Property Market 2020

car_radio19834 · 27-01-2020 11:44pm

Market is terrible right now.

No 2 beds in Maynooth/Leixlip for under 250k. Actually there was 3 in total, all old fashioned and really not worth the money. Market stinks right now.

bluelamp · 28-01-2020 7:52am

car_radio19834 wrote: »

Market is terrible right now.

No 2 beds in Maynooth/Leixlip for under 250k. Actually there was 3 in total, all old fashioned and really not worth the money. Market stinks right now.

Always the way in January, dark cold evenings and miserable looking gardens are bad for viewings, people are broke after Christmas, it takes a few weeks for people to get their new mortgage exceptions together etc.

Should be a bit more selection from march.

PommieBast · 28-01-2020 9:06am

car_radio19834 wrote: »

Market is terrible right now.

No 2 beds in Maynooth/Leixlip for under 250k. Actually there was 3 in total, all old fashioned and really not worth the money. Market stinks right now.

One house I viewed not that long ago was literally cracked in half. I wonder whether the estate agent is using it for training purposes..

Had picked up a tiny bit compared to December but things then went quiet again when the election was called.

Kamili · 28-01-2020 11:14am

PommieBast wrote: »

One house I viewed not that long ago was literally cracked in half. I wonder whether the estate agent is using it for training purposes..

Had picked up a tiny bit compared to December but things then went quiet again when the election was called.

not saying this is one, but wonder if it was a pyrite house? Seems to be a lot of those coming on the market at the moment.

there were a few new additions for a short time, but its gone extremely quiet again.

PommieBast · 28-01-2020 11:38am

Kamili wrote: »

not saying this is one, but wonder if it was a pyrite house? Seems to be a lot of those coming on the market at the moment.

Don't think so - house was 1920s or 1930s build.

Anything on the market at the moment needs an insane amount of due-diligence. I was about to bid on another apartment, but one look at the management company's accounts changed that idea..

Kamili · 28-01-2020 11:46am

PommieBast wrote: »

Anything on the market at the moment needs an insane amount of due-diligence. I was about to bid on another apartment, but one look at the management company's accounts changed that idea..

110% agree with that - you really need to google the life out of a place and check everything. Found a house recently for sale that was built partially on land that the house owner didn't own...

GalwayBmw · 28-01-2020 6:48pm

On a different occasion - as a Person monitoring the market on a daily basis I can see a lot of Dundrum/Stillorgan/Kilmakud (as well as Kilternan & Carrickmines) properties gone sale agreed within last month with the rest raising their asking prices by 10%+. My advice for anyone trading up stay put and don't let the buyers dictate on prices. Good stock is always limited.

Sheeps · 28-01-2020 8:59pm

Sinn Féin want to scrap the help to buy scheme. We know increases in the help to buy scheme inflate prices, but will removing the help to buy scheme reduce prices?

awec · 28-01-2020 9:23pm

Sheeps wrote: »

Sinn Féin want to scrap the help to buy scheme. We know increases in the help to buy scheme inflate prices, but will removing the help to buy scheme reduce prices?

Unlikely.

The Shinners don't like Help to Buy because it can only benefit those who actually pay tax. They have always had a bee in their bonnet at the fact that middle class earners are getting something from the government.

Sheeps · 28-01-2020 9:28pm

awec wrote: »

Unlikely.

The Shinners don't like Help to Buy because it can only benefit those who actually pay tax. They have always had a bee in their bonnet at the fact that middle class earners are getting something from the government.

I think it's widely acknowledged that it has pushed up the price of homes.

awec · 28-01-2020 9:36pm

Sheeps wrote: »

I think it's widely acknowledged that it has pushed up the price of homes.

It is impossible to know for sure. HTB was always intended to increase the number of buyers on the market, to incentivize developers to build. It was essentially a politically-friendly way of giving money to property developers.

Whether or not prices would have risen regardless nobody knows.

But the idea that if it were gone prices would magically come down is just wishful thinking.

The Shinners have moaned about HTB for years. They moaned that you could buy houses of a certain price. They do not like the fact that only people who pay tax get to benefit, this doesn't help them with their voters.

JohnnyChimpo · 28-01-2020 9:57pm

awec wrote: »

It is impossible to know for sure. HTB was always intended to increase the number of buyers on the market, to incentivize developers to build. It was essentially a politically-friendly way of giving money to property developers.

