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Property Market 2019

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  • Registered Users Posts: 10,905 ✭✭✭✭Bob24


    dor843088 wrote: »

    Yes we all know that average take home wages have dropped during that period. It is for the past 10 years though, i.e. not a random choice and a period selected to start exactly at the same time as one of the worst financial crisis ever. If the figures were related to the past 2 years they would more than likely show an increase (so would figures for the past 15 years).

    Looking at the past 10 years certainly does not backup a statement that in the present “wages are stagnant”, and even less so that it will be the case in the next 10 years.


  • Registered Users Posts: 210 ✭✭LotharIngum


    Villa05 wrote: »
    Interesting interview on down to business on newstalk Saturday 5th of January with a representative from the recruitment sector regarding career changes

    He said that 50% of people looking to change jobs stated that quality of life was the reason for seeking new job and they wanted to get out of Dublin to achieve this

    I would believe that figure.
    I know lots of people who hate living in Dublin.
    I would love to get out of Dublin myself.
    But id be picky on where I would like to live if I left Dublin. And also the job would have to pay me as well as I get paid now minus whatever reduction in cost of living is associated with the move.

    But, and its a big but. There would have to be plenty more jobs around that area available to me in case I ever lost they one I moved for. Safety net required.

    There is a lot more to just wanting to leave Dublin and actually leaving.
    Probably easier if you are young and single than if you have a family or a significant other to be fair. But I think young single people definitely like to stay in Dublin.

    I know two close friends who moved their families out of Dublin and got jobs elsewhere in the last 10 years or so.

    One went to Donegal and one went to West Clare. Both went to good jobs. Both sold their Dublin houses and one bought a house where he moved.
    The other rented.

    The one in Donegal lost his job that he moved to after about 4 years, as the company relocated. He got redundancy but could net get a job anywhere near the salary he was getting before. He has a mortgage. He has been working in Dublin for the last two years now. He commutes from Donegal on a Monday morning and back on a Friday evening. He rotates around friends houses. He even stayed in my apartment a few times when he was stuck. He has a miserable life now and its too expensive to uproot the family from Donegal to Dublin now.

    The other guy was able to move the family back to Dublin when his company who he worked for in Shannon shut down and there were no suitable jobs for him anywhere near. But now hes paying very high rent and has no house in Dublin like he used to. At least he hasn't a mortgage to pay in Clare though.

    So you see, its a long term game. Any move out of Dublin has to be a good solid one with a backup plan, because if it all goes wrong, getting back to Dublin may harder than you ever imagined.


  • Registered Users Posts: 861 ✭✭✭Zenify


    He has a miserable life now and its too expensive to uproot the family from Donegal to Dublin now.

    So you see, its a long term game. Any move out of Dublin has to be a good solid one with a backup plan, because if it all goes wrong, getting back to Dublin may harder than you ever imagined.

    Donegal is an extreme. Most parts of country is commutable to Dublin or even another another big city, Limerick, Cork etc. Not an example that would represent most cases IMO.


  • Registered Users Posts: 210 ✭✭LotharIngum


    Zenify wrote: »
    Donegal is an extreme. Most parts of country is commutable to Dublin or even another another big city, Limerick, Cork etc. Not an example that would represent most cases IMO.

    True, Donegal is far, but if he had moved anywhere, he would still be having to come to Dublin for work.

    The point I am making is just that where we would like to move, it has to be a safe move with a backup strategy if you lost the job you moved to, which is always going to be difficult.


  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    Bob24 wrote:
    Looking at the past 10 years certainly does not backup a statement that in the present “wages are stagnantâ€, and even less so that it will be the case in the next 10 years.


    I think it's fair to say though that there has been relatively low wage inflation compared to rapidly rising asset price inflation, in particularly in housing, over the last couple of decades, which is causing serious issues


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  • Registered Users Posts: 10,905 ✭✭✭✭Bob24


    Wanderer78 wrote: »
    I think it's fair to say though that there has been relatively low wage inflation compared to rapidly rising asset price inflation, in particularly in housing, over the last couple of decades, which is causing serious issues

    Yes sure. What I was saying is that someone making 10 years prediction on property prices with a high level of certainty is just wishful thinking, as based on too many assumptions and that it is incorrect to say that currently wages are stagnating.


  • Registered Users Posts: 28,703 ✭✭✭✭Wanderer78


    Bob24 wrote:
    Yes sure. What I was saying is that someone making 10 years prediction on property prices with a high level of certainty is just wishful thinking, as based on too many assumptions and that it is incorrect to say that currently wages are stagnating.


