Property Market 2020

Zenify · 30-03-2020 7:54pm

beauf wrote: »

How does that compare to china.

https://foreignpolicy.com/2020/03/25/europe-china-us-economic-recovery-v-coronavirus/

Im not trying to prove the situation is bad. Im hoping to god we could bounce back in a "V". IMO without any medical breakthrough thats not possible. Since that article was written 5 days ago theres now been lots about Asian Countries having a second wave. I work in tourism, I'm currently unemployed, I'd love to be back to work. Let's hope I'm wrong.

garhjw · 30-03-2020 7:55pm

cd76 wrote: »

The ones who say it won't fall are either Sellers or Estate Agents.

It has crashed already. YES !!!!

Great time to buy in about a years time.
Loads of properties and Estate Agents on the floor.
Time to put the boot in and get a nice redbrick in D6 or D3 @ 2000 prices (~ -40% on today's prices).
Happy Days for a cautious unhurried buyer.
Take your time, strike in about 10 to 18 months times.

Wow. Everyone should listen to this guy. He really really knows what he is talking about.

ZX7R · 30-03-2020 7:55pm

Reversal wrote: »

LOL. Opinion aside, the facts tell us that prices already dropped by 5% in Dublin during 2019. So that trend will remain unchanged? This crisis, the job losses, lending restrictions and the impending recession are to have no impact then?

That's what the expert's are saying

beauf · 30-03-2020 8:10pm

Zenify wrote: »

Im not trying to prove the situation is bad. Im hoping to god we could bounce back in a "V". IMO without any medical breakthrough thats not possible. Since that article was written 5 days ago theres now been lots about Asian Countries having a second wave. I work in tourism, I'm currently unemployed, I'd love to be back to work. Let's hope I'm wrong.

I'm not saying you're wrong. I'm just looking at other countries experience who've had it for far longer an we have.

https://news.sky.com/story/coronavirus-which-countries-have-successfully-flattened-the-curve-11963177

https://www.visualcapitalist.com/infection-trajectory-flattening-the-covid19-curve/

Not that it has to be the same experience for every country.

Donald Trump · 30-03-2020 8:21pm

cd76 wrote: »

Anyone who buys now is crazy. Pull out of any "Sale Agreed".
I was talking to EA guys in Sherrys and DNG today and they are getting calls since Friday with people pulling out of Sale Agreed.
Market has disappeared overnight.

- Loads of rentals on Daft with prices plummeting
- Rental demand will flop as lots of people working in Google and Linkedin and Facebook have gone back to Europe. A lot of these won't return.
- Executors Sales will go up big time(especially in Dublin) as sadly older people will die due to Covid-19. So you'll see lots of properties in established areas like Rathgar, Terneure , Clontarf etc. So lots of bargains.
- Unemployment which is now less than 5% is estimated to increase to 30% and tail off to approx 25% next year.
- People laid off will have to sell once the Govt supports and any Mortgage "break" dries up.
- Market will go down by minimum of 30%
- Next year will see it continue to bottom out. Recovery will not come until mid to late 2022 and then it will be very slow.
- Don't believe anything an EA tells you about small impact or recovery. This is a big hit. Much bigger than the Financial crises of 2008.

Best of luck

I wouldn't put a huge weight on extra executors sales. Sure they might be up, but people die from natural causes anyway. It's not a nice thing to bring up in the current climate but seeing as how you mentioned it I will respond to that point.

For example, things are terrible in Italy. They are at 11.5k deaths to date.....but it's a population of what - 60 million? Lets take a simple estimate of people living to 80. That means around 750k dying per year (assuming flat population distribution). Roughly 15k per week. Obviously this is very rough calculation.

Edgware · 30-03-2020 8:28pm

cd76 wrote: »

You're right the market has just collapsed.
Great time to buy in about a years time.
Loads of properties and Estate Agents on the floor.
Time to put the boot in and get a nice redbrick in D6 or D3 @ 2000 prices (~ -40% on today's prices).
Happy Days for a cautious unhurried buyer.
Take your time, strike in about 10 to 18 months times.

