Property Market 2015

murphaph · 29-12-2014 7:00pm

johnp001 wrote: »

Comments under that article are worth a look too!

Just looking down this forum at the thread from the seller deliberating on whether to sell now at break even point or hold on until next year for profits. I wonder how a reversal in prices would affect supply? A lot of commentators say lower prices would constrict supply as people won't sell "below value" but if there are sellers holding out for the top of the market, when it becomes obvious that this top has passed there will likely be a rush to offload assets that are now falling in value.

Too many variables like this stuff make predicting the market impossible as far as I'm concerned.

quadrifoglio verde · 29-12-2014 8:53pm

The_Conductor wrote: »

From the same publication: New Property Crash in July 2015 will make jaws drop......

Who knows what will happen........ Excess supply in rural locations is being used again- and any sites in desireable areas- even where development can only happen at a loss- is happening (Look at Michael O'Flynns- Rokeby Park in Lucan- which is costing a total of 70 million to develop- but only likely to sell for 42-45 million (given its only 70 properties!))

Developers are not being advanced finance- other than by NAMA- which in itself speaks volumes.

2015- is wind down mode for the forthcoming general election- the politicians are unlikely to do anything- literally anything- at all- that might come back to haunt them.........

So- the market is winding down at the moment- and its only likely to accelerate in my opinion.........

I saw your post about this the other day on another thread and was going to reply pointing out the figures don't stack up but figured it was a mistake and was going to cost 40 million in total and not 40 to build.
What's he playing at though?

The_Conductor · 29-12-2014 9:22pm

quadrifoglio verde wrote: »

I saw your post about this the other day on another thread and was going to reply pointing out the figures don't stack up but figured it was a mistake and was going to cost 40 million in total and not 40 to build.
What's he playing at though?

I'm guessing the original 30 million that was paid for the site- is written down to next to nothing by NAMA- and they are providing the finance to build the 70 homes (40 million)- on the understanding that their investment makes some sort of sense (well- it gets the sites off their books).

O'Flynn in turn- gets his 2% gross on the transaction- as guaranteed by NAMA- and cashflow to get Blackrock off his back (once his 2015 payments are made- apparently he has no further repayments due on his loans for several years- so he just needs to get any schemes he get- out the door in as prompt a manner as possible- and the Dublin based councils are behaving in their most helpful manners, ever........

Purchasers in turn- will be buying properties for a little over half what it cost to build them- so its a win-win for potential purchasers (presuming they have access to 600k of finance)..........

I think the big winners in all of this- would be Shannon Homes- the developers of Laraghcon- who got over 20 million from a previous owner of the site for access (sewage, water etc) which was not forthcoming by any other method......... The current inhabitants of Laraghcon may be on the hook for new expanded facilities there- well, their Management Company would be- its in their articles of association- whether anyone has bothered to read the small print or not, remains to be seen........ Given how the residents there were in breach of the planning for their development for a number of years- before they allowed the relief road open out onto the Clonee Road- I'm guessing they'll fight it tooth and nail.......

Of course- the loans used to pay the 20mil for the site- are also in NAMA....... NAMA will be thrilled to get this mess off their hands.......

I live in Lucan village by the way- on the bridge in one of the town houses where the old cinema used be- and I grew up in Laraghcon- as a kid- so I've been keeping tabs on that development in particular- as I've a personal interest in it........

MouseTail · 30-12-2014 2:29am

murphaph wrote: »

Too many variables like this stuff make predicting the market impossible as far as I'm concerned.

True, but this is a thread for predictions, so....
Bullish, I think Dublin could see 10-12% increases, there may be interference in rental market, so hard to call, maybe 10% increases. Supply wont be fixed next year!
Smaller increases elsewhere.
Unemployment at 8% by year end, hopefully less, continued growth.

ShortyGotLow · 30-12-2014 3:11am

I think Dublin houses will neither rise nor fall majorly over the next 12 months, apartments will probably drop some as I believe a lot of the boom-time built apartments are dreadful build quality and these revelations are only starting to come out now.

