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

awec wrote: »

Yes.

It is often said on here that Ireland's housing market (buying, not renting) is crazy, yet the stats suggest that we are in line with Europe. We also know that the current market is still significantly below 2008 levels.

So, putting the supply issues to the side (a big issue to put aside, I agree), would it be a really bad read to think that the market here is actually not as crazy as has been made out?

I'm not sure comparing current prices with 2008 levels is the best way of determining if prices are too high or low though? I know every country had a property bubble, but I feel like our one was particularly mental? I can't remember exact figures but saw some mental stats on LTI levels in that year in Ireland.

Looking at percentage growth rates from one period to the next and comparing countries assumes we all started from the same point.

And even with our other counterparts, just cause we are in line with them, maybe they are just as unaffordable as we are. It's an interesting comparison but don't think it should be a case of saying "sure it's awful elsewhere too so it's grand". We should aspire to be better.

To my mind, the only way to determine if property is affordable/sustainable is to compare it to household incomes (theoretically net, but since lending is based on gross, use that). Particularly in Dublin (and probably Cork/Galway), the data seems pretty clear to me that house prices in those areas cannot be supported by the income of the people in those areas, and is therefore above it's fundamental value. Don't think it's crazy. 2012 prices today would clearly be ridiculous. Maybe somewhere in the region of 10-15% below current levels would appear sustainable in the long term.

Ush1 wrote: »

Yeah not sure it's worth that but lovely house now in fairness.

Considering what you can get up on Iona road and other better, nicer and quieter roads in Drumcondra I couldn't fathom the price myself. Still, best of luck to them if they can get it.

Still no signs of meaningful inflation in Ireland's CPI.

https://www.cso.ie/en/releasesandpublications/er/cpi/consumerpriceindexmarch2021/

The CPI is equal to what it was a year ago and if you take into account the vat rate moving from 21% to 23% in March it would indicate that Year on Year we are still seeing deflation in the CPI while asset prices continue to rise.

DataDude wrote: »

I'm not sure comparing current prices with 2008 levels is the best way of determining if prices are too high or low though? I know every country had a property bubble, but I feel like our one was particularly mental? I can't remember exact figures but saw some mental stats on LTI levels in that year in Ireland.

Looking at percentage growth rates from one period to the next and comparing countries assumes we all started from the same point.

And even with our other counterparts, just cause we are in line with them, maybe they are just as unaffordable as we are. It's an interesting comparison but don't think it should be a case of saying "sure it's awful elsewhere too so it's grand". We should aspire to be better.

To my mind, the only way to determine if property is affordable/sustainable is to compare it to household incomes (theoretically net, but since lending is based on gross, use that). Particularly in Dublin (and probably Cork/Galway), the data seems pretty clear to me that house prices in those areas cannot be supported by the income of the people in those areas, and is therefore above it's fundamental value. Don't think it's crazy. 2012 prices today would clearly be ridiculous. Maybe somewhere in the region of 10-15% below current levels would appear sustainable in the long term.

Very good point here - what is sustainable to bring prices to a range which is affordable to a greater number of people. Home owenstship % has fallen if I’ve read correctly elsewhere? At what prices(s) does that trend reverse.

SheroP wrote: »

Not sure if posting in the correct forum, but what are peoples views on selling a property privately, ie no estate agent involved?? Are there any pitfalls??

You might miss out on a pool of buyers, but in this market, unlikely. You'll get a few tyre kickers wanting to see what hand soap you use etc.
You might not be able to suss out a timewaster as well as an EA can; specify any offer must close in x days, take a deposit via your solicitor if possible.

Stick a big sign outside your gaff and see what happens. List it on all the free-to-list sites you find.

Use a disposable phone, not your own one.

johnnyskeleton wrote: »

If you're happy, and they're happy, what's the problem?

Fair enough
Auctioneers were advising doing work to improve the saleability of property, these purchasers are happy enough as is , just a little concerned I’m undervaluing property, but happy not to have tyre kickers trapsing thru house -quick sale, light profit so to speak !!

Balluba wrote: »

Angela Keegan director Myhome.ie says that she expects transaction prices to be lower than asking prices and she also seems to suggest that supply is not as low as some say. I’m left wondering just what the truth is.

Here's the article:

https://www.irishtimes.com/business/economy/house-prices-rise-1-in-dublin-in-q1-but-fall-in-rest-of-country-1.4532382

Personally, I've only heard of houses going for well over the asking price, but this is of course anecdotal.

One thing to bear in mind is that the market at the moment is still disturbed due to lockdowns. Virtual viewings and "bid to view" are affecting prices in ways that would not happen in a normal market. Perhaps more properties will come on the market as restrictions ease. We shall see.

awec wrote: »

They aren't.

Big difference between going sale agreed and actually closing the sale.

This is true, but this is not a healthy way to transact business. If I were to make an offer on a home and have it accepted, then I would consider myself ethically obliged to purchase that property. Equally, if I accepted an offer from a buyer, then I would consider myself bound to sell the property to him.

To me, this "go sale agreed to view" cheapens the very concept of the sale-agreed status. In addition to the driving up of prices due to people's bidding on properties simply to view them, this is why the current process at work both worries and disgusts me.

thanks to all for help

RichardAnd wrote: »

This is true, but this is not a healthy way to transact business. If I were to make an offer on a home and have it accepted, then I would consider myself ethically obliged to purchase that property. Equally, if I accepted an offer from a buyer, then I would consider myself bound to sell the property to him.

To me, this "go sale agreed to view" cheapens the very concept of the sale-agreed status. In addition to the driving up of prices due to people's bidding on properties simply to view them, this is why the current process at work both worries and disgusts me.

Sometimes it can be out of your control though.
If the banks turns around and refuses to give you the loan then you really cant do anything about it no matter how guilty you feel.

JimmyVik wrote: »

Sometimes it can be out of your control though.
If the banks turns around and refuses to give you the loan then you really cant do anything about it no matter how guilty you feel.

Well yes, this is true. What I mean really is that to simple change one's mind after making a deal without external factors is not good business practice. It's akin to the guy on adverts.ie who promises to buy a guitar you're selling only to never answer the PMs!

awec wrote: »

The whole point of sale agreed is a halfway house between being for sale and actually sold. It's the time when someone indicates they do want to buy, but the i's need dotted and the t's crossed before they can legally commit to it.

It's a very necessary stage of the process as it provides some protection for both the buyer and seller to ensure everything is ok. For example, imagine you were selling your house and buying another one, but your purchase falls through as you find the house you wanted to buy is structurally unsound or something. You are hardly going to go through with your sale and leave yourself with no home.

I think, in these times, physically seeing the property and finding that it was not as advertised is a perfectly legitimate reason for backing out and is not at all ethically questionable.

Agreed, but in normal times, one would have seen the property and inspected it before making an offer. These are not normal times, but I am concerned that some of what we're seeing now could carry over into the post-lockdown market.

Just to be clear, I dont' consider the Sale Agreed status to be binding, but to me, it seems wrong to agree to a sale on a house I've never seen.

Instead of the bid-to-view/sale-agree model that seems to be evolving, I think it would be better for prospective buyers to prove their funding before being giving a viewing. It would limit unnecessary viewings without accruing bids that only serve to drive the price up artificially.