Irish Property Market chat II - read mod note post #1 before posting

awec · 19-05-2021 11:48AM

enricoh wrote: »

If anyone told my missus in 2006 when she was buying her 3 bed semi that it'd be still worth less than she paid for it in 2021 they'd be considered full of **** too!

Yes, and it would have been a lucky guess for anyone who got it right.

Nobody has any idea what rents will be in 10 years time. They could be 10% of current rates. They could be 50% of current rates. They could be 500% of current rates. Nobody knows, it's too far in the future.

If anyone is making out like they know what's going to happen, if anyone is talking about that far out with any sort of certainty then they are full of it.

Marius34 · 19-05-2021 11:54AM

yagan wrote: »

Their prediction would have been wrong, but you attacking them as full of shíite is wrong and rude.

I don't consider those still in negative equity as being full of shíte. Do you?

No, I feel sorry for the unlucky ones.

yagan · 19-05-2021 11:56AM

awec wrote: »

Yes, and it would have been a lucky guess for anyone who got it right.

Nobody has any idea what rents will be in 10 years time. They could be 10% of current rates. They could be 50% of current rates. They could be 500% of current rates. Nobody knows, it's too far in the future.

If anyone is making out like they know what's going to happen, if anyone is talking about that far out with any sort of certainty then they are full of it.

But we can speculate. A prediction is not a claim on the future like a mortgage is.

Being defensively fractious with others predictions only betrays a personal fixed position.

awec · 19-05-2021 11:59AM

yagan wrote: »

Proffering a prediction is not projection onto others.

A prediction is not a fact, and predictions change as the facts as we know them change.

A projection is an assumed fact because once financially committed to a 10-20-30 year debt speculation becomes irrelevant.

It is not predictions that are the problem, there are lots of interesting viewpoints offered up on here.

But if for example, I constantly "predicted" that prices were going to go up 100% in the next year, and linked articles where I deliberately misrepresented the content of those articles to back it up, or where I deliberately misrepresented facts to back this up, or where I linked articles on totally different subjects and drew incredibly tenuous conclusions to once again push the dogmatic viewpoint that I hold, and I kept posting this over and over again then it would get annoying pretty quickly for everyone else.

awec · 19-05-2021 12:00PM

yagan wrote: »

But we can speculate. A prediction is not a claim on the future like a mortgage is.

Being defensively fractious with others predictions only betrays a personal fixed position.

Speculation and wild supposition are not the same thing.

yagan · 19-05-2021 12:02PM

Marius34 wrote: »

No, I feel sorry for the unlucky ones.

Do you think the housing bust was just bad luck?

Cyrus · 19-05-2021 12:04PM

yagan wrote: »

Proffering a prediction is not projection onto others.

it is when you dominate the thread with your predictions and when you take the most tenuous leaps to 'support' those predictions.

Marius34 · 19-05-2021 12:07PM

yagan wrote: »

Do you think the housing bust was just bad luck?

For the person who bought home in 2006, had a bad luck. Back in 2006, it would have been difficult to predict, that that there will be a massive property price crash.

yagan · 19-05-2021 12:10PM

awec wrote: »

Speculation and wild supposition are not the same thing.

All wild suppositions are speculations.

I'm not stating this to be contrary, but new facts are emerging everyday that change yesterdays speculations.

The arse could fall out of the index fund bubble tomorrow and cement mixers would grind to a halt and completely alter all our wildest predictions.

While I argued with family and friends in 06-08 about the bubble I was also shocked by how bloody awful and deep the reversal was when it came.

PropQueries · 19-05-2021 12:11PM

Marius34 wrote: »

For the person who bought home in 2006, had a bad luck. Back in 2006, it would have been difficult to predict, that that there will be a massive property price crash.

According to David McWilliams/Davy Stockbrokers back in 2006:

"There are an estimated 230,000 vacant properties in Ireland, according to Davy Stockbrokers. This figure is substantiated by this year’s reports from the census gatherers, who found a surplus of vacant houses for which nobody answered the census. Following discussions with local estate agents, neighbours and postmen, they concluded that many properties had never been lived in or were long-term vacant."