The_Conductor · 30-12-2014 10:06am

I'll go with a 5% fall in Dublin property prices, and a 7-8% rise in non-Dublin property prices, with a broadly neutral overall picture. I'd also go with a massive uptick in the number of properties on offer- and a commensurate lengthening in sale times- which I imagine could head for the 10-12 week mark in the more vibrant markets (Dublin/Cork/Galway)- and much longer elsewhere.........

Wonder which of us will be most accurate?

handlemaster · 30-12-2014 10:24am

The_Conductor wrote: »

I'll go with a 5% fall in Dublin property prices, and a 7-8% rise in non-Dublin property prices, with a broadly neutral overall picture. I'd also go with a massive uptick in the number of properties on offer- and a commensurate lengthening in sale times- which I imagine could head for the 10-12 week mark in the more vibrant markets (Dublin/Cork/Galway)- and much longer elsewhere.........

Wonder which of us will be most accurate?

Why a fall ? If anything more demand with miminal supply increase .

The_Conductor · 30-12-2014 10:45am

handlemaster wrote: »

Why a fall ? If anything more demand with miminal supply increase .

Cash buyers are falling as a percentage of buyers, the yield isn't there for investors at current price levels, and finance is tighter for borrowers...... Supply may be limited- but finance is becoming even more limited.......

There are several developments coming onstream in the burbs (which I'd classify as places as far out as Navan)- supply is actually increasing- and developments on the market at the moment (think North Co. Dublin)- aren't generating the levels of interest that low supply would suggest.......

Its an interesting market- supply may not be the bottle neck- I'd suggest finance has replaced it as the no. 1 issue at this stage.........

Piriz · 30-12-2014 10:55am

handlemaster wrote: »

Why a fall ? If anything more demand with miminal supply increase .

I would expect a fall of 10 - 20% in Dublin in 2015 due to the new CB lending rules, removal of CGT exemption and general affordability being stifled by taxes and charges seriously hampering demand and affordability..

jmayo · 30-12-2014 11:48am

johnp001 wrote: »

Comments under that article are worth a look too!

Just looking down this forum at the thread from the seller deliberating on whether to sell now at break even point or hold on until next year for profits. I wonder how a reversal in prices would affect supply? A lot of commentators say lower prices would constrict supply as people won't sell "below value" but if there are sellers holding out for the top of the market, when it becomes obvious that this top has passed there will likely be a rush to offload assets that are now falling in value.

I thought this was the best one.
Obviously a construction worker hoping the good days are on their way back.

@MastaKink - The good news is for the 100,000 unemployed construction workers who need to see property prices rise 20-40% above construction cost to find stable work.

The nightmare scenario would be a spiral where rents continuing to rise because house prices are too low to see new houses built. Any rise in house prices in the €150,000 - €300,000 bracket is very good news for the economy in general but for unemployed construction workers in particular.

The best bit I think is highlighted.
How do these people think that shoving up the price of a normal family home is good news for the economy, an economy that is not the most robust, and would not exist but for the multinationals here for tax purposes.

The government will be loathe to do anything and thus I think the 20% CB deposit will actually be very loosely adhered to for most.
It is external factors that need to be considered on what happens this year.
For instance watch the Greek tragedy unfold and watch the stock market.

El_Dangeroso · 30-12-2014 1:02pm

The_Conductor wrote: »

Wonder which of us will be most accurate?

Murphy's law says every one of us will be wrong and something totally unexpected will happen, but it will be an interesting year for sure!

johnp001 · 30-12-2014 1:08pm

jmayo wrote: »

How do these people think that shoving up the price of a normal family home is good news for the economy, an economy that is not the most robust, and would not exist but for the multinationals here for tax purposes.

Agree with that. House prices rising at rates that necessitate a further crash is good news for no-one.

I had only seen the first few comments that were up at the time of my post and I was struck by...

