Irish Property Market 2020 Part 2

Timing belt · 18-10-2020 12:14am

Geuze wrote: »

IMF forecasts:

Do these forecasts including what they are classifying as a severe stress with more lockdowns or is it based on the assumption that a vaccine is found and we all go back to normal.

Geuze · 18-10-2020 12:18am

Meandyou999 wrote: »

Is a price drop of say 100k expected.?

No.

Geuze · 18-10-2020 12:40am

Timing belt wrote: »

Do these forecasts including what they are classifying as a severe stress with more lockdowns or is it based on the assumption that a vaccine is found and we all go back to normal.

https://www.imf.org/en/Publications/WEO/Issues/2020/09/30/world-economic-outlook-october-2020

The baseline projection assumes that social distancing will continue into 2021 but will subsequently fade over time as vaccine coverage expands and therapies improve.

Local transmission is assumed to be brought to low levels everywhere by the end of 2022. The medium-term projections also assume that economies will experience scarring from the depth of the recession and the need for structural change, entailing persistent effects on potential output. These effects include adjustment costs and productivity impacts for surviving firms as
they upgrade workplace safety, the amplification of the shock via firm bankruptcies, costly resource reallocation across sectors, and discouraged workers’ exit from the workforce. The scarring is expected to compound forces
that dragged productivity growth lower across many economies in the years leading up to the pandemic—relatively slow investment growth weighing on physical capital accumulation, more modest improvements in
human capital, and slower efficiency gains in combining
technology with factors of production.

Vestiapx · 18-10-2020 12:42am

Timing belt wrote: »

Yes you are correct to say that we don't know the full fall out of the economic crash. If it is short and sharp then there will probably be no impact on the housing market.

If it is a slow then the probability of a implosion in the financial market increases.

What if they print money ?

Timing belt · 18-10-2020 12:46am

Vestiapx wrote: »

What if they print money ?

There is a limit to the amount of money they print and history has thought us that lessons in relation to this.

Springy Turf · 18-10-2020 12:51am

Geuze wrote: »

https://www.imf.org/en/Publications/WEO/Issues/2020/09/30/world-economic-outlook-october-2020

The baseline projection assumes that social distancing will continue into 2021 but will subsequently fade over time as vaccine coverage expands and therapies improve.

Local transmission is assumed to be brought to low levels everywhere by the end of 2022. The medium-term projections also assume that economies will experience scarring from the depth of the recession and the need for structural change, entailing persistent effects on potential output. These effects include adjustment costs and productivity impacts for surviving firms as
they upgrade workplace safety, the amplification of the shock via firm bankruptcies, costly resource reallocation across sectors, and discouraged workers’ exit from the workforce. The scarring is expected to compound forces
that dragged productivity growth lower across many economies in the years leading up to the pandemic—relatively slow investment growth weighing on physical capital accumulation, more modest improvements in
human capital, and slower efficiency gains in combining
technology with factors of production.

I think for Ireland's case (not listed there) there is the shock of Brexit to consider as well. Odds are 50/50 on no deal right now.

Geuze · 18-10-2020 12:53am

Vestiapx wrote: »

What if they print money ?

If?

QE started years ago.

The ECB started QE in 2014.

They have created billions of euro to buy financial assets.

Geuze · 18-10-2020 12:55am

Vestiapx wrote: »

What if they print money ?

https://www.ecb.europa.eu/mopo/implement/omt/html/index.en.html

The ECB’s Asset Purchase Programme (APP) is part of a package of non-standard monetary policy measures that also includes targeted longer-term refinancing operations, and which was initiated in mid-2014 to support the monetary policy transmission mechanism and provide the amount of policy accommodation needed to ensure price stability.
It consists of the

corporate sector purchase programme (CSPP)
public sector purchase programme (PSPP)
asset-backed securities purchase programme (ABSPP)
third covered bond purchase programme (CBPP3)

