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Property Market 2018

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  • Registered Users Posts: 271 ✭✭Earleybird


    koheim wrote: »
    Morgage interest rates in Ireland will not go up, but significally down. Irish Banks are still charging 100% more than the EU average for your interest on morgages (and I really do not understand how they get away with this). Even if ECB put their interest rate up, I would argue that Irish Banks can not follow as they are already making insane profits. The backlash from the tracker morgage scandal will keep them in check and hopefully we will see better interest rates in the next few years. Money is cheap everywhere but Ireland at the moment, an interest rate of 1,8% would make housing a lot cheaper...this would benefit the society as a whole.

    Mortgage rates are as low as they can get due to the level of non-performance on the Balance Sheets, and banks aren't interested in making "housing a lot cheaper", they are concerned with maximising shareholder value. The repossession steps required in this country are quite cumbersome which means it takes years before a bank can realise cash on some assets. Without changes to the legal process there is no way rates will come down "significantly", not a chance! I think we're just about bottomed out in the interest rate space here, so I wouldn't be expecting any big savings if that's what you're holding out for. You can expect them to go up.


  • Registered Users Posts: 156 ✭✭koheim


    Earleybird wrote: »
    koheim wrote: »
    Morgage interest rates in Ireland will not go up, but significally down. Irish Banks are still charging 100% more than the EU average for your interest on morgages (and I really do not understand how they get away with this). Even if ECB put their interest rate up, I would argue that Irish Banks can not follow as they are already making insane profits. The backlash from the tracker morgage scandal will keep them in check and hopefully we will see better interest rates in the next few years. Money is cheap everywhere but Ireland at the moment, an interest rate of 1,8% would make housing a lot cheaper...this would benefit the society as a whole.

    Mortgage rates are as low as they can get due to the level of non-performance on the Balance Sheets, and banks aren't interested in making "housing a lot cheaper", they are concerned with maximising shareholder value. The repossession steps required in this country are quite cumbersome which means it takes years before a bank can realise cash on some assets. Without changes to the legal process there is no way rates will come down "significantly", not a chance! I think we're just about bottomed out in the interest rate space here, so I wouldn't be expecting any big savings if that's what you're holding out for. You can expect them to go up.
    It seems like most people are defending the Bank's high interest rates, and I do not understand why. Cheaper credit would benefit everyone. Also, the Banks were actually bailed out already for the mistakes they did pre 2009, I doubt that there are many mortgages starting after 2009 in Arrears?. The pre 2009 has been dealt with in the bail out, but still Banks are using this excuse to collectivly (like a cartel) keeping morgage interest rates artificial high, it is like an extra tax at this stage.


  • Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    koheim wrote: »
    It seems like most people are defending the Bank's high interest rates, and I do not understand why. Cheaper credit would benefit everyone. Also, the Banks were actually bailed out already for the mistakes they did pre 2009, I doubt that there are many mortgages starting after 2009 in Arrears?. The pre 2009 has been dealt with in the bail out, but still Banks are using this excuse to collectivly (like a cartel) keeping morgage interest rates artificial high, it is like an extra tax at this stage.

    We're not defending Irish banking institutions high interest rates- we're explaining them- there is a vast difference.
    I could get a mortgage tomorrow in any other EU country- at a lower interest rate than here- because the cost of lenders doing business here- is so much higher- particularly when you factor non-performing loans into the equation- than in any other EU country.

    Even now- we have 10% of all mortgages in an impaired state- versus a 'normal' level of between 3 and 4% (and this is despite instructions from the ECB to get our houses in order).

    Bank valuations are going up- and shareholders have a reasonable expectation of getting a return on their investment.

    Keeping 10% of non-performing loans on their balance sheets- has a cost- a cost that the good customers of Irish financial institutions have to pay.

    If you want Irish interest rates to come down- it implies you normalise banking practices in this country- which implies vastly loosening the ability of lenders to repossess properties with non-performing loans in lien on them- and in the case of the residential letting sector- vastly enhancing the ability of landlords to gain vacant possession of properties with overholding tenants (regardless of whether, or not, they are paying their rent).