So, estate agents predict we will chose to pay 20% extra for house next year? And what else is new?

...

Spot on John.

In other news.

Snake Oil salesmen predict strong demand for snake oil in 2015 as availability dwindles.

johnp001 · 30-12-2014 1:40pm

The_Conductor wrote: »

I'll go with a 5% fall in Dublin property prices, and a 7-8% rise in non-Dublin property prices, with a broadly neutral overall picture. I'd also go with a massive uptick in the number of properties on offer- and a commensurate lengthening in sale times- which I imagine could head for the 10-12 week mark in the more vibrant markets (Dublin/Cork/Galway)- and much longer elsewhere.........

Wonder which of us will be most accurate?

What would you predict would be the driver for rise in non-Dublin property prices happening at the same time as drops in Dublin prices?
As far as I have seen the main rises in non-dublin prices have been "halo effect" of proximity to Dublin for wicklow/kildare/meath and very slight rises in Cork. Most rural counties have oversupply due to lack of planning regulation during the boom and properties for sale below construction cost. Most counties are not showing any increases at all and some are still falling (e.g. Roscommon, Mayo, Cavan, Longford, Tipperary etc..) according to PPR data.

I agree that there is likely to be a marked increase in properties for sale if and when prices in Dublin start to fall as people who are holding off selling due to the fact that the price of their property is still rising want to take advantage of the top of the market to sell.

alias no.9 · 30-12-2014 1:46pm

Full implementation of the CB lending rules should put a halt to any further house price inflation, if that hasn't happened already, things may even fall back a bit.
It may however exacerbate the rental crisis with low turnover of stock.

Mr. teddywinkles · 02-01-2015 2:05pm

jmayo wrote: »

I thought this was the best one.
Obviously a construction worker hoping the good days are on their way back.

The best bit I think is highlighted.
How do these people think that shoving up the price of a normal family home is good news for the economy, an economy that is not the most robust, and would not exist but for the multinationals here for tax purposes.

The government will be loathe to do anything and thus I think the 20% CB deposit will actually be very loosely adhered to for most.
It is external factors that need to be considered on what happens this year.
For instance watch the Greek tragedy unfold and watch the stock market.

Whoes going to buy all these highly priced properties?

The_Conductor · 02-01-2015 2:28pm

johnp001 wrote: »

What would you predict would be the driver for rise in non-Dublin property prices happening at the same time as drops in Dublin prices?
As far as I have seen the main rises in non-dublin prices have been "halo effect" of proximity to Dublin for wicklow/kildare/meath and very slight rises in Cork. Most rural counties have oversupply due to lack of planning regulation during the boom and properties for sale below construction cost. Most counties are not showing any increases at all and some are still falling (e.g. Roscommon, Mayo, Cavan, Longford, Tipperary etc..) according to PPR data.

I agree that there is likely to be a marked increase in properties for sale if and when prices in Dublin start to fall as people who are holding off selling due to the fact that the price of their property is still rising want to take advantage of the top of the market to sell.

To be honest with you- comparing the Dublin market (and its surrounding counties) with the rest of the country- in the same sentence, is akin to comparing property on Mars with property in West Dublin.......

Recent trends in the Dublin market- alongside the very small recent falls- feature a large development in North County Dublin that failed to elicit more than passing interest from potential purchasers. Investors and cashbuyers- who were at one point comprising up to 70% if the market- have shrunk to less than 35% (and this is cashbuyers alone- investors are by and large ignoring the market- or actively selling into it). The length of time for sales- is increasing by the day- from a low of less than 4 weeks- up towards 7.5 weeks, and growing....... Supply- while still low- has increased- and looks set to grow rapidly- as investors look to cash out. Investors meanwhile- are moving their money into office developments in the Dublin area- in lieu of the residential market.

Thats Dublin. Cork and Galway- are a little behind Dublin- displaying similar characteristics.

