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

Mad_maxx · 19-05-2021 01:38PM

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.

The property pin is a cranks charter

I uses to browse it in 2012 , most claimed one bed apartments in D7 were heading for 50k

Site for oddball cranks

Cyrus · 19-05-2021 01:45PM

Mad_maxx wrote: »

The property pin is a cranks charter

I uses to browse it in 2012 , most claimed one bed apartments in D7 were heading for 50k

Site for oddball cranks

you should see it now :eek:

there were some excellent posters but since long gone.

Cyrus · 19-05-2021 01:46PM

yagan wrote: »

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.

if they are different then they arent fundamental are they.

DataDude · 19-05-2021 01:53PM

timmyntc wrote: »

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.

I'd agree that in real terms (relative to wages) it seems fairly clear that the current affordability issues won't be sustainable for too long. But if you bake in expectations of future inflation then in nominal terms prices might not necessarily fall into the future, and could grow significantly.

No strong views no what we'll see on that front. People smarter than I articulating clearly cases both for and against it.

Villa05 · 19-05-2021 01:55PM

timmyntc wrote:

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

Most of the people wheeled out by the media were paid cheerleades/economists for the various sectors profiteering from housing. I'm not aware of any in that sector that flagged any danger.

Most independent experts were at the very least were expressing extreme caution with many predicting a significant collapse

Marius34 wrote:

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.

I think even on here that the vast majority know that housing policies are a disaster, getting worse and will eventually lead to a collapse

Would you dis/agree?

Murph85 · 19-05-2021 01:56PM

timmyntc wrote: »

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.

its complex... What do you do when you are being ROBBED on rent? they are borrowing tens of billions to avoid reality now, how long before the music stops and THEN what happens? I would wager the same as last recession, borrow everything they can to avoid reform and cuts and the young and youngish act as a release valve, emigrate in their droves. Its a pity, in a way it would be better if they stayed here, cost billions extra in welfare, that would force some reform of how the state operates

yagan · 19-05-2021 01:58PM

Cyrus wrote: »

if they are different then they arent fundamental are they.

I assume you'd cite home formation as a fundamental, and if so home formers are being currently outbid by the government they fund and investment funds, ergo the fundamentals have changed.

That fundamental reverting back to the home formers depends on government policy change and perhaps the new stamp duty rate tips the dial back in the home formers favour.

yagan · 19-05-2021 02:00PM

Murph85 wrote: »

its complex... What do you do when you are being ROBBED on rent? they are borrowing tens of billions to avoid reality now, how long before the music stops and THEN what happens? I would wager the same as last recession, borrow everything they can to avoid reform and cuts and the young and youngish act as a release valve, emigrate in their droves. Its a pity, in a way it would be better if they stayed here, cost billions extra in welfare, that would force some reform of how the state operates

Cost billions in welfare? How many billions were spent outbidding those with jobs?

Marius34 · 19-05-2021 02:05PM

Villa05 wrote: »

I think even on here that the vast majority know that housing policies are a disaster, getting worse and will eventually lead to a collapse

Would you dis/agree?

Some things I agree, other things disagree. I don't have straight forward opinion here, as it's a complex situation, that will not be solved any time soon regardless, if economy do not collapse.

javaboy · 19-05-2021 02:18PM

timmyntc wrote: »

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.

I would argue that buying at (or very near) the bottom is less likely to be pure luck than buying at the top. If property prices are "clearly overvalued", that implies there's some way of measuring when they're offering good value for money e.g. median wage*x for a 3-bed semi or whatever.

You can't put everybody's decisions down to pure luck.

PropQueries · 19-05-2021 02:19PM

Dr. Rory Hearne has just published his opinion on the Government's proposed solutions to the funds bulk buying of homes, with him stating that:

"Investors received a clear message from Government last night - keep buying, you're flying"

Link to his opinion piece in The Journal here: https://www.thejournal.ie/readme/government-cuckoo-funds-ires-reit-5441281-May2021/

Villa05 · 19-05-2021 02:23PM

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.

If I remember correctly, the poster that started the very informative thread in 2006
"its the empties stoopid"

Using never before used Esb data and multiple other sources to determine the true scale of empty homes, long before the topic entered mainstream media

Was the same person that started the thread

"..... Calls the bottom" in Dublin Galway in early 2012

I think it was the poster 2Pack

Both threads had detailed analysis, reasoning and statistics to back up the case

timmyntc · 19-05-2021 02:32PM

javaboy wrote: »

I would argue that buying at (or very near) the bottom is less likely to be pure luck than buying at the top. If property prices are "clearly overvalued", that implies there's some way of measuring when they're offering good value for money e.g. median wage*x for a 3-bed semi or whatever.

