Property Market 2019

ZX7R · 05-12-2019 6:13pm

OwlsZat wrote: »

The chairman of the Irish Home Builders Association was on the radio spelling out that sales are slowing across the country and there is a volume of available stock in most new developments. He calls out that prudent lending restrictions are making the properties too expensive for new buyers.

The inputs are land, materials and wages. Leaving wages alone the Government is the biggest land hoarder in the country and it can release significant amounts of land to build on at anytime. Material costs are also partially under Government control. David McW has called out that there is a duopoly in the sales of building materials here. He uses concrete as an example cited as twice as expensive as the UK. Obviously, Government should setup a task-force to review/investigate/correct this. Further to this, given the housing crisis it could also choose to temporarily reduce the VAT paid on building materials. Much like was done in the tourism sector.

When you consider the list of available options the housing minister has, it's not surprising his performance almost collapsed the Government. Don't think they will be so lucky next time around.

I would love to see there stats on the volume of unsold stock,the greater Kildare area most sites especially computer blelt have planning in for second third developments,these developments are not been sought if things are not selling.
A good example is planning in for 800 houses in maynooth

ZX7R · 05-12-2019 6:18pm

Noah Scruffy Kale wrote: »

There is plenty of information out there, for example.

https://www.irishtimes.com/business/construction/despite-shortage-houses-being-left-unsold-1.3928592

Why? I'm not exactly sure, the market is slowing, people feel property is too expensive, but there IS unsold stock. It's simple a fact.

Unsold stock is mainly a Dublin problem,as with most things it does not really represent the county as a hole .
That is down to price and price only

SozBbz · 05-12-2019 7:14pm

ZX7R wrote: »

Unsold stock is mainly a Dublin problem,as with most things it does not really represent the county as a hole .
That is down to price and price only

You said it.

snotboogie · 05-12-2019 7:25pm

ZX7R wrote: »

I would love to see there stats on the volume of unsold stock,the greater Kildare area most sites especially computer blelt have planning in for second third developments,these developments are not been sought if things are not selling.
A good example is planning in for 800 houses in maynooth

Most of the SHD planning applications are not being built. Sites covering 66% of the homes on the scheme have seen no construction. Because of the 100 home minimum, these applications are exclusive to high demand areas; Dublin, the commuter counties, Cork and a handful in Galway.

Cuddlesworth · 05-12-2019 8:00pm

Mic 1972 wrote: »

There was a 2% drop in asking price in Dublin which means nothing to the potential profit of building new homes. If builders were able to make a profit 2-3 years ago when prices were lower, sure they are making a profit now.
From the Irish Time below, builders are not at all walking away, they are finding it difficult to get funding for additional building until those unsold inventories are reduced, Mr O’Leary said

https://www.irishtimes.com/business/economy/housing-policy-under-fresh-scrutiny-as-home-building-stalls-in-dublin-1.4075676

A 2% drop means everything because of the risk of it turning into a greater number. If an investor wants to create a couple of hundred houses, it plowing money into something that will be sold 2-3 years down the line at best. It could mean profit or it could mean significant loss(see 2008 for reference). 2% can easily turn into a greater number, demand or no demand. Consumer confidence can make or break this market.

If we see a stall, with stagnant or inflation led pricing then we are looking good. But if that 2% turns into 5% which leads to another market crash, your going to see builders and investors bailing out as quickly as they can.

ZX7R · 05-12-2019 8:07pm

snotboogie wrote: »

Most of the SHD planning applications are not being built. Sites covering 66% of the homes on the scheme have seen no construction. Because of the 100 home minimum, these applications are exclusive to high demand areas; Dublin, the commuter counties, Cork and a handful in Galway.

Where did you get the figure of 66% of planning not been started yet.
Does this % include those sights that have ground prep started but no actual houses under construction yet

Mic 1972 · 05-12-2019 8:14pm

Cuddlesworth wrote: »

A 2% drop means everything because of the risk of it turning into a greater number. If an investor wants to create a couple of hundred houses, it plowing money into something that will be sold 2-3 years down the line at best. It could mean profit or it could mean significant loss(see 2008 for reference). 2% can easily turn into a greater number, demand or no demand. Consumer confidence can make or break this market.

