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Softening house market?

1787981838487

Comments

  • Registered Users, Registered Users 2 Posts: 7,534 ✭✭✭fliball123


    Also record number of items being bought on credit and get now pay later. Next year is going to be a lot worse than the government are banking on



  • Registered Users, Registered Users 2 Posts: 398 ✭✭jimmybobbyschweiz


    Who would have guessed that a pandemic and a war would have been excellent for the economy instead of hurting it. Irish people never wealthier, savings, rents and property prices at all time highs, unemployment incredibly low and corporate tax booming? As much of a permabear I am, the facts are totally against my view and things have actually never been better. Unless perhaps it's all too good to be true....

    Post edited by jimmybobbyschweiz on


  • Registered Users, Registered Users 2 Posts: 1,371 ✭✭✭herbalplants


    It has always been the case every year. People maxed out on their credit cards. But they will need to pay it back.

    Remember the shills only get paid when you react to them.



  • Registered Users, Registered Users 2 Posts: 16,017 ✭✭✭✭markodaly


    I agree.

    Seems fine in principle but could you imagine the political blowback?



  • Registered Users, Registered Users 2 Posts: 713 ✭✭✭manniot2


    This is a very wealthy country, there are storm clouds but there always are. Property is expensive, as it is in all prosperous countries.



  • Registered Users, Registered Users 2 Posts: 1,190 ✭✭✭OEP


    Do you have a source for that - the record number of items being bought on credit?



  • Registered Users, Registered Users 2 Posts: 5,488 ✭✭✭Padre_Pio


    Of course not.

    You can find sources that say that Irish people have record levels of savings, record levels of cash in the bank.


    You can find sources that say property and rent prices are going up, albeit the rise is slowing.


    What you won't find it the opposite, despite people saying for the past 5 years that it was obviously happening.



  • Posts: 0 [Deleted User]


    https://www.independent.ie/business/personal-finance/slight-dip-in-savings-rate-but-consumers-continue-to-put-money-aside-42198885.html


    In fact Irish people are still increasing their savings, just at slower levels than earlier in the year. Any post on this forum that talks about 'Irish behaviour' is usually disparaging and invariably full of crap.



  • Registered Users, Registered Users 2 Posts: 192 ✭✭IWW2900


    The lack of knowledge in here makes me laugh.

    Of course people are saving more. Right now they are reigning in their spending. Its one of the main purposes of raising rates. Central banks are trying to slow down spending, reducing demand and bringing down the price of everything...fighting inflation.

    But they are also trying to cause job losses and deflate asset prices, which will happen. They will just keep rates high until achieved.



  • Registered Users, Registered Users 2 Posts: 767 ✭✭✭dontmindme


    All properties->05/12/22 to 11/12/22

    All Dublin

    12 Price changes

    07 Decreases

    05 Increases


    Rest of Ireland

    46 Price changes

    38 Decreases

    08 Increases



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  • Registered Users, Registered Users 2 Posts: 19,584 ✭✭✭✭Bass Reeves


    If you read the article there is some drivel in it. Newspapers seem to specialise in drivel since they went online.

    Talking about Irish savers recieving 1/4 of the rate on savings than elsewhere in the EU. 17euro in interest/10k compared to 69/10k elsewhere in the EU.

    Four times nothing is still nothing. There was another one about two weeks ago. ''High earners to get nearly twice the rate of unemployment benefit''

    The new welfare proposal was for people to get 60% of there earning for six months capped at 450 euro. When were people earning 750/week high earners. This type of sh!te annoys me.

    It is sensationalism at it worst. Just causing division and panic in society

    Slava Ukrainii



  • Registered Users, Registered Users 2 Posts: 1,551 ✭✭✭kaymin


    Top story on Bloomberg this evening:

    https://www.bloomberg.com/news/articles/2022-12-12/sweden-s-free-falling-property-market-triggers-worst-slump-in-eu?srnd=premium-europe

    Sweden’s Free-Falling Property Market Triggers Worst Economic Slump in EU

    • Home values in Sweden are now down 15% from their peak
    • Commercial real estate has been identified as the main risk