    The high cost of loans in Ireland- is a direct response of government action in Ireland- which safeguards people in their homes, both owners and tenants- regardless of whether or not they are paying their way. Thats all well and good- however, there is a cost associated with this- a cost that the normal borrowers of this country are forced to pay.


  • Registered Users Posts: 271 ✭✭Earleybird


    koheim wrote: »
    It seems like most people are defending the Bank's high interest rates, and I do not understand why. Cheaper credit would benefit everyone. Also, the Banks were actually bailed out already for the mistakes they did pre 2009, I doubt that there are many mortgages starting after 2009 in Arrears?. The pre 2009 has been dealt with in the bail out, but still Banks are using this excuse to collectivly (like a cartel) keeping morgage interest rates artificial high, it is like an extra tax at this stage.

    I don't think people are defending banks, that's just the reality. I think you've probably got a bit caught up in conspiracy theories. I can tell you now that there are also thousands of mortgages which originated after 2009 in arrears. I'm not sure you fully understand though, what would cheaper credit do? Are you aware of the factors which created the last crisis?


  • Registered Users Posts: 10,905 ✭✭✭✭Bob24


    Graham wrote: »
    According to the chief economist at Davy:



    Personally I don't expect prices to drop in 2018. Demand is still significantly outstripping supply and mortgage approvals are increasing.

    I do expect increases at the upper middle end of the market to be tempered slightly as central bank ceilings are hit.

    Yes it’s the same thing every year. Things cool down from September in as mortgage exceptions get depleted, and then the number of potential buyers falls gradually as those who wanted a place before the start of school are sorted, and people get in Christmas planning mood and enjoy their end of year holiday.

    It then picks-up again a few weeks after Christmas.

    That’s my experience anyway.


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  • Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Bob24 wrote: »
    Yes it’s the same thing every year. Things cool down from September in as mortgage exceptions get depleted, and then the number of potential buyers falls gradually as those who wanted a place before the start of school are sorted, and people get in Christmas planning mood and enjoy their end of year holiday.

    It then picks-up again a few weeks after Christmas.

    That’s my experience anyway.

    Yup- its a seasonal thing.
    No particular reason to believe this year is any different- its following a pattern well established over the past years..........


  • Registered Users Posts: 365 ✭✭KellyXX


    Bob24 wrote: »
    Yes it’s the same thing every year. Things cool down from September in as mortgage exceptions get depleted, and then the number of potential buyers falls gradually as those who wanted a place before the start of school are sorted, and people get in Christmas planning mood and enjoy their end of year holiday.

    It then picks-up again a few weeks after Christmas.

    That’s my experience anyway.

    That's always been the pattern. It's not just because of excemptions


  • Registered Users Posts: 1,238 ✭✭✭The Student


    We're not defending Irish banking institutions high interest rates- we're explaining them- there is a vast difference.
    I could get a mortgage tomorrow in any other EU country- at a lower interest rate than here- because the cost of lenders doing business here- is so much higher- particularly when you factor non-performing loans into the equation- than in any other EU country.

    Even now- we have 10% of all mortgages in an impaired state- versus a 'normal' level of between 3 and 4% (and this is despite instructions from the ECB to get our houses in order).

    Bank valuations are going up- and shareholders have a reasonable expectation of getting a return on their investment.

    Keeping 10% of non-performing loans on their balance sheets- has a cost- a cost that the good customers of Irish financial institutions have to pay.

    If you want Irish interest rates to come down- it implies you normalise banking practices in this country- which implies vastly loosening the ability of lenders to repossess properties with non-performing loans in lien on them- and in the case of the residential letting sector- vastly enhancing the ability of landlords to gain vacant possession of properties with overholding tenants (regardless of whether, or not, they are paying their rent).

    The high cost of loans in Ireland- is a direct response of government action in Ireland- which safeguards people in their homes, both owners and tenants- regardless of whether or not they are paying their way. Thats all well and good- however, there is a cost associated with this- a cost that the normal borrowers of this country are forced to pay.

    Completely agree, the sooner we regularize our housing sector the better for all involved. We have this bizarre notion that everybody should be housed where they want no matter what and they should not be held accountable for their actions.

    It's society's responsibility to give them what they want.


