2021 Irish Property Market chat - mod warnings post 1

02-03-2021 12:29am

The banks in Ireland reduced time for using mortgages from 12 months to 6 months
Other words if person who took the mortgage did not bought house in 6 months he will have start approval process from zero
All this says that banks supporting high prices and want give higher mortgages as much as possible
Other words property markets are not that strong if need that sort of intervention and property prices possibly reached the top
And as usual government does not care about it because as they usually says Market will adjust him self ( how this worked before we all know )

TheSheriff · 02-03-2021 1:02am

Deleted User wrote: »

The banks in Ireland reduced time for using mortgages from 12 months to 6 months
Other words if person who took the mortgage did not bought house in 6 months he will have start approval process from zero
All this says that banks supporting high prices and want give higher mortgages as much as possible
Other words property markets are not that strong if need that sort of intervention and property prices possibly reached the top
And as usual government does not care about it because as they usually says Market will adjust him self ( how this worked before we all know )

Likely bank dependent ?... Was mortgage approved in 2019/2020 and had to renew after six months... With BOI. This was pre-Covid

Timing belt · 02-03-2021 1:47am

<SNIP>

Padre_Pio · 02-03-2021 2:32am

MattS1 wrote: »

I wonder how many years prices can keep going up? Surely there has to be a limit as wages aren't going up even a quarter as fast.

Are house prices increasing though?

Anyone with skin in the game says yes, but the CSO says no, based on the property price register.

We're seeing some stupid behaviour the last few months, but I doubt its widespread.

Nika Bolokov · 02-03-2021 9:49am

Padre_Pio wrote: »

Are house prices increasing though?

Anyone with skin in the game says yes, but the CSO says no, based on the property price register.

We're seeing some stupid behaviour the last few months, but I doubt its widespread.

It'll be interesting to see if this becomes widespread or will it just be limited to a few desperados paying the guts of half a mil to live in Coolock.

Markitron · 02-03-2021 9:57am

Padre_Pio wrote: »

Are house prices increasing though?

Anyone with skin in the game says yes, but the CSO says no, based on the property price register.

We're seeing some stupid behaviour the last few months, but I doubt its widespread.

When a dilapidated terraced house in Edenmore (with a BER rating that is the same as living outdoors) is going for 400k, something is definitely going on.

fago · 02-03-2021 10:28am

Padre_Pio wrote: »

Are house prices increasing though?

Anyone with skin in the game says yes, but the CSO says no, based on the property price register.

We're seeing some stupid behaviour the last few months, but I doubt its widespread.

What I found interesting in the 2020 report is that 2nd hand places were basically flat (.2%), and the growth was being held up by new houses (2%).
https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexdecember2020/newandexistingdwellings/

So, it would seem given the general commentary "there's very little supply, it's all mad" for the last Q of 2020 didn't get reflected in the PPR.

On the new homes, some possibilities:
- either the various government schemes have kept the prices artificially up and the lending limits are having less of an impact in new homes.
- people are more interested in higher energy rating/new home and are willing to pay a premium. And renovation costs are horrendous.
- new homes tend to be focused on the starter market at lower price point, and any increases in savings have a more direct impact in terms of a percentage increase

Marius34 · 02-03-2021 10:35am

Padre_Pio wrote: »

Are house prices increasing though?

Anyone with skin in the game says yes, but the CSO says no, based on the property price register.

We're seeing some stupid behaviour the last few months, but I doubt its widespread.

What you think yourself to which direction currently price are moving?

I have posted for previous 4 months, some stats extracted from PPR row data, about the start of the price increase. It's well correlated with delayed results from CSO. There are upwards Trends from around October/November on sold properties, thus that would be from around July/August for people bidding on properties.

PropQueries · 02-03-2021 10:42am

fago wrote: »

What I found interesting in the 2020 report is that 2nd hand places were basically flat (.2%), and the growth was being held up by new houses (2%).
https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexdecember2020/newandexistingdwellings/

So, it would seem given the general commentary "there's very little supply, it's all mad" for the last Q of 2020 didn't get reflected in the PPR.

On the new homes, some possibilities:
- either the various government schemes have kept the prices artificially up and the lending limits are having less of an impact in new homes.
- people are more interested in higher energy rating/new home and are willing to pay a premium. And renovation costs are horrendous.
- new homes tend to be focused on the starter market at lower price point, and any increases in savings have a more direct impact in terms of a percentage increase

Back in September 2020, the Irish Independent reported:

“It has emerged that a record four out 10 homes bought in July were accounted for by a combination of the State and cuckoo funds, institutional investors that buy to rent out the properties.”