Whether or not prices would have risen regardless nobody knows.

But the idea that if it were gone prices would magically come down is just wishful thinking.

The Shinners have moaned about HTB for years. They moaned that you could buy houses of a certain price. They do not like the fact that only people who pay tax get to benefit, this doesn't help them with their voters.

I don't think anyone has ever suggested prices would come down "magically" - but the money wasted (some would say) on HTB could have gone towards building social housing which would unequivocally take some pressure off the market

awec · 28-01-2020 10:02pm

JohnnyChimpo wrote: »

I don't think anyone has ever suggested prices would come down "magically" - but the money wasted (some would say) on HTB could have gone towards building social housing which would unequivocally take some pressure off the market

Would it? The money spent on HTB might get you like 500 houses built if you're really lucky, in the grand scheme of things that's going to have next to no impact on the pressure on the market.

Conversely you could point at HTB and ask how many people have bought homes that otherwise wouldn't have been able to if the scheme didn't exist? Probably a lot more than 500.

JamesMason · 28-01-2020 11:02pm

awec wrote: »

It is impossible to know for sure. HTB was always intended to increase the number of buyers on the market, to incentivize developers to build. It was essentially a politically-friendly way of giving money to property developers.

Whether or not prices would have risen regardless nobody knows.

But the idea that if it were gone prices would magically come down is just wishful thinking.

The Shinners have moaned about HTB for years. They moaned that you could buy houses of a certain price. They do not like the fact that only people who pay tax get to benefit, this doesn't help them with their voters.

It's common knowledge that HTB caused a spike in asking prices, which let's face it, was for the benefit of the construction/development sector. Many of the electorate are keenly aware of this.

Marius34 · 29-01-2020 12:21am

I would not think, that HTB cause any significant impact on property price. It's only around 6000-7000 HTB claims (out of ~58K property sales), with over 1000 out of this number is HTB for self build. Realistically big portion of those anyway would compete in the same market. I'm quite confident, council housing or Buy/Build2Let has much bigger impact nowadays on Property price, since the number of properties taken out of the market is higher.
In the end where ever property ends, today's main issue is the lack of Supply.

Sheeps · 29-01-2020 12:55am

Marius34 wrote: »

I would not think, that HTB cause any significant impact on property price. It's only around 6000-7000 HTB claims (out of ~58K property sales), with over 1000 out of this number is HTB for self build. Realistically big portion of those anyway would compete in the same market. I'm quite confident, council housing or Buy/Build2Let has much bigger impact nowadays on Property price, since the number of properties taken out of the market is higher.
In the end where ever property ends, today's main issue is the lack of Supply.

It was 15k, and the developers cant have dual pricing for their homes so they would increase the price to account for HTB buyers and all future buyers coming through the HTB scheme.

Marius34 · 29-01-2020 7:48am

Sheeps wrote: »

It was 15k, and the developers cant have dual pricing for their homes so they would increase the price to account for HTB buyers and all future buyers coming through the HTB scheme.

15K? You probably talking about total over 3 years. What I wrote it's an annual estimate for 2019.

awec · 29-01-2020 11:54am

JamesMason wrote: »

It's common knowledge that HTB caused a spike in asking prices, which let's face it, was for the benefit of the construction/development sector. Many of the electorate are keenly aware of this.

Maybe, but the reality is obviously not that simple. There is nothing to suggest that without HTB prices would be any lower. There is nothing to suggest that prices would not have gone up regardless.

Also, it is widely regarded that HTB has had a negative effect on the pricing and sales of second hand homes.

To suggest that HTB is to blame for property prices is to suggest that scrapping it will lead to price drops. Highly unlikely, and as I said, just over-simplification of reality. The issue is, same as it always has been, a lack of supply.

Bargain_Hound · 29-01-2020 12:01pm

I think it is obvious the HTB inflated house prices thus lining the pockets of developers. I don't think it should be forgotten though that it helped first time buyers through the home owner barrier of saving the full deposit required to purchase. I'd imagine those who did buy using the HTB happily paid the increase in house prices as they were given an actual opportunity to purchase far sooner than they may have anticipated without HTB assistance.

