Property Market 2018

frefrefre · 19-02-2018 11:04am

These prices in Leixlip are mad, I don’t care what anyone says. We can’t be far off peak bubble in Greater Dublin. I’m
amazed at FG poll numbers, this is wholly unsustainable.

_Puma_ · 19-02-2018 11:27am

frefrefre wrote: »

These prices in Leixlip are mad, I don’t care what anyone says. We can’t be far off peak bubble in Greater Dublin. I’m
amazed at FG poll numbers, this is wholly unsustainable.

House prices are precisely the reason the poll numbers are high for them. The sample for these polls are generally reflective of the voting population. If more young people and students who are not on the "property ladder" started to vote then the polls would start to reflect this. There is no housing crisis, it is government policy which is reflective of the needs of the people who vote for them.

Bob24 · 19-02-2018 11:38am

_Puma_ wrote: »

House prices are precisely the reason the poll numbers are high for them. The sample for these polls are generally reflective of the voting population. If more young people and students who are not on the "property ladder" started to vote then the polls would start to reflect this. There is no housing crisis, it is government policy which is reflective of the needs of the people who vote for them.

This is true but not the only reason. In general the polls are reflective of the quickly improving economy and many people feeling their financial situation is getting better (though of course when I say many it doesn’t include everyone). Property is part of it but there are other factors like wages, unemployment numbers, etc. And of course whether the improvements are benefiting enough people ore whether they have do to FG’s policies or external factors or both are different questions for another topic, and people will have their own opinion on that.

FernandoTorres · 19-02-2018 11:39am

_Puma_ wrote: »

House prices are precisely the reason the poll numbers are high for them. The sample for these polls are generally reflective of the voting population. If more young people and students who are not on the "property ladder" started to vote then the polls would start to reflect this. There is no housing crisis, it is government policy which is reflective of the needs of the people who vote for them.

Exactly. If you speak to your friends who are in this situation and check this page regularly you'll think this is the biggest problem in the country. In reality the vast majority already own homes and may be in negative equity. They're happy to see prices rise. So are the Government as the taxes roll in and bank balance sheets are propped up. It's de facto policy to keep this going as long as possible. All the "initiatives" they've launched to date have just pushed prices up and that's no coincidence.

rui7 · 19-02-2018 1:43pm

Hi,

I was down there too in Westfield over the weekend. Show houses seem well built and finished. There were big queues for 3 beds at starting from 365k. The agents were saying based on the demand they would change the number of 3/4/5 beds that they build. They said gas isn't in the area but the houses in BeechPark across the way have gas supplied. Anyone know why this is? If anyone was queuing for the 3 beds can you PM me? I was there early on Sat morning. Thanks.

zl1whqvjs75cdy · 19-02-2018 5:17pm

Bit strange there's no gas in there. Would have thought it'd be handy enough to pipe it in. They have the heat pump systems though which are super slick so that's better than gas imo.

Henbabani · 21-02-2018 9:49am

Just saw on Daft, Lisney project in Killiney houses for rent, maybe they stuck with those houses and wait till they sold them?

bilbot79 · 21-02-2018 9:55am

Can't believe it actually got this high again. Will these sales of ptsbs non performing loan book result in a load of repossessions aka supply?

Samuel T. Cogley · 21-02-2018 10:29am

bilbot79 wrote: »

Can't believe it actually got this high again. Will these sales of ptsbs non performing loan book result in a load of repossessions aka supply?

No, it's a drop in the ocean.

The Student · 21-02-2018 10:59am

bilbot79 wrote: »

Can't believe it actually got this high again. Will these sales of ptsbs non performing loan book result in a load of repossessions aka supply?

No it will just result in those in the properties becoming homeless and joining the social housing list and those with deposits will be able to purchase the properties.

Don't expect a huge number of repossessions resulting in new supply to the market. The property can be repossessed without the need to enforce the repossession.

draiochtanois · 21-02-2018 11:49am

This post has been deleted.

missmatty · 21-02-2018 11:53am

I don't know why anyone is surprised. There's also the Department of Agriculture Veterinary Labs, State Lab and the new Forensic Lab is also moving out from the Phoenix Park and is under construction at the moment, all at Backweston which is 5 minutes drive from Leixlip.

KellyXX · 21-02-2018 6:40pm

See the start of the big property funds packing up now too.
First it was the small landlords who had enough of the rent controls and the skewed laws.
Now it's the big funds leaving.
Wonder if that will influence sale prices at all?

Mickiemcfist · 21-02-2018 7:08pm

KellyXX wrote: »

See the start of the big property funds packing up now too.
First it was the small landlords who had enough of the rent controls and the skewed laws.
Now it's the big funds leaving.
Wonder if that will influence sale prices at all?

Which funds are leaving?

