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Softening house market?

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12357…146

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    #122
    SmokyMo
    Registered Users Posts: 311 ✭✭SmokyMo


    Looking for a house at the moment. Seems like the froth that was present during last year and covid year is gone. There are a lot less bidders. But there is still strong demand for properties in 600 + 750k range in good areas.



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    #123
    JimmyVik
    Registered Users Posts: 5,368 ✭✭✭JimmyVik


    https://www.boards.ie/discussion/comment/119044855#Comment_119044855

    Just one example to make it a bit clearer.

    A couple I know traded up last year.

    In 2005 he paid 270k for a huge (compared to 2 beds now) 2 bed house in a really nice development close to the city center. I was paying €800pm on a 1 bed apartment at that time myself. They got married in 2010 and had twins in 2013. They overpaid their mortgage so had no mortgage and some savings left when they traded up last year. They moved into a 600k 4 bed house with a huge garden in Dublin. Their mortgage is now €250k for 15 years and if i remember correctly its €1600 or thereabouts per month. They are overpaying that now too. They didnt need a deposit because of the equity.

    If they were to buy that 600k house now they would need the deposit plus a mortgage of around 500k with payments of about €1900 pm for 30 years.

    So having got on the ladder in the boom times has certainly made it easier for them to buy that house now. And not having had to pay any rent from 2005 on has definitley helped them.



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    #124
    monkeybutter
    Registered Users Posts: 3,518 ✭✭✭monkeybutter


    https://www.boards.ie/discussion/comment/119044934#Comment_119044934

    does it matter how they came up with the money, not sure what the insight is

    There are people out there with salary to buy it with a mortage, or parents who gave them a leg up or who have saved up the equity to buy it and are in their 30s

    The money is out there, these people can afford to take out a 250k mortgage in their 40s with another say 100k in savings, with 2-3 dependents



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    #125
    HerrKuehn
    Registered Users Posts: 2,066 ✭✭✭HerrKuehn


    https://www.boards.ie/discussion/comment/119044705#Comment_119044705

    I think the issue you have/had is that you are too focused on waiting for the perfect time. I think a lot of people are like this with investments, not just housing but also equities. At some point you need to just pull the trigger. You can only look at the information available, make a decision and go for it. You have to accept that you might be wrong and it could drop 20% or whatever. What were you thinking in the 2012-2014 period? It was pretty obvious the economy was on the mend by 2014, the rapid increase in prices in the following years was not at all obvious, but it at least looked like a bottom had been reached.



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    #126
    monkeybutter
    Registered Users Posts: 3,518 ✭✭✭monkeybutter


    https://www.boards.ie/discussion/comment/119044918#Comment_119044918

    There arent many 600k houses left in the good areas, and plenty of bidders 😃



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    #127
    JimmyVik
    Registered Users Posts: 5,368 ✭✭✭JimmyVik


    https://www.boards.ie/discussion/comment/119044974#Comment_119044974

    ITs simple. You need less of a mortgage when you have equity. The longer the time between when you bought and now the more equity you have.

    Someone trading up with €300k equity in a house to a 600k house only has to get a mortgage of 300k.

    Someone without equity needs 600k between deposit and mortgage to buy that same house.

    Who do you think is going to find it easier?



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    #128
    Subzero3
    Registered Users Posts: 687 ✭✭✭Subzero3


    https://www.boards.ie/discussion/comment/119042724#Comment_119042724

    You can see which houses are being bought by Social/charities. They are usually sold and idle for a long time before being occupied. If you check the PP register for sales and the house is vacant but showing on that as sold a few months you can assume who bought it.



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    #129
    Gusser09
    Registered Users Posts: 6,963 ✭✭✭Gusser09


    It depends on what your definition of plenty of bidders is. I'd imagine there can't be as many bidders for the 600k-750k houses than there is for the 300k-450k houses. The maths just don't work. That being said of course you will always have people bidding for the more expensive exclusive houses.

    As it becomes more expensive to buy brand new or self build the second hand house market will continue to boom. With the price of materials still rising , price of fuel and energy still rising, inflation going bananas and wages not really matching it then second hand home sale will flourish.



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    #130
    timmyntc
    Registered Users Posts: 6,924 ✭✭✭timmyntc


    https://www.boards.ie/discussion/comment/119044988#Comment_119044988

    You fail to mention that the value of a house can go up and down. You can have negative equity.

    You also have to contend with all house prices rising - its great if my house goes up in value, but typically all houses rise due to demand so if i want to trade up I will actually have to pay more of the difference.