    Property listings in a real estate agent's window in Gothenburg, Sweden.Photographer: Nora Lorek/Bloomberg

    ByNiclas Rolander, Ott Ummelas, and Kati Pohjanpalo

    December 12, 2022 at 10:00 AM GMTUpdated onDecember 12, 2022 at 10:05 AM GMT

    Soaring inflation and rising borrowing costs have sent housing prices on a steep downward trajectory across the world, but one of the places where this trend is playing out the fastest is Sweden. After a decades-long property boom fueled by cheap credit, a shortage of housing and interest-only mortgages, the Nordic region’s largest economy is now in the midst of a sharp housing market contraction that threatens to deepen a looming economic slump.

    Home prices are down as much as 12% from their peak earlier this year when adjusted for seasonal variations — or as much as 15% in nominal terms. The plunge is happening so quickly that real-world declines could exceed the 20% drop anticipated by forecasters.

    The market is undergoing “a dramatic change,” said Annika Winsth, chief economist at Nordea Bank Abp. 

    Swedish Housing Market Has Shed Most Pandemic-Era Gains

    Source: Norges Bank, Bloomberg

    Note: House price indexes. January 2020=100.

    The double whammy of mounting costs of living and falling home values is pushing consumers to watch their spending, which is in turn creating even more economic pain. Sweden is now at risk of falling into the worst recession among the 27 economies that make up the European Union.

    The Nordic country isn’t alone in its housing woes. After booming during the pandemic, central bank rate hikes have triggered a fall in global property values. A handful of formerly frothy markets, including in Canada, Australia and New Zealand, are in the midst of declines, and more than a dozen developed economies are either in a real-estate downturn — defined as two consecutive quarters of falling prices — or about to sink into one. 

    To Swedes, the situation is especially striking as recent corrections have been shallow and short-lived, and many young home buyers have never experienced a crash.

    Real estate professionals are also adapting to this more modest environment. In Stockholm, where a regulated rental market means that applicants must sometimes wait as long as a decade to get an apartment — prompting many would-be renters to become buyers instead — realtor Emma Holst says deal-making has slowed considerably.

    “You don’t sell every property after the first viewing, as it used to be,” said Holst, who works at Lansforsakringar Fastighetsformedling in central Stockholm. 

    Swedish Mortgage Costs Have Almost Tripled

    Source: the Riksbank, Bloomberg

    Nearly real-time data provided by Booli, a property listing site run by mortgage lender SBAB, offers another look at the extent to which Sweden’s once-hot market has cooled. In general, ads now stay on the site for twice as long as they did a year ago. Detached houses in Stockholm were listed for an average of 40 days in November, up from 15 days a year earlier. In the country’s southernmost Skane region, listing times increased to 53 days, up from 18 a year prior. 

    While many countries in the EU are struggling with similar problems, Sweden’s housing market is among the most vulnerable. Roughly 64% of people in the nation of 10 million own their homes, yet most don’t have long-term fixed-rate mortgages, making them sensitive to interest-rate changes. “Monetary policy has a faster pass-through here than in other economies,” said Maria Wallin Fredholm, an economist at Swedbank AB.

    After a series of interest rate hikes by Sweden’s central bank, the biggest fear is now that consumer spending will grind to a halt. Household debt amounts to more than 90% of Sweden’s gross domestic product, meaning higher borrowing costs will have a severe impact on consumption. This is already starting to happen: retail sales are plunging and lending growth is waning. There are “no positive signals from the domestic economy, and especially not from households or the housing market,” said Nordea’s Winsth. 

    Riksbank's Worst-Case Scenario Haunts Housing Market

    Sources: the Riksbank, Bloomberg

    Should inflation continue to accelerate, the housing situation may become even more dire. Sweden’s central bank recently speculated that ongoing inflation could force the Riksbank to raise its key interest rate from 2.5% to above 4.5%. If such aggressive tightening were to happen, said Helena Bornevall, a senior economist at Svenska Handelsbanken AB, it could mean an additional 10% decline in property values.

    Holcim

    If the housing market collapses, the country’s banks would be relatively well shielded. That’s because lending is based on a borrowers’ capacity to pay off their debts, and Swedes are supported by a generous social welfare system that helps them through unemployment and illness. 