The rest of the country- will follow Dublin- but far behind Cork and Galway. I'd say Cork and Galway are 2-3 months behind Dublin- but the rest of the country- is more akin to 8-9 months (or more!).

The rental market- is wholly different to the sales market- and dwindling supply (with investors pulling properties and selling them in-lieu of letting them)- may see even more startling increases in rental demands.

At the moment rental yields do not support current valuations- and unless an equalisation occurs- whether through increased supply- or falls in prices- investors are not going to feature as the normal market force (where typically they accounted for in the region of 30% of the market- with first time buyers another 40% and the remainder being people trading up or down).

The reason I see increases continuing outside of Dublin- is solely because those markets are lagging well behind the Dublin markets- not because of inherent strenght (or indeed value) in them- which to be honest I don't believe there to be.

Pay rises- which most companies are reported to be considering this year (and this is from Ibec)- will barely better the rate of inflation- so they are not going to be a driver either way.

Whatever way you look at it- Ireland is still in dire straits- and consumers are intent on paying down debt. This is known as a virtuous circle of debt- and the ECB fear that on an Eurozone basis- it could well be the reason that the entire continent is getting dragged under.

Finally- a useful yardstick of how Ireland will perform- as in, Ireland Inc.- would be to take a good look at our two dominant trading partners- The UK and The US. Both are experiencing growth- nothing spectacular- but a damn sight better than on the continent. This alone- is what is dragging us to the fore in the Eurozone- and is why we have an unnatural rosy tint to our economic performance. As soon as there is a peep from either of trouble- we are up the swanny......

I'd echo the comments from Ibec this morning- until such time as personal taxation is addressed here in Ireland- it is increasingly impossible to compensate workers- as the tax take is simply too high- and it is impossible to compensate workers on a monetary basis.

Mr. teddywinkles · 02-01-2015 2:47pm

The_Conductor wrote: »

To be honest with you- comparing the Dublin market (and its surrounding counties) with the rest of the country- in the same sentence, is akin to comparing property on Mars with property in West Dublin.......

Recent trends in the Dublin market- alongside the very small recent falls- feature a large development in North County Dublin that failed to elicit more than passing interest from potential purchasers. Investors and cashbuyers- who were at one point comprising up to 70% if the market- have shrunk to less than 35% (and this is cashbuyers alone- investors are by and large ignoring the market- or actively selling into it). The length of time for sales- is increasing by the day- from a low of less than 4 weeks- up towards 7.5 weeks, and growing....... Supply- while still low- has increased- and looks set to grow rapidly- as investors look to cash out. Investors meanwhile- are moving their money into office developments in the Dublin area- in lieu of the residential market.

Thats Dublin. Cork and Galway- are a little behind Dublin- displaying similar characteristics.

The rest of the country- will follow Dublin- but far behind Cork and Galway. I'd say Cork and Galway are 2-3 months behind Dublin- but the rest of the country- is more akin to 8-9 months (or more!).

The rental market- is wholly different to the sales market- and dwindling supply (with investors pulling properties and selling them in-lieu of letting them)- may see even more startling increases in rental demands.

At the moment rental yields do not support current valuations- and unless an equalisation occurs- whether through increased supply- or falls in prices- investors are not going to feature as the normal market force (where typically they accounted for in the region of 30% of the market- with first time buyers another 40% and the remainder being people trading up or down).

The reason I see increases continuing outside of Dublin- is solely because those markets are lagging well behind the Dublin markets- not because of inherent strenght (or indeed value) in them- which to be honest I don't believe there to be.

Pay rises- which most companies are reported to be considering this year (and this is from Ibec)- will barely better the rate of inflation- so they are not going to be a driver either way.

Whatever way you look at it- Ireland is still in dire straits- and consumers are intent on paying down debt. This is known as a virtuous circle of debt- and the ECB fear that on an Eurozone basis- it could well be the reason that the entire continent is getting dragged under.

