Irish Property Market 2020 Part 2

Cyrus · 13-10-2020 5:20pm

PropQueries wrote: »

I'm sure they may have some extra proposals that will be issued piecemeal over the next few months. But for the moment, it looks like we may be back to the fundamentals for the next 12 months:

1. What are all those landlords who used to rent to students in Dublin, Galway, Limerick and Cork going to do with their properties?

2. What are all those property owners who used to rent on AirBnB in Dublin, Galway, Limerick and Cork going to do with their properties?

3. What are all the dedicated student accommodation providers (especially in Dublin) going to do with their properties?

4. How is WFH going to impact on the demand/supply dynamics of the property market over the next 12 months i.e. City vs. Rural? That issue is only really getting started.

let me guess, is the answer they are all going to become social housing?

fliball123 · 13-10-2020 5:23pm

Cyrus wrote: »

let me guess, is the answer they are all going to become social housing?

Well it might not be the worst idea in the world but what some forget is that students will be back maybe not this or next year but they will be back , same goes with tourist.

MacronvFrugals · 13-10-2020 5:24pm

Cyrus wrote: »

i was more of a PDs voter personally, im a floating voter now but i wont ever be floating sinn feinns way

Marginally lighter blue, but blue nonetheless

smellyoldboot · 13-10-2020 5:24pm

Bubbaclaus wrote: »

Can you explain what this means? Help to buy only applies to properties under 500k, which I doubt the "rich" have any interest in buying for their first home.

Already very comfortable/ not really in need of a subsidy so if not rich. The point is still very valid. It is not helping anyone get "on the ladder" that wouldn't otherwise be capable of doing so anyway.

Cyrus · 13-10-2020 5:25pm

fliball123 wrote: »

Well it might not be the worst idea in the world but what some forget is that students will be back maybe not this or next year but they will be back , same goes with tourist.

i was joking, his/her stock answer for any 'excess' is that the state is going to buy it up and make the whole thing a social housing scheme

fliball123 · 13-10-2020 5:26pm

Cyrus wrote: »

i was joking, his/her stock answer for any 'excess' is that the state is going to buy it up and make the whole thing a social housing scheme

I know but Cyrus in your joke there could be a short term solution (for a year or two) while corona is in town for those who need to be housed

Amirani · 13-10-2020 5:30pm

Kasey_Don wrote: »

Only the rich can avail of the help to buy..

You either don't understand the help to buy scheme, or have a bit of a distorted view of what "rich" is.

I don't like the Help to Buy scheme. But it's something that's aimed at and most impacts the middle-class, not the rich.

hometruths · 13-10-2020 5:32pm

PropQueries wrote: »

Ok, did anyone spot anything in the budget that may impact on the property market in either direction? HTB was already well flagged. Seems to me, nothing much has changed from the situation that existed last week.

Normally there's small items that aren't noticed but do make an impact. But, from a quick look, nothing seems out of the ordinary.

Government taking an equity stake in people's houses:

The affordable purchase measures will be constituted as a shared equity scheme and will account for €75 million.

The details of this are still being worked out, and will be announced in the coming weeks.

However, it is understood that the Department is in dialouge with the pillar banks to put in matching funding, bringing the total to €150 million. This will also need State aid approval.

This will not end well.

PommieBast · 13-10-2020 5:33pm

Kasey_Don wrote: »

Housing crisis started in 2013. Nearly 8 years later and this is the state of the housing market. A new build in Leixlip for ****ing 385k.

Back in 2013 the political pressure was to get people out of negative equity. Things won't be fixed unless this changes.

wassie · 13-10-2020 5:37pm

Smouse156 wrote: »

HTB = Help The Brickie!

A Brickie won’t get help on a second hand house. Inflating already overpriced property is almost as bad as a shared ownership scheme (putting people into houses they fundamentally can’t afford)

Government intervention always distorts the market, whether intended or not.

hometruths · 13-10-2020 5:51pm

Kasey_Don wrote: »

Can you explain what this is?

You only have to fund 80% (for example, depending on % of govt share) of the purchase. Govt funds the remainder. You buy the government out at some point in the future, or when you sell.

I guess in practice it will be a bit more complicated, but that's it in a nutshell as I understand it.

