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Property Market 2015

handlemaster

http://m.independent.ie/business/personal-finance/property-mortgages/return-of-property-porn-as-prices-go-through-the-roof-30857063.html

What are your predictions for 2015 property market both rental and sales.

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Floodzie

alastair wrote: »

Well, 2015 prices are, on average, up from 2014 prices so far, so that's not a great start to the prediction!

I'd agree that some extravagant prices achieved in 2014 might be a while in coming around again, but have no doubt that they will - it's just a matter of time,

All I see are asking price drops, across all house prices and types:

http://www.myhome.ie/pricechanges/dublin

This doesn't bode well for the rest of the year. We will see by the end of 2015 whether house prices this year were actually up on 2014. Already I see lots of previously sale agreed houses coming back to market with 10% drops in prices.

alastair

Floodzie wrote: »

:-) We won't see 2014 prices again! We are at the beginning of a correction

Well, 2015 prices are, on average, up from 2014 prices so far, so that's not a great start to the prediction!

I'd agree that some extravagant prices achieved in 2014 might be a while in coming around again, but have no doubt that they will - it's just a matter of time,

athtrasna

Audi12 you have been warned about previous contributions, if you cannot post constructively or helpfully please do not post on this forum hoping to stir a reaction

Mod

Glas2016

So we're putting store in what ESRI say now?? I thought they missed the crash??!

I think we can agree not uniform across the country. 80k might be considered average in some parts of major cities, whereas would be in top decile in some more rural counties.

1/5 borrowing more than 280k still supports an average national house price well north of 350k with big regional variations. You have to keep in mind that mortgages don't even come into play in some parts of top end of market.

Overall I just don't think the economics support a major drop. I can see a bit of bobbing around for the next few months as people get used to new rules but unless employment starts to drop again it just doesn't add up.

gosplan

Certain houses will go down in value.

The ESRI state that only 20% of the country's households earn over 80kpa.

That means that only 1 in 5 households can borrow more than 280k.

House prices shot up before because of free money.

Glas2016

Dreamin audi12. Can't see it. Too many fundamentals pointing up. Main one is unemployment/employment rate. CB rules only delay demand, don't remove it. Still a huge chunk of people out there in the "right age group" that want to buy. I see steady growth above rate of general inflation as a result. Simple economics.

Bob24

Shedite27 wrote: »

Why?

Probably simply because he is a prospective buyer ;-) (fair enough ...)

Floodzie

audi12 wrote: »

So any predications for the rest of the year

:-) We won't see 2014 prices again! We are at the beginning of a correction.

Two factors:

- The CB rules are only now starting to play out
- More stock is coming on stream over the next year or two

You would have to be crazy to get a mortgage now, as you will be straight into negative equity and unable to sell in the medium term should your circumstances change.

Cash buyers as always are better suited to this kind of market.

audi12

Floodzie wrote: »

Yes, but sitting in 100k+ negative equity is not a nice place to be either. Because of amortization, you are paying almost all interest for the first 5 or 10 years of a mortgage, so having to sit through that with a house price lower than your mortgage is tough. I speak from personal experience, and I would encourage people to think long and hard before signing on the dotted line, even if it means renting for a few more years.

So any predications for the rest of the year

Floodzie

handlemaster wrote: »

Thats all good and well but in particular for Dublin rents are so high that waiting two three years hoping for a drop in prices costs you big. Typically three beds are making 1300 plus per month * 12 months * X years = lots

Yes, but sitting in 100k+ negative equity is not a nice place to be either. Because of amortization, you are paying almost all interest for the first 5 or 10 years of a mortgage, so having to sit through that with a house price lower than your mortgage is tough. I speak from personal experience, and I would encourage people to think long and hard before signing on the dotted line, even if it means renting for a few more years.

handlemaster

JP 1800 wrote: »

The pertinent point is again back to affordability, I am aware rents are high but first time buyers can't afford to buy thus have to rent.

If they cant afford to buy so be it. Because the alternative is more non payers in the future

JP 1800

handlemaster wrote: »

Thats all good and well but in particular for Dublin rents are so high that waiting two three years hoping for a drop in prices costs you big. Typically three beds are making 1300 plus per month * 12 months * X years = lots

The pertinent point is again back to affordability, I am aware rents are high but first time buyers can't afford to buy thus have to rent.

handlemaster

JP 1800 wrote: »

I will chime in for what I see is a major factor, affordability and actual value for money. What any property market needs is an influx of new money from investors or first time buyers because when it boils down to it the market is and always has been a Ponzi scheme. For those trading up or down the prices do not have as much of an impact because it will be asset transfer i.e. buy high or sell high, with low prices sell low, buy low. But for those entering the market the value for money and affordability come to play. At the moment there is an affordability issue with prices going above the average income multiple for first time buyers, also as the stock is limited there does not seem to be any perceived value for money due to lack of competition. I will say it that we are in the middle or tail end of another property bubble and a lot of people, me included whom are first time buyers can see that.