Given that DCC believes it costs a minimum of €400k+ to just build a standard 3 bed semi (excl. land costs etc), they’re obviously paying well over the odds and probably driving up the “official” published price of what new build homes are really selling for.

What’s even more ridiculous is that Cairn Homes average selling price last year was c. €350k and Glenveagh’s average selling price was c. €311k, so the DCC figures are off the charts given the actual selling prices of the big developers.

Link to free to read article in Irish Independent here: https://independent.ie/business/personal-finance/home-prices-fall-as-state-and-cuckoos-swoop-on-market-39538530.html

Padre_Pio · 02-03-2021 10:45am

Marius34 wrote: »

What you think yourself to which direction currently price are moving?

Going up, after going down for the last while.
I'm not saying everything is rosey, but it's not the boom again.

I think there's a lot of people who are dead set on buying, lockdown or no, and are prepared to pay a premium just to get a deal done.

We're seeing these exceptions and applying them to the market as a whole

Marius34 · 02-03-2021 10:59am

Padre_Pio wrote: »

Going up, after going down for the last while.
I'm not saying everything is rosey, but it's not the boom again.

I think there's a lot of people who are dead set on buying, lockdown or no, and are prepared to pay a premium just to get a deal done.

We're seeing these exceptions and applying them to the market as a whole

Yes, I think same that it's not the same boom as of Tigers times again.
It's difficult to say currently if its good or bad time to buy. But I understand why people are frustrated, and not willing to wait for end of lockdown. We definitely can't tell if there will be any better situation anytime soon.

Padre_Pio · 02-03-2021 11:01am

Marius34 wrote: »

Yes, I think same that it's not a boom again this time.
It's difficult to say currently if its good or bad time to buy. But I understand why people are frustrated, and not willing to wait for end of lockdown. We definitely can't tell if there will be any better situation anytime soon.

I don't think it's ever possible to say this, at least not for the last 15 years.
In 2008, people we still betting that things were only going up, and in 2012, the bottom of the market, you'd never know if it was going to keep falling.
The market was meant to crash last year and it's as hot as ever. Who knows if this year, or next year, or the year after will be the peak.

The property market in this country has been f*cked for at least the last 20 years. If you got a good deal, it's more accident than design.

Marius34 · 02-03-2021 11:16am

Padre_Pio wrote: »

I don't think it's ever possible to say this, at least not for the last 15 years.
Even in 2012, the bottom of the market, you'd never know if it was going to keep falling.

The property market in this country has been f*cked for at least the last 20 years. If you got a good deal, it's more accident than design.

It would have been difficult to tell in 2012 that it has reached the lowest point. But it was fairly clear to me that Property Market was in bubble back in 2007, and it became fairly clear the direction of the price in the beginning of 2008 (I'm not saying that it was expected such a massive crash).

I agree that Property market is very unstable in Ireland. But I think there is a hope for some stability.

PropQueries · 02-03-2021 11:23am

Marius34 wrote: »

It would have been difficult to tell in 2012 that it has reached the lowest point. But it was fairly clear to me that Property Market was in bubble back in 2007, and it became fairly clear the direction of the price in the beginning of 2008 (I'm not saying that it was expected such a massive crash).

I agree that Property market is very unstable in Ireland. But I think there is a hope for some stability.

I think anyone who had their eye on the ball in 2012 could have spotted that the government was about to inflate the market with two pieces of legislation.

1. They introduced the CGT tax reliefs in 2012 to allow investors to buy up houses and not pay any CGT tax if they held onto them for 7 years. That was to increase demand and reduce supply entering the market for the next 7 years.

2. They introduced various pieces of legislation to encourage both REITs and vulture funds into the market. This was to soak up all the excess supply.

Worked wonders as we saw. Unfortunately both these groups are now in the market to sell which will have the opposite impact on prices as they exit the market IMO

Cyrus · 02-03-2021 11:31am

Padre_Pio wrote: »

Going up, after going down for the last while.
I'm not saying everything is rosey, but it's not the boom again.

I think there's a lot of people who are dead set on buying, lockdown or no, and are prepared to pay a premium just to get a deal done.

We're seeing these exceptions and applying them to the market as a whole

one thing is for sure, the cb rules have been important on keeping a lid on prices, in reality prices in the recovered markets have been relatively stagnant over the past 3-4 years.

cnocbui · 02-03-2021 11:35am

PropQueries wrote: »

I think anyone who had their eye on the ball in 2012 could have spotted that the government was about to inflate the market with two pieces of legislation.