MacronvFrugals · 13-10-2020 5:52pm

schmittel wrote: »

You only have to fund 80% (for example, depending on % of govt share) of the purchase. Govt funds the remainder. You buy the government out at some point in the future, or when you sell.

I guess in practice it will be a bit more complicated, but that's it in a nutshell as I understand it.

In other words what desperate things can we come up with to keep property prices inflated.

hometruths · 13-10-2020 5:58pm

MacronvFrugals wrote: »

In other words what desperate things can we come up with to keep property prices inflated.

Indeed. it sort of seems like once the public gets hooked on high property prices, it is difficult to wean everybody off them. And the longer it goes on the more people don't realise that high prices don't actually make anybody better off.

Except the builders obviously.

PropQueries · 13-10-2020 6:03pm

Cyrus wrote: »

i was more of a PDs voter personally, im a floating voter now but i wont ever be floating sinn feinns way

Never thought

We actually have something in common.

PropQueries · 13-10-2020 6:06pm

Cyrus wrote: »

let me guess, is the answer they are all going to become social housing?

You're probably not actually not far off the mark:

"The Department of Justice has announced plans to lease 35 properties in Galway city centre to house asylum seekers. The apartments and town houses are located on Dominick Street and on Munster Avenue. The properties in question have been used for student accommodation and short-term tourist rental purposes in the past."

Link to article on RTE 23/09/2020: https://www.rte.ie/news/connacht/2020/0923/1166889-asylum-seekers-housing-galway/

PropQueries · 13-10-2020 6:10pm

schmittel wrote: »

Government taking an equity stake in people's houses:

This will not end well.

It never does. Let's hope they don't decide to include second-hand homes in that...

Taylor365 · 13-10-2020 6:14pm

calfmuscle wrote: »

I'm a first time buyer trying to buy solo, the market it flying up around here. Iv rang asking about 3 houses priced 215 to 245 all went by 15k to 40k over the asking price. Its a nightmare and unless there is a crash I'll never get a home.

I would say "Nay worries, renting for life isn't a death sentence", but in this country it really is :pac:

Rent, artificially inflated and regulated into oblivion for the small time LL, will never be at an acceptable level while evictions take so long and big business can keep units sit empty.

Smouse156 · 13-10-2020 6:15pm

PropQueries wrote: »

It never does. Let's hope they don't decide to include second-hand homes in that...

I just don’t understand the heavy social housing spend! They all vote for SF/IRA anyway and will just drive away any potential voters out of the FTB group

PropQueries · 13-10-2020 6:15pm

MacronvFrugals wrote: »

In other words what desperate things can we come up with to keep property prices inflated.

It could actually benefit first-time buyers who are interested in the second-hand home market by removing people from the demand side for second-hand homes towards new builds. That's assuming they don't include second-hand homes.

hometruths · 13-10-2020 6:19pm

PropQueries wrote: »

It could actually benefit first-time buyers who are interested in the second-hand home market by removing people from the demand side for second-hand homes towards new builds. That's assuming they don't include second-hand homes.

Surely if you're a first time buyer who can avail of 30k HTB and not have to fund whatever portion of equity the govt are buying on a new build, you'd need your head examined to buy a second hand house?!

L1011 · 13-10-2020 6:37pm

Smouse156 wrote: »

I just don’t understand the heavy social housing spend! They all vote for SF/IRA anyway and will just drive away any potential voters out of the FTB group

Politics to the politics forum - this applies to everyone. Impact of the budget is fine to discuss but specific party politics are a no.

Hubertj · 13-10-2020 6:43pm

schmittel wrote: »

Surely if you're a first time buyer who can avail of 30k HTB and not have to fund whatever portion of equity the govt are buying on a new build, you'd need your head examined to buy a second hand house?!

Sorry I don’t follow. Why would you always choose new vs 2nd hand?

HotDudeLife · 13-10-2020 6:44pm

Nice to see the government bailed out landlord<SNIP>. The addition of nearly 10k social housing units is welcome.

More supply is a good thing, even though some insist low supply = high prices, this is not true. We had historical levels of low supply between 2010-2013 and that is around the same time we witnessed the lowest prices.

brisan · 13-10-2020 6:45pm

schmittel wrote: »

Surely if you're a first time buyer who can avail of 30k HTB and not have to fund whatever portion of equity the govt are buying on a new build, you'd need your head examined to buy a second hand house?!