Thats all good and well but in particular for Dublin rents are so high that waiting two three years hoping for a drop in prices costs you big. Typically three beds are making 1300 plus per month * 12 months * X years = lots

JP 1800

I will chime in for what I see is a major factor, affordability and actual value for money. What any property market needs is an influx of new money from investors or first time buyers because when it boils down to it the market is and always has been a Ponzi scheme. For those trading up or down the prices do not have as much of an impact because it will be asset transfer i.e. buy high or sell high, with low prices sell low, buy low. But for those entering the market the value for money and affordability come to play. At the moment there is an affordability issue with prices going above the average income multiple for first time buyers, also as the stock is limited there does not seem to be any perceived value for money due to lack of competition. I will say it that we are in the middle or tail end of another property bubble and a lot of people, me included whom are first time buyers can see that.

Archaeoliz

When I bought my first house that I was told, Easter into the beginning of the summer holidays is busiest as most buyers want to be in before the beginning of the new school year and September to October half-term is busiest for people who want to be in for Christmas. Then things pick up again a little January for those who'd like to be in by Easter...

[Deleted User]

I think summer is a popular time to move but doesn't seem to be a big selling season.

gaius c

barca_123 wrote: »

Is it true that a good few properties will come up post summer around Sept? Whats it been like in previous years?

I believe the summer is a slow time for buying / selling. I'm keeping an eye on daft / myhome and not much lately.

Thanks,

Summer is always quiet, dead really. Typically most stock comes online in spring but there's always stock added in the autumn too but not as much.

[Deleted User]

From memory, last September/October were reasonably busy in terms of new houses coming to market. The spring/summer selling season last year was manic so that might have prompted a few sellers to test the market.

If more people are saving deposits at the moment in order to meet the new Central Bank rules, it might cool things off a bit, including reducing the number of trader-uppers looking to sell their first house.

Michael D Not Higgins

barca_123 wrote: »

Is it true that a good few properties will come up post summer around Sept? Whats it been like in previous years?

I believe the summer is a slow time for buying / selling. I'm keeping an eye on daft / myhome and not much lately.

Thanks,

Christmas is the usual lull. Summer is usually the busiest time to move.

barca_123

Is it true that a good few properties will come up post summer around Sept? Whats it been like in previous years?

I believe the summer is a slow time for buying / selling. I'm keeping an eye on daft / myhome and not much lately.

Thanks,

[Deleted User]

All is calm at the moment, if my daft/myhome alerts are anything to go by. A lot of new supply came to the commuter-belt towns I follow around May and June but not much lately.

However, a fair number of those houses are still there - some sitting on the market for quite a while. I passed the window of a local estate agent and a couple of places are marked sale agreed but have not yet been taken off Daft (or marked sale agreed on the site).

Maybe the current supply will slowly be picked off in the coming months. If not, when new supply starts coming on in the autumn there will be a lot to choose from.

Maybe the Central Bank regulations are finally starting to have an impact?

athtrasna

Villa05, please do not post generalised negativity that makes no contribution to this thread.

Mod

MarkAnthony

<MOD SNIP>

Meh I'm from Oxfordshire and I have it better here than my brother does. There are huge similarities between the two cities in terms of issues but wages are way higher here and propety prices are, in the main, lower.

I got caught with neg equity but I'm happy out over all.

Bob24

gaius c wrote: »

That's an extremely one-sided view.
Rent works for some. Buying works for others.
Pretending that buying is always superior to renting is the sort of thinking that helped supercharge the bubble we had.
For one, you're ignoring how tying yourself down limits mobility for work, etc.

I would say the only cases where renting is superior is if something is preventing you from buying (you can't afford buying, you can't commit to a particular location for several year, you only need a small place in the short term but know you will have to get something larger within a couple of years, etcs).

Once you are able and ready to commit to a particular property for a long enough period, there are very few reasons to rent as in this country renting is actually a very large risk to someone who wants stability.