    Swedish Households Turn Gloomier on Outlook for Home Prices

    The real risk to lenders is commercial real estate, as commercial property lending accounts for between 16% and 36% of major banks’ loan stocks.

    For individual borrowers struggling with housing payments, there aren’t many good options, especially since it’s very rare to settle debt on a mortgage in Sweden. A mortgage is “the last thing you stop paying,” said Nordea’s Winsth, noting that people who default carry the designation for the rest of their lives. “It’s not like in parts of the US,” she added, “where you can hand in the keys and walk away.”



  • Registered Users, Registered Users 2 Posts: 712 ✭✭✭bamayang


    Any chance you could also add the quantity of properties available on daft as a total? Would be very interesting to see alongside those numbers.



  • Registered Users, Registered Users 2 Posts: 210 ✭✭Mr Hindley


    These are my latest stats on total supply, if that helps. It counts all properties, incl sites.




  • Registered Users, Registered Users 2 Posts: 192 ✭✭IWW2900


    Similar articles coming to Ireland soon. I suspect we are already underway, data just not reflecting yet.



  • Registered Users, Registered Users 2 Posts: 713 ✭✭✭manniot2


    Looks like many countries experienced the same Covid bounce to residential property as we did. That 2020/2021 increase of 10% will probably be reversed in the coming months but hard to see much more than that based on supply/demand dynamics. I spoke to an agent recently that told me you will not get a 2021 price for your house now - for some reason people went daft in that period post lockdown.



  • Registered Users, Registered Users 2 Posts: 7,534 ✭✭✭fliball123




  • Registered Users, Registered Users 2 Posts: 3,752 ✭✭✭quokula


    There don't seem to be any stats that exist to indicate increases in consumer debt - as mentioned above the stats show the opposite.

    There is definitely an increase in BNPL offerings from retailers, but this is more a case of service providers like Klarna coming into the market making it an easy option for retailers to add for competitiveness. Companies innovating in **** business practices to extract as much profit as possible is a constant for all market conditions. It will be regulated away if it ever shows signs of getting out of hand.



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  • Registered Users, Registered Users 2 Posts: 71,184 ✭✭✭✭L1011


    That doesn't actually say anything about there being a total increase in purchases on credit. I'd expect virtually all buy now pay later purchases are replacing credit card purchases - credit replacing credit, just at a much lower interest rate.



  • Registered Users, Registered Users 2 Posts: 1,339 ✭✭✭Viscount Aggro


    I know how it works. Interest rate rises are to devalue peoples spending power, stop the frivolity and conspicuous consumption.

    There has to be a softening of property prices, another few interest rate rises will do it.



  • Registered Users, Registered Users 2 Posts: 16,017 ✭✭✭✭markodaly


    Lads, we should know by now that the game is rigged.

    Governments, like ours and others, will not let the free market rip and let house prices correct to their true value. There is simply too much negative political heat to take on if this occurs. Now prices may correct modestly, 5% maybe even 10% over the few years. But forget about houses correcting anything over that. The government can pull a rabbit out of the hat and support the market at a whim.



  • Registered Users, Registered Users 2 Posts: 192 ✭✭IWW2900


    I love this naive attitude.

    People think our government is different than other governments around the world. They act like we are in some way special.

    I got news for you, governments around the world are the same everywhere. UK, US, Sweden, Canada, they are all just trying to stay in power and their policies are all short term. Properties will fall here like everywhere else.



  • Registered Users, Registered Users 2 Posts: 192 ✭✭IWW2900


    The biggest issue we have here is the large investment funds buying into commercial and residential properties. This is what will hit us harder.



  • Posts: 0 [Deleted User]


    Okay so you're first post was nonsense and you're just going to change the subject, good stuff. Just to confirm, Irish people are still saving, not having one last hurrah as you initially claimed.



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  • Registered Users, Registered Users 2 Posts: 18,420 ✭✭✭✭rob316


    The taxpayer is just going to continue to subsidise the new build market more and more.

    They were warned shared equity will push up the prices of new builds and it has so now they have to raise the ceiling further. Its just a developer led scam this whole thing.



