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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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[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.

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]

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

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...

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.

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

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: »

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

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.

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

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.

Bob24

Shedite27 wrote: »

Why?

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

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.

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

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.

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

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,

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: »

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.

Prices are rather unlikely to drop 11% in the next five months. It's safe to say that we are indeed seeing average 2014 prices repeated this year.

Riverireland

Floodzie wrote: »

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.

Happened to a few friends of mine in North Kildare. Sale agreed with buyers but mortgage refused when the buyers went to draw it down. Reputable estate agent so down to the banks refusal. Houses back on market, little or no viewings.

Floodzie

Riverireland wrote: »

Reputable estate agent so down to the banks refusal.

The better estate agents ask for a mortgage offer letter (not just the instant Approval in Principle you can get over the phone) before allowing an offer. Sad to see that even that wasn't enough and they couldn't draw down the funds in the end.

The_Conductor

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,

Prices are only up- thanks to continued increases (which have slowed and are now almost at a halt) outside of the greater Dublin area. Prices in the greater Dublin area- have been falling for 3 months now- and are accelerating. I agree- its unlikely we'll have a net 11% decrease in prices over the remainder of the year- but the way things are going- it could be a close run thing- its no longer an outside shot.

Shedite27

Floodzie wrote: »

The better estate agents ask for a mortgage offer letter before allowing an offer.

Bit of a tangent, but does the mortgage offer letter contain the max amount? Are you not completly showing your hand if you give that to the EA?

The_Conductor

Floodzie wrote: »

The better estate agents ask for a mortgage offer letter (not just the instant Approval in Principle you can get over the phone) before allowing an offer. Sad to see that even that wasn't enough and they couldn't draw down the funds in the end.

AIP- is a back of the envelope calculation of the maximum lending capacity of a potential borrower. It does not normally involve an in-depth financial assessment- and in the case of some lenders- an unduly rosy AIP is the norm- to try to encourage customers to go with them- over their competing lenders.

Anyone who assumes an approval-in-principle is anything other than a guidance- especially these days- needs a serious reality check.

The flipside of this- is the number of posters- even in this forum- about how unscrupulous estate agents are not going to see their borrowing capacity- under any circumstances. An estate agent who prudently vets prospective customers- is doing both the buyer and the seller a service- there has to be an acceptance that this is part of the changed scenery (but there also has to be a series of balances and checks- to ensure any knowledge gleaned- isn't abused by the agent- possibly through a new solicitor letter which could be a standard letter advising that the prospective purchaser is in a position to raise funds in support of a given bid (of course this would mean a new solicitors letter every time you raised your bid- but that will just have to be life). If its a standard letter- there is no reason a solicitor couldn't run it off for 15-20 quid.

alastair

The_Conductor wrote: »

Prices are only up- thanks to continued increases (which have slowed and are now almost at a halt) outside of the greater Dublin area. Prices in the greater Dublin area- have been falling for 3 months now- and are accelerating. I agree- its unlikely we'll have a net 11% decrease in prices over the remainder of the year- but the way things are going- it could be a close run thing- its no longer an outside shot.

Dublin prices fell less than a half percent in the last month. Which doesn't bode well for any close run thing on falling below the 2014 average. Even if you believe that there's an acceleration in price falls in place, which is by no means certain, Dublin had bigger drops at the start of the year, followed by growth.

The_Conductor

alastair wrote: »

Prices are rather unlikely to drop 11% in the next five months. It's safe to say that we are indeed seeing average 2014 prices repeated this year.

The other side of this coin is- a larger number of lower value properties hitting the market- could seriously skew the data. Keep in mind 2014 saw a large number of executor sales- and cash buyers were still over 60% of the market (they're still at a rather startling 40%- but nowhere near as high as they were even 12 months ago- and falling as a percentage of purchasers at an increasing pace).