If we see a stall, with stagnant or inflation led pricing then we are looking good. But if that 2% turns into 5% which leads to another market crash, your going to see builders and investors bailing out as quickly as they can.

House prices are at their peak, builders aren't going anywhere just because asking prices are adjusting to real sale prices. If prices dropped to 2015-16 levels, which is about 20% less than today, builders would still make a profit
They aren't going to stop building. As stated in the article, they are having problems getting funding at the pace they were before because money comes from selling the current stock and things have slowed down. The 2% drop in asking price is meant to speed up sales, if you look at the latest PPR sales for Oct and Sep, there is no real sale price decline

Cuddlesworth · 05-12-2019 8:53pm

Mic 1972 wrote: »

House prices are at their peak, builders aren't going anywhere just because asking prices are adjusting to real sale prices. If prices dropped to 2015-16 levels, which is about 20% less than today, builders would still make a profit
They aren't going to stop building. As stated in the article, they are having problems getting funding at the pace they were before because money comes from selling the current stock and things have slowed down. The 2% drop in asking price is meant to speed up sales, if you look at the latest PPR sales for Oct and Sep, there is no real sale price decline

while prices in Dún Laoghaire-Rathdown, typically seen as a bellwether for the rest of the country, saw a decline of 6.3 per cent.

Might just be a blip but it can easily snowball into something larger.

SozBbz · 05-12-2019 9:20pm

Cuddlesworth wrote: »

while prices in Dún Laoghaire-Rathdown, typically seen as a bellwether for the rest of the country, saw a decline of 6.3 per cent.

Might just be a blip but it can easily snowball into something larger.

Meh, I don't think so.

Also, I'd argue that DLR is NOT a belweather, its the ultimate outlier. Its the most affluent LA region in the country. Its where things happen first, not an indicator of whats happening nationally. Sure, the national trend tends to follow, but often many years later. Just because something is happening in DLR now, doesnt mean its a microcasm of the national picture. If anything, DLR is probably buffered from price falls as there was always be some demand to live in the area.

Anyhow, while I'm not someone who denies that prices have peaked or indeed care much if they fall, the fundamentals underpinning the economy have not shifted.

Strong employment
Strong population growth
And provided you build them in the right places, people are still big on the idea of home ownership

Finally I really think affordability is the major factor. Yes there are some new builds that have been slow to shift, but IMO that was bound to happen as the prices of said new builds go beyond the help to buy threshold. Wages growth has also been slower than houseprice inflation in the past few years, so this was bound to catch up on itself at somepoint.

ZX7R · 05-12-2019 9:26pm

Cuddlesworth wrote: »

while prices in Dún Laoghaire-Rathdown, typically seen as a bellwether for the rest of the country, saw a decline of 6.3 per cent.

Might just be a blip but it can easily snowball into something larger.

So according to the article layman's terms
Dublin has Dropped slightly , nationally it's increased excluding Dublin.
Fun laoghaire /ratdown down 6% but it's never the cheapest to buy either ways.
Plus it will be interesting to see what happens the end of December seen as there Data is only up till July or do we have to wait till July next year for the next update.
6 months of data July till present I'd saw there has been a further increase nationally

Assetbacked · 06-12-2019 2:46am

awec wrote: »

The deposit rule is to try guard against negative equity to a certain degree. It shouldn't go anywhere.

Hmm maybe operate it so that factoring in rent payments in lieu of a deposit is allowed only where your rent for the previous X number of months was at least Y% higher than paying the mortgage they are willing to give to you based on your salary, etc. Maybe not even operate it in lieu of a deposit but as a derogation from the requirement to have at least a 10% deposit, e.g. Only 5% deposit is required if you can show you've paid for the previous X months Y% higher than the mortgage you require.

Cuddlesworth · 06-12-2019 10:24am

SozBbz wrote: »

Also, I'd argue that DLR is NOT a belweather, its the ultimate outlier. Its the most affluent LA region in the country. Its where things happen first, not an indicator of whats happening nationally. Sure, the national trend tends to follow, but often many years later.