    The only advantage of house vs renting from that POV is that when you pay down a mortgage you pay toward some equity, whereas rent is truly dead money. But planning on leveraging the increase in your house value to trade up is a fools game, because all prices rise and you end up no better off in monetary terms.



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    #131
    Pussyhands
    Registered Users Posts: 8,239 ✭✭✭Pussyhands


    The market was already overvalued in 2018/19.

    People on here only talk about demand as if that's the only thing that affects prices. The free money party of the last decade is coming to an end. Belts are going to have to be tightened. Credit is going to get more expensive.

    Just a reminder that when Covid happened, the ESRI said house prices would drop by 12%. Now for those who say demand is high so it won't go down, how do you explain the ESRI's prediction when no one could come in or out of the country so the demand would have remained the same. Then the government went throwing silly money everywhere and shutting down construction (for the peasants only, the multinationals continued as normal)

    What's happening now is people are seeing the predictions of interest rates rises and recessions and believe that if they don't get in now, they'll either not get a mortgage or their interest rate will be higher. So they're going all in to buy at any price.

    Human psychology is a massive part of the housing market. All people think of now is house prices going up 10% a year and think they'll buy and then they'll be getting 10% equity a year. We have a generation of 20 somethings and 30 somethings who don't remember the property market crash of a decade ago.

    IRES Reit, Irelands largest residential REIT with 4000 properties is actually down 20% in share price since the turn of the year. That downfall coincided at the same time as the stock markets began to tank. Why would a REIT who continues to see rental income rise and current housing stock increase in value drop in price by 20%?

    It's interesting that the same comments were made by stock market investors last year when the market got frothy, how there's no way Amazon or Facebook will fall, they make money hand over fist and are not going to drop much. Amazon are down 42% from their ATH, FB down 48%, Microsoft down 21%.



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    #132
    JimmyVik
    Registered Users Posts: 5,368 ✭✭✭JimmyVik


    https://www.boards.ie/discussion/comment/119045012#Comment_119045012

    You havent been reading the posts fully. You are jumping in half way through the conversation. I am talking about people who bought back during the last crash and how they are better off now than those looking to buy for the first time now. The value of their house did go down - a lot in fact.

    Also when house values increase you are still better off being "on the ladder". I really shouldnt have to explain why, so im not going to even try explaining this again.



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    #133
    monkeybutter
    Registered Users Posts: 3,518 ✭✭✭monkeybutter


    https://www.boards.ie/discussion/comment/119045004#Comment_119045004

    there are no houses to buy, that is all that matters

    there are more 400k type houses around than 750k ones in general so the people bidding evens out

    say 3 beds vs 4 beds vs 5 beds, just not that many 5 beds in most areas

    plenty of bidders, there are no rental properties either, massive pent up demand of people living at home etc

    70 houses for sale in an area of 70k people, in the middle of the selling season



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    #134
    timmyntc
    Registered Users Posts: 6,924 ✭✭✭timmyntc


    https://www.boards.ie/discussion/comment/119045039#Comment_119045039

    People who bought in the crash are the best off - they got property at cheapest price in several decades

    If you mean people who bought pre-crash then their only saving grace is that we are in another bubble, and that government policy since 2012 has been to inflate property prices as much as possible to "rescue" people from negative equity.

    If those people you talk about bought at any other time in the last decade they would be better off than the time they did buy (at the peak)



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    #135
    monkeybutter
    Registered Users Posts: 3,518 ✭✭✭monkeybutter


    https://www.boards.ie/discussion/comment/119045023#Comment_119045023

    there was no free money for normal people would ya stop, you are stuck in 2007

    the ESRI made a prediction and like most economics ones it was wrong

    supply tightened due to covid, no building, the demand keeps going up as the population expands and top of already very high demand

    people buying houses now are all too familiar with the crash, very few are buying as an investment



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    #136
    SmokyMo
    Registered Users Posts: 311 ✭✭SmokyMo


    https://www.boards.ie/discussion/comment/119044981#Comment_119044981

    Not true at all. There a quite a few at that price range. Price band of 400k - 550 only has 30% more.

    In addition there has been influx of properties for 1mill + in the last 2 months.

    Caveat is, I am only talking about south dublin county.



