House Prices 2021

she32 · 23-05-2020 1:30am #1

Hi there,

Currently saving as a FIrst time buyer. What are your thoughts on the housing market over the next 12 months.

Due to the current global pandemic ... Do you think it will become a buyers market and house prices are likely to drop significantly?

Captain Bob · 23-05-2020 2:52pm

short answer: 2008 house market crisis multiplied at least by 2

DubCount · 23-05-2020 3:20pm

Short Answer - don't believe anyone who says they know - they don't because nobody knows.

The virus has some elements which should put pressure on prices to reduce. There will likely be some kind of recession with less spending money in the economy. Some immigrants may leave the country which will ease housing demand. An increase in the death rate amongst the order population (who tend to be property owners) may increase the supply of second hand homes.

However, some elements of the virus put opposite pressure on the market. We've had a shut down in building for several weeks which will curtail the supply of new houses in 2020. Social distancing and PPE requirements will slow down building and make building new houses more expenses. Interest rates will remain low for longer making mortgages more affordable. The central bank may ease lending restrictions which will fuel demand.

Don't try and second guess the market. A house purchase is along term investment and 20 years from now, nobody will be talking about this virus. Consider where you want to live and what kind of home you want.

Idbatterim · 23-05-2020 3:34pm

As per a once post, youd have to expect price drops. But the size of them, who knows .

Alrigghtythen · 23-05-2020 3:39pm

If the price crashes wont they all be bought up by vulture funds and people with cash decreasing the supply for the ordinary person? Building will be slower and less people will be movig. I dont think they'll be massive decreases but then anything could happen

GetWithIt · 23-05-2020 7:45pm

It’s never the wrong time to do the right thing - Donny Cassidy, 2008

Villa05 · 23-05-2020 8:54pm

KBC BANK and ESRI are predicting falls of 12%, possibility of - 20% over 18 months

Hard to see any scenario where price won't fall significantly

Local conditions will have a big factor also

Snow Garden · 23-05-2020 11:48pm

The market is currently broken/stalled. Do yourself a favour and do nothing until early 2021.
You might get an idea on how this crisis will play out then and you certainly wont miss out on any golden opportunities in the meantime.

Captain Bob · 24-05-2020 12:10pm

What is gonna happen with house market, will happen with everything else. People will just stop spending, no matter what. Who was about to buy something big, is gonna wait now. Not only here, but around the world. We are not even in buyer's market yet. We will be there once lockdown is lifted. And the only thing you gonna hear now "this is the very best time to buy a house!". Again, again and again.

DubCount · 24-05-2020 2:13pm

Captain Bob wrote: »

What is gonna happen with house market, will happen with everything else. People will just stop spending, no matter what. Who was about to buy something big, is gonna wait now. Not only here, but around the world. We are not even in buyer's market yet. We will be there once lockdown is lifted. And the only thing you gonna hear now "this is the very best time to buy a house!". Again, again and again.

There is a difference in relation to housing. People don't need holidays, new cars and most consumer goods. People need accommodation whether there is a recession or not. Maybe there will be an increase in the levels of social housing. Maybe demand for higher value property will fall. Some demand might be curtailed by emigrants leaving or increased death rate. However, we still need a certain level of property to house our population, and if supply stays below demand, prices may actually increase.

This may not be the best time to buy a property. Maybe it is. We're a long way from knowing when the market reaches the bottom or how big the dip will be, or how quick it will recover.

Villa05 · 24-05-2020 2:53pm

she32 wrote:

Currently saving as a FIrst time buyer. What are your thoughts on the housing market over the next 12 months.

Start your research now
Set up email alerts from daft with what falls close to your affordability range
Log these on an excel sheet with the following fields.
Important: log all of the properties
Address
Agent
No of beds
Condition
Aspect
Broadband availability
Ber score
Asking price
Sold price (fill from property price reg)
Time on the market

and any other aspect of the property that is important to you. This will arm you with indepth local knowledge of the market you wish to buy in. Many agents can be spoofers. This research will enable you to determine which agents are being honest with you and which are economical with the truth

Price trends will become apparent quickly. You can see what purchasers are prepared to pay more for. This will also show properties may have less demand because they don't have an attribute that may not be all that important to you.