You can't put everybody's decisions down to pure luck.

Its clear when property is overvalued - whether that be from supply shortages or other reasons, - you can base the "good value" price on construction costs, land costs, and yes some relation of affordability to the average salary in the area. Identifying the absolute peak is difficult, but its easy to say we are well above normal, and well above "value for money".

Seeing the bottom is a different story though, properties were undervalued at that stage due to such a glut of supply and non-existent demand. Country was reeling, and prices were plummeting, but you couldnt calculate what price they would fall to - because it was purely supply vs demand taken to the other extreme.

A functioning market does not see houses go up for sale well below cost price, because it isnt profitable to build them in the first place. So when it does happen, it is very unusual and not easily predictable if at all.

yagan · 19-05-2021 02:38PM

Cyrus wrote: »

you should see it now :eek:

there were some excellent posters but since long gone.

I think The Fantasy Pump would be a more apt name for it now judging by all the anti vaxxer nonsense on it now.

Marius34 · 19-05-2021 02:39PM

timmyntc wrote: »

Its clear when property is overvalued - whether that be from supply shortages or other reasons, - you can base the "good value" price on construction costs, land costs, and yes some relation of affordability to the average salary in the area. Identifying the absolute peak is difficult, but its easy to say we are well above normal, and well above "value for money".

Seeing the bottom is a different story though, properties were undervalued at that stage due to such a glut of supply and non-existent demand. Country was reeling, and prices were plummeting, but you couldnt calculate what price they would fall to - because it was purely supply vs demand taken to the other extreme.

A functioning market does not see houses go up for sale well below cost price, because it isnt profitable to build them in the first place. So when it does happen, it is very unusual and not easily predictable if at all.

No, it's not easy. Are we above normal? Depends who you ask, and the basis on which it is estimated "normal".

Browney7 · 19-05-2021 02:43PM

Murph85 wrote: »

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..

I feel what's fuelling public discontent (based on commentary but an election may prove otherwise) is that a sizable proportion of the population (and getting larger) feel their choices are very limited and none very palatable and this is being seen by extended family members ("our Johnny has a great job up in Dublin and paying 1200 for a room or 2 grand for an apartment" kind of thing)

The choice available to "buying units" (couples and singles) seems to be as follows:

1) Win a decent chunk on the lotto, bitcoin etc or become a C suite executive in a big tech of FIRE firm or a hospital consultant and just buy what you want. Or else wait for your parents to die and get their house and or money.

2) if you have a 30 or 40 grand deposit, and say 350k of mortgage approval (100k salary for buying purposes: 2 teachers or a well paid 30 something IT, finance professional), bite the bullet and you may get a new build out beyond Maynooth or down in Wexford or Drogheda and some options in North county Dublin. Existing stock at this price range is perceived as being in less than salubrious areas and often of poor quality (needs more money that you can't get mortgage approved for or savings together for) or else not future proofed for life changes (kids in a 2 bed apartment isn't doable for long). People are also somewhat scarred from the bust ("my mate had a one bed and couldn't sell it when the time came to have a family what if the same happens to you" kind of schtick).

Call this the :"Tis a bleedin rip off Joe" effect.

3) if unwilling or unable to do this, move well out of Dublin to near home or somewhere remote, maybe take a paycut, build your own if you can get land and planning or else buy something if you can. Due to jobs, not an option for everyone. People may also worry about career progression but WFH may alleviate this. This is likely an option for teachers and nurses who's salary is the same in Dublin as in Limerick or Leitrim for example.

"We're being driven out of Dublin Joe"

4) if you don't have a deposit, move home to parents if possible or pay rent (which is expensive in Dublin). Places are hard to find, had been a bit of a lottery to get places at somewhat reasonable rents (1500 for a 2 bed, 1300 for a one bed). Plenty availability if you go for 1800 for a one bed and 2200 for a 2 bed if you do business with Mr REIT. Also move out of Dublin and rent somewhere cheaper if you can. Suck it and see and get your deposit and go to step 2.

"We're putting out lives on hold Joe, what if I can't have kids Joe when the time comes, we're running out of time".