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    #137
    monkeybutter
    Registered Users Posts: 3,518 ✭✭✭monkeybutter


    https://www.boards.ie/discussion/comment/119045106#Comment_119045106

    How many houses are for sale say in say stepaside? 12, so it is true, the 400k house is 600k there



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    #138
    Gusser09
    Registered Users Posts: 6,963 ✭✭✭Gusser09


    https://www.boards.ie/discussion/comment/119045041#Comment_119045041

    I own a 5 bed house after building an extension last year.



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    #139
    Pussyhands
    Registered Users Posts: 8,239 ✭✭✭Pussyhands



    With a broad hiring freeze in place, some workers at Facebook are growing concerned that layoffs may be next.

    The company told employees last week in memos seen by Insider it was enacting a hiring pause that would first affect many levels of engineers and would expand to impact "almost every team across the company."


    "My guess is there are layoffs coming," one employee told Insider. Some high-level managers are already "talking about re-prioritizing things," the person added, leading them to expect the cancellation of projects and people being let go.


    Certain elements of last week's memos on the freeze also have people worried and trying to read between the lines, three employees said. Facebook's chief financial officer, David Wehner, wrote that the company needs to hit "lower expense guidance," which it recently reduced by some $3 billion. Other vague phrases, such as "re-prioritize work," "reviewing head count allocation," and calling the recent stock market downturn "a valuable forcing function," also struck an ominous note with some staffers.


    Wehner noted that he would share more details with employees "as we have them," while Miranda Kalinowski, Facebook's recruiting head, wrote that she was sharing "what we know so far" in her own note. That gave the impression to some employees that the freeze was sudden and the strategy for head count was still being developed.


    All of this, along with Facebook's recent hiring spree and the continued slump in the company's market value, has several staff bracing for layoffs. The social-media giant increased head count by 60% from the end of 2019 through 2021, according to an Insider analysis of regulatory filings. Since mid-November, the shares have plunged more than 40%.


    "The 'hiring freeze' is likely just to stem the tide of spending growth on new hires as they figure out priorities," one of the employees said. The two other current employees expressed similar concerns, while noting that the company has said nothing about the prospect of layoffs thus far. The people who spoke with Insider asked not to be identified discussing sensitive topics.


    A spokesperson for Facebook, now called Meta, referred Insider to a statement given last week about the hiring freeze: "We regularly re-evaluate our talent pipeline according to our business needs and in light of the expense guidance given for this earnings period, we are slowing its growth accordingly. However, we will continue to grow our workforce to ensure we focus on long term impact."

    No plans for layoffs 'at this time'

    The spokesperson declined to comment further, but the company told the Wall Street Journal last week that it has not plans for layoffs "at this time."


    Facebook remains highly profitable but spending has increased and growth has slowed, worrying investors. A run on hiring in what was a very competitive tech-job market has cost the company. It's also spending billions of dollars to create the metaverse, an immersive digital world that will take at least a decade to emerge.


    One manager-level employee who recently left the company said Facebook often reorganizes at the team level, and occasionally eliminates some roles. More actions like this are possible, even in the range of 1,000 people, but this person said a bigger layoff — something like a 10% reduction in its workforce — is "deeply unlikely."


    Another current employee agreed, citing how cash-rich Facebook is. This person sees new efforts to reduce spending, like the hiring freeze, and trimmed spending on Facebook's Reality Labs division, responsible for metaverse projects, as a good sign.

    However, an advisor to major tech companies said he would not be surprised if Facebook went the route of layoffs in the coming months. Even the most historically successful and seemingly untouchable companies are unlikely to remain immune from the current downturn. And when companies enact layoffs, they "want it to have an impact," he said, typically looking in the range of a 7% to 10% reduction in force, also known as a RIF.


    "You do not want to undercut and then have to do it again," the advisor said.

    🤔



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    #140
    monkeybutter
    Registered Users Posts: 3,518 ✭✭✭monkeybutter


    https://www.boards.ie/discussion/comment/119045141#Comment_119045141

    fair play to ya

    did you bring the whole pay up to b2 rating or whatever it is in line with building regs?



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    #141
    monkeybutter
    Registered Users Posts: 3,518 ✭✭✭monkeybutter


    https://www.boards.ie/discussion/comment/119045141#Comment_119045141

    are you selling? everyone is extending as they can't move



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    #142
    monkeybutter
    Registered Users Posts: 3,518 ✭✭✭monkeybutter


    https://www.boards.ie/discussion/comment/119045153#Comment_119045153

    The job market in IT hasn't been as good as this in say 25 years



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    #143
    JimmyVik
    Registered Users Posts: 5,368 ✭✭✭JimmyVik


    https://www.boards.ie/discussion/comment/119045023#Comment_119045023

    I dont put much stock in any predictions from anyone, even the ESRI.