  • Registered Users, Registered Users 2 Posts: 5,618 ✭✭✭baldbear


    How much HAP do the government give on a €2k rental?

    The 1st time buyer grant is keeping developers happy.

    The government leasing from investment funds is keeping them happy.

    There are so many empty properties in towns around the country it's just unbelievable . Are their no generous incentives in place to get these places habitable?



  • Registered Users, Registered Users 2 Posts: 945 ✭✭✭WhiteWalls


    Great to see confidence in our housing minister anyway, sure all must be well



  • Registered Users, Registered Users 2 Posts: 19,584 ✭✭✭✭Bass Reeves


    HAP is anything from 190-1300 euro depending on where it is and the size of the family.

    If you want a reason why there is so many empty unrented properties go to the RTB website and decide if you were an owner would you rent those properties.

    If you own a second property or if you own only one and are going to vacate it temporarily you would be stupid to rent it. If you are elderly and are in a nursing home your family would be stupid to rent it. If you are elderly and move in with a son or daughter you would be stupid to rent it.

    Basically because of present legislation any house temporarily vacant should never be rented.

    Slava Ukrainii



  • Registered Users, Registered Users 2 Posts: 19,584 ✭✭✭✭Bass Reeves


    Great we will all just copy and paste. No analysis no taughts of our own just pick an article copy and paste.

    Just one striking thing about the article above was the fact that it seems that virtually all Swedish mortgages are variable and this is effecting both buyers and existing mortgage holders.

    As well house hold debt is 90% of Swedish gross domestic product. Mortgage costs ( I presume the interest part has tripled)

    Obviously the poster thinks this is exactly the same as Ireland

    Slava Ukrainii



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  • Registered Users, Registered Users 2 Posts: 20,832 ✭✭✭✭Donald Trump


    The new welfare proposal was for people to get 60% of there earning for six months capped at 450 euro. When were people earning 750/week high earners. This type of sh!te annoys me.

    You may be misreading their intention. They might just be pointing out that someone who is a higher earner - say 100k year - will get double the "standard" dole if he loses his job. They might not be trying to say "only high earners will get the super-dole".


    You can look at it two ways. The 100k a year fella paid a lot more tax. But the 25k a year fella who loses his job probably would need the extra 200 quid a week far more than the fella who just finished the 100k a year job. That might have been the point of that headline.



  • Posts: 0 [Deleted User]


    This is a pretty handy site, puts the number of properties dropping prices into perspective.

    Taking into account both increases and decreases, there is a net percentage 0.27% downward change in property listings.



  • Registered Users, Registered Users 2 Posts: 16,017 ✭✭✭✭markodaly


    One has to think about it this way when buying property imho.

    Also, its really the interest part that is the rent, as the other bit is taking a portion off the principle, which is a proxy for saving and building wealth.

    All within reason by the way.



  • Registered Users, Registered Users 2 Posts: 16,017 ✭✭✭✭markodaly


    How much should repayments be for 3 bed as a matter of interest?

    Say for the sake of argument the first payment is 50:50 interest:principle, so they are paying 900 interest but paying 900 off the mortgage itself.

    Also it depends on their take home pay. If their take-home pay is 3k per month, that is right, but if its 6k per month, then it's comfortable.



  • Registered Users, Registered Users 2 Posts: 16,017 ✭✭✭✭markodaly


    Where are these property price falls and rent falls?



  • Registered Users, Registered Users 2 Posts: 60 ✭✭old_house


    I am not surprised that we see more decreases than increases in the listed price. Why would anyone want to go back to renew a listing and increase the price unless maybe a sale has fallen through and it has to be relisted anyway? I think most people would just deal with the offers coming in and sell it to the highest bidder without going back to the listing, whereas if it turns out the asking price was too high or something comes up during the survey lower relistings are much more likely. Asking prices are not very realiable as a value indicator, and changes in same even less so...



  • Registered Users, Registered Users 2 Posts: 713 ✭✭✭manniot2


    Agreed. I think the metric is interesting in terms of price decreases but the increases are not a reflection of what happens on the ground.