5) you may be happy enough with the status quo for you at present and hope things settle down in a while but are fearful of what happens in two or three years if it still persists.

6) emigrate and experience life somewhere else for a while.

People are not able to view the next five years with any sense of hope or a view of, "it's going to get better for us". If you're renting, all you're seeing is new apartments being built and very high rents which greatly hinder your ability to save if you rent them. You earn too much for HAP.

If you're looking at buying, all you see is bidding wars and councils buying up all they can or even investors buying all they can to lease to the councils.

All seems like a terrible clusterf**k to me.

PropQueries · 19-05-2021 02:50PM

Browney7 wrote: »

I feel what's fuelling public discontent (based on commentary but an election may prove otherwise) is that a sizable proportion of the population (and getting larger) feel their choices are very limited and none very palatable and this is being seen by extended family members ("our Johnny has a great job up in Dublin and paying 1200 for a room or 2 grand for an apartment" kind of thing)

The choice available to "buying units" (couples and singles) seems to be as follows:

1) Win a decent chunk on the lotto, bitcoin etc or become a C suite executive in a big tech of FIRE firm or a hospital consultant and just buy what you want. Or else wait for your parents to die and get their house and or money.

2) if you have a 30 or 40 grand deposit, and say 350k of mortgage approval (100k salary for buying purposes: 2 teachers or a well paid 30 something IT, finance professional), bite the bullet and you may get a new build out beyond Maynooth or down in Wexford or Drogheda and some options in North county Dublin. Existing stock at this price range is perceived as being in less than salubrious areas and often of poor quality (needs more money that you can't get mortgage approved for or savings together for) or else not future proofed for life changes (kids in a 2 bed apartment isn't doable for long). People are also somewhat scarred from the bust ("my mate had a one bed and couldn't sell it when the time came to have a family what if the same happens to you" kind of schtick).

Call this the :"Tis a bleedin rip off Joe" effect.

3) if unwilling or unable to do this, move well out of Dublin to near home or somewhere remote, maybe take a paycut, build your own if you can get land and planning or else buy something if you can. Due to jobs, not an option for everyone. People may also worry about career progression but WFH may alleviate this. This is likely an option for teachers and nurses who's salary is the same in Dublin as in Limerick or Leitrim for example.

"We're being driven out of Dublin Joe"

4) if you don't have a deposit, move home to parents if possible or pay rent (which is expensive in Dublin). Places are hard to find, had been a bit of a lottery to get places at somewhat reasonable rents (1500 for a 2 bed, 1300 for a one bed). Plenty availability if you go for 1800 for a one bed and 2200 for a 2 bed if you do business with Mr REIT. Also move out of Dublin and rent somewhere cheaper if you can. Suck it and see and get your deposit and go to step 2.

"We're putting out lives on hold Joe, what if I can't have kids Joe when the time comes, we're running out of time".

5) you may be happy enough with the status quo for you at present and hope things settle down in a while but are fearful of what happens in two or three years if it still persists.

6) emigrate and experience life somewhere else for a while.

People are not able to view the next five years with any sense of hope or a view of, "it's going to get better for us". If you're renting, all you're seeing is new apartments being built and very high rents which greatly hinder your ability to save if you rent them. You earn too much for HAP.

If you're looking at buying, all you see is bidding wars and councils buying up all they can or even investors buying all they can to lease to the councils.

All seems like a terrible clusterf**k to me.

It doesn't help that the Housing Minister, Taoiseach et.c have been spouting over the past week the we need e.g. c. 33k new built homes each year for the next decade while on the flip side, the Minister for Housing tells DLR county council that they can't build more than c. 2,500 new units per annum over the next 6 years despite DLR identifying and wanting c. 3,500 per annum.

None of their recent actions/proposals/words make any sense if they truly believed there is a housing supply issue IMO

DataDude · 19-05-2021 02:52PM

Browney7 wrote: »

I feel what's fuelling public discontent (based on commentary but an election may prove otherwise) is that a sizable proportion of the population (and getting larger) feel their choices are very limited and none very palatable and this is being seen by extended family members ("our Johnny has a great job up in Dublin and paying 1200 for a room or 2 grand for an apartment" kind of thing)

The choice available to "buying units" (couples and singles) seems to be as follows:

1) Win a decent chunk on the lotto, bitcoin etc or become a C suite executive in a big tech of FIRE firm or a hospital consultant and just buy what you want. Or else wait for your parents to die and get their house and or money.

