Brexit and Irish Property

embers_fire · 11-02-2019 9:57am #1

I've just gone sale agreed on a property in Galway. After looking seriously for the last two years, I've seen prices increase rapidly and have been out-bid, had sellers pull out (due to wanting more money) and now I think I may have a house that the seller will actually sell.
But should I pull out and wait a few months to see if Brexit affects house prices?

I'm not expecting asking prices to drop in the next six months regardless of outcome but maybe there will be less people bidding and this will affect selling price. The house I am looking to buy now is going for 5k less than asking but the asking was higher than typical prices in the area. There did seem to be less interest than usual though.

NIMAN · 11-02-2019 10:03am

There has already been articles and data to show that house price rises have slowed, and stopped, in some parts of the country.

Whether or not this is related to Brexit is debatable. Maybe they have just naturally reached their ceiling. They were increasing at crazy rates in the major cities, so maybe they were always going to slow down at some point.

The one way that a hard Brexit may affect house prices is due to the Irish economy getting a battering from it, a slow down occurring, unemployment going up, and a slight panic setting in. Maybe like 08 on a smaller scale perhaps?

amcalester · 11-02-2019 10:19am

It's hard to know what will happen.

FWIW I bought late last year in a border town, a fairly standard new build 3 bed semi-d. Brexit did concern me, but I needed somewhere to live and buying where I did was cheaper than renting in Dublin (even allowing for increased commuting costs).

2 things that made me less worried about buying now were 1) my job is not dependent on the Irish economy and 2) my partner and I could afford the mortgage on 1 salary if we were to lose a job (the mortgage application was based on 1 salary).

Where I bought had an open day at the weekend and there seemed to be a lot of interest in the next phase which have increased in price by 5% since I bought.

marieholmfan · 11-02-2019 10:23am

A hard Brexit will impact your ability to borrow.

_Brian · 11-02-2019 10:31am

The bigger question Is will Brexit affect your job ?
If you can afford this house and your job is secure what difference what happens.

Irish people need to stop seeing a house as a thing that is only useful if it continually appreciates in value.

If you pay €300k now and in six months it’s worth €250k, what difference, if it’s your home it’s the same house with same rooms.

drunkmonkey · 11-02-2019 10:41am

Over the life of the mortgage I'd expect prices to come way down as the current bubble is fuelled by a lack of houses. That should be fixed within the next few years.
I'd ask myself a few questions,
do I care if prices go up or down?
Am I still able to live comfortably if I put 3 kids in the mix with the current mortgage repayments? Can the house accommodate them.
Money is very cheap right now, can I handle an extra few percent on the interest rate?
Location, Location, Location, am I happy to live here as in is it a final home or just a stop gap to where you want to be?

Brexit might have an effect but I'd be more worried if I was a farmer about the effects on income and land values.

Houses are overpriced right now but your aware of that so don't look at it as an investment that boat has sailed.
Depending on your age and circumstances renting right now might not be the end or the world, they say rent is dead money that would be true in a properly functioning house market but we don't have on in Ireland until supply catches up with demand.

embers_fire · 11-02-2019 10:42am

_Brian wrote: »

If you pay €300k now and in six months it’s worth €250k, what difference, if it’s your home it’s the same house with same rooms.

I can see your point but a 50k reduction in price is 50k less owed to the bank (or maybe 40 - 45k less when rent payment for additional months is taken into account). Which equates to several years less without debt for six months of waiting.

murphaph · 11-02-2019 10:57am

Brexit may also see an influx of people to Ireland, both Brits looking to move their businesses and the diverted flow of labour from continental Europe. There are so many variables.

phunkadelic · 11-02-2019 10:58am

embers_fire wrote: »

I can see your point but a 50k reduction in price is 50k less owed to the bank (or maybe 40 - 45k less when rent payment for additional months is taken into account). Which equates to several years less without debt for six months of waiting.

Exactly, it's nothing to do with hoping your house will appreciate in value. Why would you want to pay 10% more now. Would be a sickener if it drops 10% in the next year.

AlmightyCushion · 11-02-2019 11:39am

embers_fire wrote: »

I can see your point but a 50k reduction in price is 50k less owed to the bank (or maybe 40 - 45k less when rent payment for additional months is taken into account). Which equates to several years less without debt for six months of waiting.

If house prices drop 20% in the space of 6 months (which is the reduction in the post you are replying to) then you'd probably have much bigger problems. Even in the 2008 crash I don't think house prices dropped that quick and in that crash the economy was nearly destroyed here.

embers_fire · 11-02-2019 5:55pm

AlmightyCushion wrote: »

If house prices drop 20% in the space of 6 months (which is the reduction in the post you are replying to) then you'd probably have much bigger problems. Even in the 2008 crash I don't think house prices dropped that quick and in that crash the economy was nearly destroyed here.

I wouldn't imagine property prices would drop by 50k over six months but there could be some drop in purchase prices towards the end of the year. Asking prices will probably remain the same or even continue to rise but it is possible that the agreed sale prices may drop compared to what is being asked.
I'd be concerned that purchasing now may be a bad idea compared to several months from now i.e. I may get a better deal if I wait.

marieholmfan · 11-02-2019 6:14pm

phunkadelic wrote: »

Exactly, it's nothing to do with hoping your house will appreciate in value. Why would you want to pay 10% more now. Would be a sickener if it drops 10% in the next year.