1. They introduced the CGT tax reliefs in 2012 to allow investors to buy up houses and not pay any CGT tax if they held onto them for 7 years. That was to increase demand and reduce supply entering the market for the next 7 years.

2. They introduced various pieces of legislation to encourage both REITs and vulture funds into the market. This was to soak up all the excess supply.

Worked wonders as we saw. Unfortunately both these groups are now in the market to sell which will have the opposite impact on prices as they exit the market IMO

You have an absolute gift for confirmation bias. As I have pointed out before, other major OECD countries are all experiencing and expecting property price rises due to COVID as a motivating factor, to a large part. Arguing that Ireland's property prices are going to go against the trend is naive. Australia's property prices just went up something like 3.4% in a month. Canada's market is boiling. NZ's is doing a charge of the light brigade. Covid has caused increased demand for ownership vs renting and for larger properties and a noticeable shift away from cities. Supply hasn't caught up.

Marius34 · 02-03-2021 11:43am

cnocbui wrote: »

You have an absolute gift for confirmation bias. As I have pointed out before, other major OECD countries are all experiencing and expecting property price rises due to COVID as a motivating factor, to a large part. Arguing that Ireland's property prices are going to go against the trend is naive. Australia's property rices just went up something like 3.4% in a month. Canada's market is boiling. NZ's is doing a charge of the light brigade. Covid has caused increased demand for ownership vs renting and for larger properties and a noticeable shift away from cities. Supply hasn't caught up.

Not only larger. But in general there is increase needs for living space. 4-6 people without kids sharing a house may have a problem now while working from home.

PropQueries · 02-03-2021 11:47am

Marius34 wrote: »

Not only larger. But in general there is increase needs for living space. 4-6 people without kids sharing a house may have a problem now while working from home.

Excellent point and if you’re right, property prices in the city will collapse.

Before you had 4 singles sharing a house at 500 each a month. Now, according to your theory, you would have two people, so unless they’re willing to pay double their existing rent, rents must drop.

If rents in the city drop, does that have no impact on property prices in the city?

Cyrus · 02-03-2021 11:49am

In the interests of balance on the whole WFH thing,

the Goldman Sachs CEO says its an aberration and not the new normal for them at least

https://www.cnbc.com/2021/02/25/goldman-sachs-ceo-solomon-calls-working-from-home-an-aberration-.html

“I do think for a business like ours which is an innovative, collaborative apprenticeship culture, this is not ideal for us and it’s not a new normal,” Solomon said.

“It’s an aberration that we’re going to correct as quickly as possible,” he added.

Solomon said he was particularly focused on ensuring that the next cohort of young workers to join Goldman Sachs this coming summer didn’t start working at the firm remotely, as he believed they could miss out on “direct contact” and “direct mentorship.”

Bojo tends to agree

https://www.theguardian.com/world/2021/feb/27/coronavirus-boris-johnson-workers-will-return-to-offices-in-a-few-short-months

“I know that some people may imagine that all conferences are going be like this, held over Zoom, Teams or what have you and we’ve got to prepare for a new age in which people don’t move around, do things remotely, they don’t commute any more,” he said.

“I don’t believe it. Not for a moment. In a few short months, if all goes to plan, we in the UK are going to be reopening our economy. And then, believe me, the British people will be consumed once again with their desire for the genuine face-to-face meeting that makes all the difference to the deal or whatever it is.”

MacronvFrugals · 02-03-2021 11:51am

Cyrus wrote: »

In the interests of balance on the whole WFH thing,

the Goldman Sachs CEO says its an aberration and not the new normal for them at least

https://www.cnbc.com/2021/02/25/goldman-sachs-ceo-solomon-calls-working-from-home-an-aberration-.html

This was posted last week

Cyrus · 02-03-2021 11:59am

MacronvFrugals wrote: »

This was posted last week

sorry, i see it didnt get much notice.

PropQueries · 02-03-2021 12:04pm

Cyrus wrote: »

In the interests of balance on the whole WFH thing,

the Goldman Sachs CEO says its an aberration and not the new normal for them at least

https://www.cnbc.com/2021/02/25/goldman-sachs-ceo-solomon-calls-working-from-home-an-aberration-.html

Bojo tends to agree

https://www.theguardian.com/world/2021/feb/27/coronavirus-boris-johnson-workers-will-return-to-offices-in-a-few-short-months

I think governments are genuinely worried about the impact of WFH on city center retail, cafe etc. jobs. And rightly so.