Know/am related to a couple and it's not as rosey as you think. Type A contract tops out at just under €200k. Say you get lucky at get a 4x mortgage and you have 100k deposit. Just about get you this (just sold for 915).

https://www.daft.ie/for-sale/semi-detached-house-44-glenabbey-road-mount-merrion-co-dublin/2896459

Few more years of saving and might be able to insulate. Maybe extend it when you're into your 50s...

Not arguing they're suffering by any means, but if you compare it what people think the life of a hospital consultant looks like, and what the consultants of yesteryear could have afforded - it's a fairly stark contrast. It's getting to the point where prime SCD is off limits to pretty much anyone without significant inherited wealth.

awec · 19-05-2021 02:52PM

PropQueries wrote: »

It doesn't help that the Housing Minister, Taoiseach et.c have been spouting over the past week the we need e.g. c. 33k new built homes each year for the next decade while on the flip side, the Minister for Housing tells DLR county council that they can't build more than c. 2,500 new units per annum over the next 6 years despite DLR identifying and wanting c. 3,500 per annum.

None of their recent actions/proposals/words make any sense if they truly believed there is a housing supply issue IMO

This is not the flip side. These two things are not contradictory. I believe this is the third time this has been pointed out to you.

yagan · 19-05-2021 02:52PM

timmyntc wrote: »

Seeing the bottom is a different story though, properties were undervalued at that stage due to such a glut of supply and non-existent demand. Country was reeling, and prices were plummeting, but you couldnt calculate what price they would fall to - because it was purely supply vs demand taken to the other extreme.

Even as prices continued going up in 06/07 there was a glut in supply which just shows how loose credit distorted supply and demand. Now the distortions are/were AirBnB, international investment funds such as pensions, and our own government panic buying to bring down the housing list.

The stamp duty hike is an upfront charge for pension funds so their yield projections that are already messed up by Covid now have another factor to weigh up.

As passive funds they could still plough more money in but at some stage their yield return may go so negative that it will impossible to for members not to ignore.

timmyntc · 19-05-2021 02:53PM

Marius34 wrote: »

No, it's not easy. Are we above normal? Depends who you ask, and the basis on which it is estimated "normal".

Average house price in Dublin right now is ~396,000.
Average income in Dublin right now is around 45k

Assuming two people on average wage looking for a joint mortgage, their maximum price is around 90k * 3.5 = 315,000

So we are in a situation where more than half of all couples in the capital, cannot afford the average house. it begs the question - who IS buying all these homes?

javaboy · 19-05-2021 02:54PM

timmyntc wrote: »

Seeing the bottom is a different story though, properties were undervalued at that stage due to such a glut of supply and non-existent demand. Country was reeling, and prices were plummeting, but you couldnt calculate what price they would fall to - because it was purely supply vs demand taken to the other extreme.

A functioning market does not see houses go up for sale well below cost price, because it isnt profitable to build them in the first place. So when it does happen, it is very unusual and not easily predictable if at all.

Fair enough. I guess the distinction is in the consequences of incorrectly predicting the top vs the bottom. Buy at 50k below what turns out to be the top thinking there's much further to go and you end up in negative equity when there's a crash/correction. Buy at 50k above what turns out to be the actual bottom and you're still sitting pretty after a few years.

The tolerances for bad predictions at the top and bottom are very different. You can afford to get it a little more wrong at the bottom so it's "easier".

timmyntc · 19-05-2021 02:56PM

yagan wrote: »

Even as prices continued going up in 06/07 there was a glut in supply which just shows how loose credit distorted supply and demand. Now the distortions are/were AirBnB, international investment funds such as pensions, and our own government panic buying to bring down the housing list.

The stamp duty hike is an upfront charge for pension funds so their yield projections that are already messed up by Covid now have another factor to weigh up.

As passive funds they could still plough more money in but at some stage their yield return may go so negative that it will impossible to for members not to ignore.

But with local authorities signing long term leases with these funds their yield is guaranteed.

Marius34 · 19-05-2021 02:58PM

timmyntc wrote: »

Average house price in Dublin right now is ~396,000.
Average income in Dublin right now is around 45k

Assuming two people on average wage looking for a joint mortgage, their maximum price is around 90k * 3.5 = 315,000

So we are in a situation where more than half of all couples in the capital, cannot afford the average house. it begs the question - who IS buying all these homes?