  • Registered Users Posts: 945 ✭✭✭Colonel Claptrap


    koheim wrote: »
    Also, the Banks were actually bailed out already for the mistakes they did pre 2009, I doubt that there are many mortgages starting after 2009 in Arrears?. The pre 2009 has been dealt with in the bail out, but still Banks are using this excuse to collectivly (like a cartel) keeping morgage interest rates artificial high, it is like an extra tax at this stage.

    Banks didn't clear their books in 2009 and start fresh. People defaulted and continue to default every day.

    Also not all bad debts were packaged up and bailed out. Only those in severe difficulty with little to no chance of restarting repayments.

    The bulk of this bad debt was commercial loans. Mortgage debt was only part of the bailout.


  • Closed Accounts Posts: 196 ✭✭karenalot


    Bob24 wrote: »
    Yes it’s the same thing every year. Things cool down from September in as mortgage exceptions get depleted, and then the number of potential buyers falls gradually as those who wanted a place before the start of school are sorted, and people get in Christmas planning mood and enjoy their end of year holiday.

    It then picks-up again a few weeks after Christmas.

    That’s my experience anyway.

    The central bank also relaxed the rules in Jan 2017 for first time buyers to only need a 10% overall deposit. Previously they needed 20% on anything over 220k. Coupled in with the Help to Buy scheme I’d imagine this added quite a few new buyers at the beginning of the year.


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  • Registered Users Posts: 1,126 ✭✭✭missmatty


    We've been looking 2 years and there was a definite big upswing in the amount of other people looking from early 2017.

    I wish to god now that we had bought one of the first 5 houses we viewed, we were too picky and it took us a while to decide what & where we really wanted to buy. Meanwhile I would say the price difference in properties is 20k higher than it was when we started.


  • Registered Users Posts: 4,758 ✭✭✭enricoh


    Talking to a commuter belt estate agent today and he was saying it has definitely plateau'd (is that a word?!) Out the last 5 months or so.
    He has a few new developments to sell and was saying they are selling slowly, nobody queuing up etc. The builders can only get finance off glorified loan sharks at big interest rates and the loan sharks are the real ones making the money.

    Coupled with the fact that home sellers are believing the hype and think they'll get an extra 10 or 15 % next year so hold off.


  • Moderators, Computer Games Moderators Posts: 15,225 Mod ✭✭✭✭FutureGuy


    http://www.thejournal.ie/property-prices-2018-3784492-Jan2018/

    What are people’s thoughts here? Predictions for increases through this year, with Limerick suburbs expecting up to a 20% rise?


  • Registered Users Posts: 10,905 ✭✭✭✭Bob24


    FutureGuy wrote: »
    http://www.thejournal.ie/property-prices-2018-3784492-Jan2018/

    What are people’s thoughts here? Predictions for increases through this year, with Limerick suburbs expecting up to a 20% rise?

    I get the rational for their forecasts and they might well be correct if things keep going the year the same way as they did last year, but I guess the problem with those predictions is that they get it more or less right year after year ... until they get it horribly wrong because their assumptions are made wrong due to some circonstances they didn’t or couldn’t see coming.


  • Registered Users Posts: 214 ✭✭Henbabani


    FutureGuy wrote: »
    http://www.thejournal.ie/property-prices-2018-3784492-Jan2018/

    What are people’s thoughts here? Predictions for increases through this year, with Limerick suburbs expecting up to a 20% rise?
    That's the same assumption that predict 12-15% increase in 2017? :)
    I don't think it's going to happened, people spoke about 12-15% increase this year but we finished with less than 9%, which still big increase, people start to understand that massive jobs will not come from London to Dublin, supply start to face demand, maybe this year or the next is the last time we'll see big increases in the coming years.


  • Registered Users Posts: 49 Averagevegan


    Henbabani wrote: »
    That's the same assumption that predict 12-15% increase in 2017? :)
    I don't think it's going to happened, people spoke about 12-15% increase this year but we finished with less than 9%, which still big increase, people start to understand that massive jobs will not come from London to Dublin, supply start to face demand, maybe this year or the next is the last time we'll see big increases in the coming years.


    I think we will see 15% in d4. Prices in d4 have only increased ~5% p.a. for the last 2 years so there is room to catch up.