Where a market has stalled or very low volume sales you will see when it has resumed quiet quickly, as properties you see as good value others will see the same thing and they will be the first to sell. This may be the time for you to make your move

This research will take you maybe 15 minutes a week. For you, it could save you a small fortune

TheSheriff · 24-05-2020 3:08pm

Villa05 wrote: »

Start your research now
Set up email alerts from daft with what falls close to your affordability range
Log these on an excel sheet with the following fields.
Important: log all of the properties
Address
Agent
No of beds
Condition
Aspect
Broadband availability
Ber score
Asking price
Sold price (fill from property price reg)
Time on the market

and any other aspect of the property that is important to you. This will arm you with indepth local knowledge of the market you wish to buy in. Many agents can be spoofers. This research will enable you to determine which agents are being honest with you and which are economical with the truth

Price trends will become apparent quickly. You can see what purchasers are prepared to pay more for. This will also show properties may have less demand because they don't have an attribute that may not be all that important to you.

Where a market has stalled or very low volume sales you will see when it has resumed quiet quickly, as properties you see as good value others will see the same thing and they will be the first to sell. This may be the time for you to make your move

This research will take you maybe 15 minutes a week. For you, it could save you a small fortune

Most likely the best advice on this forum.

bdmc5 · 24-05-2020 7:21pm

Villa05 wrote: »

KBC BANK and ESRI are predicting falls of 12%, possibility of - 20% over 18 months

Hard to see any scenario where price won't fall significantly

Local conditions will have a big factor also

The same article you mentioned forecast prices to increase by 8 percent in 2021 and 5 percent 2022 so you could buy now actually have a house worth 1 percent more than today based on that article.

Given the strong demand for housing pre-COVID-19 and the continued pent-up of demand as people understandably hold off buying, The reduction in quality housing availability sellers Take houses off the market than accept 20% below asking in such a short period of time and so on. Loads of scenarios that may prevent house prices dropping significantly.

OP nothing wrong with proceeding buying a home in 2020 at a price that you can afford and possibly have negotiated a small discount the hedge your bets against any house price drop. Good luck either way

Eric Cartman · 24-05-2020 7:30pm

I think the HSE looking for their pound of flesh from the recently deceased people in the covid riddled care homes are going to put a fair amount of housing stock back on the market. Plus even the elderly who were in their own homes, You'll have many very settled areas of Dublin with a lot more properties for sale or their kids paying the tax man and keeping them as a rental.

you'll have many foreign workers who choose not to return to Dublin for a long time and some people pursuing more options to work from home who, while previously searching for Dublin housing, will now set their sights out further , knowing they'll only be commuting 1-2 days a week instead of a full 5.

I think a lot of apartments will enter the market as softening prices mean those who were in dual income stable tech jobs are able to leap from apartment living in south Dublin to housing in the suburbs.

Mic 1972 · 24-05-2020 9:19pm

If inflation kicks in and supply remains low we may even end up with further house price increases, the next 12 month are unpredictable at this point. I've been monitoring the market very closely since January and i have not seen any sign of change

bluelamp · 24-05-2020 9:37pm

bdmc5 wrote: »

The same article you mentioned forecast prices to increase by 8 percent in 2021 and 5 percent 2022 so you could buy now actually have a house worth 1 percent more than today based on that article.

I really can't see how we could have the biggest economic shock in history, and how prices will somehow not drop significantly, and will be fully recovered in two years.

Over 1 million citizens are receiving welfare now, whether it be the wage subsidy, or pandemic unemployment payment. Paschal Donohoe said there is a significant risk that unemployment is going to remain persistently high over the next few years, stating that up to 300,000 jobs might not return.

Massive unemployment doesn't go hand in hand with stable house prices.

Banks are refusing mortgage draw downs to people receiving any of these payments - even if still employed. It will be six months post receiving these payments before people will be looked at by the banks again.

A lot of our housing demand is created by the 80,000+ immigrants that come here every year. That demand is gone for 2020, and probably 2021. Advertise a rental on daft in Dublin, and maybe 80% of respondents won't be Irish.

We have 17,000 foreign university students in Ireland - that number is going to fall massively.

Tourism is dead - 300,000 people in Ireland work in tourism. Airbnb's are flooding the rental market, and we have a huge amount of new hotel rooms and student accommodation coming on line this year (some of which are already seeking permission to rent as private rentals instead this year).

