Property Market 2019

4ensic15 · 23-06-2019 10:39pm

rookieMan wrote: »

Not a popular idea but building apartments can bring down the construction cost per apartment thus making this viable for builders while still keeping the central bank limit. We just have to design liveable apartments. Not the 2 bed ones but more like 3 bed + study ones. Other countries have done it, so can we.

Builders have a problem funding the building of apartments. Unlike building a housing scheme, all of the apartments have to be built simultaneously and go on the market togther. Substantial quantities of materials and large labour costs must be paid for before a single apartments is sold. in a housing scheme, the houses can be built a few at a time and the proceeds of sale of the first units can be put towards paying the outlay and leaving some money to fund the next phase. the overall credit used is far lower and the risk is smaller as the build time of each section of units is faster and market developments can be dealt with.

rookieMan · 23-06-2019 10:44pm

4ensic15 wrote: »

Builders have a problem funding the building of apartments. Unlike building a housing scheme, all of the apartments have to be built simultaneously and go on the market togther. Substantial quantities of materials and large labour costs must be paid for before a single apartments is sold. in a housing scheme, the houses can be built a few at a time and the proceeds of sale of the first units can be put towards paying the outlay and leaving some money to fund the next phase. the overall credit used is far lower and the risk is smaller as the build time of each section of units is faster and market developments can be dealt with.

How are builders able to build large commercial offices? Isnt the situation similar? We perhaps need such big builders in housing too and a planning commission willing to give go ahead to apartment complexes.

voluntary · 23-06-2019 10:47pm

rookieMan wrote: »

Almost every family I have spoken to prefers 3 bhk over 2 bhk

Ask these families what would they prefer: a house with a swimming pool or without.

voluntary · 23-06-2019 10:49pm

4ensic15 wrote: »

Builders have a problem funding the building of apartments. Unlike building a housing scheme, all of the apartments have to be built simultaneously and go on the market togther. Substantial quantities of materials and large labour costs must be paid for before a single apartments is sold. in a housing scheme, the houses can be built a few at a time and the proceeds of sale of the first units can be put towards paying the outlay and leaving some money to fund the next phase. the overall credit used is far lower and the risk is smaller as the build time of each section of units is faster and market developments can be dealt with.

Maybe we need a new funding/sale model of apartments where buyers buy off plans and pay upfront?

ZX7R · 23-06-2019 11:06pm

The other big problem with building apartments is location of the land to build on not many places left in Dublin for example to build them

myshirt · 23-06-2019 11:08pm

voluntary wrote: »

Maybe we need a new funding/sale model of apartments where buyers buy off plans and pay upfront?

Or get a single purchaser and save all the bleedin' messin.

voluntary · 23-06-2019 11:10pm

myshirt wrote: »

Or get a single purchaser and save all the bleedin' messin.

Why OR and not AND to enable more projects?

ZX7R · 23-06-2019 11:17pm

voluntary wrote: »

Why OR and not AND to enable more projects?

Because most construction companies don't want the hassle of maintaining snagging for the period time of handing over building this period could last up to 3 years.

ECO_Mental · 24-06-2019 8:08am

Article in this mornings independent...TBH I think they have been reading this thread :P

they put it down to

Banking lending limits
Banks not using thier allocation of exemptions

Dublin obviously is a different ball game and €466k average for a 3 bed semi is WAY above anywhere in the country.

https://www.independent.ie/business/personal-finance/property-mortgages/house-prices-fall-1000-a-month-as-new-homes-built-38246221.html

Wildly Boaring · 24-06-2019 9:42am

So 450k plus houses are down between 2 and 3 percent in a year.

Is this not a good thing?
Houses have found their level?
Fall couple percent. Stagnate like Galway in same report etc??

Straight away Michael O Flynn on Newstalk crying. "Get rid of those pesky banking rules ASAP!!"

He did mention land prices as part of build costs. Surely a fall here is first thing needs to happen.

Danzy · 24-06-2019 9:46am

For a country which goes on about being a great place to do business, continuously rising house prices at the rates of the last 5 years is toxic.