  • Registered Users Posts: 712 ✭✭✭jsd1004


    Henbabani wrote: »
    That's the same assumption that predict 12-15% increase in 2017? :)
    I don't think it's going to happened, people spoke about 12-15% increase this year but we finished with less than 9%, which still big increase, people start to understand that massive jobs will not come from London to Dublin, supply start to face demand, maybe this year or the next is the last time we'll see big increases in the coming years.

    In reality it was 20-25%. And rents are up the same.


  • Registered Users Posts: 214 ✭✭Henbabani


    jsd1004 wrote: »
    Henbabani wrote: »
    That's the same assumption that predict 12-15% increase in 2017? :)
    I don't think it's going to happened, people spoke about 12-15% increase this year but we finished with less than 9%, which still big increase, people start to understand that massive jobs will not come from London to Dublin, supply start to face demand, maybe this year or the next is the last time we'll see big increases in the coming years.

    In reality it was 20-25%. And rents are up the same.
    when you split Dublin - only the city center saw 20.8% increase, south and north city saw 11%, west and north county saw 11% also, and south county only 5%, don't know where you see 25%.
    the details from here:
    https://www.daft.ie/report/2017-Q4-dafthouseprice-report.pdf


  • Registered Users Posts: 712 ✭✭✭jsd1004


    Henbabani wrote: »
    when you split Dublin - only the city center saw 20.8% increase, south and north city saw 11%, west and north county saw 11% also, and south county only 5%, don't know where you see 25%.
    the details from here:
    https://www.daft.ie/report/2017-Q4-dafthouseprice-report.pdf

    Thats the Daft report. Ive seen 20-30% increase. The last quarter has been especially nuts. 2 bed apartments going for 440k. They would have been 300 max a year ago and that would have been generous. Student rooms are 7k per student year now. Were as little as 4k a year ago.


  • Registered Users Posts: 10,905 ✭✭✭✭Bob24


    jsd1004 wrote: »
    2 bed apartments going for 440k. They would have been 300 max a year ago and that would have been generous.

    Which area? I've seen large increases in GCD, but nowhere near that. A 2 bed which was 400k 2 years ago would probably be 500k now, which is a big increase for 2 years but nothing like the yearly increase you are mentioning.


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  • Registered Users Posts: 861 ✭✭✭Zenify


    jsd1004 wrote: »
    Thats the Daft report. Ive seen 20-30% increase. The last quarter has been especially nuts. 2 bed apartments going for 440k. They would have been 300 max a year ago and that would have been generous.

    So you're saying that you have seen a 2 bed apartment increase by nearly 50% in one year?


  • Registered Users Posts: 712 ✭✭✭jsd1004


    Bob24 wrote: »
    Which area?

    Strand apartments in the city are now fetching up to 440k each. I deal in student accommodation (castletroy) and next year will be 7k per room per academic year minimum. I have some professional accommodation (castletroy)and that is now around 450 euro per month rate per room. 500 for an ensuite. Troy and Northern Trust have put a huge strain on supply.

    http://www.limerickleader.ie/news/home/286233/limerick-city-apartment-makes-biggest-price-since-boom.html


  • Registered Users Posts: 10,905 ✭✭✭✭Bob24


    Ah OK Limerick seems to be in a league of its own.


  • Registered Users Posts: 712 ✭✭✭jsd1004


    Zenify wrote: »
    So you're saying that you have seen a 2 bed apartment increase by nearly 50% in one year?

    Yes and more..Some apartments in limerick have increased in value by 300% in 5 years. 13 ballantyne place sold for 35k in 2013. Now for sale for 120k


  • Registered Users Posts: 3 BettyRB


    Well, this thread makes sobering reading with the strong price growth predicted by most of you. Do people think this is a good thing? I'd of thought big mortgages suck the life out of other areas of the economy, we seem obsessed with high house prices though. I'm certainly priced out of Dublin, hope 2018 isn't too disastrous in term of rises but I fear the worst. Nobody is shouting stop either.


  • Registered Users Posts: 49 Averagevegan


    BettyRB wrote: »
    Well, this thread makes sobering reading with the strong price growth predicted by most of you. Do people think this is a good thing? I'd of thought big mortgages suck the life out of other areas of the economy, we seem obsessed with high house prices though. I'm certainly priced out of Dublin, hope 2018 isn't too disastrous in term of rises but I fear the worst. Nobody is shouting stop either.