ELM327 · 21-02-2018 7:09pm

I was behind someone in the queue at the local Topaz. They bought 50 diesel for the jeep and a jumbo breakfast roll.

We're back at the boom lads.

Browney7 · 21-02-2018 7:14pm

KellyXX wrote: »

See the start of the big property funds packing up now too.
First it was the small landlords who had enough of the rent controls and the skewed laws.
Now it's the big funds leaving.
Wonder if that will influence sale prices at all?

Which funds?

KellyXX · 22-02-2018 10:01am

Browney7 wrote: »

Which funds?

Oaktree.
Just the start of the flow. Will happen slowly at first so as not to undermine their asking prices and then pick up the pace .

Even these funds, with their tax breaks can't make renting work in Ireland now. What hope for anyone else whom has to pay tax as well and maybe have rent locked low on a single property.

Maybe the good news is that once the pace picks up with the exodus there might be cheaper properties to buy.

Wanderer78 · 22-02-2018 10:04am

KellyXX wrote:

Oaktree

Vulture fund?

Graham · 22-02-2018 10:13am

KellyXX wrote: »

See the start of the big property funds packing up now too.
First it was the small landlords who had enough of the rent controls and the skewed laws.
Now it's the big funds leaving.

KellyXX wrote: »

Oaktree.

I don't think Oaktree ever had any aspirations to remain long-term landlords. Their model appears to be buying distressed asset backed debt, cashing out when it's profitable.

I certainly wouldn't read anything into the state of the corporate residential rental market based on the actions of Oaktree.

Mickiemcfist · 22-02-2018 10:14am

KellyXX wrote: »

Oaktree.
Just the start of the flow. Will happen slowly at first so as not to undermine their asking prices and then pick up the pace .

Even these funds, with their tax breaks can't make renting work in Ireland now. What hope for anyone else whom has to pay tax as well and maybe have rent locked low on a single property.

Maybe the good news is that once the pace picks up with the exodus there might be cheaper properties to buy.

They're the worlds largest distressed debt investor, they're not like a REIT. They more than likely had an end sales price in mind when they bought those apartments in Cork. I wouldnt hold my breath for many more sales.

KellyXX · 22-02-2018 10:20am

Graham wrote: »

I don't think Oaktree ever had any aspirations to remain long-term landlords. Their model appears to be buying distressed asset backed debt, cashing out when it's profitable.

I certainly wouldn't read anything into the state of the corporate residential rental market based on the actions of Oaktree.

What? You mean the model all the rest of them are working to too?

I work in finance, and I can tell you that they would be keeping them if they thought there was more profit coming down the line.

It's just the start of the snowball.
Don't go thinking this isn't a significant development.

Bob24 · 22-02-2018 10:44am

Mickiemcfist wrote: »

They're the worlds largest distressed debt investor, they're not like a REIT. They more than likely had an end sales price in mind when they bought those apartments in Cork. I wouldnt hold my breath for many more sales.

+1

Purchasing non performing loans at a discount to squeeze as much as possible from the debtors in order to make a profit and being a long term institutional landlord are two very different businesses. Not to be confused: for the first category being a landlord can be a temporary side-effect of their business, but for the second category it *is* their business.

Graham · 22-02-2018 10:50am

KellyXX wrote: »

I work in finance, and I can tell you that they would be keeping them if they thought there was more profit coming down the line.

The company specialises in flipping distressed debt for profit. By all accounts it appears to be all they do, and it's something they're fairly good at. What makes you think they would change their entire business model and branch into an entirely unrelated industry?

If AIB had repossessed a hotel, put in interim management and sold when the hotel market had recovered we wouldn't be assuming that was an indicator of a downturn for the hotel industry at large.

Surely as someone who works in finance you recognise that it's fairly sound/common business practice for a company to stick to it's core business. The business it knows. The business its good at.

Mickiemcfist · 22-02-2018 10:59am

KellyXX wrote: »

What? You mean the model all the rest of them are working to too?

I work in finance, and I can tell you that they would be keeping them if they thought there was more profit coming down the line.

It's just the start of the snowball.
Don't go thinking this isn't a significant development.

I work in finance with a focus on property, many many institutions on purchasing a property will have a plan at the outset that goes something like this: buy at X, sell at Y. They don't get greedy & wait for it to go further, as that's how you end up like so many Irish developers in 2009 - bankrupt.

These apartments will sell to another large fund, it's in one lot of 140 odd apartments with tenants in situ, it's not going to have the slightest impact on house prices.

The_Conductor · 22-02-2018 11:10am

KellyXX wrote: »

What? You mean the model all the rest of them are working to too?

I work in finance, and I can tell you that they would be keeping them if they thought there was more profit coming down the line.

It's just the start of the snowball.
Don't go thinking this isn't a significant development.