IMO, the removal of the HTB scheme could negatively affect developers future plans to build more houses. How many new builds are sold to first time buyers availing of this scheme versus second time buyers? I bet it is hugely swaying towards towards the former.

Marius34 · 29-01-2020 12:49pm

Bargain_Hound wrote: »

How many new builds are sold to first time buyers availing of this scheme versus second time buyers? I bet it is hugely swaying towards towards the former.

50/50 for 2019. Around 5K (excluding self build) for HTB. And around same for STB. Although it's a different market atleast in Dublin Co. HTB is mainly < 400K, whereas STB > 400K. Many builders moving towards Build/Buy2Rent. For example read about Clongriffin, Gannon recently moved to build whole Clongriffin almost entirely for Build2Rent, probably it's more profitable than HTB...

JohnnyChimpo · 29-01-2020 1:05pm

awec wrote: »

Would it? The money spent on HTB might get you like 500 houses built if you're really lucky, in the grand scheme of things that's going to have next to no impact on the pressure on the market.

Conversely you could point at HTB and ask how many people have bought homes that otherwise wouldn't have been able to if the scheme didn't exist? Probably a lot more than 500.

Hmm, well thanks for encouraging me to actually google the numbers we're talking about here.

The Irish Times says:

Latest figures from Revenue show that Government had spent about €215 million incentivising first-time buyers through the scheme as of September of this year.

.

Now that's probably a 1,000 houses by a rough estimate of current costs. Economy of scale might get you a few more but it's a reasonable rough figure. I grant you that's a drop in the ocean in terms of market pressure, taken in isolation

Same IT article also says

Since its launch in April 2014, more than 32,000 people have applied for Help to Buy, although less than 15,000 of these claims have actually progressed to draw-down.

So that's a potential 15,000 people helped via this scheme. So it's a slam-dunk, right? I don't know... how do we quantify what percentage of these applicants would have been able to purchase somewhere else, but were diverted towards new builds by the HTB scheme? In what sense then do we say they were "helped to buy"? And then how do you quantify how many non-applicants were squeezed out of the purchase market by the concomitant rise in the overall market? I haven't heard any analysis about this other than anecdote, I think you can make the argument either way. Overall though, I would rather this money go to social building rather than indirect exchequer transfer to developers. But that's partly a moral and ideological argument

The_Conductor · 29-01-2020 1:21pm

Keep in mind RTE did an investigation on the implementation of the HTB scheme- which determined conclusively that the whole of the HTB 'grant' was incremented onto the price of new properties within 6 weeks of the launch of the scheme. Its probable that prices would have risen anyway (given the ongoing disparity between supply and demand)- however, it is almost definite that a 20k overnight increase in prices would never have occurred.

Yes- it was a sop to developers framed in such a manner that it sold a different story to prospective first time buyers- but the beneficiaries of the scheme were most certainly the developers, rather than the FTBs.

Of more arguable statistics is whether the HTB scheme was a principle driver of the divergence between the prices of new and secondhand properties. However, if you look at supplyside equations- only just over 10k new units were available on the open market last year- whereas over 55k secondhand units were. When the first time buyers are being corralled into the segment of the market with the smallest volume in supply- and abandoning the secondhand market- which has expanded exponentially- the excess supply (of admittedly poor quality units) in the second hand market only had one direction to go.

Of interest- would be whether an incoming government would expand the HTB scheme to include secondhand units- and would FTBs be willing to chase poorer quality stock (albeit at better prices)?

Personally, in an era of full employment- and CSO audited wage increases of 4.1% on average in 2019, I believe moving away from the HTB scheme altogether and towards an SSIA scheme structured in such a manner that it didn't have a defined end date- would be a more profitable manner of assisting first time buyers (and indeed subsequent purchasers) towards saving up the magical deposit requirements.

The fact that the HTB scheme is just for FTB and that its only for new properties- are two factors that critically need to be addressed.

SozBbz · 29-01-2020 1:22pm

IMO Help to buy has probably increased prices for qualifying new builds and then conversly negativly impacted the prices for 2nd hand homes in the same price bracket.

I don't think what really attracts people to the HTB scheme is the ability to use some of the "Help" to alleviate the deposit requirement. In that circumstance, where saving the full deposit the old fashioned way might take another 12-24 months depending on circumstance, I can see how this would be attractive, especially if you can get get the loan based on 3.5x on your existing salary.