No it wouldn't.
Unless you are a cash only buyer a declining market will have a significant impact on your ability to borrow.

Samuel T. Cogley · 11-02-2019 6:35pm

I'd say you're in a better position now than post Brexit. People are probably holding off, expect more competition once the unknowns are known.

marieholmfan · 11-02-2019 6:54pm

Samuel T. Cogley wrote: »

I'd say you're in a better position now than post Brexit. People are probably holding off, expect more competition once the unknowns are known.

Maybe. It depends on how much money you have, if you have 50% of the price of the house you want than waiting could mean a significant saving.
Lending in Ireland could collapse post Brexit.

macnug · 11-02-2019 7:01pm

embers_fire wrote: »

I can see your point but a 50k reduction in price is 50k less owed to the bank (or maybe 40 - 45k less when rent payment for additional months is taken into account). Which equates to several years less without debt for six months of waiting.

More if you include interest.

alwald · 11-02-2019 11:25pm

Another event to throw into the mix, apart from Brexit and trade wars, is May's European Parliament elections which could see 1/3 of the seats won by Eurosceptic parties.

The rise of these parties could "undermine and cause irreparable damage to areas such as trade, security, and defence," it said.

Far-right political parties for the first time could win enough seats that would allow them -- at least on paper -- to disrupt the EU’s legislative business. And while that would require a hodgepodge of parties to overcome fundamental policy differences, Italy’s anti-immigration Deputy Prime Minister Matteo Salvini has already sought with mixed success to forge alliances with leaders including Poland’s Jaroslaw Kaczynski and Hungary’s Viktor Orban to usher in a “new European spring.”

https://www.euronews.com/2019/02/11/eurosceptic-parties-could-win-a-third-of-seats-or-more-in-may-elections-study

https://www.bloomberg.com/news/articles/2019-02-10/spanish-premier-is-running-out-of-options-ahead-of-key-vote

booksale · 12-02-2019 6:01am

I was told by a police that there are a lot of people from Europe moving to Ireland from UK recently because of Brexit. I imagine the increased population would put pressure on Irish accommodation.

We bought a house and we were cash buyers. Basically we are broke now after buying the house in a rural where we could afford. But we are happy we have a our place we called it home. And we are ready for a career change and change of life style. We feel good without having worrying about paying rent. Although there are things to do in the house, we can do it in our pace whenever we can afford.

Husband was not sure as he believed price would drop as on top of Brexit, his brother in law in finance predicted there would be economy crisis and things were slowing down in China, USA, Middle East...

But my thinking was we need a home and we are not sure when the price would be dropping. We would be using our saving to pay the rent and might be the money we saved by delaying buying would not cover the rent we pay.

Wanderer78 · 12-02-2019 7:49am

booksale wrote:

But my thinking was we need a home and we are not sure when the price would be dropping. We would be using our saving to pay the rent and might be the money we saved by delaying buying would not cover the rent we pay.

There's never a perfect time to buy a home, nobody can accurately predict a recession, it's a risk you take. Best of luck with the house

Mad_maxx · 12-02-2019 10:32pm

AlmightyCushion wrote: »

If house prices drop 20% in the space of 6 months (which is the reduction in the post you are replying to) then you'd probably have much bigger problems. Even in the 2008 crash I don't think house prices dropped that quick and in that crash the economy was nearly destroyed here.

From spring 2007 to July 2009, property prices dropped 40%, then another 20% from then until mid 2012

That waa an extraordinary time of course, I reckon there is a bit of pre brexit nerves right now but that unless brexit goes really pear shaped, we will see a big bounce in 2019

superd1978 · 24-09-2019 10:35am

Bumping this post, as Im in a similar situation. Has anyone any updated views on economy / property, given we are now facing an impending no-deal brexit?

Im suppose Im trying to understand how a no-deal brexit can impact property here in ireland

Im been looking to buy a property over recent months, however i think the sensible move is to sit things out for a few months.

Bluefoam · 24-09-2019 11:14am

superd1978 wrote: »

Bumping this post, as Im in a similar situation. Has anyone any updated views on economy / property, given we are now facing an impending no-deal brexit?

Im suppose Im trying to understand how a no-deal brexit can impact property here in ireland

Im been looking to buy a property over recent months, however i think the sensible move is to sit things out for a few months.

Theres two ways things can go:

the property market is facing impending doom, we're all ****ed
it's actually not that bad, we'll be grand

Either way, take into account your job stability, stability of the banks, possibility of falling or rising prices, interest rates and how they will effect the market, your ability to pay the mortgage...

Glad I could help

antiskeptic · 24-09-2019 11:21am

superd1978 wrote: »

Bumping this post, as Im in a similar situation. Has anyone any updated views on economy / property, given we are now facing an impending no-deal brexit?

Im suppose Im trying to understand how a no-deal brexit can impact property here in ireland

Im been looking to buy a property over recent months, however i think the sensible move is to sit things out for a few months.

The trouble is we don't know if we are facing an impending no deal Brexit. That game is very much in play.

If No deal house prices could be expected to deflate - as will the amount of money you can borrow along with the ease with which tou can borrow it.

If soft/no brexit then probably back to flat or gentle increase.

A lot depends on whether you're a cash buyer or not. If I had cash I'd wait. Otherwise you got to consider both options have downsides

Brexit and Irish Property

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