The_Conductor · 24-06-2019 9:48am

Danzy wrote: »

For a country which goes on about being a great place to do business, continuously rising house prices at the rates of the last 5 years is toxic.

Unless there are continuously rising salaries to offset the continuously rising prices....... Which- other than in a few select sectors, there isn't.

The_Conductor · 24-06-2019 9:57am

Wildly Boaring wrote: »

Stagnate like Galway in same report etc??

Large parts of Galway city are significantly more expensive than even D6 and on parr with D4. Those sort of prices are silly- and its crazy that they grew to these extents. Galway seems to be in a world of its own concerning property prices- its completely and utterly divorced from the rest of the country.

beauf · 24-06-2019 10:16am

ECO_Mental wrote: »

Article in this mornings independent...TBH I think they have been reading this thread :P

they put it down to
Banking lending limits

Banks not using thier allocation of exemptions

Dublin obviously is a different ball game and €466k average for a 3 bed semi is WAY above anywhere in the country.

https://www.independent.ie/business/personal-finance/property-mortgages/house-prices-fall-1000-a-month-as-new-homes-built-38246221.html

It would be monumentally stupid to change the lending rules.

JJJackal · 24-06-2019 10:38am

The_Conductor wrote: »

Large parts of Galway city are significantly more expensive than even D6 and on parr with D4. Those sort of prices are silly- and its crazy that they grew to these extents. Galway seems to be in a world of its own concerning property prices- its completely and utterly divorced from the rest of the country.

There are a few old Georgian houses (only a few which drives up price) and some massive detached houses (with better BER than most Dub equivalent) with substantial Gardens that are valued at 1 million plus. There are currently 7 houses on sale in GC for over 1 million - one of these comes with 23 acres of land.

The expensive areas in Galway tend to overlooking Galway Bay

JJJackal · 24-06-2019 10:39am

Wildly Boaring wrote: »

So 450k plus houses are down between 2 and 3 percent in a year.

Is this not a good thing?
Houses have found their level?
Fall couple percent. Stagnate like Galway in same report etc??

Straight away Michael O Flynn on Newstalk crying. "Get rid of those pesky banking rules ASAP!!"

He did mention land prices as part of build costs. Surely a fall here is first thing needs to happen.

Stagnating and down 2-3 per cent is good

A yearly decrease of 10-20 per cent would be bad

SirGerryAdams · 24-06-2019 11:18am

I don't see how the bank lending rules have prevented the middle range houses from being overpriced.

Let's say a couple were looking at a house for 350k, that was the most they could offer. Someone with 400k outbids them each time.

This couple then drop down to the 300k range and outbid by 10k all the people with a max borrowing ability of 300k.

Sure, the level of debt taken by the banks is not as big with the CB rules but if there is a recession and people lose jobs they won't be able to keep paying the mortgage, foreign workers will flee meaning rent demands fall, meaning rents fall, meaning yields fall, meaning house prices fall.

CB rules have limited the risk of the banks - but it hasn't limited the risk of prices falling by a substantial amount.

JJJackal · 24-06-2019 11:23am

SirGerryAdams wrote: »

I don't see how the bank lending rules have prevented the middle range houses from being overpriced.

Let's say a couple were looking at a house for 350k, that was the most they could offer. Someone with 400k outbids them each time.

This couple then drop down to the 300k range and outbid by 10k all the people with a max borrowing ability of 300k.

Sure, the level of debt taken by the banks is not as big with the CB rules but if there is a recession and people lose jobs they won't be able to keep paying the mortgage, foreign workers will flee meaning rent demands fall, meaning rents fall, meaning yields fall, meaning house prices fall.

CB rules have limited the risk of the banks - but it hasn't limited the risk of prices falling by a substantial amount.

In a recession people will only sell if they have or want to. CB rules prevent your mortgage including "renting out all 3 rooms" in your 3 bed house and sleeping on the floor to get a bigger mortgage. In 2006 alot of people relied on renting rooms to cover the mortgage. Current mortgages are based on peoples salary - so less likely they wont be able to afford repayments. Or if there are job losses there wont be mass mortgage default just an increase.

