House Prices 2021

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

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

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

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 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 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.

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

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.

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 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

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 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.