APP net purchases, by programme

Between October 2014 and December 2018 the Eurosystem conducted net purchases of securities under one or more of the asset purchase programmes. During the net asset purchase phase, monthly purchase pace averaged:

€60 billion from March 2015 to March 2016
€80 billion from April 2016 to March 2017
€60 billion from April 2017 to December 2017
€30 billion from January 2018 to September 2018
€15 billion from October 2018 to December 2018

Between January 2019 and October 2019, the Eurosystem fully reinvested the principal payments from maturing securities held in the APP portfolios. The Governing Council aimed to maintain the size of its cumulative net purchases under each constituent programme of the APP at their respective levels as at the end of December 2018.

On 12 September 2019 the ECB Governing Council decided that “net purchases will be restarted under the Governing Council’s asset purchase programme (APP) at a monthly pace of €20 billion as from 1 November 2019. The Governing Council expects them to run for as long as necessary to reinforce the accommodative impact of its policy rates, and to end shortly before it starts raising the key ECB interest rates.” On 12 March 2020 the ECB Governing Council decided to add “a temporary envelope of additional net asset purchases of €120 billion” until the end of 2020.

Geuze · 18-10-2020 12:55am

Vestiapx wrote: »

What if they print money ?

Here is the amount of money created each month by the ECB, used to buy financial assets:

index_content.en_clip_image002.png?tyui

Meandyou999 · 18-10-2020 10:17am

Bass Reeves wrote: »

Houses in rural have continued to rise over the last 3-5 years. They were slower to recover than Dublin prices so there prices reflect that compared to 4years ago.

Repayments would be about 1220/month over 25years on a 5year fixed rate. That is 38 percent of take home pay. It a bit above what is recommended however on low wage this will always e an issue.

Will houses prices crash Who knows. But those that are most bearish on this consider that WFH will attract people to houses outside larger urban areas. How this will effect rural houses prices is the question

Thanks.
Would it be safee over 30 years.
Also more interest paid.

JJJackal · 18-10-2020 10:47am

Springy Turf wrote: »

I think for Ireland's case (not listed there) there is the shock of Brexit to consider as well. Odds are 50/50 on no deal right now.

I wonder if COVID has mediated the shock of no deal.

By this I mean, has alot of the negative already been done eg decreased tourists, decreased consumption of Irish products in UK

Anyone know?

OwlsZat · 18-10-2020 12:01pm

JJJackal wrote: »

I wonder if COVID has mediated the shock of no deal.

By this I mean, has alot of the negative already been done eg decreased tourists, decreased consumption of Irish products in UK

Anyone know?

I thought it was just about our beef/dairy exports. 85% go to the UK. We will need to reduce the prices in a currently loss making sector.

Danzy · 18-10-2020 12:04pm

OwlsZat wrote: »

I thought it was just about our beef/dairy exports. 85% go to the UK. We will need to reduce the prices in a currently loss making sector.

Loss making?

There is billions being made.

Agri will be hit hard by a no deal Brexit but the real money will be lost in services.

Springy Turf · 18-10-2020 2:34pm

Danzy wrote: »

Loss making?

There is billions being made.

Agri will be hit hard by a no deal Brexit but the real money will be lost in services.

By who? Not the farmers - they are on subsidies to make ends meet.

CardMagic · 18-10-2020 4:41pm

Anyone know when we are likely the see more new developments finished in dublin? I see a lot of signs for new builds as I travel around Dublin but progress seems slow. The HTB scheme appears quite lucrative but I feel I could be waiting a long time and information is hard to come by for these new developments.

jgt3 · 18-10-2020 6:14pm

Springy Turf wrote: »

By who? Not the farmers - they are on subsidies to make ends meet

True, but the industry as a whole is making cash hand over fist. Really a rigged system we built.

cnocbui · 18-10-2020 6:45pm

jgt3 wrote: »

True, but the industry as a whole is making cash hand over fist. Really a rigged system we built.

Do you work for free then?

jgt3 · 18-10-2020 6:56pm

cnocbui wrote: »

Do you work for free then?