  • Registered Users, Registered Users 2 Posts: 1,786 ✭✭✭DownByTheGarden


    Each house around us that is sold is being sold for higher than the last. I dont know anyone who has moved and is paying less rent apart from one couple who moved into a rent controlled apartment owned by a relative of theirs.



  • Registered Users, Registered Users 2 Posts: 20,832 ✭✭✭✭Donald Trump


    Maybe if the estate agent listed it for 400k and they currently have the house in a bidding war at 500k and don't want people wasting their time calling to bid 410k?



  • Registered Users, Registered Users 2 Posts: 1,366 ✭✭✭DataDude


    Monthly price movements:

    July +1.0

    August + 1.1

    September + 0.6

    October (just released) +0.4

    As always discussed these are very lagged but finally the data looks to be cooling off after unexpectedly shooting higher in the summer months.



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  • Registered Users, Registered Users 2 Posts: 16,017 ✭✭✭✭markodaly



    Governments don't want to see huge house price crashes.

    It's terrible for their electoral success and terrible for the wider economy.

    Much easier for them to support existing property owners, i.e the majority of the population and give cash handouts or subsidies to would he house buyers, which in turn pushes up prices.

    We have a big worldwide crash in 2008-2009. What do you think QE was? What do you think NAMA was? When have seen this movie before, yet you think we will have a different ending.

    I will admit that there may be some heat taken out of the market, especially in older houses in poor locations. Perhaps a modest 5-10% drop over a few years, But if you think houses will drop 50%, I've magic beans to sell you.



  • Registered Users, Registered Users 2 Posts: 244 ✭✭FedoraTheAura


    I take it these are finalised sales figures? So Octobers figures are probably for sales agreed in June/July?

    Hope the trend continues!



  • Registered Users, Registered Users 2 Posts: 7,534 ✭✭✭fliball123




  • Registered Users, Registered Users 2 Posts: 60 ✭✭old_house


    I think some older houses at the lower end of the market will benefit from the recently expanded vacant property refurbishment grant where an FTB can get €30,000 (plus an additional €20,000 for structural works if required), and that's on top of the available SEAI grants as long as the house has been vacant for 2 years or more and you make it your primary residence afterwards. That is a huge amount of money and I can see how that will make those houses a lot more appealing to some.



  • Registered Users, Registered Users 2 Posts: 60 ✭✭old_house


    It's an abstract number, but what it means is that a modest house at a price point of €250,000 got another €1000 more expensive - within a month. It's still hard to keep up with that...



  • Registered Users, Registered Users 2 Posts: 7,753 ✭✭✭MrMusician18


    I think a 50% drop is probably off the cards too, but a fall in prices in real terms is probably inevitable.

    The population cohort that will be entering the market next i.e. current 20-30 year olds is significantly smaller than the current buying cohort of 30-45 year olds. As the absolute stock of houses is growing this can only lead to prices falling. This is unless net migration continues strongly to fill jobs that are mortgageable.

    As an aside it's absolutely mad that we carry out a census every five years which predicts supply challenges in many sectors (e.g. the late noughties baby boom resulting in a current stress on secondary school places) but nothing ever seems to be done to prepare for it.



  • Registered Users, Registered Users 2 Posts: 3,110 ✭✭✭cute geoge


    Lads I am sorry to keep coming on here and saying prices if they drop wont drop a whole pile .If property sale price is withing sticking distance of making a deal to purchase ,you should grab the bull by the horns .Lots of cheap property was bought up there after the burst ,thats never again going to happen .

    You have clowns like Paul Murphy coming on prime time tv telling you that builders should build houses for no profit so prices will drop ,it is hard to know what planet some people are living on!!



  • Registered Users, Registered Users 2 Posts: 1,366 ✭✭✭DataDude


    Yep, sounds about right.

    Expect it to continue to trend down and should be showing flat/negative by early next year. But I made the same prediction in Spring 2022 when things were trending down and it took off again. So who knows!



  • Registered Users, Registered Users 2 Posts: 192 ✭✭IWW2900


    Why central banks are going to crash markets worldwide.




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  • Posts: 0 [Deleted User]


    Your graph does not indicate if or why a central bank would crash a market, it is just more fluff.



This discussion has been closed.
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