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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

DubCount wrote: »

With the unemployment and recession a SF government would bring - you're probably right :rolleyes:

Don’t forget people emigrating that will free up a lot of property

Pelezico

awec wrote: »

Yea? What's your source for this?

What in earth is a dream house? I have never managed to understand that one.

Mic 1972

PropQueries wrote: »

Back in 2014, David McWilliams asked who will the funds sell the assets they bought (“for 25 cent in the euro.”) to when they decide to exit. His opinion was:

“They will sell to Irish investors. Where will the Irish get the cash? Why they’ll borrow it from Irish banks and we will be back to where we started with Irish banks overleveraged to expensive Irish property.”

He got it wrong. They’re not selling to Irish investors. It appears they’re selling/leasing them back to the Irish state. The very same state they bought them off of for c. 25c in the euro only a few years ago.

At least NAMA may make a “profit” at least. I wonder what history will make of that 2012 to 2016 period?

Link to his article here: http://www.davidmcwilliams.ie/when-the-vulture-funds-move-on-our-broken-banks-will-be-right-back-where-they-started/

You keep saying that but you havent provided any evidence to back taht up.

What evidence do you have about private investors not hoarding residential properties?

Pelezico

Why does anyone quote David McWilliams. He is good for a oneliner but little else.

A sort of pop economist.

awec

Pelezico wrote: »

What in earth is a dream house? I have never managed to understand that one.

It's just a house that ticks all the boxes for a buyer. It's not literally a "dream house".

PropQueries

Timing belt wrote: »

Don’t forget people emigrating that will free up a lot of property

Apparently c. 700,000 people have left London since the pandemic started.

Any ideas on how many have left Dublin as the Irish media seem to be very quite on that front here? It's actually a very big question given all the analysis on WFH, future of the city etc. IMO

Link to article in Irish Times on 700,000 leaving London here: https://www.irishtimes.com/news/world/uk/covid-19-london-s-population-fell-by-700-000-amid-exodus-of-foreign-born-residents-from-uk-1.4458762

Mic 1972

PropQueries wrote: »

Apparently c. 700,000 people have left London since the pandemic started.

Any ideas on how many have left Dublin as the Irish media seem to be very quite on that front here? It's actually a very big question given all the analysis on WFH, future of the city etc. IMO

Link to article in Irish Times on 700,000 leaving London here: https://www.irishtimes.com/news/world/uk/covid-19-london-s-population-fell-by-700-000-amid-exodus-of-foreign-born-residents-from-uk-1.4458762

I would say foreigners left London because of Brexit, not because of the pandemic.

PropQueries

Pelezico wrote: »

Why does anyone quote David McWilliams. He is good for a oneliner but little else.

A sort of pop economist.

Sometimes one-liners are what's needed to explain something that's apparently complex.

For example, his following one-liner (ok, 3 lines

) makes perfect sense in the current climate in relation to resolving the housing "shortage":

"How come there are only 100,000 people living between the canals in Dublin when at the same time in Copenhagen there are close to 600,000 living in more or less the same footprint? Copenhagen a not high-rise city, rather it is an intensively-used six-storey city. The main difference is usage."

PropQueries

Mic 1972 wrote: »

I would say foreigners left London because of Brexit, not because of the pandemic.

Doubtful. Even Johnny Ronan is looking to get back into the property game in London.

"Developer Johnny Ronan has told the Business Post that he is pursuing a return to the London property market. He expects to have his first project in there next year. The paper writes that Ronan’s company has “ambitions on the scale of Battersea” for the city. Treasury Holdings, led by Ronan and Richard Barrett, was the latest developer to be undone by plans for the former power station when the financial crash hit in 2008."

Link to Irish Times article today here: https://www.irishtimes.com/business/developer-johnny-ronan-plans-new-assault-on-london-property-market-1.4503562

Pelezico

awec wrote: »

It's just a house that ticks all the boxes for a buyer. It's not literally a "dream house".

It is part of the language used to encourage people to spend more than they can easily afford.

Mic 1972

PropQueries wrote: »

Doubtful. Even Johnny Ronan is looking to get back into the property game in London.

"Developer Johnny Ronan has told the Business Post that he is pursuing a return to the London property market. He expects to have his first project in there next year. The paper writes that Ronan’s company has “ambitions on the scale of Battersea” for the city. Treasury Holdings, led by Ronan and Richard Barrett, was the latest developer to be undone by plans for the former power station when the financial crash hit in 2008."

Link to Irish Times article today here: https://www.irishtimes.com/business/developer-johnny-ronan-plans-new-assault-on-london-property-market-1.4503562

How is this proof that foreigners aren't leaving London because of Brexit exactly?

PropQueries

Mic 1972 wrote: »

How is this proof that foreigners aren't leaving London because of Brexit exactly?