Certainly not working for free. Don't know where anyone asked for that.

cnocbui · 18-10-2020 7:11pm

jgt3 wrote: »

Certainly not working for free. Don't know where anyone asked for that.

I took it you were talking about house building. were you talking about something else?

jgt3 · 18-10-2020 7:20pm

cnocbui wrote: »

I took it you were talking about house building. were you talking about something else?

No I forgot to quote but I was working on the tangent about beef industry / brexit.

Bass Reeves · 18-10-2020 9:15pm

Meandyou999 wrote: »

Thanks.
Would it be safee over 30 years.
Also more interest paid.

Over 30 years repayments should be about 150/ month less at about 11070/ month on a five year fixed. It we would cost about 18-20kin extra interest. However I would not get caught up on extra interest if it reduced financial stress on you it would be worth it.

My own theory on mortgages is usually financial stress occurs more because of ancillary loans or borrowings that are short-term such as credit cards or car loans. If a longer term mortgage allows you to avoid prepaying electricity, or stage paying insurance or car tax it will allow you to control savings better.

salamiii · 18-10-2020 9:20pm

Dublin September house prices sold down

https://www.propertypriceregister.ie/website/npsra/PPR/npsra-ppr.nsf/PPR-By-Date&Start=1&Query=%5Bdt_execution_date%5D%3E=01/09/2020%20AND%20%5Bdt_execution_date%5D%3C01/10/2020%20AND%20%5Bdc_county%5D=Dublin&County=Dublin&Year=2020&StartMonth=09&EndMonth=09&Address=

Sarn · 18-10-2020 9:56pm

salamiii wrote: »

Dublin September house prices sold down

https://www.propertypriceregister.ie/website/npsra/PPR/npsra-ppr.nsf/PPR-By-Date&Start=1&Query=%5Bdt_execution_date%5D%3E=01/09/2020%20AND%20%5Bdt_execution_date%5D%3C01/10/2020%20AND%20%5Bdc_county%5D=Dublin&County=Dublin&Year=2020&StartMonth=09&EndMonth=09&Address=

Did you post the wrong link? That doesn’t provide any information on trends up or down.

Timing belt · 18-10-2020 10:24pm

Included within AIB's half yearly report are there assumptions for the economy to work out the level of bad debt provision booked.

Apologise if this has already been shared but I thought people may be interested in there assumptions on house prices

Source: https://aib.ie/investorrelations/financial-information/results-centre/2020-annual-financial-results

Timing belt · 18-10-2020 10:34pm

Here is BOI Assumptions included in there Half yearly report

source: https://investorrelations.bankofireland.com/app/uploads/BOI-Interim-Report-2020.pdf

Timing belt · 18-10-2020 10:47pm

It will be interesting to see if there is a change in assumptions when they publish there Q3 results at the end of the month

hometruths · 18-10-2020 10:49pm

Timing belt wrote: »

It will be interesting to see if there is a change in assumptions when they publish there Q3 results at the end of the month

Yes, presumably the probability of "Upside Scenario' is looking much closer to zero now.

Actually probability of BOI's 'Central Scenario' also looking a lot more like zero now too.

Timing belt · 18-10-2020 10:53pm

schmittel wrote: »

Yes, presumably the probability of "Upside Scenario' is looking much closer to zero now.

Actually probability of BOI's 'Central Scenario' also looking a lot more like zero now too.

Bank of Ireland do make reference to house price lagging behind the economy.

hometruths · 18-10-2020 10:55pm

Timing belt wrote: »

Bank of Ireland do make reference house price lagging behind the economy.

Yes but presumably the 10% fall prediction was by year end. I guess they will update that too.

Timing belt · 18-10-2020 10:57pm

schmittel wrote: »

Yes but presumably the 10% fall prediction was by year end. I guess they will update that too.