Finally- a useful yardstick of how Ireland will perform- as in, Ireland Inc.- would be to take a good look at our two dominant trading partners- The UK and The US. Both are experiencing growth- nothing spectacular- but a damn sight better than on the continent. This alone- is what is dragging us to the fore in the Eurozone- and is why we have an unnatural rosy tint to our economic performance. As soon as there is a peep from either of trouble- we are up the swanny......

I'D ECHO THE COMMENTS FROM IBEC THIS MORNING- UNTIL SUCH TIME AS PERSONAL TAXATION IS ADDRESSED HERE IN IRELAND- IT IS INCREASINGLY IMPOSSIBLE TO COMPENSATE WORKERS- AS THE TAX TAKE IS SIMPLY TOO HIGH- AND IT IS IMPOSSIBLE TO COMPENSATE WORKERS ON A MONETARY BASIS.

I thought I was alone on that view

yankinlk · 02-01-2015 2:47pm

tldr. market will increase this year from pentup demand. plenty of people have wanted to move for a very long time, and as the market has finally restarted this will finally be allowed to happen. expect 4 more years of property increases.

The_Conductor · 02-01-2015 2:55pm

Mr. teddywinkles wrote: »

I thought I was alone on that view

I have a gross marginal rate of tax of over 60%- and two young children whose childcare bill alone eats up most of my net pay (not that I regret them for a moment)- so I'm with you on this. Our taxation system here has to be one of the most regressive on the planet. There is something seriously wrong- when you'd be significantly better off on social welfare- than in gainful employment.........

The_Conductor · 02-01-2015 2:59pm

yankinlk wrote: »

tldr. market will increase this year from pentup demand. plenty of people have wanted to move for a very long time, and as the market has finally restarted this will finally be allowed to happen. expect 4 more years of property increases.

The fact of the matter is though- the pent-up demand is incredibly local in nature. People want to live in specific locations (think Dublin city centre, South Dublin- and Cork and Galway). New developments on the outskirts of Dublin- are proving nigh impossible to sell- people just aren't interested. There was a very high profile flop in the last few months in North County Dublin- and that was phase 1 of a development that was supposed to be 2000 houses over 5-6 phases over the next 4 years.

Pent-up-demand- yes. However, its for a very small range of high demand areas. Elsewhere- people have a 'meh' approach- who is going to pay top dollar for somewhere which has a 90 minute commute each way? It was seen as the new norm during the boom- but not anymore- its not.

ionapaul · 02-01-2015 3:07pm

yankinlk wrote: »

tldr. market will increase this year from pentup demand. plenty of people have wanted to move for a very long time, and as the market has finally restarted this will finally be allowed to happen. expect 4 more years of property increases.

Jesus - if this is allowed to happen we (as a country) deserve whatever comes down the line. I'd be very wary about a "bail-in" scenario a la Cyprus if we manage to feck things up again, defo wouldn't leave all my dough in Irish institutions if we go mad over the next few years!

johnp001 · 02-01-2015 3:14pm

The_Conductor wrote: »

To be honest with you- comparing the Dublin market (and its surrounding counties) with the rest of the country- in the same sentence, is akin to comparing property on Mars with property in West Dublin.......

...

I'd echo the comments from Ibec this morning- until such time as personal taxation is addressed here in Ireland- it is increasingly impossible to compensate workers- as the tax take is simply too high- and it is impossible to compensate workers on a monetary basis.

Thanks for this comprehensive answer to my question!

I agree wholeheartedly that the markets are not comparable but my own view is that there isn't a time lag on the effects of the factors which affect the market in Dublin and which also affect the market nationwide.
Economic, regulatory, taxation, supply, sentiment etc. factors combined in 2013 to push Dublin prices upwards. A lot of the same factors applied to all other markets simultaneously but the price increases prices in other parts of the country were less significant or wholly absent in many areas (especially where there is no shortage of supply).
Now that some of these common factors have changed (e.g. CGT, tax relief, lending restrictions) and are starting to pull Dublin prices downwards again these common drivers will be having the same effect across the entire market.