Doesn't seem to me that it would have been too difficult to predict what was about to happen back in 2006 IMO

Link here: http://www.davidmcwilliams.ie/a-warning-from-deserted-ghost-estates/

timmyntc · 19-05-2021 12:11PM

Marius34 wrote: »

For the person who bought home in 2006, had a bad luck. Back in 2006, it would have been difficult to predict, that that there will be a massive property price crash.

Plenty of people did predict it though - the majority didnt see it but plenty of minority commentators did.

Some got a nice cheap house in 2011/2012 when the market bottomed out too.

It's not impossible to see when we're in a bubble - predicting when the bubble bursts is the hard part.

awec · 19-05-2021 12:14PM

timmyntc wrote: »

Plenty of people did predict it though - the majority didnt see it but plenty of minority commentators did.

Some got a nice cheap house in 2011/2012 when the market bottomed out too.

It's not impossible to see when we're in a bubble - predicting when the bubble bursts is the hard part.

Again though, people who bought in 11/12 had no idea whatsoever they were buying at the bottom, it was luck.

There were people on this forum in 11/12 saying that anyone buying was crazy, prices were still going to go off a cliff.

Marius34 · 19-05-2021 12:16PM

timmyntc wrote: »

Plenty of people did predict it though - the majority didnt see it but plenty of minority commentators did.

Some got a nice cheap house in 2011/2012 when the market bottomed out too.

It's not impossible to see when we're in a bubble - predicting when the bubble bursts is the hard part.

There are minority of people who always feel living in crisis, and see worst is coming constantly. So yes, at some points they get it right, it doesn't mean that they are good in predicting future.

L1011 · 19-05-2021 12:17PM

awec wrote: »

Again though, people who bought in 11/12 had no idea whatsoever they were buying at the bottom, it was luck.

There were people on this forum in 11/12 saying that anyone buying was crazy, prices were still going to go off a cliff.

There were plenty of people who told me I was mad buying three months before TRS was ending as prices would absolutely fall by the TRS value (which was only a few grand, it was extended a few times though) and then some in January 2013. Never happened even though this really looked like it could happen - far more sane basis than many arguments being put through now.

PropQueries · 19-05-2021 12:18PM

awec wrote: »

Again though, people who bought in 11/12 had no idea whatsoever they were buying at the bottom, it was luck.

There were people on this forum in 11/12 saying that anyone buying was crazy, prices were still going to go off a cliff.

And, they would have been correct if the Government didn't invite the funds in to purchase c. €200 Billion in distressed Irish bank assets the following year. What the funds are currently planning to do with many of those remaining assets is anyone's guess, but I believe an exit (sooner rather than later) would be firmly on their agenda IMO

Will such funds be as interested next time? For them to be as interested next time, property prices would probably need to fall substantially again. And, even then, I don't believe they would be that interested IMO

yagan · 19-05-2021 12:20PM

Marius34 wrote: »

For the person who bought home in 2006, had a bad luck. Back in 2006, it would have been difficult to predict, that that there will be a massive property price crash.

From what I saw amongst family and friends at the time those who cited luck as the main factor for the bust never made any predictions to begin with.

yagan · 19-05-2021 12:24PM

PropQueries wrote: »

And, they would have been correct if the Government didn't invite the funds in to purchase c. €200 Billion in distressed Irish bank assets the following year. What the funds are currently planning to do with many of those remaining assets is anyone's guess, but I believe an exit (sooner rather than later) would be firmly on their agenda IMO

Will such funds be as interested next time? For them to be as interested next time, property prices would probably need to fall substantially again. And, even then, I don't believe they would be that interested IMO

This is where I speculate that we may possibly see a slow correction as the rental funds now invested in our market will only be doing asset writedowns on a phased basis, it might feel more like a slow bleed.