I see what you mean... will be interesting to see if they push it out to 2021

thefridge2006 · 18-10-2020 11:20pm

HotDudeLife wrote: »

I like how selective you are in choosing 2024 (in an attempt to undermine my contribution to this thread) when my post stated late 2022 and 2023/24. Newsflash, there is not much time between late 2022 and 2023.

May i ask how exactly are you a mod? All you seem to do is try embarrass and vilify posters who expect property prices to drop.

I've said this in the past. Some Mods in here should be ashamed of themselves.

JimmyVik · 19-10-2020 9:07am

I would like to officially push out my prediction of a major property price drop to Jan 2022 from my previous one of Jan 2021.
If it hasnt happened by then, make it Jan 2023.
I'll be right in the end. I always am.

Balluba · 19-10-2020 9:19am

JimmyVik wrote: »

I would like to officially push out my prediction of a major property price drop to Jan 2022 from my previous one of Jan 2021.
If it hasnt happened by then, make it Jan 2023.
I'll be right in the end. I always am.

I see that the Daft Report/ Oct is published this morning

fliball123 · 19-10-2020 9:44am

Balluba wrote: »

I see that the Daft Report/ Oct is published this morning

http://www.msn.com/en-ie/money/news/house-prices-rise-5percent-as-supply-falls-to-lowest-in-over-a-decade/ar-BB1aa3Za?li=BBr5KbJ&ocid=iehp

wow and here was me being ridiculed continuously over stating that supply is dwindling all the time and that this would impact price as night is dark and day is light both statements are true as is supply vs demand = price ...

So the theories of housing follows the economy ...when did the ecconomy go up by 5% in the last 2 years???? I have said that this time it is different then 2008 the comparisons on here to that crash have been laughable. Add in that Pfizer are hopefully close to getting clearence for a vaccine by next month the doomsayers will be pissing in their cornflakes this morning

https://www.rte.ie/news/business/2020/1016/1172037-pfizer-could-file-for-vaccine-clearance-next-month/

KennisWhale · 19-10-2020 9:53am

fliball123 wrote: »

http://www.msn.com/en-ie/money/news/house-prices-rise-5percent-as-supply-falls-to-lowest-in-over-a-decade/ar-BB1aa3Za?li=BBr5KbJ&ocid=iehp

wow and here was me being ridiculed continuously over stating that supply is dwindling all the time and that this would impact price as night is dark and day is light both statements are true as is supply vs demand = price ...

So the theories of housing follows the economy ...when did the ecconomy go up by 5% in the last 2 years???? I have said that this time it is different then 2008 the comparisons on here to that crash have been laughable. Add in that Pfizer are hopefully close to getting clearence for a vaccine by next month the doomsayers will be pissing in their cornflakes this morning

https://www.rte.ie/news/business/2020/1016/1172037-pfizer-could-file-for-vaccine-clearance-next-month/

It's meaningless data - the volume of transactions is less than half of what it was last year for the same period.

Remember, we have not had the covid economic fallout yet as governments are still propping it all up. The economic fallout won't come until restrictions are eased, then a few months later we will see the impact on the property market. Any commentary on the state of the market because of covid, right now, is irrelevant (whether someone says everything is fine or not).

Hubertj · 19-10-2020 9:55am

KennisWhale wrote: »

It's meaningless data - the volume of transactions is less than half of what it was last year for the same period.

Remember, we have not had the covid economic fallout yet as governments are still propping it all up. The economic fallout won't come until restrictions are eased, then a few months later we will see the impact on the property market. Any commentary on the state of the market because of covid, right now, is irrelevant (whether someone says everything is fine or not).

i agree with you. But i think the poster is referring to others in the forum constantly stating the crash is imminent. As you correctly said, the dust has to settle before we can understand where prices will fall to.

Balluba · 19-10-2020 9:57am

fliball123 wrote: »

http://www.msn.com/en-ie/money/news/house-prices-rise-5percent-as-supply-falls-to-lowest-in-over-a-decade/ar-BB1aa3Za?li=BBr5KbJ&ocid=iehp

wow and here was me being ridiculed continuously over stating that supply is dwindling all the time and that this would impact price as night is dark and day is light both statements are true as is supply vs demand = price ...

