47-000-1.4155272

Yes I’d tend to agree but the poster said average.

Also do we know the median in Dublin?

jill_valentine · 12-02-2021 11:19PM

Cyrus wrote: »

Yes I’d tend to agree but the poster said average.

Also do we know the median in Dublin?

It's a little awkward to find the Dublin median because the that much more generous "average" is promoted more often by Leo and friends

We can roughwork it though. Per CSO, weekly median for Dublin as of 2018 was €645.78

https://www.cso.ie/en/csolatestnews/pressreleases/2019pressreleases/pressstatement-earningsanalysisusingadministrativedatasources2018/

646 x 52 = €33,592.

Your 3.5 salary cap gives you €117,572, so your deposit has to be a bit above ten grand. Roughly then, we're floating around roughly the 130k mark.

So, a little better than my previous roughwork, but not much, and as the Median, half of the workforce is actually below that.

Geuze · 13-02-2021 12:31AM

MacronvFrugals wrote: »

Using the median 35k is correct

Median household gross income is 47k

https://www.irishtimes.com/news/politics/election-2020-fact-check-is-the-average-income-really-47-000-1.4155272

Median household incomes 2019

https://www.cso.ie/en/releasesandpublications/ep/p-silc/surveyonincomeandlivingconditionssilc2019/income/

Gross, this means including welfare payments = 51,217
Disposable, after tax = 43,552

Geuze · 13-02-2021 12:31AM

Cyrus wrote: »

Yes I’d tend to agree but the poster said average.

Also do we know the median in Dublin?

The earnings of mortgage borrowers is published, if you want to check them.

13-02-2021 12:53AM

The estate agents are having a field day.

€105k over asking
https://www.daft.ie/for-sale/terraced-house-47-the-priory-grange-road-rathfarnham-dublin-14/2877728?fbclid=IwAR30CJi2WCCebb4YtQuu8pJGhtIN2QgBRETXmSNuzRJK8MQGFXsZXh3jVRc

Cyrus · 13-02-2021 01:23AM

Presume this has been posted already , props tends to post anything property related in any of the main newspapers

In case he missed it ,

Prices and transaction numbers increasing , in face dec 20 had more sales than dec 19 despite everything.

https://www.irishtimes.com/business/economy/house-prices-defy-predictions-to-rise-2-2-in-2020-1.4483071

HansKroenke · 13-02-2021 01:33AM

Cyrus wrote: »

Presume this has been posted already , props tends to post anything property related in any of the main newspapers

In case he missed it ,

Prices and transaction numbers increasing , in face dec 20 had more sales than dec 19 despite everything.

https://www.irishtimes.com/business/economy/house-prices-defy-predictions-to-rise-2-2-in-2020-1.4483071

I love the strawman in the article;

At the outset of the pandemic, with unemployment spiralling, many had predicted 2020 would see a major fall in house prices.

Maybe it is just me but I have not seen any article in the IT or Indo with "many" predicting "2020 would see a major fall in house prices". In fact, quite the opposite; my reading of property articles in these publications would have me convinced that property is a safe haven asset, immune from wider economic turmoil! It's nearly like "just tell yourself something enough times until you believe it".

combat14 · 13-02-2021 01:49AM

Cyrus wrote: »

Presume this has been posted already , props tends to post anything property related in any of the main newspapers

In case he missed it ,

Prices and transaction numbers increasing , in face dec 20 had more sales than dec 19 despite everything.

https://www.irishtimes.com/business/economy/house-prices-defy-predictions-to-rise-2-2-in-2020-1.4483071

one swallow does not make a summer - one month comparison doesnt either

Sierra Oscar · 13-02-2021 02:45AM

HansKroenke wrote: »

I love the strawman in the article;

Maybe it is just me but I have not seen any article in the IT or Indo with "many" predicting "2020 would see a major fall in house prices". In fact, quite the opposite; my reading of property articles in these publications would have me convinced that property is a safe haven asset, immune from wider economic turmoil! It's nearly like "just tell yourself something enough times until you believe it".

You're off the mark a bit there to be honest. Plenty of articles in both the Irish Times and Irish Independent at the start of Covid-19 predicted a major fall in property prices. Much discussion about it in general too in all walks of life, here included.