Cyrus · 19-05-2021 12:33PM

awec wrote: »

Again though, people who bought in 11/12 had no idea whatsoever they were buying at the bottom, it was luck.

There were people on this forum in 11/12 saying that anyone buying was crazy, prices were still going to go off a cliff.

you need only look at the threads on the property pin at the time, some thought there was no floor, and when prices began to recover they recovered pretty quickly.

PropQueries · 19-05-2021 12:38PM

Cyrus wrote: »

you need only look at the threads on the property pin at the time, some thought there was no floor, and when prices began to recover they recovered pretty quickly.

But the recovery in property prices had very little to do with fundamentals at that time. The funds came in and purchased c. €200 Billion in distressed Irish assets (and mopped up most of that pre-crash over-supply with a significant percentage of that pre-crash over-supply still sitting vacant on their books IMO) and interest rates went lower and lower.

Going forward, the same dynamics are most likely going to take effect but in reverse i.e. the funds will most likely be looking to exit and interest rates will most likely start moving upwards IMO

Cyrus · 19-05-2021 12:46PM

PropQueries wrote: »

But the recovery in property prices had very little to do with fundamentals at that time. The funds came in and purchased c. €200 Billion in distressed Irish assets (and mopped up most of that pre-crash over-supply with a significant percentage of that pre-crash over-supply still sitting vacant on their books IMO) and interest rates went lower and lower.

Going forward, the same dynamics are most likely going to take effect but in reverse i.e. the funds will most likely be looking to exit and interest rates will most likely start moving upwards IMO

what are the fundamentals?

yagan · 19-05-2021 12:52PM

PropQueries wrote: »

Going forward, the same dynamics are most likely going to take effect but in reverse i.e. the funds will most likely be looking to exit and interest rates will most likely start moving upwards IMO

I chime with some funds exiting, but I'm still on the fence about inflation.

The lumber price rise that Warren Buffet cited stoked lots of debate about inflation in the USA but has already started abating as supply chains catch up.

In ireland it takes weeks for a supplier like Kilsaran to ramp back up to where they were before the shutdowns so it will be interesting to hear if anyone has any information on gate volume at their mines.

yagan · 19-05-2021 12:54PM

Cyrus wrote: »

what are the fundamentals?

What they were in 2011/12 is different to what they are now.

I'd cite the government and investor funds outbidding home buyers as a fundamental distortion to the market.

PropQueries · 19-05-2021 12:58PM

Cyrus wrote: »

what are the fundamentals?

Well. given the significant over-supply of post-crash housing that existed in 2011 and that net inward migration was still negative until c. 2015.

The only plausible explanation for property prices rising post 2012 are the funds and their purchase of c. €200 Billion in distressed Irish assets over that period IMO

Well, that and the impact of AirBnB etc. on the supply of properties being available to both renters and buyers during that period. I would throw in other stuff but I think the above two points account for much of the "supply problem" and property price increases between 2012 and 2016 IMO

Murph85 · 19-05-2021 01:18PM

even when the next economic bust comes, liked covid in terms of jobs, it will be the same crowd mostly or entirely effected again, private sector and mostly those who landed up on the PUP this time. Supply will go to **** again obviously... Any PS cuts will be peanuts most likely, and any one qualifying for a mortgage, will be earning the marginal rate, I mean a 3% pay cut, is effectively a 1.5% pay cut...

God knows how this will all pan out, would love to have a crystal ball, offering us a look at up to ten years down the road...

The celtic tiger boom, we were throwing out 130,000 houses a year I believe? what was it the boom that ended with covid? 20,000 ish?

Murph85 · 19-05-2021 01:20PM

awec wrote: »

Again though, people who bought in 11/12 had no idea whatsoever they were buying at the bottom, it was luck.