    Any such predictions would have an extremely high level of uncertainty attached, with so many variables at play, I do also agree that it's difficult to say if current wages are stagnant or not, but I suspect some have been, rapid asset price inflation is killing us though, particularly younger generations.


  • Registered Users Posts: 1,962 ✭✭✭Mr. teddywinkles


    JohnCleary wrote: »
    I'm hoping for another recession, tbh.

    Bought during the last recession for cash, sold April 2018 (you can guess, I came out winning, also no CGT because of PPR).

    Currently have 80% deposit for what i'd consider 'perfect home' budget. A recession that would bring prices down a few % and boom, I can buy my ideal home with cash.

    C'mon ta fcuk.... I don't want to be waiting around any longer.

    Lots of people had no jobs or emigranted away from family during recession. Thoughtful guy you are.


  • Registered Users Posts: 8,184 ✭✭✭riclad


    The reason why the rents are high in dublin is that theres, 1000,s of job vacancy,s in dublin .
    IF you are a chemist, engineer, programmer , web designer theres
    alot more choice in regard to where you work in dublin than there is in donegal, limerick or other rural area,s .
    i know lots of people who are happy to live in dublin ,it depends on how old you are , what is your salary .
    Are you renting , are you a home owner .If you are on a low wage ,paying high rent in dublin ,you may not be very happy .


  • Registered Users Posts: 8,239 ✭✭✭Pussyhands


    Lots of people had no jobs or emigranted away from family during recession. Thoughtful guy you are.

    You are naive if you think randomers are thoughtful of other randomers. Everyone is out for themselves.

    I can guarantee you no one owning a house now wants prices to drop. Are they thoughtful?


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  • Registered Users Posts: 18,357 ✭✭✭✭kippy


    Pussyhands wrote: »
    You are naive if you think randomers are thoughtful of other randomers. Everyone is out for themselves.

    I can guarantee you no one owning a house now wants prices to drop. Are they thoughtful?

    Really - I don't mind if they drop or not to be honest, I'd prefer if they did at some point in the future so the kids have a chance of home ownership.


  • Registered Users Posts: 4,473 ✭✭✭Villa05


    Pussyhands wrote:
    I can guarantee you no one owning a house now wants prices to drop. Are they thoughtful?


    I know many people that own houses and want prices to drop. Why?

    Because they have grown up children who need a home and many people believe current prices are crazy for what you are getting for your money


  • Closed Accounts Posts: 4,042 ✭✭✭ Peter Muscular Quirk


    Wouldn't mind a price drop. Am looking to trade up at some stage so a 10 % drop would work out better for me.


  • Registered Users Posts: 8,239 ✭✭✭Pussyhands


    Villa05 wrote: »
    I know many people that own houses and want prices to drop. Why?

    Because they have grown up children who need a home and many people believe current prices are crazy for what you are getting for your money

    There is **** all people of the hundreds of thousands who have bought in the last 12/13 years that want prices to drop.

    Sure we even have people whinging about being in negative equity despite never having an intention of selling.


  • Registered Users Posts: 11,926 ✭✭✭✭titan18


    Banks didn’t lend last time. Cash buyers bought most of the property for 2-3 years. Good luck.

    I know, but I'd have 60k of a deposit, so if house prices tumble back to close to the prices of 7/8 years ago, I don't actually need much of a mortgage anymore. Even with lower lending levels, I actually have a chance of buying a house in comparison to no chance that I have now.


  • Registered Users Posts: 10,905 ✭✭✭✭Bob24


    Pussyhands wrote: »
    There is **** all people of the hundreds of thousands who have bought in the last 12/13 years that want prices to drop.

    Even assuming everyone is selfish and short sighted, you can be sure some people would like it.

    As others have said an obvious exemple is someone who would like to upgrade to something better. At 10% drop accross the board means that their upgrade cost is cut by 10%. What’s not to like for them?

    To be honest while I’m fine with my current situation and don’t wish for anything, I wouldn’t have any issue with prices dropping as I definitely see how I could use it to my advantage.


  • Closed Accounts Posts: 173 ✭✭beaz2018


    Bob24 wrote: »
    Even assuming everyone is selfish and short sighted, you can be sure some people would like it.

    As others have said an obvious exemple is someone who would like to upgrade to something better. At 10% drop accross the board means that their upgrade cost is cut by 10%. What’s not to like for them?

    To be honest while I’m fine with my current situation and don’t wish for anything, I wouldn’t have any issue with prices dropping as I definitely see how I could use it to my advantage.