Companies are also going to take massive advantage of this situation to reduce wages and conditions of their staff - its already happening, further reducing peoples spending power.

I really don't buy the argument of pent up demand and an under supply still existing.

Demand is disappearing very quickly. I think we are going to have a massive oversupply of both properties to let, and for sale.

Villa05 · 24-05-2020 10:22pm

Mic 1972 wrote:

If inflation kicks in and supply remains low we may even end up with further house price increases, the next 12 month are unpredictable at this point. I've been monitoring the market very closely since January and i have not seen any sign of change

I don't think inflation will save the property bulls,
Wages are quiet high here can't see them going much higher without loosing jobs to more competitive areas

The last decade was in general a period of 0 or very little inflation, however house prices and rents were hyper inflated. As a result people's disposable income is low. General inflation will result in even lower disposable income
Stagflation is far more likely than inflation
Wages will not increase as other costs increase

Villa05 · 24-05-2020 11:54pm

DubCount wrote:

However, some elements of the virus put opposite pressure on the market. We've had a shut down in building for several weeks which will curtail the supply of new houses in 2020. Social distancing and PPE requirements will slow down building and make building new houses more expenses. Interest rates will remain low for longer making mortgages more affordable. The central bank may ease lending restrictions which will fuel demand.

Developers have stated that social distancing and ppe will have little or no impact on cost and could be absorbed by developers
Interest rates are the lowest they have ever been. Poor decision making by people in power could change that. Ireland is one of the most indebted nations in the world on per capita basis. Things could get very nasty very quick

Banks have tightened lending within these restrictions.
Restrictions were put in place on the direction of the ECB following the last crash, our leaders have not displayed that they have learned from the mistakes of that crash.
There will be no easing of the restrictions

Villa05 · 25-05-2020 12:15am

bdmc5 wrote:

Given the strong demand for housing pre-COVID-19 and the continued pent-up of demand as people understandably hold off buying, The reduction in quality housing availability sellers Take houses off the market than accept 20% below asking in such a short period of time and so on. Loads of scenarios that may prevent house prices dropping significantly.

Dublin prices have been static since October 2018. The strong demand is at the lower price point. The recession will pull that price point lower.
Construction sector will be impacted greatly by the recession. The commercial sector which had been booming will stall given the uncertainty surrounding significant moves to work from home and a badly damaged retail sector
There are over a 120000 employed in the construction sector. If alot of these end up loosing their jobs the onus may be on the state to start an affordable housing program. This will get these people back to work and offset the 1 billion the state is paying in subsidising resedintial rents on an annual basis. The state has the land and can access money at close to 0 interest rates making this a win win for workers, house hunters, government and the economy

bdmc5 · 25-05-2020 12:26am

bluelamp wrote: »

I really can't see how we could have the biggest economic shock in history, and how prices will somehow not drop significantly, and will be fully recovered in two years.

Over 1 million citizens are receiving welfare now, whether it be the wage subsidy, or pandemic unemployment payment. Paschal Donohoe said there is a significant risk that unemployment is going to remain persistently high over the next few years, stating that up to 300,000 jobs might not return.

Massive unemployment doesn't go hand in hand with stable house prices.

Banks are refusing mortgage draw downs to people receiving any of these payments - even if still employed. It will be six months post receiving these payments before people will be looked at by the banks again.

A lot of our housing demand is created by the 80,000+ immigrants that come here every year. That demand is gone for 2020, and probably 2021. Advertise a rental on daft in Dublin, and maybe 80% of respondents won't be Irish.

We have 17,000 foreign university students in Ireland - that number is going to fall massively.

Tourism is dead - 300,000 people in Ireland work in tourism. Airbnb's are flooding the rental market, and we have a huge amount of new hotel rooms and student accommodation coming on line this year (some of which are already seeking permission to rent as private rentals instead this year).

Companies are also going to take massive advantage of this situation to reduce wages and conditions of their staff - its already happening, further reducing peoples spending power.

I really don't buy the argument of pent up demand and an under supply still existing.

Demand is disappearing very quickly. I think we are going to have a massive oversupply of both properties to let, and for sale.

Of course these are all variables but you gone to extreme generalisations there. Your not renting or looking to buy are you (im not selling)? Where are getting demand is drying up, where are getting ALL mortgage drawdown are being rejected if on c19 payments which is totally untrue from expierence , i could go on.