I know what you mean, but seeing something expensive, and not affordable by many, doesn't really tell if we are above or below the normal.

Browney7 · 19-05-2021 03:02PM

DataDude wrote: »

Know/am related to a couple and it's not as rosey as you think. Type A contract tops out at just under €200k. Say you get lucky at get a 4x mortgage and you have 100k deposit. Just about get you this (just sold for 915).

https://www.daft.ie/for-sale/semi-detached-house-44-glenabbey-road-mount-merrion-co-dublin/2896459

Few more years of saving and might be able to insulate. Maybe extend it when you're into your 50s...

Not arguing they're suffering by any means, but if you compare it what people think the life of a hospital consultant looks like, and what the consultants of yesteryear could have afforded - it's a fairly stark contrast. It's getting to the point where prime SCD is off limits to pretty much anyone without significant inherited wealth.

Apologies Datadude! Didn't mean to offend and you're right. Suppose my point is, a hospital consultant is still "fairly alright" and can get approval and can operate at most levels of the market but not in the expected echelons. Instead, you come down a few rungs and look at other places and fuel bidding wars and gentrification pricing out those below you (not the hospital consultants fault!).

It was more to address the point of "if you don't like it, go back to college and upskill or pull yourself up by the bootstraps"

PropQueries · 19-05-2021 03:02PM

awec wrote: »

This is not the flip side. These two things are not contradictory. I believe this is the third time this has been pointed out to you.

So, on the one side he's saying that we need c. 33k new built units each year for the next decade and then on the other side he's telling DLR that they can't build more than c. 2,500 new units per annum (for whatever reason) for the next six years in a c.120sq.km area right next to Dublin City and that isn't contradictory?

Where does he want everyone to live as his colleague in the Department of Finance is planning to increase carbon taxes every year for the foreseeable future to encourage us to be more environmentally friendly and I assume urban sprawl isn't environmentally friendly.

Those two sides also appear very contradictory to me, especially as you've already pointed out that that you believe remote working won't be as popular as some of us here believe it will be.

timmyntc · 19-05-2021 03:03PM

Marius34 wrote: »

I know what you mean, but seeing something expensive, and not affordable by many, doesn't really tell if we are above or below the normal.

It tells us the fundamentals are off.
The main buyers cannot afford these houses, so who is buying them instead (and why?)

It's neither normal or sustainable for institutional investors or local authorities to be buying up houses on this scale, and it wont last. When it stops, prices will drop somewhat. After that its a question of will they offload the property they own.

DataDude · 19-05-2021 03:03PM

timmyntc wrote: »

Average house price in Dublin right now is ~396,000.
Average income in Dublin right now is around 45k

Assuming two people on average wage looking for a joint mortgage, their maximum price is around 90k * 3.5 = 315,000

So we are in a situation where more than half of all couples in the capital, cannot afford the average house. it begs the question - who IS buying all these homes?

"One of the country’s leading mortgage brokers, Gerry Hiney of Park Financial Planning, said “panic and frustration” in the market is causing parents to dig deep to help their children.

“The bank of mum and dad is as strong as ever,” he said. “For every 10 applications we receive, seven of them have some form of a gift attached.”

If you're on the average wage and your parents aren't in a position to help you out - you're out of luck, sadly.

Cyrus · 19-05-2021 03:09PM

timmyntc wrote: »

Average house price in Dublin right now is ~396,000.
Average income in Dublin right now is around 45k

Assuming two people on average wage looking for a joint mortgage, their maximum price is around 90k * 3.5 = 315,000

So we are in a situation where more than half of all couples in the capital, cannot afford the average house. it begs the question - who IS buying all these homes?

missing a few things there

first off you need a deposit which is a minimum of 40k, secondly there is the HTB on new builds.

The gap isnt as big as your post would portray.

Geuze · 19-05-2021 03:09PM

timmyntc wrote: »

Average house price in Dublin right now is ~396,000.
Average income in Dublin right now is around 45k

Assuming two people on average wage looking for a joint mortgage, their maximum price is around 90k * 3.5 = 315,000

So we are in a situation where more than half of all couples in the capital, cannot afford the average house. it begs the question - who IS buying all these homes?

Where did you get 45k from?

Average earnings in Ireland for FT workers are 49k, and I 'm guessing it's higher in Dublin.

The CBI publish the data on the earnings of people who get mortgages.

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