This is different from many European countries where renting can be seen as more practical and cost effective than buying to a number of people who have a choice between both options.

I would absolutely agree when you say the idea that buying is "always superior to renting is the sort of thinking that helped supercharge the bubble we had."

But on the other end - they is no denying that in Ireland there is more truth in way of thinking than in most other European countries.

Villa05

sapper wrote:

Is there standard formula for a basic comparison between renting and buying? Im currently renting, having sold recently and looking to buy and I am wondering how much of the rent I am paying is "dead money". Any dead money is therefore an additional cost of my intended purchase whenever that happens.

Try ronan Lyonshall blog. I think he had attempted a calculator

Floodzie

Dee24 wrote: »

Yeah we are on a tracker. Our interest rate is 1.15%. However they did say yesterday there's a possibility they could take the tracker off us as that house is no longer our primary residence.

Unfortunately you will no longer be under the Code for Mortgage Arrears if you own another property, as your original home will now be considered a buy-to-let. And you can bet your bottom euro that you will lose your tracker or at the very least be on a tracker at a higher rate.

It is possible that you could put the new home in your partner's name, and the original property in yours. Not sure how iffy that is though.

El_Dangeroso

sapper wrote: »

Is there standard formula for a basic comparison between renting and buying? Im currently renting, having sold recently and looking to buy and I am wondering how much of the rent I am paying is "dead money". Any dead money is therefore an additional cost of my intended purchase whenever that happens.

Say my mortgage on my old house was EUR1000, at the time of selling say EUR300 principal and EUR700 interest ,and then I rent a house the same size,spec and standard across the road for EUR1,000.

If the value of my old house stays flat while I rent, then I'm losing EUR300 a month by spending my EUR1000 by giving it to my landlord instead of paying EUR300 towards the deeds of my old house

But say over the course of the next 12 months, the value of my old house drops by EUR5,000, havent I made money by renting (ie EUR5000 vs EUR300x12=EUR3600)?

I don't know if there's one for exactly what you require, but this is a good calculator:
http://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html?_r=0

Just menatally replace $ with €

Dee24

gaius c wrote: »

Are you on a tracker? If not, you should probably use your saved cash to pay down some of the mortgage. You're not making any interest on the cash and you're paying interest on the mortgage.

If you are on a tracker, you're best off to save more and try to do a deal with the bank re early repayment of the tracker.

Yeah we are on a tracker. Our interest rate is 1.15%. However they did say yesterday there's a possibility they could take the tracker off us as that house is no longer our primary residence. But hopefully it won't come to that. Also they were stress testing us on our existing mortgage up to 6.55%.

Just posting the feedback as it may help others out who is in a similar position to us.

sapper

Is there standard formula for a basic comparison between renting and buying? Im currently renting, having sold recently and looking to buy and I am wondering how much of the rent I am paying is "dead money". Any dead money is therefore an additional cost of my intended purchase whenever that happens.

Say my mortgage on my old house was EUR1000, at the time of selling say EUR300 principal and EUR700 interest ,and then I rent a house the same size,spec and standard across the road for EUR1,000.

If the value of my old house stays flat while I rent, then I'm losing EUR300 a month by spending my EUR1000 by giving it to my landlord instead of paying EUR300 towards the deeds of my old house

But say over the course of the next 12 months, the value of my old house drops by EUR5,000, havent I made money by renting (ie EUR5000 vs EUR300x12=EUR3600)?

MarkAnthony

gosplan wrote: »

This is really true.

By sheer luck a sale we agreed in 2007 fell through and we've been renting ever since. I didn't even really like the house.

All the pressure to buy came from the national mantra 'you must own your own property - rent is dead money'

The same mantra convinced everyone that one bed apts were a good way onto the property ladder.

Mine didn't fall through in 2006. I had been brought up on the property ladder game in a different country and I didn't anticipate the bubble properly. Dublin is a capital city after all and one would expect property to be expensive at it's centre. The plan was always to keep the property anyway and rent it out. We did end up staying a couple of years longer than we wanted however we were paying €550 in a mortgage rather than €1000+ in rent, we never had to worry about the LL not paying the mortgage and being evicted. We put in the appliances and furniture + kitchen and bathroom we wanted. We saved, got a deposit together and bought a house, and now someone else is paying our mortgage on that property.

While I'm not suggesting doing that was for everybody, or indeed that poor decisions weren't made, especially with property that wasn't going to rent well in the future not everyone who bought in the bubble was fooked.