Large estates take years to build. If you get a sniff of a decline, investors will be skittish.

lawred2 · 06-12-2019 10:30am

ZX7R wrote: »

Unsold stock is mainly a Dublin problem,as with most things it does not really represent the county as a hole .
That is down to price and price only

Where is this?

What type? Commercial or residential?

awec · 06-12-2019 11:02am

Assetbacked wrote: »

Hmm maybe operate it so that factoring in rent payments in lieu of a deposit is allowed only where your rent for the previous X number of months was at least Y% higher than paying the mortgage they are willing to give to you based on your salary, etc. Maybe not even operate it in lieu of a deposit but as a derogation from the requirement to have at least a 10% deposit, e.g. Only 5% deposit is required if you can show you've paid for the previous X months Y% higher than the mortgage you require.

The 10% is not a question of affordability, so rent payments don't come into it.

The reason they insist on 10% minimum is so you can absorb a 10% drop in the market and stay in positive equity. If, on the day you got the keys to your new gaff, house prices dropped 10%, you'd be fine.

5% is really not a lot, so you'd be left very exposed to even slight market changes if you were borrowing 95%.

Assetbacked · 06-12-2019 1:15pm

awec wrote: »

The 10% is not a question of affordability, so rent payments don't come into it.

The reason they insist on 10% minimum is so you can absorb a 10% drop in the market and stay in positive equity. If, on the day you got the keys to your new gaff, house prices dropped 10%, you'd be fine.

5% is really not a lot, so you'd be left very exposed to even slight market changes if you were borrowing 95%.

But that assumes the mere fact the price of the house drops instantly by 10% is necessarily catastrophic to your ability to repay. Is that not a bit extreme? After all, negative equity only matters if you are selling or can't afford the mortgage.

Mickiemcfist · 06-12-2019 1:17pm

Assetbacked wrote: »

But that assumes the mere fact the price of the house drops instantly by 10% is necessarily catastrophic to your ability to repay. Is that not a bit extreme? After all, negative equity only matters if you are selling or can't afford the mortgage.

It means that you have zero fallback should you not be able to repay. I.e. you can't sell up & repay your mortgage.

JJJackal · 06-12-2019 1:26pm

Assetbacked wrote: »

But that assumes the mere fact the price of the house drops instantly by 10% is necessarily catastrophic to your ability to repay. Is that not a bit extreme? After all, negative equity only matters if you are selling or can't afford the mortgage.

If your selling up you also have auctioneer fees and solicitor fees. So a drop of <10% would be enough for you not to be able to pay the full mortgage back on resale

Padre_Pio · 06-12-2019 5:21pm

JJJackal wrote: »

If your selling up you also have auctioneer fees and solicitor fees. So a drop of <10% would be enough for you not to be able to pay the full mortgage back on resale

But they are already paid by this point. Why would they be included?

Sweet.Science · 06-12-2019 5:39pm

How are all these new builds selling? Not many under 400k in Dublin

The_Conductor · 06-12-2019 5:40pm

Mickiemcfist wrote: »

It means that you have zero fallback should you not be able to repay. I.e. you can't sell up & repay your mortgage.

There are tens of thousands of people from the last time round who bought apartments in Dublin- who are still, even now, in negative equity.

Its only an issue if you are selling the unit and have to capitalise the equity loss (and most lenders do facilitate bringing negative equity over to subsequent property- if you can prove repayment capacity).

Its not a massive issue really- though obviously you'll feel poorer if you're in negative equity- but its a paper loss, its not money that you actually have at your disposal.

Mickiemcfist · 06-12-2019 6:12pm

The_Conductor wrote: »

There are tens of thousands of people from the last time round who bought apartments in Dublin- who are still, even now, in negative equity.

Its only an issue if you are selling the unit and have to capitalise the equity loss (and most lenders do facilitate bringing negative equity over to subsequent property- if you can prove repayment capacity).

Its not a massive issue really- though obviously you'll feel poorer if you're in negative equity- but its a paper loss, its not money that you actually have at your disposal.