Basically Brexit hasn't collapsed or won't collapse the UK economy like some in the media were and continue to appear to be portraying IMO

HansKroenke

DubCount wrote: »

With the unemployment and recession a SF government would bring - you're probably right :rolleyes:

I think we'll see a lot of panic from home owners who fear their house prices will drop 20/30% and may look to sell up in order to avoid what they think will be chaos with a SF led government. However, this panic-induced supply increase will consequently lead to prices going lower more than SF in power!

PropQueries

HansKroenke wrote: »

I think we'll see a lot of panic from home owners who fear their house prices will drop 20/30% and may look to sell up in order to avoid what they think will be chaos with a SF led government. However, this panic-induced supply increase will consequently lead to prices going lower more than SF in power!

But isn't that the thing. Who's selling unless they have to or are trading up or down. Outside of investors etc.

I think the Government puts too much emphasis on the thinking that high house prices keep existing home owners (voters) happy.

Most are way more interested in local issues e.g. local services etc. And, it's local services that will be most impacted by the current spending on "resolving" the housing issue i.e. more money spent on resolving the housing issue means less money for the services that really keep people (voters) happy.

It's a talking point, but that's about it in the vast majority of cases. If a regular person's house falls by 50%, do they really care if they still have their job?

I think the problem is that the Government is equating house prices to the economy and votes and they're not as linked as they were in the past IMO

Developers would still build if the average house price in Dublin was €250k. They're building for those selling prices outside of Dublin and the only thing that would happen if prices fell by 50%, if there really is demand, is that site costs and the additional profit margins for developers in Dublin would drop IMO

Graham

PropQueries wrote: »

Basically Brexit hasn't collapsed or won't collapse the UK economy like some in the media were and continue to appear to be portraying IMO

I don't understand the point you're trying to make PQ.

On one hand you're suggesting Dublin is facing an exodus like London that will see Irish property prices/demand severely impacted.

On the other hand you're hinting the prospects are so rosey for London than Johnny Ronan is piling back in but the same can't/won't apply to Dublin.

It's like you only ever consider anything that might impact Irish property negatively and ignore anything else.

hometruths

HansKroenke wrote: »

I think we'll see a lot of panic from home owners who fear their house prices will drop 20/30% and may look to sell up in order to avoid what they think will be chaos with a SF led government. However, this panic-induced supply increase will consequently lead to prices going lower more than SF in power!

Exactly, hence the confidence in my prediction!

PropQueries

Graham wrote: »

I don't understand the point you're trying to make PQ.

On one hand you're suggesting Dublin is facing an exodus like London that will see Irish property prices/demand severely impacted.

On the other hand you're hinting the prospects are so rosey for London than Johnny Ronan is piling back in but the same can't/won't apply to Dublin.

It's like you only ever consider anything that might impact Irish property negatively and ignore anything else.

Not at all. I was asking one of the few posters who appears to have a grasp of this type of data if he has any similar analysis for Dublin to the London analysis that c. 700,000 have left London since the pandemic started

It's very important data in relation to the whole debate around supply/demand for housing during covid and will be even more important post covid IMO

Have a similar percentage left Dublin?

Just to add. I have a very high opinion of London and that no matter what happens, I believe it will prevail through any crisis. It's not really a back-office location like Ireland. I fully understand most disagree with my back-office reference to Ireland but that's my current understanding. London has c. 8 million people and is fairly self-sustaining, economy-wise IMO. Dublin isn't IMO.

Mic 1972

PropQueries wrote: »

Basically Brexit hasn't collapsed or won't collapse the UK economy like some in the media were and continue to appear to be portraying IMO

on the other hand the pandemic has collapsed every country the same, so why would anyone leave London to go to another collapsed country?

hometruths

PropQueries wrote: »

It's a talking point, but that's about it in the vast majority of cases. If a regular person's house falls by 50%, do they really care if they still have their job?

If there is one thing we learnt from the last crash it’s that people really do care if their house drops in value by 50%. No matter how much people might say now it doesn’t matter, it’s my home it’s not an investment, if prices drop by 50% we will hear all about the hell of living with negative equity again.

PropQueries

Mic 1972 wrote: »

on the other hand the pandemic has collapsed every country the same, so why would anyone leave London to go to another collapsed country?

I think you're overestimating the impact on different countries.

Eastern EU countries are relatively fine compared to the west as they didn't start out with our debt levels or the artificially high cost of living.

Eastern EU countries are actually on the cusp of growing massively due the influx of highly educated and highly trained returning emigrants from the west IMO

PropQueries

schmittel wrote: »

If there is one thing we learnt from the last crash it’s that people really do care if their house drops in value by 50%. No matter how much people might say now it doesn’t matter, it’s my home it’s not an investment, if prices drop by 50% we will hear all about the hell of living with negative equity again.

Negative equity is a completely different kettle of fish

But most who bought up to the year 2001 really didn't care about the property crash last time.

Of course, if they used that equity to invest in other properties or to pay for that holiday home in Bulgaria that's also different.