There were people on this forum in 11/12 saying that anyone buying was crazy, prices were still going to go off a cliff.

its a mix of skill, savy and luck, it is absolutely luck , if you happen to have bought at the exact bottom, as its not obvious it was the bottom, until a good time later...

yagan · 19-05-2021 01:22PM

PropQueries wrote: »

Well. given the significant over-supply of post-crash housing that existed in 2011 and that net inward migration was still negative until c. 2015.

The only plausible explanation for property prices rising post 2012 are the funds and their purchase of c. €200 Billion in distressed Irish assets over that period IMO

Well, that and the impact of AirBnB etc. on the supply of properties being available to both renters and buyers during that period. I would throw in other stuff but I think the above two points account for much of the "supply problem" and property price increases between 2012 and 2016 IMO

I wonder if the funds that spurred so much development had added in the AirBnB distortion to their yield projections?

After a year of international travel restrictions I'd forgotten the AirBnB effect that so surprised Eoghan Murphy when they suddenly started appearing on the long term rental market.

Murph85 · 19-05-2021 01:24PM

PropQueries wrote: »

I don't believe I ever said one single thing, more that many single things will join together at one moment and soon IMO

For example, there was a poster a few days ago asking about investing in a one bed apartment in Citywest and renting it out for €1,300 per month.

Does anyone truly believe that a one bedroom apartment in Citywest will be renting for €1,300 per month in ten years time. That matters to this years property market, as an investor would need to be confident that rents will be at least similar to today in ten years time to justify paying a certain price today for such an apartment.

From just three or many more possible imminent threats to the property market.

Given the probable exponential advance of remote working over such a time period, a significant reduction in student numbers etc. in the city and throw in, not just the proposed Biden global tax reforms on future FDI but also the EU's proposed new replacement for the CCCTB as reported yesterday, there's every reason to believe that both rents and property prices in Dublin will be significantly lower in 10 years time IMO

And, if one believes that rents are going to be significantly lower in ten years time, that means properties being purchased today as an investment should be priced (or will begin to be priced very shortly) significantly lower in today's market to take account of that changed future IMO

Link to RTE article on the EU's new replacement for the CCCTB here: https://www.rte.ie/news/business/2021/0518/1222387-european-union-tax-plan/

all very plausible BUT we are living in the here and now, your predictions may come true. But what are you going to do in the mean time? live at home wel into your thirties? pay extortionate rents meaning you cant save, so even if property prices collapse, you still cant benefit from it? emigrate or wait for over a decade on the housing list? because they are the options...

Id say we will see a lot of emigration again soon, and laughably, many males, in the trades, that we desperately need..

L1011 · 19-05-2021 01:28PM

PropQueries wrote: »

(and mopped up most of that pre-crash over-supply with a significant percentage of that pre-crash over-supply still sitting vacant on their books IMO)

Where? Where do funds have significant amounts of 14+ year built property sitting empty?

Your over-used Business Post link about the new blocks of Clancy Quay would be misrepresentation so don't bother linking to it.

timmyntc · 19-05-2021 01:36PM

awec wrote: »

Again though, people who bought in 11/12 had no idea whatsoever they were buying at the bottom, it was luck.

There were people on this forum in 11/12 saying that anyone buying was crazy, prices were still going to go off a cliff.

I agree, buying at the bottom is pure luck. But buying at the top is crazy. You do have to ask yourself - is it really worth this much?

Current property prices are clearly overvalued - how long it will remain this way who knows, but unless you *need* to buy, you should hold off.

yagan · 19-05-2021 01:37PM

Murph85 wrote: »

Id say we will see a lot of emigration again soon, and laughably, many males, in the trades, that we desperately need..

There isn't the same demand now in Canada and Oz as there was when China went on a commodities spending spree after 08.

Once the new mining operations were online to meet Chinese demand in many places like Western Australia tradesperson movement went into reverse.

I can see more building opportunities for regenerations in Irish towns if WFH becomes the norm.

Irish Property Market chat II - *read mod note post #1 before posting*

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Irish Property Market chat II - read mod note post #1 before posting