In the great recession, you couldnt sell new houses, ghost estates... Think builders are more cautious re this this time around too

24-06-2019 2:58pm

The new CB Governor can expect to be heavily lobbied to raise the lending caps when/if he arrives

https://www.irishtimes.com/business/commercial-property/easing-mortgage-caps-is-lenders-top-priority-for-new-central-bank-governor-1.3933697

tigger123 · 24-06-2019 4:46pm

cisk wrote: »

The new CB Governor can expect to be heavily lobbied to raise the lending caps when/if he arrives

https://www.irishtimes.com/business/commercial-property/easing-mortgage-caps-is-lenders-top-priority-for-new-central-bank-governor-1.3933697

I'd imagine when they appointed him they already had a fairly strong idea of what his position on the CB rules is. I doubt there'll be any surprises.

myshirt · 24-06-2019 5:17pm

tigger123 wrote: »

I'd imagine when they appointed him they already had a fairly strong idea of what his position on the CB rules is. I doubt there'll be any surprises.

Not necessarily so.

The appointment cannot be contingent on him holding certain views and positions. It's on competence.

The next review of the macroprudential rules are later this year. Who knows if they'll change the limits. I doubt it. The market needs to move to a target cost model or some Kaizen costing. Seen some projects managed in a piss poor way and the cost just passed on to the homebuyers. Too easy for them. They need to have some cost discipline.

The_Conductor · 24-06-2019 5:32pm

tigger123 wrote: »

I'd imagine when they appointed him they already had a fairly strong idea of what his position on the CB rules is. I doubt there'll be any surprises.

Apparently his appointment was delayed because of leaks from the CB in Newzealand relevant to the forthcoming budget- which has mightily annoyed the NewZealanders, and led to an investigation. His appointment as head of the Irish CB was put back to September to allow the investigation in New Zealand time to wind its way to a conclusion.

tobsey · 24-06-2019 7:21pm

The_Conductor wrote: »

Apparently his appointment was delayed because of leaks from the CB in Newzealand relevant to the forthcoming budget- which has mightily annoyed the NewZealanders, and led to an investigation. His appointment as head of the Irish CB was put back to September to allow the investigation in New Zealand time to wind its way to a conclusion.

His start date of September was agreed before any of that happened.

JJJackal · 24-06-2019 7:23pm

myshirt wrote: »

Not necessarily so.

The appointment cannot be contingent on him holding certain views and positions. It's on competence.

The next review of the macroprudential rules are later this year. Who knows if they'll change the limits. I doubt it. The market needs to move to a target cost model or some Kaizen costing. Seen some projects managed in a piss poor way and the cost just passed on to the homebuyers. Too easy for them. They need to have some cost discipline.

Builders can pass on cost to home owners if they want and make as much profit as they can extract; they are not a charity

airportgirl83 · 24-06-2019 7:26pm

tobsey wrote: »

The_Conductor wrote: »

Apparently his appointment was delayed because of leaks from the CB in Newzealand relevant to the forthcoming budget- which has mightily annoyed the NewZealanders, and led to an investigation. His appointment as head of the Irish CB was put back to September to allow the investigation in New Zealand time to wind its way to a conclusion.

His start date of September was agreed before any of that happened.

New Zealand has big problems with property market as well. I don't think foreigners are even allowed to buy property over there atm. I would not expect him to relax lending rules tbh.

Zenify · 24-06-2019 8:06pm

Noticing a lot of apartments going on sale in south Dublin over the last few weeks. Particularly the last two weeks.

The_Conductor · 24-06-2019 8:31pm

Zenify wrote: »

Noticing a lot of apartments going on sale in south Dublin over the last few weeks. Particularly the last two weeks.

Someone, or several people/groups/developers - cashing out asap before a market peak is acknowledged in the mainstream media?

June is a funny time to put volume on the market........

hmmm · 24-06-2019 8:36pm

I've noticed South Dublin apartment prices dipped a bit in the second half of 2018, and have been largely stable since - asking prices have begun to creep up in certain areas, and some of the more expensive (400+) have come back. The panic has gone out of the market IMO. Nothing wrong with stable prices, or slightly rising and falling.