Tourism is on hold not dead. Business cant wait to reopen and judging by the crowds this weekend in cork anyway people are gagging to get out a spend their money. For every business looking to reduce hours and salary there major multinationals allowing people to work from home at full salary.

I definitely acknowledge where your coming from but i think you are underestimating demand. I have friends and family members actively getting outbid on houses where sellers are not entertaining any discounts. The market is really in an almost holding position for now but its interesting KBC reckon price could recover in 2 years if do they drop.

Villa05 · 25-05-2020 12:58am

bdmc5 wrote:

I definitely acknowledge where your coming from but i think you are underestimating demand. I have friends and family members actively getting outbid on houses where sellers are not entertaining any discounts. The market is really in an almost holding position for now but its interesting KBC reckon price could recover in 2 years if do they drop.

KBC and ESRI have skin in the game, it is in their interests to put a rosy spin on it. Remember, Don't talk down the economy and put on the green Jersey from 2008.

bluelamp · 25-05-2020 1:00am

bdmc5 wrote: »

Of course these are all variables but you gone to extreme generalisations there. Your not renting or looking to buy are you (im not selling)? Where are getting demand is drying up, where are getting ALL mortgage drawdown are being rejected , i could go on.

Tourism is on hold not dead. Business cant wait to reopen and judging by the crowds people are gagging to get out a spend their money. For every business looking to reduce hours and salary there major multinationals allowing people to work from home at full salary.

I definitely acknowledge where your coming from but i think you are underestimating demand. I have friends and family members actively getting outbid on houses where sellers are not entertaining any discounts. The market is really in an almost holding position for now but its interesting KBC reckon price could recover in 2 years if do they drop.

No I'm not looking to buy, sell, or rent (thankfully).

Maybe I am being too pessimistic about the market - but I really can't see prices holding with so many factors putting downward pressure on it.

And yes, of course there is still some demand, but I'm just arguing that it is going to be greatly reduced.

I dont think anybody is predicting a 2008 scenario - but I also cant see prices only dropping 10% or so, and being back to their peak in 2021.

shenanagans · 25-05-2020 1:18am

If prices fall significantly won't developers stop building. Given the impact social distancing is predicted to have on the cost of building.

New builds on offer will dry up pretty quick. No point building houses to sell them below cost.

Geuze · 25-05-2020 1:22am

Yes, I can't see new house prices falling 20%.

Developers will simply stop building instead.

Unless there is a matching huge fall in site purchase costs.

A new house for 450k in Jan 2020, I can't see this at 360k in Jan 2021.

I can see developers give maybe 5% off, or give incentives like kitchens, etc.

Geuze · 25-05-2020 1:23am

Much of what BlueLamp says is true, but I can see a bigger impact on rents, rather than prices.

shenanagans · 25-05-2020 1:28am

Geuze wrote: »

Much of what BlueLamp says is true, but I can see a bigger impact on rents, rather than prices.

Totally agree. Rents will drop significantly. The increasing build cost will stem the potential drop in property prices. IMO

Hubertj · 25-05-2020 6:26am

Villa05 wrote: »

KBC and ESRI have skin in the game, it is in their interests to put a rosy spin on it. Remember, Don't talk down the economy and put on the green Jersey from 2008.

A 12% - 25% fall in prices within a short period isn’t putting a rosey spin on anything.

DubCount · 25-05-2020 10:07am

Villa05 wrote: »

Developers have stated that social distancing and ppe will have little or no impact on cost and could be absorbed by developers
Interest rates are the lowest they have ever been. Poor decision making by people in power could change that. Ireland is one of the most indebted nations in the world on per capita basis. Things could get very nasty very quick

Banks have tightened lending within these restrictions.
Restrictions were put in place on the direction of the ECB following the last crash, our leaders have not displayed that they have learned from the mistakes of that crash.
There will be no easing of the restrictions

https://www.rte.ie/news/ireland/2020/0519/1139398-construction-coronavirus/
CIF do reckon it will have an impact on house prices according to this article. It makes sense. If you add cost to any business, there is a decision to either pass on the extra cost to customers or absorb them. I cant see developers just swallowing the extra cost. A lot of them reckon its difficult make residential property building economic as it is.