Why
if the second hand house is in an area you want ?
Buy the worst house on the best road you can afford
You can change everything about a house except its location

HotDudeLife · 13-10-2020 6:48pm

schmittel wrote: »

Surely if you're a first time buyer who can avail of 30k HTB and not have to fund whatever portion of equity the govt are buying on a new build, you'd need your head examined to buy a second hand house?!

In areas close to me, the new builds were whipped up in ridiculous locations and prices well above what they are worth, plus a good chunk of them are allocated to social housing so chance they may become ghettos.

Also who wants to work hard and pay for a brand new house only to have some leech move in next door for free. If something is for free/highly reduced, they won't value it and these areas will turn into dumps.

Second hand houses in mature areas are the way to go.

TheSheriff · 13-10-2020 6:49pm

brisan wrote: »

Why
if the second hand house is in an area you want ?
Buy the worst house on the best road you can afford
You can change everything about a house except its location

Have to agree here, we ruled out new builds early on in our search. I'd love one (purely for build quality), but give me an established park rather than the pot luck new build estates any day of the week.

HotDudeLife · 13-10-2020 6:51pm

calfmuscle wrote: »

I'm a first time buyer trying to buy solo, the market it flying up around here. Iv rang asking about 3 houses priced 215 to 245 all went by 15k to 40k over the asking price. Its a nightmare and unless there is a crash I'll never get a home.

Patience my friend, play the long game. This house of cards won't be standing much longer, huge crash coming in 2021-2022.

awec · 13-10-2020 6:54pm

HotDudeLife wrote: »

Patience my friend, play the long game. This house of cards won't be standing much longer, huge crash coming in 2021-2022.

Huge crash coming next year*.

* repeat every year.

TheSheriff · 13-10-2020 6:55pm

HotDudeLife wrote: »

Patience my friend, play the long game. This house of cards won't be standing much longer, huge crash coming in 2021-2022.

Every few months it gets further and further away......

Cyrus · 13-10-2020 6:57pm

TheSheriff wrote: »

Every few months it gets further and further away......

Yes and some of the more prolific doom merchants have left the thread , they will be back as soon as there is any glimmer that their prophecies of utter economic devastation are coming to pass, I see them thanking the odd post.

hometruths · 13-10-2020 6:58pm

TheSheriff wrote: »

Have to agree here, we ruled out new builds early on in our search. I'd love one (purely for build quality), but give me an established park rather than the pot luck new build estates any day of the week.

Personally I'd never live in a housing estate of any vintage but it strikes me that the bulk of FTBers are driven to spend the max they can afford based on the amount of deposit saved + lending limits etc.

I could easily envisage a scenario in which most FTBers feel like it is an unwise decision to buy a 250k second hand house when for the same outlay they could buy a 320k new build.

TheSheriff · 13-10-2020 7:00pm

schmittel wrote: »

Personally I'd never live in a housing estate of any vintage but it strikes me that the bulk of FTBers are driven to spend the max they can afford based on the amount of deposit saved + lending limits etc.

I could easily envisage a scenario in which most FTBers feel like it is an unwise decision to buy a 250k second hand house when for the same outlay they could buy a 320k new build.

New builds come with several disadvantages, and as someone who is actively looking we were as wise as every other FTB. Every new built we went too, first question was "Wheres the social housing going".

awec · 13-10-2020 7:02pm

schmittel wrote: »

Surely if you're a first time buyer who can avail of 30k HTB and not have to fund whatever portion of equity the govt are buying on a new build, you'd need your head examined to buy a second hand house?!

Most FTBs don't really get to make this decision, at least not if they are shopping for houses that are comparable between new / used.

Imagine they give up the 30k. And let's imagine the 30k inflates the price of the house, so a similar second hand house is 30k cheaper than the new house.

So for example:

new build @ 500k - deposit required = 50k, 30k htb 20k savings
second hand @ 470k - deposit required = 47k, 47k savings

Over twice the savings needed. SO if it took them 2 years to save 20k, it'll take at least that again to save the next bit.

Even if the second hand was say 60k cheaper, you are still looking at needing 44k deposit saved, again still twice the amount.