Madness to give out more money to people to borrow, but I would like us to find a way to make it easier to get a deposit together.

Eric Cartman · 24-06-2019 8:38pm

The_Conductor wrote: »

Someone, or several people/groups/developers - cashing out asap before a market peak is acknowledged in the mainstream media?

June is a funny time to put volume on the market........

was always going to be the way, were just finishing up H1 / Q2 of 2019 and the results are pretty stable. This is the peak and its either going to stay stable or dip but we've hit the CB rules cap hard now, everyone and their dog selling up, also loads of the airbnb money is drying up now with the new rules coming in so many are just selling rather than rent long term ever again.

Mickiemcfist · 24-06-2019 8:40pm

airportgirl83 wrote: »

New Zealand has big problems with property market as well. I don't think foreigners are even allowed to buy property over there atm. I would not expect him to relax lending rules tbh.

Yea that's correct, it's a good policy imo.

ZX7R · 24-06-2019 8:42pm

The_Conductor wrote: »

Someone, or several people/groups/developers - cashing out asap before a market peak is acknowledged in the mainstream media?

June is a funny time to put volume on the market........

More the fact developers getting projects finished before builders holidays,that's an old wives tale of june being a bad time to put property on the market.
If you go back over the years there is always a little flood of propertys completed and sold before builders holidays.

Eric Cartman · 24-06-2019 8:52pm

ZX7R wrote: »

More the fact developers getting projects finished before builders holidays,that's an old wives tale of june being a bad time to put property on the market.
If you go back over the years there is always a little flood of propertys completed and sold before builders holidays.

investors 'paying balance on completion' and builders wanting to all get paid before being off on holidays has a hell of a lot to do with this. I know electricians that have lived monastic existences for 4-5 months pre dating july and boom 25k shows up 5 days before a 2 week stint on a spanish island.

adriaaaan · 24-06-2019 11:08pm

The CB rules won't be touched in the near or long term. Mostly for political reasons but also why would you change the one economic policy that has worked exactly as intended? I wouldn't waste time debating it.

SirGerryAdams · 25-06-2019 9:31am

adriaaaan wrote: »

The CB rules won't be touched in the near or long term. Mostly for political reasons but also why would you change the one economic policy that has worked exactly as intended? I wouldn't waste time debating it.

Central bank rules did what it was supposed to, but it didn't really do what people thought it would do.

It has limited the risk of the banks. That is all.

The prices of middle prices houses are far overpriced now compared to the upper ends of the market.

If you had 100 couples looking for a mortgage in 2006 on a combined salary of 100k, 70 might have bought for 350k and maybe 30 for 450k.

Today, of those same couples on same salary, 100 of them would be looking at 350k houses. So instead of 70 couples fighting for the same houses you have 100 couples now, increasing the price even further!

The market is demand and supply. You can't alter that effect by any policy.

If someone can't buy, they're renting. If more people are renting with the same short supply rents will be higher. If rents are higher yields are higher. Rental income will determine house price.

kippy · 25-06-2019 9:37am

SirGerryAdams wrote: »

Central bank rules did what it was supposed to, but it didn't really do what people thought it would do.

It has limited the risk of the banks. That is all.

The prices of middle prices houses are far overpriced now compared to the upper ends of the market.

If you had 100 couples looking for a mortgage in 2006 on a combined salary of 100k, 70 might have bought for 350k and maybe 30 for 450k.

Today, of those same couples on same salary, 100 of them would be looking at 350k houses. So instead of 70 couples fighting for the same houses you have 100 couples now, increasing the price even further!

The market is demand and supply. You can't alter that effect by any policy.

If someone can't buy, they're renting. If more people are renting with the same short supply rents will be higher. If rents are higher yields are higher. Rental income will determine house price.

You can alter supply by any number of policies if you want, same as with demand.......the biggest issues are there are far too many stakeholders with varying degrees of clout involved and the impact of any policies can take years to actually affect the market.

Again, we still have a massive amount of unoccupied housing stock, just not in the right areas!

adriaaaan · 25-06-2019 9:42am

SirGerryAdams wrote: »

Central bank rules did what it was supposed to, but it didn't really do what people thought it would do.