Yea, you're making my point for me. There are still tens of thousands of people from last time round who are still even now, in those apartments, despite having massively outgrown them as a family but banks are not facilitating bringing negative equity over to a subsequent property. I know of 5 families off the top of my head who are in that situation, more people than I know who've had it easier & traded out of it.

You can argue whatever way you want, but someone buying a property should have skin in the game, banks should be buffered from risks & 10% is not exactly a massive number. The HTB can contribute to it & banks are giving cashback offers, theres ways of doing it.

Bluefoam · 06-12-2019 6:25pm

Mickiemcfist wrote: »

Yea, you're making my point for me. There are still tens of thousands of people from last time round who are still even now, in those apartments, despite having massively outgrown them as a family but banks are not facilitating bringing negative equity over to a subsequent property. I know of 5 families off the top of my head who are in that situation, more people than I know who've had it easier & traded out of it.

You can argue whatever way you want, but someone buying a property should have skin in the game, banks should be buffered from risks & 10% is not exactly a massive number. The HTB can contribute to it & banks are giving cashback offers, theres ways of doing it.

I agree & people should also take responsibility for their own financial descision making. The idea that people in negative equity or who have overextended themselves should be helped out is not viable.

ZX7R · 06-12-2019 6:38pm

lawred2 wrote: »

Where is this?

What type? Commercial or residential?

The article doesn't state witch

JJJackal · 06-12-2019 6:46pm

Padre_Pio wrote: »

But they are already paid by this point. Why would they be included?

Because if the bank is selling it or you and the bank have agreed to sell it there are new fees - probably 2-3% of the value of the property

So I buy a house today with 90% mortgage 10% deposit.

Tomorrow I decide I cant afford it. I hopefully will sell at 100% but my costs will be 2-3% so I will only get 97-98%.

If prices dropped overnight by 10%, the bank would have to pay legal...

alias no.9 · 06-12-2019 8:44pm

No matter how inflated the prices may have been, 10+ years of mortgage repayments along with the recovery since 2013 should have eliminated negative equity unless there was arrears or interest only periods.

Padre_Pio · 06-12-2019 10:11pm

JJJackal wrote: »

Because if the bank is selling it or you and the bank have agreed to sell it there are new fees - probably 2-3% of the value of the property

So I buy a house today with 90% mortgage 10% deposit.

Tomorrow I decide I cant afford it. I hopefully will sell at 100% but my costs will be 2-3% so I will only get 97-98%.

If prices dropped overnight by 10%, the bank would have to pay legal...

And they would simply pass the charges onto you, leaving you still in debt.

riclad · 06-12-2019 10:24pm

i Know people outside dublin who are still in negative equity,
the mortage is nearly still twice the value of the property.
Prices in rural area,s have not gone up as much as in citys like dublin.

JJJackal · 06-12-2019 10:55pm

Padre_Pio wrote: »

And they would simply pass the charges onto you, leaving you still in debt.

exactly my point

Padre_Pio · 06-12-2019 10:57pm

JJJackal wrote: »

exactly my point

I dont know what point you're making..

OwlsZat · 07-12-2019 2:07am

riclad wrote: »

i Know people outside dublin who are still in negative equity,
the mortage is nearly still twice the value of the property.
Prices in rural area,s have not gone up as much as in citys like dublin.

Where?

Horusire · 07-12-2019 8:08pm

OwlsZat wrote: »

Where?

My guess is Longford or possibly certain parts of Cavan.

Prices in those areas will never rise anywhere near tiger prices in the medium term. IMO

The_Conductor · 07-12-2019 9:15pm

OwlsZat wrote: »

Where?

There are some developments in Co. Dublin that went for between 400 and 450k back in 2007- that are now barely worth 300k- even after the recovery in prices. Its very location specific- average apartment prices in Dublin are now at 87% of their peak values- however, an average hides a wealth of divergences at both sides of the equation.........

mariaalice · 07-12-2019 10:15pm

The_Conductor wrote: »

There are some developments in Co. Dublin that went for between 400 and 450k back in 2007- that are now barely worth 300k- even after the recovery in prices. Its very location specific- average apartment prices in Dublin are now at 87% of their peak values- however, an average hides a wealth of divergences at both sides of the equation.........