Irish Times - May 2020 - House prices to fall by 12 % over next 18 months, ESRI says

Irish Independent - House prices due to fall sharply in wake of pandemic

I'm actually struggling to find articles from either publication from the start of the pandemic onwards claiming house prices would increase. It seems to only have dawned on them from late 2020 that their predictions of a major slump were not playing out on the ground.

bilbot79 · 13-02-2021 03:07AM

cisk wrote: »

The estate agents are having a field day.

€105k over asking
https://www.daft.ie/for-sale/terraced-house-47-the-priory-grange-road-rathfarnham-dublin-14/2877728?fbclid=IwAR30CJi2WCCebb4YtQuu8pJGhtIN2QgBRETXmSNuzRJK8MQGFXsZXh3jVRc

Yikes. Might rent for a year and wait out these crazy prices

thefridge2006 · 13-02-2021 03:26AM

Cyrus wrote: »

the point i'm making is obvious.

this chap lol

thefridge2006 · 13-02-2021 03:28AM

Cyrus wrote: »

after you :rolleyes:

Whoever smelt it dealt it....

Takes one to know one..................

thefridge2006 · 13-02-2021 03:35AM

Cyrus wrote: »

so which is it, you arent as smart as i think you are or im not as smart as i think i am,

make up your mind

and if you want to question my intelligence just come out and do it rather than try to be snide like that.

You calling someone snide... lol that's hilarious

thefridge2006 · 13-02-2021 04:01AM

Cyrus wrote: »

Presume this has been posted already , props tends to post anything property related in any of the main newspapers

In case he missed it ,

Prices and transaction numbers increasing , in face dec 20 had more sales than dec 19 despite everything.

https://www.irishtimes.com/business/economy/house-prices-defy-predictions-to-rise-2-2-in-2020-1.4483071

Who did you accuse of being snide again????

Cyrus · 13-02-2021 08:12AM

combat14 wrote: »

one swallow does not make a summer - one month comparison doesnt either

I would agree however if the trends had been in the opposite direction this would have gotten far more coverage on this thread given it was 13 hours old when I posted .

So I was being genuine when I said I presumed it had been posted already and I missed it.

Cyrus · 13-02-2021 08:15AM

HansKroenke wrote: »

I love the strawman in the article;

Maybe it is just me but I have not seen any article in the IT or Indo with "many" predicting "2020 would see a major fall in house prices". In fact, quite the opposite; my reading of property articles in these publications would have me convinced that property is a safe haven asset, immune from wider economic turmoil! It's nearly like "just tell yourself something enough times until you believe it".

As the other poster has already said that is patently untrue , at the outset of this the prevailing opinion was that we were looking at wide spread price decreases , as time went on and this didn’t materialise the tone changed.

HansKroenke · 13-02-2021 09:28AM

Sierra Oscar wrote: »

You're off the mark a bit there to be honest. Plenty of articles in both the Irish Times and Irish Independent at the start of Covid-19 predicted a major fall in property prices. Much discussion about it in general too in all walks of life, here included.

Irish Times - May 2020 - House prices to fall by 12 % over next 18 months, ESRI says

Irish Independent - House prices due to fall sharply in wake of pandemic

I'm actually struggling to find articles from either publication from the start of the pandemic onwards claiming house prices would increase. It seems to only have dawned on them from late 2020 that their predictions of a major slump were not playing out on the ground.

Firstly, both articles talk of the same report, which came from the ESRI. Secondly, I don't see anything in either article warning of significant falls in house prices in 2020. They are presenting a scenario where house prices fall in 2021. But even at that, they note that supply constraints might not even lead to them falling.

Again, just to reiterate the point which still stands that there is this paranoia among those talking up the housing market where they need to justify their positions by inventing fictitious enemies, in this case "many" opposing forces who talked the market down, when in fact they didn't have many saying that. My experience is also that pre-cocid, Brexit was being painted as the enemy for the slowdown in the market by market participants. It's the "fake it until you make it" approach.

Here are the 2020 Property Market threads where you can go through the pages to get links to media articles in 2020 relating to the Irish property market;

https://touch.boards.ie/thread/2058041687
https://touch.boards.ie/thread/2058095305/1

I've pulled the following from between May and September and honestly have not found many predicting house prices falling in 2020;

https://www.irishtimes.com/business/economy/property-price-growth-slows-in-may-as-transactions-plunge-1.4305091?mode=amp&mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Feconomy%2Fproperty-price-growth-slowed-in-may-as-transactions-plunged-1.4305091

KBC Bank Ireland chief economist Austin Hughes said the fall in transactions points to a problematic outlook.