By being able to buy straight away, a person could be saving themselves 12-24 months rent and starting their mortgage sooner. I can see in those circumstances how people become less price sensitive when it comes to looking at the overall package of a new build with Help to Buy.

awec · 29-01-2020 1:43pm

The_Conductor wrote: »

Keep in mind RTE did an investigation on the implementation of the HTB scheme- which determined conclusively that the whole of the HTB 'grant' was incremented onto the price of new properties within 6 weeks of the launch of the scheme. Its probable that prices would have risen anyway (given the ongoing disparity between supply and demand)- however, it is almost definite that a 20k overnight increase in prices would never have occurred.

Yes- it was a sop to developers framed in such a manner that it sold a different story to prospective first time buyers- but the beneficiaries of the scheme were most certainly the developers, rather than the FTBs.

Of more arguable statistics is whether the HTB scheme was a principle driver of the divergence between the prices of new and secondhand properties. However, if you look at supplyside equations- only just over 10k new units were available on the open market last year- whereas over 55k secondhand units were. When the first time buyers are being corralled into the segment of the market with the smallest volume in supply- and abandoning the secondhand market- which has expanded exponentially- the excess supply (of admittedly poor quality units) in the second hand market only had one direction to go.

Of interest- would be whether an incoming government would expand the HTB scheme to include secondhand units- and would FTBs be willing to chase poorer quality stock (albeit at better prices)?

Personally, in an era of full employment- and CSO audited wage increases of 4.1% on average in 2019, I believe moving away from the HTB scheme altogether and towards an SSIA scheme structured in such a manner that it didn't have a defined end date- would be a more profitable manner of assisting first time buyers (and indeed subsequent purchasers) towards saving up the magical deposit requirements.

The fact that the HTB scheme is just for FTB and that its only for new properties- are two factors that critically need to be addressed.

Disagree. Surely everyone who bought a house, who wouldn't have otherwise been able to buy a house, is a beneficiary?

Even if the grant did push up prices, it also simultaneously reduced deposit requirements drastically for FTBs, by up to 50%. It is hard to argue that this was not beneficial.

Take an example of a house costing 450k. FTBs need to save 45k if HTB doesn't exist. Lets say absolute worst case, the price goes to 470K instantly. The HTB reduces the deposit to 27k. This is a huge drop, and massively benefits people buying houses, because for many people gathering the deposit is the hard bit, especially if stuck renting in high rent zones.

DelBoy Trotter · 29-01-2020 1:46pm

awec wrote: »

Disagree. Surely everyone who bought a house, who wouldn't have otherwise been able to buy a house, is a beneficiary?

Even if the grant did push up prices, it also simultaneously reduced deposit requirements drastically for FTBs, by up to 50%. It is hard to argue that this was not beneficial.

Take an example of a house costing 450k. FTBs need to save 45k if HTB doesn't exist. Lets say absolute worst case, the price goes to 470K. The HTB reduces the deposit to 23.5k. This is huge.

I'd agree with the The_Conductor on this. The buyer is still paying the exact same for the house, they aren't saving anything. The developer is getting an extra 20k, and if the person buying the house isn't a first time buyer, they are actually paying an extra 20k than before the help to buy scheme came in

awec · 29-01-2020 1:51pm

DelBoy Trotter wrote: »

I'd agree with the The_Conductor on this. The buyer is still paying the exact same for the house, they aren't saving anything. The developer is getting an extra 20k, and if the person buying the house isn't a first time buyer, they are actually paying an extra 20k than before the help to buy scheme came in

20k over the lifetime of a mortgage, in exchange for bringing forward their purchase of a house a year or two. That's a year or two of less rent.

There is no way this can be argued as not being beneficial to buyers. It's not about whether or not they're ultimately paying less for a house, obviously they're not. 20k onto the mortgage in exchange for 20k in their hand right now? That’s a good deal.

JohnnyChimpo · 29-01-2020 1:51pm

The_Conductor wrote: »

Personally, in an era of full employment- and CSO audited wage increases of 4.1% on average in 2019, I believe moving away from the HTB scheme altogether and towards an SSIA scheme structured in such a manner that it didn't have a defined end date- would be a more profitable manner of assisting first time buyers (and indeed subsequent purchasers) towards saving up the magical deposit requirements.