They have zero interest in becoming landlords- it is not their business model, and regardless of any profit in it- it is not a business they intend to enter.

I've worked in finance too (in the past)- and was quizzical about some activities I saw- which I thought were counter intuitive- however, in retrospect- they made perfect sense.

Oaktree have bought these loans at a significant discount- and will flip the properties in as expeditious a manner as possible- wholly ignoring rental yield etc- they want to make a profit on them- and will try to maximise their return on their investment- but they most certainly have zero interest in running a property portfolio.

Toby Esterhase · 22-02-2018 11:57am

The only 'predictable' impact I could see causing a drop in house prices over the next 5 years is interest rates rising. This would cause more of a slow decline rather than a crash as less people are offered mortgages and existing homeowners get into mortgage difficulty when their savings run out. A slow process. Combined with an increase in supply (building/planning/etc is evidently a very slow process in this country) I could see 8-10% annual decline from 2023-2028 as the impact is felt.
Other events like Brexit or war are less predictable to determine their impact on house prices.
Short term there is no signs of a slowdown. I thought the few months up to Christmas were showing signs of a slowdown but since the new year prices (asking prices anyway) are up over 10% in Dublin 15 where I am looking to buy.

Bob24 · 22-02-2018 12:20pm

Toby Esterhase wrote: »

Short term there is no signs of a slowdown. I thought the few months up to Christmas were showing signs of a slowdown but since the new year prices (asking prices anyway) are up over 10% in Dublin 15 where I am looking to buy.

I've seen the exact same thing with Grand Canal Dock apartements which I have been following for a few years (don't ask! :-)). There was low interest and stagnating prices with little offers in late November/December, but asking prices for what is coming to the market in the past 2-3 weeks has been 10% higher than asking prices for similar properties back in August/September (focusing on a small high density area is of course not representative of the whole market but makes it very easy to compare prices over time as most sales focus just on a couple of developments so after a while you know the historical prices for each type of apartment in the various developments).

For example this which came out yesterday for 600k (yes, 600k for a 2 bed apt!) would have been 550k from the same EA at the end of the summer (I remember them advertising a very similar apartment on the same side of the building and similar floor in August for 550). And knowing the EA they are pretty consistant with their pricing strategy for each development. In this case I'd say they are hoping for 10-30k above asking price but will sell for the asking price if there is no better offer for a couple of weeks.

Browney7 · 22-02-2018 12:54pm

KellyXX wrote: »

What? You mean the model all the rest of them are working to too?

I work in finance, and I can tell you that they would be keeping them if they thought there was more profit coming down the line.

It's just the start of the snowball.
Don't go thinking this isn't a significant development.

I'm sure the people working in Finance advising on this deal know a lot more than anyone posting here on boards.

Realistically, these guys bought this block for a knockdown price in 2010. They now look at the open market price of the asset and see it's at 100 million. They have an in house view for where they see future capital values going and future income from the asset and see that it's no longer meeting their return on capital hurdle rate so they sell and look for something else (distressed) in another jurisdiction. Their expertise is buying and flipping distressed assets, not running a business with a twenty year investment horizon in mind.

The buyer could be IRES or any other institutional investor or wealthy individuals who has different expectations for returns on capital.

theboringfox · 22-02-2018 1:06pm

The_Conductor wrote: »

They have zero interest in becoming landlords- it is not their business model, and regardless of any profit in it- it is not a business they intend to enter.

I've worked in finance too (in the past)- and was quizzical about some activities I saw- which I thought were counter intuitive- however, in retrospect- they made perfect sense.

Oaktree have bought these loans at a significant discount- and will flip the properties in as expeditious a manner as possible- wholly ignoring rental yield etc- they want to make a profit on them- and will try to maximise their return on their investment- but they most certainly have zero interest in running a property portfolio.

Agree. These guys look for big returns on capital. So it's not them saying no growth. It's that they want the capital back now and will be used elsewhere. You have to look at the opportunity cost. These guys won't accept 5 or 10% return if they feel they can get higher return elsewhere.

I think hopefully in next couple years we get back to price rises more in line with inflation. That's healthier. I don't want booming prices or crashes.

KellyXX · 22-02-2018 1:44pm

Graham wrote: »

The company specialises in flipping distressed debt for profit. By all accounts it appears to be all they do, and it's something they're fairly good at. What makes you think they would change their entire business model and branch into an entirely unrelated industry?

If AIB had repossessed a hotel, put in interim management and sold when the hotel market had recovered we wouldn't be assuming that was an indicator of a downturn for the hotel industry at large.

Surely as someone who works in finance you recognise that it's fairly sound/common business practice for a company to stick to it's core business. The business it knows. The business its good at.

I sit beside and have lunch with the experts at this stuff and I can tell you that since yesterday this is a big buzz. It's not over yet.

Property Market 2018

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