The market, certainly for apartments, had stalled before all this. There will be opportunities in the short to midterm for cash buyers. I wouldnt agree on a 10 to 18 month timeframe though. If you see the property type you want hold tight for six months but then go for it.
Any longer and you might have more competition

Zenify · 30-03-2020 8:42pm

beauf wrote: »

I'm not saying you're wrong. I'm just looking at other countries experience who've had it for far longer an we have.

https://news.sky.com/story/coronavirus-which-countries-have-successfully-flattened-the-curve-11963177

https://www.visualcapitalist.com/infection-trajectory-flattening-the-covid19-curve/

Not that it has to be the same experience for every country.

The reason the curve is flattening is because we are not at work. If everyone goes back to work it goes up again. This is the current situation, economy vs health. Luckily we have the capacity to say health is more important and we can flatten the curve. Your very argument about the curve flattening is the reason the economy and jobs are f**ked. Thus leading to a decline property market.

Maitguel · 30-03-2020 9:01pm

Not sure if this is the right thread but what way do people see interest rates going in the 12-24 months?

Taylor365 · 30-03-2020 9:17pm

Maitguel wrote: »

Not sure if this is the right thread but what way do people see interest rates going in the 12-24 months?

Through the earth's crust.

beauf · 30-03-2020 9:23pm

Zenify wrote: »

The reason the curve is flattening is because we are not at work. If everyone goes back to work it goes up again. This is the current situation, economy vs health. Luckily we have the capacity to say health is more important and we can flatten the curve. Your very argument about the curve flattening is the reason the economy and jobs are f**ked. Thus leading to a decline property market.

Kinda looking at other countries where people are returning to work. Reopening shops and factories. Which was kinda the point.

greendom · 30-03-2020 9:28pm

beauf wrote: »

Kinda looking at other countries where people are returning to work. Reopening shops and factories. Which was kinda the point.

Be interesting to see if the virus returns in these places and to what extent.

Zenify · 30-03-2020 9:28pm

beauf wrote: »

Kinda looking at other countries where people are returning to work. Reopening shops and factories. Which was kinda the point.

I'm honestly hoping that it continues to get better for them but I'd say they will have to shut down again soon from more infections. Time will tell and we will know in 2 or 3 weeks. Dont have to wait to long.

Rainmann · 30-03-2020 9:37pm

Maitguel wrote: »

Not sure if this is the right thread but what way do people see interest rates going in the 12-24 months?

I am pretty sure they typically reduce interest rates in a recession to encourage lending and boost the economy. But interest rates are very low, could we have negative interest rates?

voluntary · 30-03-2020 9:45pm

The ECB is going to print tons of euros, not as much as FED is printing dollars but still a lot. This should allow banks to borrow cheap and possibly pass the savings on customers. The risk is, that if ECB prints a lot of new euros and we somehow magically experience a rapid recovery, then we may also experience a rapid increase in inflation. Rapidly increasing inflation would need to be followed by higher interest rates.

garhjw · 30-03-2020 9:52pm

voluntary wrote: »

The ECB is going to print tons of euros, not as much as FED is printing dollars but still a lot. This should allow banks to borrow cheap and possibly pass the savings on customers. The risk is, that if ECB prints a lot of new euros and we somehow magically experience a rapid recovery, then we may also experience a rapid increase in inflation. Rapidly increasing inflation would need to be followed by higher interest rates.

Agree, a lot is going to depend on the stimulus package, euro bonds, term of them etc etc.... austerity must be a big no no

Graham · 30-03-2020 10:21pm

voluntary wrote: »

The ECB is going to print tons of euros, not as much as FED is printing dollars but still a lot. This should allow banks to borrow cheap and possibly pass the savings on customers. The risk is, that if ECB prints a lot of new euros and we somehow magically experience a rapid recovery, then we may also experience a rapid increase in inflation. Rapidly increasing inflation would need to be followed by higher interest rates.

Thanks voluntary, it's been so long since we had inflation of any significance I think most people don't consider it any more.

For homeowners high inflation could mean their mortgages shrink rapidly in real terms while property prices increase.

People saving for a deposit, could see the value of their savings dwindle while property prices get further away.