But the person who purchased in 2007 has paid a morgage for 12 year so how could hey still be in negative equity?

appledrop · 07-12-2019 10:23pm

alias no.9 wrote: »

No matter how inflated the prices may have been, 10+ years of mortgage repayments along with the recovery since 2013 should have eliminated negative equity unless there was arrears or interest only periods.

Your wrong even in Dublin some people still in negative equity During peak boom 2 bed houses near us sold for 400k +. Even with recovery only worth 265 now. Yes if you took 20 year mortgage you might be ok but I know people who got 35 or 40 year mortgages from bank so still in negative equity. Mad but true.

Arthur Daley · 07-12-2019 10:37pm

mariaalice wrote: »

But the person who purchased in 2007 has paid a morgage for 12 year so how could hey still be in negative equity?

Well normally yes indeed. Is it too much to ask some of them to pay the mortgage over 12 years before whining about being in negative equity.

mariaalice · 07-12-2019 10:51pm

They will have lost a lot of money but that is different than being in negative equity?.

They may well only have got to the stage where having paid 12 years of the mortgage the house is now worth what they owe.

appledrop · 07-12-2019 11:00pm

No when you first staying paying off your mortgage nearly all of the money you pay goes off the interest not the actually mortgage money. The longer your mortgage term the worse this is. So if someone took out a 40 year mortgage they wouldn't actually have that much money paid off principal if only 10-12 years in.

mariaalice · 07-12-2019 11:05pm

appledrop wrote: »

No when you first staying paying off your mortgage nearly all of the money you pay goes off the interest not the actual mortgage money. The longer your mortgage term the worse this is. So if someone took out a 40 year mortgage they wouldn't actually have that much money paid off principal if only 10-12 years in.

Would there be many who took out a 100% 40-year mortgage in 2007, and after that how many took it out for a 1 or 2 bed appartment and how many took it out for a 3 bed semi.

Padre_Pio · 07-12-2019 11:46pm

mariaalice wrote: »

Would there be many who took out a 100% 40-year mortgage in 2007, and after that how many took it out for a 1 or 2 bed appartment and how many took it out for a 3 bed semi.

And how many took it out for properties that were massively overpriced and have not recovered.

Very very few. So few it's not worth talking about.

appledrop · 07-12-2019 11:49pm

It is worth talking about. Trust me I know as it was people in my age bracket family/ friends/acquaintances
who all bought around this time + so many in 400k plus bracket on 40 year mortgages as young enough. Really people need to do the maths.

ZX7R · 08-12-2019 9:16am

appledrop wrote: »

It is worth talking about. Trust me I know as it was people in my age bracket family/ friends/acquaintances
who all bought around this time + so many in 400k plus bracket on 40 year mortgages as young enough. Really people need to do the maths.

Didn't even realize you could get a 40 year mortgage.
But if people did get them does it really matter about negative equity.
Surely if getting a mortgage for that length you are not planning on selling anytime soon.

missmed · 08-12-2019 11:48am

Hello,

I’m bidding on a house, my current offer is 620 which was rejected. The seller is a bank and they are fixed on minimum 650. My EA asked if I could pay 650 but I said no we dont have that. He said he’ll try again with our existing offer. What is the best thing to do in this situation? offer halfway or just sit tight? The reason i’m considering halfway is that someone else could come in and bid more than me.

Samuel T. Cogley · 08-12-2019 12:52pm

Bank will likely sit tight for the figure which has probably been made by committee. I'm open to correction ofc.

Dolbhad · 08-12-2019 1:02pm

missmed wrote: »

Hello,

I’m bidding on a house, my current offer is 620 which was rejected. The seller is a bank and they are fixed on minimum 650. My EA asked if I could pay 650 but I said no we dont have that. He said he’ll try again with our existing offer. What is the best thing to do in this situation? offer halfway or just sit tight? The reason i’m considering halfway is that someone else could come in and bid more than me.