So the theories of housing follows the economy ...when did the ecconomy go up by 5% in the last 2 years???? I have said that this time it is different then 2008 the comparisons on here to that crash have been laughable. Add in that Pfizer are hopefully close to getting clearence for a vaccine by next month the doomsayers will be pissing in their cornflakes this morning

https://www.rte.ie/news/business/2020/1016/1172037-pfizer-could-file-for-vaccine-clearance-next-month/

Are you assuming that the Irish public will have confidence in a vaccine that was fast tracked through safety tests?

fliball123 · 19-10-2020 9:58am

KennisWhale wrote: »

It's meaningless data - the volume of transactions is less than half of what it was last year for the same period.

Remember, we have not had the covid economic fallout yet as governments are still propping it all up. The economic fallout won't come until restrictions are eased, then a few months later we will see the impact on the property market. Any commentary on the state of the market because of covid, right now, is irrelevant (whether someone says everything is fine or not).

Well the volume of transactions is also on the way up I think I heard a poster stating it was down to a third of what it was this time last year a couple of months ago and now its up to half. Look I am not saying buy or sell, but the data to date has proven me right with regards to the supply issue and its impact on current prices. Now what happens when Covid is no longer an issue is anyone guess.

fliball123 · 19-10-2020 10:00am

Balluba wrote: »

Are you assuming that the Irish public will have confidence in a vaccine that was fast tracked through safety tests?

Well it will be well tested by then sure if you look at history any vaccine has been resisted going back to the likes of the Polio vaccine, apparently Elvis had to be hired to get people taking it. It may take a while a year or 2 but I think if people have to continue living under lockdown rules I reckon the majority will risk it in order to get back to living a normal life

Balluba · 19-10-2020 10:03am

fliball123 wrote: »

Well it will be well tested by then sure if you look at history any vaccine has been resisted going back to the likes of the Polio vaccine, apparently Elvis had to be hired to get people taking it. It may take a while a year or 2 but I think if people have to continue living under lockdown rules I reckon the majority will risk it in order to get back to living a normal life

I’m sure Meghan and Harry can be hired this time to persuade us to take it

fliball123 · 19-10-2020 10:05am

Balluba wrote: »

I’m sure Meghan and Harry can be hired this time to persuade us to take it

Funnily enough I believe the queen is going to be asked to do it.

lalababa · 19-10-2020 10:09am

Supply is low. AFAIK and can see there are alot of people awash with money. Ireland is not a poor country. These rich/well off have their own houses BUT as investment goes in Ireland property is always king. If prices drop 5/10 % (which they mightn't ) till be these guys/gals buying the limited stock.
VERSUS
Mini recession due to covid. And all that entails. Not so much money backed demand from people that NEED housing.

The unfortunate trend especially in Ireland is of ever increasing house prices relative to wages. This trend is very worrying, and should be reversed. Can only be reversed by government and private partnerships wanting the same thing. I'm thinking of the Leitrim Architect who put up a 3 bed A rated house in 2008 for 25k + (5-10k labour). Check it out on Irishvernacular.com. ðŸ€”

fago · 19-10-2020 10:17am

KennisWhale wrote: »

It's meaningless data - the volume of transactions is less than half of what it was last year for the same period.

Remember, we have not had the covid economic fallout yet as governments are still propping it all up. The economic fallout won't come until restrictions are eased, then a few months later we will see the impact on the property market. Any commentary on the state of the market because of covid, right now, is irrelevant (whether someone says everything is fine or not).

I think it's almost impossible to read anything into asking prices, in my view.

myhome price changes taking a random sampling of 5 pages has 75% reductions, 25% up. I don't know how to square that against the daft report, the source data should be the same.
And then there's also the fiddling that goes on such as a property taken down at 750 and reposted at 685. If 685 is above the current median asking price is that an increase, or because its a relisting is it marked as a decrease?