It's not a decision most can really make. But I would say that finance is only one aspect of this, obviously many FTBs do buy second hand because of the other intangibles (e.g. location preferences or whatever).

Rattlehead_ie · 13-10-2020 7:05pm

It also depends on whats out there to buy new and mortgage running out.
Im in a situation of where Im looking at both as a FTB, but everything in the areas Im looking at new is gone and waiting for "next phase" with no timeline. At least the HTB was extended.

hometruths · 13-10-2020 8:10pm

TheSheriff wrote: »

New builds come with several disadvantages, and as someone who is actively looking we were as wise as every other FTB. Every new built we went too, first question was "Wheres the social housing going".

Hadn't really considered that, but fair point, I can see how that would be a factor.

hometruths · 13-10-2020 8:19pm

awec wrote: »

Most FTBs don't really get to make this decision, at least not if they are shopping for houses that are comparable between new / used.

Imagine they give up the 30k. And let's imagine the 30k inflates the price of the house, so a similar second hand house is 30k cheaper than the new house.

So for example:

new build @ 500k - deposit required = 50k, 30k htb 20k savings
second hand @ 470k - deposit required = 47k, 47k savings

Over twice the savings needed. SO if it took them 2 years to save 20k, it'll take at least that again to save the next bit.

Even if the second hand was say 60k cheaper, you are still looking at needing 44k deposit saved, again still twice the amount.

It's not a decision most can really make. But I would say that finance is only one aspect of this, obviously many FTBs do buy second hand because of the other intangibles (e.g. location preferences or whatever).

Yes, I think we are in agreement - they're being funnelled into new builds whether they like it or not.

The point I made was in reference to the possibility that there might be some shared equity scheme on top of HTB.

Although a new build in a housing estate would be the last thing I would want if I was an FTB being offered HTP and shared equity, even I would buy a new build.

If it is anything like the UK scheme it would be too good to turn down:

With a Help to Buy: Equity Loan the government lends you up to 20% (40% if you’re in London) of the cost of your newly built home.

You pay a deposit of 5% or more and arrange a mortgage of 25% or more to make up the rest.

Particularly, if like me you're cynical enough to believe you'd never actually have to pay it off, and your fellow taxpayers will foot the bill for you!

enricoh · 13-10-2020 8:27pm

calfmuscle wrote: »

I'm a first time buyer trying to buy solo, the market it flying up around here. Iv rang asking about 3 houses priced 215 to 245 all went by 15k to 40k over the asking price. Its a nightmare and unless there is a crash I'll never get a home.

Chances are you were outbid by taxpayers money for social housing on some of them. If u can't beat them, join them!

KnowingWind · 13-10-2020 8:52pm

Just remember guys.

Just about when all the sheep are saying property will go up forever and never drop...is when it drops.

The drops are quick, all signs are in.

mousblaster17 · 13-10-2020 8:59pm

HotDudeLife wrote: »

Patience my friend, play the long game. This house of cards won't be standing much longer, huge crash coming in 2021-2022.

lol!

Waiting for house prices to drop be like...

if you believe prices will drop, you'll never buy.

Bubbaclaus · 13-10-2020 9:05pm

KnowingWind wrote: »

Just remember guys.

Just about when all the sheep are saying property will go up forever and never drop...is when it drops.

The drops are quick, all signs are in.

If all the signs are in, then I'm sure you would like to share them all with the class.

Graham · 13-10-2020 9:09pm

KnowingWind wrote: »

when all the sheep are saying property will go up forever and never drop

I must have missed that post.

fliball123 · 13-10-2020 9:14pm

HotDudeLife wrote: »

Patience my friend, play the long game. This house of cards won't be standing much longer, huge crash coming in 2021-2022.

yawn people have been saying that since Feb in a few months its going to hit yadda yadda..play the long game if you want but the budget will keep things ticking along no sign of price drops

KennisWhale · 13-10-2020 9:19pm

irishtimes.com/business/economy/budget-2021-main-points-up-to-5-000-a-week-for-covid-hit-firms-hospitality-vat-rate-cut-1.4379526?mode=amp

Spending of 2.4 billion in 2021 will support an additional 15,000 Housing Assistance Payment tenancies and 800 Rental Accommodation Scheme tenancies.

This signals to me an artificially inflated rental market when the State is the largest tenant and directly competes on such a huge scale with individuals.