I find for bank sales they have a price and tend to wait for it. A bank is in no rush to sell and will need to sell at a certain price to recover what they can. Once they get the price they go sale agreed, unlike a private seller who may wait longer having getting their agreed price in case someone higher comes along.

alias no.9 · 08-12-2019 1:36pm

appledrop wrote: »

Your wrong even in Dublin some people still in negative equity During peak boom 2 bed houses near us sold for 400k +. Even with recovery only worth 265 now. Yes if you took 20 year mortgage you might be ok but I know people who got 35 or 40 year mortgages from bank so still in negative equity. Mad but true.

A 400k mortgage drawn down in march 2006 over 30 years and paid to schedule should have an outstanding balance in the order of 240k now.

I'd wager that with the recovery in prices since 2016, even with a 100% mortgage, only extreme corner cases can still be in negative equity without having missed payments or tacked on borrowing for cars or holidays, etc...

There were people who bought later than that and for longer terms but those figures allow for the current value of the property to be 40% below purchase price. Too many independent varibles need to line up for there to be a significant cohort of people to still be in negative equity in Dublin where even a 100% mortgage has been paid to schedule.

bluelamp · 09-12-2019 6:26pm

Fine Gael TD Colm Brophy lodges planning objection for 590 apartments to be built in Knocklyon, saying apartments are the wrong type of housing for this area.

More nimbyism - and a refusal to accept that Dublin needs something other than 3 bed semi detached houses as far as the eye can see.

https://extra.ie/2019/12/09/business/property/objection-housing-development-taoiseach

super_furry · 09-12-2019 6:31pm

bluelamp wrote: »

Fine Gael TD Colm Brophy lodges planning objection for 590 apartments to be built in Knocklyon, saying apartments are the wrong type of housing for this area.

More nimbyism - and a refusal to accept that Dublin needs something other than 3 bed semi detached houses as far as the eye can see.

https://extra.ie/2019/12/09/business/property/objection-housing-development-taoiseach

Usually I'd be all for going after him there but Jesus the last thing they need up in Knocklyon is more apartments. It's like Legoland up there, between Hunters Wood, Stocking Lane and all those other soulless developments halfway up the Wicklow Mountains pretending that they're in Rathfarnham, the place is already massively over-developed for the little amenities that are up there. Just getting onto the motorway in the morning can take an hour in bad weather.

The_Conductor · 09-12-2019 8:16pm

super_furry wrote: »

Just getting onto the motorway in the morning can take an hour in bad weather.

Just getting on the motorway from anywhere can take an hour in good weather in the morning- on a bad morning, its an outright nightmare.

We need high density housing units- ideally as close to the city centre as possible- and when they're on the outskirts- we need to make sure we develop viable public transport options. Facilities, services and amenities- will follow- if there is the demand for them (even in high density areas, there isn't always sufficient demand to support them).

We 100% do not need more housing estates- and if apartments were built and priced appropriately- would it be the end of the world.

People need accommodation- and trying to pretend that Wexford, Portlaoise, Athlone and Cavan- are within commuting distance of Dublin- as some people are trying to say- is a load of bollox.

Dublin is a mess- however, the bigger issue is sprawl of low density developments- not high density living.

Ireland needs a coordinated development plan- for the country as a whole- the local authority system has patently failed- and to continue this experiment in local representation- is flogging a dead horse.

Millionaire only not · 09-12-2019 8:20pm

Padre_Pio wrote: »

And how many took it out for properties that were massively overpriced and have not recovered.

Very very few. So few it's not worth talking about.

But sure the suffering that few u talk about , what they have gone through or still going through!
Have a heart because banks won’t

enricoh · 09-12-2019 8:37pm

Was reading in the sunday Indo business section that 20% of new builds in estates are for sale 6 months or more at the minute.
A mate working on a few estates in meath was saying if you took all the social housing/ charity purchases out of the equation he'd be signing on by Christmas.
Is it squeaky bum time for builders paying off financiers? Will the mixers be getting knocked off in the new year? I reckon so, unless brexit has spooked punters temporarily.

Property Market 2019

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