It has limited the risk of the banks. That is all.

The prices of middle prices houses are far overpriced now compared to the upper ends of the market.

If you had 100 couples looking for a mortgage in 2006 on a combined salary of 100k, 70 might have bought for 350k and maybe 30 for 450k.

Today, of those same couples on same salary, 100 of them would be looking at 350k houses. So instead of 70 couples fighting for the same houses you have 100 couples now, increasing the price even further!

The market is demand and supply. You can't alter that effect by any policy.

If someone can't buy, they're renting. If more people are renting with the same short supply rents will be higher. If rents are higher yields are higher. Rental income will determine house price.

This would be a good point if the facts backed it up but unfortunately they don't. The price of second houses is falling now especially in the more expensive areas of South Dublin according to REA survey released yesterday. So your point about increased competition driving up prices is incorrect This has been attributed to increased supply of new homes but that is a moot point. CB rules are stabilizing prices and limited the temptation of hungry bankers to drive another bubble.

Link https://www.irishexaminer.com/breakingnews/ireland/average-price-of-three-bed-home-in-dublin-falls-to-433000-932641.html

cruizer101 · 25-06-2019 9:51am

SirGerryAdams wrote: »

If you had 100 couples looking for a mortgage in 2006 on a combined salary of 100k, 70 might have bought for 350k and maybe 30 for 450k.

Today, of those same couples on same salary, 100 of them would be looking at 350k houses. So instead of 70 couples fighting for the same houses you have 100 couples now, increasing the price even further!

But people don't earn nice round numbers like that, people earn 97k, 97.2k, 97.5k, etc...

So people will all have different budgets even with the hard set 3.5 multiple.

SirGerryAdams · 25-06-2019 9:55am

kippy wrote: »

You can alter supply by any number of policies if you want, same as with demand.......the biggest issues are there are far too many stakeholders with varying degrees of clout involved and the impact of any policies can take years to actually affect the market.

Again, we still have a massive amount of unoccupied housing stock, just not in the right areas!

Sorry, policy which impacts the supply obviously affects it.

I mean policies like limiting borrowing amounts, LTV amounts etc. can't stop it.

I mean look at the comments of people who have bought here.

I bought because my mortgage went up to 1900 a month and my mortgage was cheaper. If I wait a year that's 24k I've spent on rent.

You can almost see the similarities between the two generations. Celtic tiger was "gotta get on the property ladder as prices are going up."

Now it's "Gotta buy a house even if it's way overpriced because I'll be paying more rent."

Islander13 · 25-06-2019 10:05am

It hardly limits the risk of the banks. Its near impossible to enforce in this country

Evd-Burner · 25-06-2019 10:14am

SirGerryAdams wrote: »

Sorry, policy which impacts the supply obviously affects it.

I mean policies like limiting borrowing amounts, LTV amounts etc. can't stop it.

I mean look at the comments of people who have bought here.

You can almost see the similarities between the two generations. Celtic tiger was "gotta get on the property ladder as prices are going up."

Now it's "Gotta buy a house even if it's way overpriced because I'll be paying more rent."

I am in the process of buying a house as I have to move out of my parents by 30. I don't have enough money to pay rent at over 2k per month, whereas the mortgage will be 1100, even with tax and insurances, upkeep etc it is still well below 2k. I like everyone else I know are buying because I can no longer wait. If things crash I may not be able to get credit to buy in the future.

beauf · 25-06-2019 10:33am

SirGerryAdams wrote: »

Central bank rules did what it was supposed to, but it didn't really do what people thought it would do.

It has limited the risk of the banks. That is all.

The prices of middle prices houses are far overpriced now compared to the upper ends of the market.

If you had 100 couples looking for a mortgage in 2006 on a combined salary of 100k, 70 might have bought for 350k and maybe 30 for 450k.

Today, of those same couples on same salary, 100 of them would be looking at 350k houses. So instead of 70 couples fighting for the same houses you have 100 couples now, increasing the price even further!

The market is demand and supply. You can't alter that effect by any policy.