Only 2 things are reliable - you're properly interested in a place, you ring an auctioneer and they tell you the current offer and go from there against your budget/interest, or look at the PPR

Marius34 · 19-10-2020 10:53am

KennisWhale wrote: »

It's meaningless data - the volume of transactions is less than half of what it was last year for the same period.

Remember, we have not had the covid economic fallout yet as governments are still propping it all up. The economic fallout won't come until restrictions are eased, then a few months later we will see the impact on the property market. Any commentary on the state of the market because of covid, right now, is irrelevant (whether someone says everything is fine or not).

wrong.
the volume of transactions is around 30% lower, and recovering.

Marius34 · 19-10-2020 11:00am

fago wrote: »

I think it's almost impossible to read anything into asking prices, in my view.

myhome price changes taking a random sampling of 5 pages has 75% reductions, 25% up. I don't know how to square that against the daft report, the source data should be the same.
And then there's also the fiddling that goes on such as a property taken down at 750 and reposted at 685. If 685 is above the current median asking price is that an increase, or because its a relisting is it marked as a decrease?

Only 2 things are reliable - you're properly interested in a place, you ring an auctioneer and they tell you the current offer and go from there against your budget/interest, or look at the PPR

In stable market I would expect mast majority of price changes to be as reduced, and in rare cases increased. If you can't sell something for defined price, don't see much reasons why would you want to increase asking price.

KennisWhale · 19-10-2020 11:52am

Marius34 wrote: »

wrong.
the volume of transactions is around 30% lower, and recovering.

Not wrong at all.

There has been a 40% fall off in transactions in August, which followed (by comparison to the same months in 2019) 40.7% lower in July, 53.6% lower in June, 46% lower in May and 29% lower in April.

PropQueries · 19-10-2020 11:53am

Some news on the potential impact of WFH on the commercial property market in the UK:

"Deloitte is planning to close four of its 50 UK offices in the coming months as the coronavirus pandemic has forced the accounting group to cut costs and remote working has reduced its need for expensive property leases."

From same article:

"In August, Capita, a major government outsourcer, revealed it was planning to close more than a third of its 250 offices to allow thousands of its staff to work from home for good."

Link to FT article here: https://www.ft.com/content/1e82aa9e-a982-4e7d-889b-e4bb4d24bb1c

19-10-2020 12:04pm

lalababa wrote: »

The unfortunate trend especially in Ireland is of ever increasing house prices relative to wages. This trend is very worrying, and should be reversed. €”

We aren't stuck for land in Ireland. There is no reason we cant build enough houses for our small population. It's a failure of policy.

Marius34 · 19-10-2020 12:10pm

KennisWhale wrote: »

Not wrong at all.

There has been a 40% fall off in transactions in August, which followed (by comparison to the same months in 2019) 40.7% lower in July, 53.6% lower in June, 46% lower in May and 29% lower in April.

This is not all transactions, just some that are filled with revenue, that we don't know well what that even mean. The actual transactions from PPR is just around 30% lower in volumes.

Even with this data provided about revenue, would be wrong to say that transactions are less than half, as this happened for one month only.

PropQueries · 19-10-2020 12:13pm

Deleted User wrote: »

We aren't stuck for land in Ireland. There is no reason we cant build enough houses for our small population. It's a failure of policy.

Or is it a success of policy? Developers do actually like to build. The only roadblocks routinely put in their way is government policy.

For example, in the Irish Times today: 'Johnny Ronan loses out in court battle on 13-storey docklands plan'

"The High Court has overturned a fresh grant of permission by An Bord Pleanála for increased height of two blocks of apartments in a development of 500 apartments/co-living spaces in the north Dublin docklands."

Link to Irish Times article here: https://www.irishtimes.com/business/construction/johnny-ronan-loses-out-in-court-battle-on-13-storey-docklands-plan-1.4384899

Irish Property Market 2020 Part 2

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