Bank lending rules were brought in by the Central Bank, largely to stop bank credit fueling house price inflation like in the run up to the last housing crisis. If house prices start to fall, the requirement to curtail demand through these restrictions will become less necessary, and the Central Bank may ease some of these restrictions. If they do, it will add upward house price pressure.

Villa05 · 25-05-2020 12:58pm

Geuze wrote:

Developers will simply stop building instead.

Geuze wrote:

Yes, I can't see new house prices falling 20%.

Geuze wrote:

Unless there is a matching huge fall in site purchase costs.

There is more than one source of new houses. As stated the state can build houses without many of the costs private developers incur with a much lower cost of capital and with potentially lower labour and land costs

Hubertj wrote:

A 12% - 25% fall in prices within a short period isnâ€™t putting a rosey spin on anything.

Saying everything will be grand and we will be back at Jan 2019 price in 2 years is

DubCount wrote:

CIF do reckon it will have an impact on house prices according to this article. It makes sense. If you add cost to any business, there is a decision to either pass on the extra cost to customers or absorb them. I cant see developers just swallowing the extra cost. A lot of them reckon its difficult make residential property building economic as it is.

CIF"s were rubbished by many developers and Tom parlon (CIF) was forced to correct what he said last week on radio in an interview with Sarah McInereney

DubCount wrote:

Bank lending rules were brought in by the Central Bank, largely to stop bank credit fueling house price inflation like in the run up to the last housing crisis. If house prices start to fall, the requirement to curtail demand through these restrictions will become less necessary, and the Central Bank may ease some of these restrictions. If they do, it will add upward house price pressure.

The Central Bank is an arm of the ECB. if banks themselves are tightening their lending criteria, loosening the central bank restrictions becomes irrelevant.
It's not going to happen anyway, especially when it is apparent that their is supply demand imbalance.

DubCount · 25-05-2020 7:04pm

Villa05 wrote: »

There is more than one source of new houses. As stated the state can build houses without many of the costs private developers incur with a much lower cost of capital and with potentially lower labour and land costs

The government has been reluctant to directly enter the house building game. With increased borrowings already, I'm not sure where the money would come from for the government to start building now - even if they wanted to.

Villa05 wrote: »

CIF"s were rubbished by many developers and Tom parlon (CIF) was forced to correct what he said last week on radio in an interview with Sarah McInereney

I don't believe developers are making sufficient profits to just be able to absorb the higher costs coming their way.

Villa05 wrote: »

The Central Bank is an arm of the ECB. if banks themselves are tightening their lending criteria, loosening the central bank restrictions becomes irrelevant.
It's not going to happen anyway, especially when it is apparent that their is supply demand imbalance.

Not sure the Central Bank of Ireland would see themselves as just an arm of the ECB. The ECB sets Monetary Policy for the Eurozone, and does not direct the national central banks in relation to matters like the mortgage LTV rules. If it did, the same lending rules would exist in France, Germany etc..

I think you're trying to have it all ways here. If there is a supply/demand imbalance, then the rules will likely be kept in place. But if there is a supply/demand imbalance, this will put upward pressure on house prices. If the supply/demand imbalance is corrected, then much of the rationale for having the rules in the first place goes away, and they could easily be relaxed if house prices start to fall.

Retail banks will tighten lending in the short term. As we come out of lockdown, they'll be back to their normal selves trying to sell as many loans as they can get away with to beat their competition.

sanfranbest · 25-05-2020 8:01pm

This crisis is not like the crash of 2008, back then banks did not have money to lend.

The only buyers were all cash purchasers.

This time banks have access to lots of cheap funds from the ECB, but the question is will they lend it.

The current pandemic is uncharted territory, nobody can predict how it will play out.

Sellers that do not need to sell will hold off, buyers will sit on the fence and hope prices will fall.

I would not expect much to happen for at least another 12 months.

One thing is for sure, is that we are in for a very interesting year ahead.

JJJackal · 25-05-2020 9:34pm

I have three observations.

1) People who are lucky enough to still be working are saving a bomb (even if you got a 10% pay cut) - working from home is definitely cheaper than going to office - food, transport etc

2) People on lower paid jobs got 350/week if let go. Some paid more than prior - estimated 5% less on average (i thought i read that somewhere).

3) ECB about to flood Europe with 500 billion plus of funds. There are about 450 million people in EU - thats over a billion per million. Suggesting Ireland gets north of 5 billion. We are borrowing a ton of money at 0% interest

Not sure what this means for property market.