But I don’t believe they can force companies to bring office workers back full time when both companies and employees have already embraced this new normal.

awec · 02-03-2021 12:08pm

PropQueries wrote: »

I think governments are genuinely worried about the impact of WFH on city center retail, cafe etc. jobs. And rightly so.

But I don’t believe they can force companies to bring office workers back full time when both companies and employees have already embraced this new normal.

They won't need to force anyone.

Cyrus · 02-03-2021 12:08pm

PropQueries wrote: »

But I don’t believe they can force companies to bring office workers back full time when both companies and employees have already embraced this new normal.

i didnt see any one mention companies being forced?

and calling what we have right now a new normal is a bit bizarre, if we have the same level of WFH in a years time then maybe its a new normal but i would wager we wont see that.

Marius34 · 02-03-2021 12:11pm

PropQueries wrote: »

Excellent point and if you’re right, property prices in the city will collapse.

Before you had 4 singles sharing a house at 500 each a month. Now, according to your theory, you would have two people, so unless they’re willing to pay double their existing rent, rents must drop.

If rents in the city drop, does that have no impact on property prices in the city?

It depends on different situation.
If there were 4 single professionals. Now one of them may move out to rent one bed apartment, able to pay more for rent. Other 3 may pay now 666 Eur each.
Same people now have demands for 2 properties.

It all depends on different situation, you can not concentrate on those case, but you need to look overall picture on Demands/Supplies.
And WFH change will impact only portion of people once we get out of the lockdowns.

fliball123 · 02-03-2021 12:18pm

PropQueries wrote: »

I think governments are genuinely worried about the impact of WFH on city center retail, cafe etc. jobs. And rightly so.

But I don’t believe they can force companies to bring office workers back full time when both companies and employees have already embraced this new normal.

I seen conflicting reports I believe Varadkar is looking to incentivise working from home as it will reduce traffic, pollution and also give people a bit more work/life balance and then other sectors talking about about Dublin city center will lose a lot of business. IMO good enough for them it will be great not to have to go into Dublin city center if you dont need to it might force them into free parking and changing the nature of Dubin city center

PommieBast · 02-03-2021 12:23pm

PropQueries wrote: »

I think governments are genuinely worried about the impact of WFH on city center retail, cafe etc. jobs. And rightly so.

Given the tightness of the Irish lockdown (see various threads related to hospitality pubs) and the proposals to make work-from-home a legal right, I have doubts about that..

PropQueries · 02-03-2021 12:28pm

According to the Irish Independent "Century-old building firm G&T Crampton calls in a liquidator".

"G&T Crampton, the Dublin building firm famed for more than 100 years for the quality of its construction will seek to appoint a liquidator to two Irish companies at a meeting of creditors on March 12th."

"Houses built by the firm in the first half of the twentieth century continue to command a premium on the market – whether the homes were built for Dublin Corporation in Cabra or for the city’s wealthy elite in Herbert Park, Dublin 4 and Foxrock."

It's newsworthy given the company's history, but I have no idea what this liquidation relates to. But, it doesn't really look like it's due to the current market conditions, so maybe someone in the know can shed some light on the exact reasons?

Link to article in Irish Independent here: https://www.independent.ie/business/irish/century-old-building-firm-g-and-t-crampton-calls-in-a-liquidator-40147469.html

fliball123 · 02-03-2021 12:29pm

PommieBast wrote: »

Given the tightness of the Irish lockdown (see various threads related to hospitality pubs) and the proposals to make work-from-home a legal right, I have doubts about that..

I dont think you can do that as what would happen to professions that you need a physical body to be there, such as a garda or a doctor or a bin man etc..It just wont work. Going forward I can see some companies using it as a way to add an incentive to work for them by letting an employee work from home but I cannot see it becoming a legal right..It may even become a Benefit in Kind that may need to be taxed like a company car.

PropQueries · 02-03-2021 12:35pm

fliball123 wrote: »

I dont think you can do that as what would happen to professions that you need a physical body to be there, such as a garda or a doctor or a bin man etc..It just wont work. Going forward I can see some companies using it as a way to add an incentive to work for them by letting an employee work from home but I cannot see it becoming a legal right..It may even become a Benefit in Kind that may need to be taxed like a company car.

With the Greens in power, if encouraging WFH isn't top of the government agenda, given its obvious environmental positives, we would then have to assume that the Greens were only brought in as cover to increase taxes on all our heating and travel costs i.e. back-door tax increases dressed up as "protecting the environment" IMO

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

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2021 Irish Property Market chat - mod warnings post 1