Are those numbers correct? An "additional" 15,800 tenancies to how many and 2.4bn being funnelled into the pockets of private landlords from the State!? Mind-boggling and catastrophically high figures.

calfmuscle · 13-10-2020 9:25pm

enricoh wrote: »

Chances are you were outbid by taxpayers money for social housing on some of them. If u can't beat them, join them!

I'll be living in a cemetery sooner.

Timing belt · 13-10-2020 9:26pm

fliball123 wrote: »

yawn people have been saying that since Feb in a few months its going to hit yadda yadda..play the long game if you want but the budget will keep things ticking along no sign of price drops

The first time we will get a chance to see what is ahead in the property market is when the banks release there Q3 earnings at the end of the month. That will tell the level of arrears and the impact it will have on the banks future lending.

Edit: Extract from S&P report on banks Sept 2020

"Provisioning charges continue to vary widely from bank to bank. Through June, asset quality
metrics revealed only modest evidence of deterioration, as we gather that provisioning is guided
mostly by management teams’ expectations of future loan performance. Irish, U.K., and Dutch
banks, for example, seemed to have front-loaded much more provisions than others. Those that
did not front-load as much will likely continue recording sizable provisions through into 2021."

MacronvFrugals · 13-10-2020 10:13pm

KennisWhale wrote: »

irishtimes.com/business/economy/budget-2021-main-points-up-to-5-000-a-week-for-covid-hit-firms-hospitality-vat-rate-cut-1.4379526?mode=amp

This signals to me an artificially inflated rental market when the State is the largest tenant and directly competes on such a huge scale with individuals.

Are those numbers correct? An "additional" 15,800 tenancies to how many and 2.4bn being funnelled into the pockets of private landlords from the State!? Mind-boggling and catastrophically high figures.

Do you know the total number of hap tenancies?

Springy Turf · 13-10-2020 10:14pm

Timing belt wrote: »

The first time we will get a chance to see what is ahead in the property market is when the banks release there Q3 earnings at the end of the month. That will tell the level of arrears and the impact it will have on the banks future lending.

We just got a new lender in the country with lower interest rates. Banks have to pay to keep money on deposit. For sure the banks might lower their risk profile, but already with our mortgage lending rules there is a regulatory limit on mortgage sizes against income.

Timing belt · 13-10-2020 10:18pm

Springy Turf wrote: »

We just got a new lender in the country with lower interest rates. Banks have to pay to keep money on deposit. For sure the banks might lower their risk profile, but already with our mortgage lending rules there is a regulatory limit on mortgage sizes against income.

I am not talking about the banks lending more I'm talking about them lending less if arrears eat into there capital and limit there ability to lend.

KennisWhale · 13-10-2020 10:28pm

MacronvFrugals wrote: »

Do you know the total number of hap tenancies?

irishtimes.com/news/environment/housing-assistance-scheme-will-breach-1bn-mark-next-month-1.4131081

This was an article from the start of the year. I'm not sure if it is being deliberately obtuse or if it is the IT's particularly awful standard of journalism these days but I cannot garner the total number of Hap tenancies from the article despite my perception indicating that it can be extrapolated from the article. 52,000, is that what it provides?

silver2020 · 13-10-2020 10:31pm

KnowingWind wrote: »

Just remember guys.

Just about when all the sheep are saying property will go up forever and never drop...is when it drops.

The drops are quick, all signs are in.

been hearing that so often and in reality it has only happened once in the past 30 years and that because the world had gone crazy on a property and lending ponzi scheme and no-one shouted stop til the guy at the bottom said he wanted his money back.

Cheap and easy credit with few question asked - that was the mode of operation almost WORLDWIDE. All asset classes collapsed almost overnight.

That is not happening these days. Some prices are frothy, some are great value (I bought a holiday home investment recently that was 75% below the price some fool bought in 2006 - I'll get 20% return by letting it on airbnb and be able to use it frequently)

Decent sized 3 beds are becoming available in Dublin for 300k - that's affordable for many. A 30 year 275k mortgage will be €1100 a month. You can fix it for 10 years for under €1150, or be sensible and go for 25 years @ €1275 a month

There is no deep recession even on the horizon

Irish Property Market 2020 Part 2

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