    But would your own house not fall in value by 10% also? Thus leaving less equity to purchase the new one?


  • Registered Users Posts: 10,905 ✭✭✭✭Bob24


    beaz2018 wrote: »
    But would your own house not fall in value by 10% also? Thus leaving less equity to purchase the new one?

    If you’re upgrading and prices are falling accross the board, the more expensive house you want to buy at is dropping more in absolute value than the the one you want to sell, reducing you upgrade cost.

    Simple exemple:
    - You own a 200k house and want to upgrade to a 300k one. Cost of upgrade is 100k.
    - Price drop by 10% accross the board
    - You now own a 180k house and want to upgrade to a 270k one. Cost of upgrade has became 90k, 10% less than before.

    So 10% drop in prices is saving you 10% on your upgrade cost.


  • Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,032 Mod ✭✭✭✭AlmightyCushion


    beaz2018 wrote: »
    But would your own house not fall in value by 10% also? Thus leaving less equity to purchase the new one?

    You have less equity in your current house but the new house has dropped by more actual value than your current house so you're still technically better off.

    Current house 300k
    New house 400k

    A 10% drop will mean your current house has lost 30k value whilst your new house will cost 40k less so it still saves you money. Obviously, it's not always that simple. Trading down works out more expensive. Reduction in equity could complicate things. Also different area might drop at different rates as it's rarely a straight XX% drop across the board.


  • Registered Users Posts: 236 ✭✭Moonjet


    All this is assuming there will be any reduction in prices at all, which is certainly not a done deal given the economic/political instability in the EU and US at the moment.


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  • Moderators, Education Moderators, Technology & Internet Moderators Posts: 35,032 Mod ✭✭✭✭AlmightyCushion


    Moonjet wrote: »
    All this is assuming there will be any reduction in prices at all, which is certainly not a done deal given the economic/political instability in the EU and US at the moment.

    Pretty much so. Who knows what is gonna happen over the next few years.


  • Registered Users Posts: 10,905 ✭✭✭✭Bob24


    Moonjet wrote: »
    All this is assuming there will be any reduction in prices at all, which is certainly not a done deal given the economic/political instability in the EU and US at the moment.

    To be fair the past few posts were in response to someone saying that no current homeowner would possibly wish for price drops.

    None of the posts are saying that price drops are coming, they are arguing that there is a category of home owners for which they could be desirable, even from a selfish perspective.

    But yeah it’s obviously not a given. And to be fair as I’ve said before there are so many uncertain and exogenous factors at play that while someone can make forecasts *assuming* the Irish environment remains the same, the certainty level of those forecasts is pretty low.


  • Registered Users Posts: 591 ✭✭✭the butcher


    Some predictions.
    Q1 will see the continuation of the slowdown in the upper edges of the market here.
    Q2 will see a slight slowdown in the market increases overall, supply will increase in Q3.
    I expect an international recession to hit end of 2019 to impact the market further.


  • Closed Accounts Posts: 173 ✭✭beaz2018


    Pussyhands wrote: »
    Hoping they get out before the prices fall. I think early last year was the peak.

    By the time they get to selling it prices may have tanked.

    From reading the Sunday Times yesterday, I think the above is accurate. Seems prices in 2018 did not achieve their 2017 levels in many parts. With all the uncertainty around, that trend will likely continue.


  • Registered Users Posts: 21,224 ✭✭✭✭ELM327


    Without additional external factors (eg hard brexit/no deal brexit) influencing things, I cannot see a recession in 2019.
    The only similarity to the beginning of a downturn/recession is the migration of investors from stocks to real estate. However Trumps actions are influencing this more than any actual financial reasons.


  • Registered Users Posts: 591 ✭✭✭the butcher


    ELM327 wrote: »
    Without additional external factors (eg hard brexit/no deal brexit) influencing things, I cannot see a recession in 2019.
    The only similarity to the beginning of a downturn/recession is the migration of investors from stocks to real estate. However Trumps actions are influencing this more than any actual financial reasons.

    It would be unwise not to keep an eye on US-China trade wars (growing protectionism), our reliance on corporation tax increases (similar to stamp duty back in previous bubble), Deutsche Bank trouble (could pull a Lehman Brothers on us), Italian/Greek debt crisis, era of low interest rates, oil prices + tensions etc etc

    Our public debt levels are still growing despite economic growth. Ten firms pay nearly 40% of corporation tax, Revenue says.