Darc19 · 25-05-2020 9:39pm

Likely that prices will drop as people become realistic that there are things outside of their control in the world and will not extend themselves

Prices in many areas had gone too high, so my opinion is that prices will fall back, but not alarmingly so.

And that is good for the market. We need to get away from "making a profit" on home ownership

Geuze · 25-05-2020 10:02pm

JJJackal wrote: »

I have three observations.

3) ECB about to flood Europe with 500 billion plus of funds. There are about 450 million people in EU - thats over a billion per million. Suggesting Ireland gets north of 5 billion. We are borrowing a ton of money at 0% interest

Are you referring to the PEPP?

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

The PEPP is 750bn, and this new money is used by the ECB to buy financial assets.

It is not "given to Ireland".

It is being used to buy Govt bonds, and other financial assets.

It is helping to reduce Govt bond yields.

25-05-2020 10:13pm

Villa05 wrote: »

There is more than one source of new houses. As stated the state can build houses without many of the costs private developers incur with a much lower cost of capital and with potentially lower labour and land costs

I think the National Maternity Hospital and the issues with the construction company who the Government employed to build schools proves that the State is neither capable of building cheaper nor efficiently. The construction company involved in the NMH told the Government they were happy to walk away and Western Building Systems said they worked to the plans and spec given to them by the Dept of Education.

You think a construction worker is going to accept a lower wage just because the State is the developer? Besides which, where would the money come from to build these State sponsored properties?

HamSarris · 25-05-2020 11:20pm

House prices in Dublin could lose up to 50% relative to gold – negative sentiment preventing people from taking on loans, work insecurity, hedge funds pulling out of the market, more working from home means less people willing to pay 2 grand a month for a mouldy kip in Dublin.

House prices could conceivably go up in Euro terms but would be lower than inflation and a lot lower than increases in most other assets.

House prices around the country should show a more modest decline, with some scenic areas possibly seeing a rise due to high salary, work from home individuals moving there.

OttoPilot · 25-05-2020 11:28pm

JJJackal wrote: »

I have three observations.

1) People who are lucky enough to still be working are saving a bomb (even if you got a 10% pay cut) - working from home is definitely cheaper than going to office - food, transport etc

2) People on lower paid jobs got 350/week if let go. Some paid more than prior - estimated 5% less on average (i thought i read that somewhere).

3) ECB about to flood Europe with 500 billion plus of funds. There are about 450 million people in EU - thats over a billion per million. Suggesting Ireland gets north of 5 billion. We are borrowing a ton of money at 0% interest

Not sure what this means for property market.

A billion per million? So €1,000 per person? Hardly earth shattering

farmerval · 25-05-2020 11:40pm

I suspect that there could be a drop in the number of new houses coming oto the market next year.
Right now the only thing that developers are interested in is finishing developments already started.
They may thread softly about opening new sites until they see what way the wind is blowing. Both Cairn and Glenveigh have said they are not starting new sites for the near term. They want to complete already started sites and assess the Covid implications first.
Whether the large funds forward buying developments for long term rental will continue doing so at the moment or not will also be a factor. Their forward purchasing is a big factor in driving output in the market in the last two years.
There are quite a lot of social housing initiatives on site too, one of the reasons Fine Gael wanted to stave off an election for as long as possible, smiling cutting the ribbon on lots of developments of social housing would have been great PR. These will presumably help in the rental sector somewhat.

The big unknown will be what effect the Covid will have on the market, presumably a large proportion of the jobs affected will be in the lower end of the jobs market, pubs, hotels, shops etc.

Right now the sun is shining, we should be in absolute peak house sales season, the Covid is going as good as we could probably hope for, so naturally we think about how quickly things will get back to where they were, however if we get a second Covid wave next winter then all bets are off.

OttoPilot · 26-05-2020 10:41am

farmerval wrote: »

I suspect that there could be a drop in the number of new houses coming oto the market next year.
Right now the only thing that developers are interested in is finishing developments already started.
They may thread softly about opening new sites until they see what way the wind is blowing. Both Cairn and Glenveigh have said they are not starting new sites for the near term. They want to complete already started sites and assess the Covid implications first.
Whether the large funds forward buying developments for long term rental will continue doing so at the moment or not will also be a factor. Their forward purchasing is a big factor in driving output in the market in the last two years.
There are quite a lot of social housing initiatives on site too, one of the reasons Fine Gael wanted to stave off an election for as long as possible, smiling cutting the ribbon on lots of developments of social housing would have been great PR. These will presumably help in the rental sector somewhat.