    But someone living in rented property right now has a totally different viewpoint to someone not paying rent.

    All they are seeing is rent going up and if this continues for their whole lives, how will they pay rent in retirement?

    But if you own your own home you can fix your mortgage long term now and be insulated from rising rents. Also a mortgage ends. Rent doesnt.

    Imagine being 70 and having to go into a house share to afford rent.

    I think thats what is driving demand for buying more than anything else.



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    #144
    Gusser09
    Registered Users Posts: 6,963 ✭✭✭Gusser09


    https://www.boards.ie/discussion/comment/119045154#Comment_119045154

    No just managed to escape that one. I think the whole BER thing is questionable anyway. We have the house externally insulated, the gold standard if you like, and it is still only D1. Strange. Not selling but as the kids get older might consider downsizing to a new build. Only one other 5 bed for sale in my town at the moment out of 30 properties.

    I actually think that extending is getting to the stage where it is out of the reach of most given the price rises. We added one 2 extra bedrooms, 1 ensuite, a full downstairs wetroom and a utility for less than 80k last year. The same extension would cost 130K this year. It's mad.

    Even looking at new 3 bed builds there just isn't any scope to extend on them.



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    #145
    HerrKuehn
    Registered Users Posts: 2,066 ✭✭✭HerrKuehn


    https://www.boards.ie/discussion/comment/119045178#Comment_119045178

    It is also the case that most people only ever see the trend continuing, e.g. house prices are going to go up forever, house prices are going to fall forever, interest rates will remain low forever. But the fact is that it all changes on a random Tuesday. Personally, I think we are at an inflection point and I would not like to be in the market for a house at the moment. Interest rates will rise, ECB signals they should start rising in July. If you do buy a house, I think it's best to fix for a number of years and accept that there will likely be drops in house prices over the next few years.



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    #146
    JimmyVik
    Registered Users Posts: 5,368 ✭✭✭JimmyVik


    https://www.boards.ie/discussion/comment/119045057#Comment_119045057

    Apologies, indeed i did mean pre-crash.

    The only reason i took those as an example is because it is the worst situation i can remember where i was in a position to buy too. So if it turned out for them, then its likely it will be alright in another 15 or so years for people buying now no matter what happens.

    And no, their saving grace is not that we are in another bubble (more speculation that we are in a bubble but you could be right), its that they are out of the rent racket and half way or more through their mortgage right now. Far better situation than starting from scratch now.



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    #147
    Sebastian Dangerfield
    Registered Users Posts: 1,798 ✭✭✭Sebastian Dangerfield


    I went to see a house 3 weeks ago, and when chatting the estate agent told me it was priced around the level the seller hoped to make.

    The following week I sent a builder for a look, and the agents figure had gone up by 200k. How I laughed at the absurdity, til I called and found out the latest bid was 305k over asking, with three parties still involved.



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    #148
    monkeybutter
    Registered Users Posts: 3,518 ✭✭✭monkeybutter


    https://www.boards.ie/discussion/comment/119045211#Comment_119045211

    how big a drop so? when will it drop? in 10 years?



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    #149
    monkeybutter
    Registered Users Posts: 3,518 ✭✭✭monkeybutter


    https://www.boards.ie/discussion/comment/119045228#Comment_119045228

    was it like a stately home? its all about context, which such a username it must have been



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    #150
    HerrKuehn
    Registered Users Posts: 2,066 ✭✭✭HerrKuehn


    https://www.boards.ie/discussion/comment/119045230#Comment_119045230

    I don't think anyone can tell you how much it will drop by. I am just basing my opinion on the fact that interest rates are predicted to rise shortly. Financial markets are expecting ECB to be between 1.5 and 1.75% by Sep next year. This would likely mean 2% on mortgage rates. Added to that we have very high inflation, reducing peoples disposable income and ability to service a mortgage. So, everything points to the potential for drops.



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    #151
    JimmyVik
    Registered Users Posts: 5,368 ✭✭✭JimmyVik


    https://www.boards.ie/discussion/comment/119045230#Comment_119045230

    I find when people make predictions that when you ask them for their last 5 predictions for the same thing they will only refer to their current prediction :)

    But I would certainly be fixing for as long as i could at this time. No harm locking in your good rate.

    One thing is for sure though. Any economic shock to property markets wont be noticed until after the damage is done. After that you'll have everyone looking back at their latest prediction of it and proclaiming genius.



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