“With property price register data suggesting an even sharper year-on-year drop in sales in June, this also forcefully suggests the major impact of the pandemic on the Irish property market in 2020 is likely to be seen primarily in the form of depressed activity levels rather than dramatically lower prices.

https://www.irishtimes.com/business/personal-finance/expanded-help-to-buy-scheme-makes-little-sense-and-may-fuel-house-price-rises-1.4312728?mode=amp

For the short-term, it might make totting the sums easier for first-time homebuyers this year but only if developers don’t increase prices on new homes schemes to match. And the suspicion since since help-to-buy was first introduce din 2014 if that builders do just that.

https://thecurrency.news/articles/20965/

Short-run implications of Covid-19 triggered recession on the Irish property markets are hard to forecast. Data on Irish residential property prices through May 2020 show little impact of the pandemic on house price dynamics. In fact, national property prices have been virtually flat from the start of 4Q 2018 through 2Q 2020, whole Dublin residential property prices have shown a decline over the same period of time.

https://m.independent.ie/irish-news/news/bidding-wars-for-niche-homes-as-buyers-flood-the-market-following-covid-19-lockdown-39416426.html

Early indications from the nationwide Residential Property Price Barometer compiled by Institute of Professional Auctioneers and Valuers (IPAV), which is not due out until this September, indicate strong activity in the market.

Speaking to the Sunday Independent this weekend, the chief executive of IPAV, Pat Davitt, said: "We have compiled prices up until the end of June and I can tell you that prices have gone up for the last six months.

Actually, I had intended to go through the thread from May to September but only ended up doing July as it was right at the beginning of 2020 Part II and it took 90 pages, 45 minutes to get these! But I can tell you that I didn't see any other articles, except for ones just talking about CSO dáta published.

Cyrus · 13-02-2021 09:33AM

Is referring to what’s actually happening talking up the property market ?

Because despite the narrative on here I have not seen anyone talk up the market in any real way , the thread is dominated by people who are forecasting property price drops from 10 percent all the way to 75 percent in the near term .

I can’t recall anyone forecasting any material increases.

Cyrus · 13-02-2021 09:37AM

HansKroenke wrote: »

Firstly, both articles talk of the same report, which came from the ESRI. Secondly, I don't see anything in either article warning of significant falls in house prices in 2020. They are presenting a scenario where house prices fall in 2021. But even at that, they note that supply constraints might not even lead to them falling.

Again, just to reiterate the point which still stands that there is this paranoia among those talking up the housing market where they need to justify their positions by inventing fictitious enemies, in this case "many" opposing forces who talked the market down, when in fact they didn't have many saying that. My experience is also that pre-cocid, Brexit was being painted as the enemy for the slowdown in the market by market participants. It's the "fake it until you make it" approach.

Here are the 2020 Property Market threads where you can go through the pages to get links to media articles in 2020 relating to the Irish property market;

https://touch.boards.ie/thread/2058041687
https://touch.boards.ie/thread/2058095305/1

I've pulled the following from between May and September and honestly have not found many predicting house prices falling in 2020;

https://www.irishtimes.com/business/economy/property-price-growth-slows-in-may-as-transactions-plunge-1.4305091?mode=amp&mode=sample&auth-failed=1&pw-origin=https%3A%2F%2Fwww.irishtimes.com%2Fbusiness%2Feconomy%2Fproperty-price-growth-slowed-in-may-as-transactions-plunged-1.4305091

https://www.irishtimes.com/business/personal-finance/expanded-help-to-buy-scheme-makes-little-sense-and-may-fuel-house-price-rises-1.4312728?mode=amp

https://thecurrency.news/articles/20965/

https://m.independent.ie/irish-news/news/bidding-wars-for-niche-homes-as-buyers-flood-the-market-following-covid-19-lockdown-39416426.html

Actually, I had intended to go through the thread from May to September but only ended up doing July as it was right at the beginning of 2020 Part II and it took 90 pages, 45 minutes to get these! But I can tell you that I didn't see any other articles, except for ones just talking about CSO dáta published.

https://www.google.co.uk/amp/s/www.irishtimes.com/business/construction/stock-market-moves-indicate-new-house-prices-could-fall-up-to-20-1.4210823%3fmode=amp

March 2020 Covid crisis could cause house prices to fall 20 percent.

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

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2021 Irish Property Market chat - mod warnings post 1