The big unknown will be what effect the Covid will have on the market, presumably a large proportion of the jobs affected will be in the lower end of the jobs market, pubs, hotels, shops etc.

Right now the sun is shining, we should be in absolute peak house sales season, the Covid is going as good as we could probably hope for, so naturally we think about how quickly things will get back to where they were, however if we get a second Covid wave next winter then all bets are off.

Whatever the drop off in residential building, I imagine there will be an even bigger drop off in office building. I think investors will be even more wary of covids impact on office development. Could there be an oversupply of labour i wonder, leading to downward cost pressure?

addaword · 26-05-2020 10:45am

she32 wrote: »

Hi there,

Currently saving as a FIrst time buyer. What are your thoughts on the housing market over the next 12 months.

Due to the current global pandemic ... Do you think it will become a buyers market and house prices are likely to drop significantly?

As Ben Dunne said on the tv last night, the coming recession is going to make 2008 look like a picnic, or words to that effect. Of course property prices are going to fall significantly.

emancip87 · 26-05-2020 10:49am

They would need to drop by 70% to reflect the realistic value considering the quality of build, the overall infrastructure and the level of life quality whic is non existent overall.

26-05-2020 11:51am

emancip87 wrote: »

They would need to drop by 70% to reflect the realistic value considering the quality of build, the overall infrastructure and the level of life quality whic is non existent overall.

The value, realistic or otherwise, of a house is what someone is willing to pay for it at any particular time.

Villa05 · 26-05-2020 12:20pm

DubCount wrote:

The government has been reluctant to directly enter the house building game. With increased borrowings already, I'm not sure where the money would come from for the government to start building now - even if they wanted to.

Governments change

We are currently paying 1 billion per year in subsidising private rents, this is by a government that was the owner of the largest real estate portfolio in the world

I'm sure that the EU would listen diligently to projects that stimulate economies, take workers off welfare, and provide much needed housing for workers who may be living in overcrowded accommodation aiding the spread of covid 19 and be self financing

DubCount wrote:

I don't believe developers are making sufficient profits to just be able to absorb the higher costs coming their way.

A number of developers have claimed they can. The person that claimed they can't is someone who has made a career out extorting the maximumum out of the taxpayers for infrastructure projects

DubCount wrote:

I think you're trying to have it all ways here. If there is a supply/demand imbalance, then the rules will likely be kept in place. But if there is a supply/demand imbalance, this will put upward pressure on house prices. If the supply/demand imbalance is corrected, then much of the rationale for having the rules in the first place goes away, and they could easily be relaxed if house prices start to fall.

Fair point, but the fact that 8 years after the biggest property crash in the world, we are in position that housing has become unaffordable for so many displays how little has been learned from the last crash.

The supply demand imbalance is at a level that private sector can't/won't meet and can only be met by Gov intervention.
If the government intervenes and allows funding to housing associations it can be done at a cost neutral or even at a profit.
If its left to private sector rentals the cost will be enormous.

Can we afford not to do it? Are we comfortable with paying higher taxes to pay higher rents?
Would a housing policy that generates revenue for the state be much better than a policy that drains the state resources

These are all choices that are in our own hands

Villa05 · 26-05-2020 12:33pm

Dav010 wrote:

I think the National Maternity Hospital and the issues with the construction company who the Government employed to build schools proves that the State is neither capable of building cheaper nor efficiently. The construction company involved in the NMH told the Government they were happy to walk away and Western Building Systems said they worked to the plans and spec given to them by the Dept of Education.

There are numerous case studies of housing associations that have provided affordable housing at affordable prices, they just need to be funded

Dav010 wrote:

You think a construction worker is going to accept a lower wage just because the State is the developer? Besides which, where would the money come from to build these State sponsored properties?