    House prices in Dublin are 25 per cent overvalued against income, according to the Economist, which also finds in a new survey that property price growth in the city has outpaced growth in 22 other global cities over the past five years. 75 per cent of exports are accounted for by just 50 companies, a much higher concentration than most other economies. Workers at multinational firms account for over a fifth of all income tax paid in the State and the large number of high earners at these firms poses a real risk to the tax base, an Oireachtas report found.

    Budget watchdog the Irish Fiscal Advisory Council (IFAC) said recently that the departure of just one large multinational could leave the State nursing a €276m hole in the public finances. Ireland is vulnerable to “firm-specific shocks”, the NCC warns, meaning changes in the fortunes of a few big US firms could hit our economy significantly.

    These are real threats to our economy and should be noted especially considering we are closer to a new recession than we were to the old one. Since 2012, Irish rents are up 60 per cent. House prices are up 40 per cent. And disposable income is up 8 per cent. In 1970s you only needed one wage to get a house and retire in your 60s on a decent pension. We have eroded that economy away and the reality is sadly we are becoming a nation of debt slaves all trying to aspire to the same when it's really out of our reach now.

    Fine Gael told us that the previous property bubble prices in the 2007 era were unsustainable. What are they now so close to the peak?


  • Registered Users Posts: 21,224 ✭✭✭✭ELM327


    The only difference between the 90's-early 2000's and now is that back then a large proportion of families were one income households - with the man at work and the woman at home with the kids.
    That doesn't happen now, as much, so as the vast majority of purchasers now have two incomes supporting the bid and not one, demand pushes up the price as more buyers have access to more borrowing potential.

    You can't compare now with 2012 and say house prices and rents are up. In 2012 the economy was emerging from the worst economic crash in global terms in at least a generation - and arguably the worst since the depression of the late 20's. To use that as a floor to base increase percentages off is a little misleading.

    You are correct regarding the impact CT has on our tax take and a large departure could impact the economy. But that was always the case. It has been irish strategy as far as I can remember to attract large amounts of FDI.

    The PIIGS countries have been threatening default for nigh on 10 years now, if they were going to default they would arguably have done so earlier - not now when there are shoots of recovery.


  • Registered Users Posts: 10,905 ✭✭✭✭Bob24


    ELM327 wrote: »

    You can't compare now with 2012 and say house prices and rents are up. In 2012 the economy was emerging from the worst economic crash in global terms in at least a generation - and arguably the worst since the depression of the late 20's. To use that as a floor to base increase percentages off is a little misleading.

    Just to say, rents are very significantly higher than their pre-crisis peek in 2006-2007 - which then was their highest point ever.

    So when it comes to rents you don’t need to take the bottom of the crash as a reference point to see a massive increase, even compared to the top of the boom we had before that crash are today’s rents massively higher (way more than either inflation or pay progression during the same period).

    Granted, selling prices are a different story.


  • Registered Users Posts: 21,224 ✭✭✭✭ELM327


    Bob24 wrote: »
    Just to say, rents are very significantly higher than their pre-crisis peek in 2006-2007 - which then was their highest point ever.

    So when it comes to rents you don’t need to take the bottom of the crash as a reference point to see a massive increase, even compared to the top of the boom we had before that crash are today’s rents massively higher.

    Granted, selling prices are a different story.


    Rental prices are indeed higher than the peak of the boom, never mind the trough of 2009-2012.
    However this cannot be attributed entirely to the property market fluctuation, or simple supply and demand. It is not a free market, it is one subvented by the government through RA/HAP, and with the RPZ it is artificially interfering in the market. This makes LL want to exit the market and as such less properties are actually available to rent, which reduces supply and increases demand.


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  • Registered Users Posts: 1,275 ✭✭✭tobsey


    You have less equity in your current house but the new house has dropped by more actual value than your current house so you're still technically better off.

    Current house 300k
    New house 400k

    A 10% drop will mean your current house has lost 30k value whilst your new house will cost 40k less so it still saves you money. Obviously, it's not always that simple. Trading down works out more expensive. Reduction in equity could complicate things. Also different area might drop at different rates as it's rarely a straight XX% drop across the board.

    That’s true but for most people trading up the equity in their current home is the deposit for the next. If you have a house worth 300k and a mortgage of 200k and want to trade up to a 400k house, you have 100k deposit which is 25% LTV against the new house. If the value drops to 270k you now have 70k equity. The new house has dropped to 360k but you’re limited to a 350k house because your 70k has to be at least 20% of the new purchase price due to the CBI limits on second time buyers.

    I know the figures will be different for everyone but the scenario above is basically my situation. I would prefer prices to rise slightly to give me more equity because I’m currently limited by the LTV restriction rather than the LTI.


This discussion has been closed.
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