    High house prices are a disaster. But there is a wedge of unproductive society that relays on high priced to keep them in a lifestyle that they've become accustom to.


  • Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    BettyRB wrote: »
    Well, this thread makes sobering reading with the strong price growth predicted by most of you. Do people think this is a good thing? I'd of thought big mortgages suck the life out of other areas of the economy, we seem obsessed with high house prices though. I'm certainly priced out of Dublin, hope 2018 isn't too disastrous in term of rises but I fear the worst. Nobody is shouting stop either.

    I don't think that anyone is denying that prices are going to rise- however, I'd argue that the 'strongly' part of the equation- is very location dependent. Most of Dublin is simply unaffordable for most- incomes have been creeping up at a far lower rate than house (and other) prices. According to the CSO average income in 2017 increased by 1.8% and IBEC are on the record predicting wage increases of 1.9% for 2018. This 'constraint' is concurrently being reported as a good thing- and simultaneously- heralded as proof that we have learnt a lesson from the bust 11 years ago- and are paying down debt, rather than spending (which is supported by Department of Finance income tax figures- which are at odds with below profile returns for alcohol, tobacco and other headings).

    Dublin price rises- are tame in comparison to the rest of the country (and especially tame in comparison to the likes of Limerick- which just seems to be nuts- though Cork and Galway appear to be moderating, not at the same rate as Dublin- but heading in that direction.

    Supply is increasing- and affordability- is rapidly becoming an issue- quite when the top of the market is called- is more a question of a time frame than a suggestion of a unicorn sighting- and is rapidly being viewed in this manner.

    As for some people having gotten used to high prices- and a particular lifestyle- honestly- its vastly overstated- the bigger beneficiary of all of this- are multinational companies who bought Irish property during the downturn and aren't paying tax on their rental income- and the Revenue Commissioners themselves- who levy up to 54% tax on some small scale Irish landlords. This salient fact is very seldom mentioned in the media.

    Irish prices- are nuts- and are costing us jobs- both Brexit related jobs and other multinational posts. Irish taxes- are making it impossible to remunerate Irish employees. Irish governments- have made working incredibly expensive- and seem to love having a high cost economy- which is destroying the lives of those who live here- and vastly costly in terms of the HSE and social welfare costs. Some deals- such as the incredibly expensive agreements with pharmaceutical companies- are hammering those who are doing their utmost just to get by.

    There are lots of things wrong in the Irish economy- of which our house prices and rent levels- are just two items on the list. They are now (with the exception of some bizarre outliers- such as Limerick) moderating- we *need* to moderate the other costs in our economy before they sink us (keeping in mind our demographic time bomb is going to hit us in the next decade- about 10 years later than some other EU countries- but its there nonetheless).


  • Registered Users Posts: 4,472 ✭✭✭Villa05


    Dublin price rises- are tame in comparison to the rest of the country (and especially tame in comparison to the likes of Limerick- which just seems to be nuts- though Cork and Galway appear to be moderating, not at the same rate as Dublin- but heading in that direction.


    Are Dublin prices tame in comparison to Limerick. I always thought Limerick property market trailed Dublin by 2 to 3 years and is only currently playing catch up unfortunately


  • Moderators, Society & Culture Moderators Posts: 32,278 Mod ✭✭✭✭The_Conductor


    Villa05 wrote: »
    Are Dublin prices tame in comparison to Limerick. I always thought Limerick property market trailed Dublin by 2 to 3 years and is only currently playing catch up unfortunately

    Dublin prices never rose 40%+ in a year- akin to what is on display in some areas of Limerick......... I've never seen the likes of it.


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  • Registered Users Posts: 10,905 ✭✭✭✭Bob24


    Villa05 wrote: »
    Are Dublin prices tame in comparison to Limerick. I always thought Limerick property market trailed Dublin by 2 to 3 years and is only currently playing catch up unfortunately

    Dublin prices never rose 40%+ in a year- akin to what is on display in some areas of Limerick......... I've never seen the likes of it.

    I’m not familiar with the the Limerick marker so this might be a dumb question, but could the sharer rise now be explained by having experienced sharper drops when times were bad?


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