If someone can't buy, they're renting. If more people are renting with the same short supply rents will be higher. If rents are higher yields are higher. Rental income will determine house price.

I think that contradictory. If it had no effect, then none what you said would been happening. Therefore it does have an effect.

It has stopped a lot of people (not all certainly) from over extending themselves. They might not be happy about it. But thats what it has done.

OwlsZat · 25-06-2019 2:28pm

Evd-Burner wrote: »

I am in the process of buying a house as I have to move out of my parents by 30. I don't have enough money to pay rent at over 2k per month, whereas the mortgage will be 1100, even with tax and insurances, upkeep etc it is still well below 2k. I like everyone else I know are buying because I can no longer wait. If things crash I may not be able to get credit to buy in the future.

Did you sign a contract at some point with the old pair? or is this self imposed exit criteria.

Evd-Burner · 25-06-2019 3:25pm

OwlsZat wrote: »

Did you sign a contract at some point with the old pair? or is this self imposed exit criteria.

Not a contract, but was told when I moved back home in mid 20's that I can stay until 30 and use 2 rooms for myself and the kids when I have them. I was given plenty of time to save and I have been reminded on many occasions that I must be either out by 30 or in the process of buying and I am currently in the process of buying.

OwlsZat · 25-06-2019 9:25pm

I'd imagine that's a pretty common state of play. Children who want to move out but have to move back in to save for a deposit. Current valuations mean the parents property is worth a lot but the same valuations prevent their kids from getting on the ladder...

Do high valuations suit anyone?

beauf · 25-06-2019 9:32pm

Valuation on a property you've been in for 20+ years aren't going to mean much as you are unlikely to sell.

Mickiemcfist · 25-06-2019 9:35pm

OwlsZat wrote: »

I'd imagine that's a pretty common state of play. Children who want to move out but have to move back in to save for a deposit. Current valuations mean the parents property is worth a lot but the same valuations prevent their kids from getting on the ladder...

Do high valuations suit anyone?

Suits the banks balance sheets & for some reason people who never want to sell are still obsessed with it.

Assetbacked · 25-06-2019 11:06pm

Mickiemcfist wrote: »

Suits the banks balance sheets & for some reason people who never want to sell are still obsessed with it.

The bad thing for those obsessed with property prices being high is that there is a dwindling pool of first time buyers that can afford to buy and there is absolutely nothing which is slowing the decline of first time buyers in the market.

Considering the rental crisis is getting worse with far less rental properties being made available than the increasing demand requires, in ten years there could be a flood of second hand properties on the market because there aren't enough buyers to afford them and their renovation costs which should bring the prices way down and to a more appropriate level in line with wages.

I've posted before about two houses near my parents home in the ca. 1.2m asking price category on the market for a few months at this stage. Those looking to upgrade to these kind of properties will start to struggle to get the appropriate asking price on their own homes needed to meet these valuations and their asking prices will have to start to reduce due to the lack of first time buyers there to take the upgrade property off the hands of these owners.

Bluefoam · 26-06-2019 9:49am

OMG house prices are falling off a cliff... BUY, BUY, BUY!!!

https://www.independent.ie/business/personal-finance/property-mortgages/revealed-house-prices-in-dublin-falling-by-1000-a-month-38246221.html

What? House prices are rising? SELL! QIUCKLY!!

https://www.thejournal.ie/house-prices-increase-dublin-nationwide-4696800-Jun2019/

Mad_maxx · 26-06-2019 10:28am

Mickiemcfist wrote: »

Suits the banks balance sheets & for some reason people who never want to sell are still obsessed with it.

The banks are not in any better shape than they were five years ago if the share price of Bank of Ireland is anything to go by?

26-06-2019 11:07am

Bluefoam wrote: »

OMG house prices are falling off a cliff... BUY, BUY, BUY!!!

What? House prices are rising? SELL! QIUCKLY!!

The average price of a house in Dublin has increased once again to €388,000

Typical Journal clickbait rubbish headline. The daft report uses asking prices of sample size of 5000 properties advertised on daft. But they got the headline they wanted.

Property Market 2019

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