This time we really don't have that problem, so I think even less people would care if property prices fell by 50%+ IMO

Cyrus

schmittel wrote: »

If there is one thing we learnt from the last crash it’s that people really do care if their house drops in value by 50%. No matter how much people might say now it doesn’t matter, it’s my home it’s not an investment, if prices drop by 50% we will hear all about the hell of living with negative equity again.

The media promoted that drivel aswell it was such utter nonsense, trapped in a negative equity hell.

Cyrus

PropQueries wrote: »

Apparently c. 700,000 people have left London since the pandemic started.

Any ideas on how many have left Dublin as the Irish media seem to be very quite on that front here? It's actually a very big question given all the analysis on WFH, future of the city etc. IMO

Link to article in Irish Times on 700,000 leaving London here: https://www.irishtimes.com/news/world/uk/covid-19-london-s-population-fell-by-700-000-amid-exodus-of-foreign-born-residents-from-uk-1.4458762

Would it maybe make sense that 100s of thousands of hospitality workers and the like left London given the sector was closed and there wasn’t much point staying there paying London rents.

I’d imagine they will be back as soon as the world opens again.

PropQueries

Cyrus wrote: »

Would it maybe make sense that 100s of thousands of hospitality workers and the like left London given the sector was closed and there wasn’t much point staying there paying London rents.

I’d imagine they will be back as soon as the world opens again.

I agree. All I'm wondering is if a similar percentage left Dublin.

Timing belt

Cyrus wrote: »

Would it maybe make sense that 100s of thousands of hospitality workers and the like left London given the sector was closed and there wasn’t much point staying there paying London rents.

I’d imagine they will be back as soon as the world opens again.

The big question is have property prices collapsed with the 700k leaving If not then people must be expecting most of them to return once things open up.

PropQueries

Timing belt wrote: »

The big question is have property prices collapsed with the 700k leaving If not then people must be expecting most of them to return once things open up.

Back in 2018, The Guardian reported:

"Ghost towers: half of new-build luxury London flats fail to sell. Developers have 420 towers in pipeline despite up to 15,000 high-end flats still on the market"

Very very similar to Dublin pre-covid IMO. What will be different post-covid?

Link to article here: https://www.theguardian.com/business/2018/jan/26/ghost-towers-half-of-new-build-luxury-london-flats-fail-to-sell

cnocbui

PropQueries wrote: »

I think you're overestimating the impact on different countries.

Eastern EU countries are relatively fine compared to the west as they didn't start out with our debt levels or the artificially high cost of living.

Eastern EU countries are actually on the cusp of growing massively due the influx of highly educated and highly trained returning emigrants from the west IMO

What do yo base that on? Currently they are all basically static in net migration terms. The only outliers with any net immigration are Czechia and Ukraine.

https://www.indexmundi.com/map/?v=27&r=eu&l=en

PropQueries

cnocbui wrote: »

What do yo base that on? Currently they are all basically static in net migration terms. The only outliers with any net immigration are Czechia and Ukraine.

https://www.indexmundi.com/map/?v=27&r=eu&l=en

I'm basing my opinion on an article in The Economist on the 30th January 2021:

"How the pandemic reversed old migration patterns in Europe"

"In 2020 Europe saw a great reverse migration, as those who had sought work abroad returned home. Exact numbers are hard to come by. An estimated 1.3m Romanians went back to Romania—equivalent to three times the population of its second-biggest city. Perhaps 500,000 Bulgarians returned to Bulgaria—a huge number for a country of 7m. Lithuania has seen more citizens arriving than leaving for the first time in years. Other measures show the same. In Warsaw, dating apps brim with returning Poles looking for socially undistanced fun."

Link to article in The Economist here: https://www.economist.com/europe/2021/01/30/how-the-pandemic-reversed-old-migration-patterns-in-europe

Timing belt

PropQueries wrote: »

Back in 2018, The Guardian reported:

"Ghost towers: half of new-build luxury London flats fail to sell. Developers have 420 towers in pipeline despite up to 15,000 high-end flats still on the market"

Very very similar to Dublin pre-covid IMO. What will be different post-covid?

Link to article here: https://www.theguardian.com/business/2018/jan/26/ghost-towers-half-of-new-build-luxury-london-flats-fail-to-sell

very similar to Dublin as you would expect with similar affordability issues

https://www.mylondon.news/news/property/london-property-19-areas-london-19796990

PropQueries

Timing belt wrote: »

very similar to Dublin as you would expect with similar affordability issues

https://www.mylondon.news/news/property/london-property-19-areas-london-19796990

On the 12th February 2012, according to the Financial Times:

"City centre housing rents fall as tenants move to suburbs"

"Rents fell last year by 8.3 per cent in Greater London, the steepest annual fall since the financial crisis of 2008, according to a report published this week by property website Zoopla. Rents also fell in Manchester, Birmingham, Edinburgh and Aberdeen, albeit by smaller margins."

Lets see how quickly property values follow the rental income falls. How long can those investors in those pre-covid empty apartments prevail for?

Link to FT article here: https://www.ft.com/content/5b5e0c37-a14c-4044-86d7-7ed78474dbfb