The fact that the HTB scheme is just for FTB and that its only for new properties- are two factors that critically need to be addressed.

I agree this is the crucial element that's being overlooked, if we're talking about demand-side solutions

cruizer101 · 29-01-2020 2:30pm

Anecdotal only, but I know of a number of people who got htb but already has a deposit saved, so for them there was no bringing forward when they could buy they were buying anyway. So in those cases, which I suspect is a high enough amount of the cases, there was no advantage, the houses just went up in price which was covered by htb.

The_Conductor · 29-01-2020 2:40pm

cruizer101 wrote: »

Anecdotal only, but I know of a number of people who got htb but already has a deposit saved, so for them there was no bringing forward when they could buy they were buying anyway. So in those cases, which I suspect is a high enough amount of the cases, there was no advantage, the houses just went up in price which was covered by htb.

Ditto- offhand, and its anecdotal, I know of 7 colleagues and family members who had a deposit saved up and 2 who didn't- all of whom qualified for HTB.

There are some people out there who it does assist with getting a deposit together- there are others who through hard graft and hardship, managed to save the deposit on their own reconnaissance, despite having to pay rent (and in several cases childcare costs).

It helped some people who might not otherwise have had their full 10% deposit- others- it paid for the increase in price- and/or lowered the LTV ratio slightly.

Either way- it was incremented onto the house price- so the borrower ended up paying the extra 20k to the developer.

Deposit rules were bent at the outset to allow HTB go towards deposits- the original plan was that it did not qualify- that has to be kept in mind too- this was a sop for developers- and a few people who were having difficulty getting their deposits together benefited- but at the cost of a more expensive house than it would otherwise have been.

The RTE Investigates programme was very clear cut- the full 20k was immediately (within 6 weeks of the launch of the scheme) fully accounted for in price increases nationally.

awec · 29-01-2020 3:09pm

The_Conductor wrote: »

Ditto- offhand, and its anecdotal, I know of 7 colleagues and family members who had a deposit saved up and 2 who didn't- all of whom qualified for HTB.

There are some people out there who it does assist with getting a deposit together- there are others who through hard graft and hardship, managed to save the deposit on their own reconnaissance, despite having to pay rent (and in several cases childcare costs).

It helped some people who might not otherwise have had their full 10% deposit- others- it paid for the increase in price- and/or lowered the LTV ratio slightly.

Either way- it was incremented onto the house price- so the borrower ended up paying the extra 20k to the developer.

Deposit rules were bent at the outset to allow HTB go towards deposits- the original plan was that it did not qualify- that has to be kept in mind too- this was a sop for developers- and a few people who were having difficulty getting their deposits together benefited- but at the cost of a more expensive house than it would otherwise have been.

The RTE Investigates programme was very clear cut- the full 20k was immediately (within 6 weeks of the launch of the scheme) fully accounted for in price increases nationally.

It's unfortunate that your insinuation here is that only people who saved their deposits without HTB worked hard to get it.

I would think for the overwhelming majority of cases, the HTB brought forward house purchases for first time buyers. I have as much evidence to back this up as you have for your view (i.e. none), but I would be surprised if it didn't.

I guess if purely anecdotal evidence is what we're going on then every single person I have ever met who has used HTB would not have been able to buy a house at that time without it.

Trading 20k over 25/30 years for 20k in your hand right now, when that 20k is the difference between you buying a house or not? Good deal. Yes, the money goes into the developers pocket, but alas that was one of the points all along. Incentivize house building and make it a easier for first time buyers to get out of rental property. It is hard to argue that it has not been a success on both fronts.

Of course, in the property market there are also people who lose out. People trying to sell second hand houses will have suddenly found it difficult to flog their house to first time buyers. You could argue the HTB should be extended to second hand property. I would disagree, as this does not help with increasing the housing stock. People who were ready to buy whenever the HTB came into force will have suddenly found increased competition when buying houses. It's unfortunate for sure.

But to suggest the sole beneficiary is developers? Don't think that really adds up. By and large, FTBs have absolutely and unequivocally benefited from this scheme. Whether or not it's time to end it is another story.

Property Market 2020

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