The_Conductor · 02-01-2015 3:19pm

Perhaps......

What will be telling- is what happens if/when people begin to unload property on the market- if they get it in their heads that its peaked (again).
There is the potential for carnage- and I just don't buy the 'pent-up-demand' argument- even if there are potential buyers in the wings- they're not going to be too enthused about buying into a falling market (though if rents go up even more- this may change a few minds)........

At the end of the day- the big thing that has always had an effect here- is the herd mentality. Where the herd is charging- remains to be seen- but the portents are not good..................

seamus · 02-01-2015 3:19pm

The_Conductor wrote: »

I have a gross marginal rate of tax of over 60%- and two young children whose childcare bill alone eats up most of my net pay (not that I regret them for a moment)- so I'm with you on this. Our taxation system here has to be one of the most regressive on the planet. There is something seriously wrong- when you'd be significantly better off on social welfare- than in gainful employment.........

I think you mean progressive

Regressive would mean that you pay less tax the more you earn. Which we all know is far from the case

The_Conductor · 02-01-2015 3:22pm

Yup!

seamus wrote: »

I think you mean progressive

Regressive would mean that you pay less tax the more you earn. Which we all know is far from the case

who_ru · 02-01-2015 5:03pm

affordability people, affordability. with the rate of tax, direct and indirect, cost of living, all the new charges etc. affordability is becoming out of reach for many.

to paraphrase bono - whose gonna but your wild house prices?

yankinlk · 02-01-2015 6:19pm

ionapaul wrote: »

Jesus - if this is allowed to happen we (as a country) deserve whatever comes down the line. I'd be very wary about a "bail-in" scenario a la Cyprus if we manage to feck things up again, defo wouldn't leave all my dough in Irish institutions if we go mad over the next few years!

allowed to happen as a country? try stop it. this appears to be one government that may accidentally do it, but even still they will fail.

ive nailed my prediction to the mast, if only to mark it for myself to check on in 4 years. i never said it would rise like last year, god no, but it aint gonna go in reverse like all the doom sayers on this board claim. see u in 12, 24, 36 months.

Sala · 02-01-2015 9:42pm

Interesting that mortgages.ie calculator has this below it:

Happy New Year
Buyers should watch the market closely. We expect new Central Bank regulations, greater supply and less investor participation will result in a dramatic slow down in house price growth.

I would have thought they'd be a bit of a vested interest as a broker and not want to talk down prices

Millem · 02-01-2015 10:30pm

Sala wrote: »

Interesting that mortgages.ie calculator has this below it:

Happy New Year
Buyers should watch the market closely. We expect new Central Bank regulations, greater supply and less investor participation will result in a dramatic slow down in house price growth.

I would have thought they'd be a bit of a vested interest as a broker and not want to talk down prices

But what they don't say is that for the month of November mortgage approvals were up 42% for ftbs.
http://www.irishtimes.com/business/financial-services/mortgage-approvals-soar-as-buyers-seek-to-beat-restrictions-1.2043799
We were looking in south dublin in December and there was loads of cash buyers bidding who wouldn't make the 31st dec deadline. Every house I rang up enquiring had offers over the asking price :eek:

mr_seer · 03-01-2015 12:22am

Millem wrote: »

But what they don't say is that for the month of November mortgage approvals were up 42% for ftbs.
http://www.irishtimes.com/business/financial-services/mortgage-approvals-soar-as-buyers-seek-to-beat-restrictions-1.2043799
We were looking in south dublin in December and there was loads of cash buyers bidding who wouldn't make the 31st dec deadline. Every house I rang up enquiring had offers over the asking price :eek:

It really depends on the price bracket you are shopping in. I am considering making an offer on 2 houses, both of which have been on the market for months without a single offer. The market has gone very quiet according to EAs and anecdotally I can tell you that viewings I have been to in the last few months have been very quiet