I have lost my job on a number of occasions, I have never returned to work on a salary that was at or above my previous salary

Builders salaries are not a barrier to affordable housing, so the point may be mute, Thanks for pointing it out

Hubertj · 26-05-2020 12:33pm

Villa05 wrote: »

Governments change

We are currently paying 1 billion per year in subsidising private rents, this is by a government that was the owner of the largest real estate portfolio in the world

I'm sure that the EU would listen diligently to projects that stimulate economies, take workers off welfare, and provide much needed housing for workers who may be living in overcrowded accommodation aiding the spread of covid 19 and be self financing

A number of developers have claimed they can. The person that claimed they can't is someone who has made a career out extorting the maximumum out of the taxpayers for infrastructure projects

Fair point, but the fact that 8 years after the biggest property crash in the world, we are in position that housing has become unaffordable for so many displays how little has been learned from the last crash.

The supply demand imbalance is at a level that private sector can't/won't meet and can only be met by Gov intervention.
If the government intervenes and allows funding to housing associations it can be done at a cost neutral or even at a profit.
If its left to private sector rentals the cost will be enormous.

Can we afford not to do it? Are we comfortable with paying higher taxes to pay higher rents?
Would a housing policy that generates revenue for the state be much better than a policy that drains the state resources

These are all choices that are in our own hands

it doesn't matter who is in government - the relevant departments don't have the capability or competence to manage large infrastructure projects. Institutionalized incompetence due to poor government, poor management and unions. You think the likes of SF could change that?

OwlsZat · 26-05-2020 12:38pm

shenanagans wrote: »

If prices fall significantly won't developers stop building. Given the impact social distancing is predicted to have on the cost of building.

New builds on offer will dry up pretty quick. No point building houses to sell them below cost.

Thanks for regurgitating an old boards mistruth. The vast majority of builders will keeping building in spite of some downward price pressure. Provided they can keep themselves and others in the job they will do so. Making themselves and their friends unemployed isn't hugely appealing to most.

Edit missed you said Developers. Developers this time around come in the form of PLCs. The likes of Cairn, Glenveagh etc., I don't think their shareholders would l be to impressed if they were to stop building. If they did the shareprice would crash as people head for the extit. Management rely on share price related bonus's so don't see it happening. Simply put less building eqauls less profits, if anything it would make more sense for them to build more if margins were down so they could maintain their current revenue.

Idbatterim · 26-05-2020 12:43pm

addaword wrote: »

As Ben Dunne said on the tv last night, the coming recession is going to make 2008 look like a picnic, or words to that effect. Of course property prices are going to fall significantly.

All speculation. This isnt like 2008 where we were largely at fault. They have no more of a clue what will happen, than the rest of us. This scaremongering, becomes a self fulfilling prophecy. Anyway, this awful rat race, many people I know are worse off financially but happier overall, than when this started. Nobody will be thrown out of their home here or die of hunger, regardless if there is another recession. I hope there isnt , but probably seems likely.

Youd swear average joe soap was going.g from wolf of wall street to a bum on the street. When the vast majority of people have never had anything other than a very basic lifestyle, this bull**** scaremongering does my head in ...

Pablo_Flox · 26-05-2020 12:46pm

OwlsZat wrote: »

Thanks for regurgitating an old boards mistruth. The vast majority of builders will keeping building in spite of some downward price pressure. Provided they can keep themselves and others in the job they will do so. Making themselves and their friends unemployed isn't hugely appetising to most.

You think that builders will keep building houses at little / no profit margins so they can keep their friends in a job? Sorry to piss on your parade, but business is not the warm fuzzy world you seem to think it is... Developers are not charities and won't be building anything just to keep a few people off the dole.

Idbatterim · 26-05-2020 12:48pm

I can see the government doing some scheme to keep building going for several reasons , if developers start pulling plug due to falling prices. On schemes where ground has not yet been broken ...

FVP3 · 26-05-2020 12:53pm

I don't understand exactly why building costs ( particularly labour costs) wouldn't fall in a recession. Materials cost too if the demand is lower. And the government could reduce some taxes somewhere. 2008 was driven by a credit crunch. We haven't had that yet, and hopefully we wont.

TheSheriff · 26-05-2020 12:57pm

Back to the office fully in July, got the email today. No WFH happening here

I am starting to think less and less there will be a "big" drop; I think everyone I know is gearing up to buy in Dublin. A few months ago it was all about moving out of Dublin......strange its taken a pandemic to changes peoples minds. They now think they'll get a discount on a house. None have been impacted by CV-19.

House Prices 2021

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