There are a number of factors- of which the central bank lending rules are only one- conspiring to call a halt to what can only be deemed inappropriate property price appreciation- and these factors are all coming to the fore at a similar time- so the effect of any one factor- could potentially be magnified beyond what anyone might expect.

Vis-a-vis prices outside the Pale- rural prices have in fact recovered to a greater extent of their 2007 values- than did prices in Dublin (and are still growing- versus Dublin prices- which are falling). A turnaround in rural prices- in conjunction with a continuation of falls in Dublin- could have a significant impact- and is indeed, entirely foreseeable.

alastair

The_Conductor wrote: »

The other side of this coin is- a larger number of lower value properties hitting the market- could seriously skew the data. Keep in mind 2014 saw a large number of executor sales- and cash buyers were still over 60% of the market (they're still at a rather startling 40%- but nowhere near as high as they were even 12 months ago- and falling as a percentage of purchasers at an increasing pace).

There are a number of factors- of which the central bank lending rules are only one- conspiring to call a halt to what can only be deemed inappropriate property price appreciation- and these factors are all coming to the fore at a similar time- so the effect of any one factor- could potentially be magnified beyond what anyone might expect.

Vis-a-vis prices outside the Pale- rural prices have in fact recovered to a greater extent of their 2007 values- than did prices in Dublin (and are still growing- versus Dublin prices- which are falling). A turnaround in rural prices- in conjunction with a continuation of falls in Dublin- could have a significant impact- and is indeed, entirely foreseeable.

But no-one is claiming that continued 'inappropriate property price appreciation' is likely. A relatively flat scenario that sustains the average 2014 prices is what we currently have, and even with increased stock and the new 20% deposit regime, there's no indicators that prices will drop back below those 2014 averages.

The_Conductor

alastair wrote: »

Dublin prices fell less than a half percent in the last month. Which doesn't bode well for any close run thing on falling below the 2014 average. Even if you believe that there's an acceleration in price falls in place, which is by no means certain, Dublin had bigger drops at the start of the year, followed by growth.

Dublin's falls at the start of the year- if you look at figures for previous years- mirrored what happened previously. Dublin's falls more latterly- do not- they are out of pattern. Its not appropriate to point at the falls in Q1 and say- we recovered from them in 2014- therefore something similar will happen in 2015. We did not have commensurate falls in late April/May/June in the Dublin market in 2014 (and 2013)- that are evident in the data here.

The sole driver of any growth at all- gross- over the last 5 months- has been rural price rises (which would still show rises nationally- even if you stripped out Dublin prices for the last 5 months).

The types of property selling- are also of interest- in the Dublin market- there had been an increase in the absolute number of sales of lower value properties- in Q1- before the levels of activity in the market sunk below levels at which we can conduct a valid statistical analysis. I'd suggest the current issue- is a vast increase in supply- particularly of properties just above the thresholds that people are capable of financing- that is causing a logjam (and is only going to get worse). If you were to look at Cork- for example- this massive increase in supply- has not happened yet- but is foreseeable.

The Dublin / Other major urban centres / rural markets- have clearly stratified now- and major issues are becoming more apparent.

seamus

There may be some kind of weird bouncing effect in the market for the next few years. So prices will rise for a year or two, then snap back for another year or two, then back up again. The price rises this time were short-lived and nothing compared to the boom, so likewise the correction should be small - that is, we won't see 60% wiped off property values again.

The difference this time is that when a price increase arrives again, late 2017/early 2018 time, the CB rules should keep things in check and stop anything from growing at major levels.

Though who knows what a Government facing into an election year might do try and save a falling market

alastair

The_Conductor wrote: »

The Dublin / Other major urban centres / rural markets- have clearly stratified now- and major issues are becoming more apparent.

And yet, there's nothing to suggest that we're about to see the kind of dramatic price falls that would result in dropping back to 2013 prices - even in Dublin. I'm not sure what major issues you believe are becoming apparent, but there's always been an obvious stratification between Dublin and the rural property market, and there probably always will be.