Browney7 · 30-03-2020 10:35pm

Rainmann wrote: »

I am pretty sure they typically reduce interest rates in a recession to encourage lending and boost the economy. But interest rates are very low, could we have negative interest rates?

It's taken the Irish banks years to gradually reduce rates as their tracker book gets repaid - they'll suffer losses on other lines of lending and so I'd be amazed if they willingly reduced their margins on their newer mortgage block.

Ursabear · 30-03-2020 10:41pm

Graham wrote: »

Thanks voluntary, it's been so long since we had inflation of any significance I think most people don't consider it any more.

For homeowners high inflation could mean their mortgages shrink rapidly in real terms while property prices increase.

People saving for a deposit, could see the value of their savings dwindle while property prices get further away.

I've been saving for over a decade so this worries me a lot

I have a good deposit saved , contract working has not been ideal for getting a mortgage but have recently started a permanent role so I hope my savings do not lose value before I can buy a place to live

Eric Cartman · 30-03-2020 10:44pm

Graham wrote: »

Thanks voluntary, it's been so long since we had inflation of any significance I think most people don't consider it any more.

For homeowners high inflation could mean their mortgages shrink rapidly in real terms while property prices increase.

People saving for a deposit, could see the value of their savings dwindle while property prices get further away.

the ECB was tasked with getting inflation over 2% for the last decade and failed miserably, despite rounds of QE and negative interest rates, Any gigantic push on QE (printing money) will have to come with a rate hike and its going to hit especially new mortgage holders just as hard as savers.

Graham · 30-03-2020 10:47pm

We're not just talking about the ECB here E.C., we could see central banks the world over turn on the money taps.

ittakestwo · 30-03-2020 10:55pm

Ursabear wrote: »

I've been saving for over a decade so this worries me a lot I have a good deposit saved , contract working has not been ideal for getting a mortgage but have recently started a permanent role so I hope my savings do not lose value before I can buy a place to live

Europe is more likely to get caught in a deflationary cycle than having inflation. Japan has been stuck printing money for decades and still has no inflation.

Eric Cartman · 30-03-2020 10:56pm

Graham wrote: »

We're not just talking about the ECB here E.C., we could see central banks the world over turn on the money taps.

absolutely, but the further the taps the further the hike, not to say they'll be flowing in day 1 but I doubt wages will rise with inflation , when the rate hike kicks in, those thinking they're on easy street with cheap mortgages are in for a kick in the balls.

awec · 30-03-2020 11:10pm

I have no evidence to support this but I would be surprised if the majority of new mortgages in the past few years weren't fixed.

Rainmann · 30-03-2020 11:16pm

awec wrote: »

I have no evidence to support this but I would be surprised if the majority of new mortgages in the past few years weren't fixed.

I went for a 5 year fixed one at a 2.6% rate. Only when I did the numbers did I realize how much of a difference 1 or 2% can make in terms of repayments and I just wanted the certainty.

cd76 · 30-03-2020 11:48pm

Donald Trump wrote: »

I wouldn't put a huge weight on extra executors sales. Sure they might be up, but people die from natural causes anyway. It's not a nice thing to bring up in the current climate but seeing as how you mentioned it I will respond to that point.

For example, things are terrible in Italy. They are at 11.5k deaths to date.....but it's a population of what - 60 million? Lets take a simple estimate of people living to 80. That means around 750k dying per year (assuming flat population distribution). Roughly 15k per week. Obviously this is very rough calculation.

understood, but we have a perfect storm. Global recession, Mass unemployment, Higer death(RIP) rate amongst the empty nesters, economic migrants going home .. plenty of opportunity.

cd76 · 30-03-2020 11:54pm

Edgware wrote: »

The market, certainly for apartments, had stalled before all this. There will be opportunities in the short to midterm for cash buyers. I wouldnt agree on a 10 to 18 month timeframe though. If you see the property type you want hold tight for six months but then go for it.
Any longer and you might have more competition

.. with 25% unemployment and a global recession this is not a 6 to 12 month impact. We're looking at a 3 year recession and in such a case the property low is still 12 to 18 months away. People try and make ends meet and their house is the last thing they will abandon. UK and US is likely to pickup first. Ireland will see massive youth emigration to the UK like in the 50s and the 80s.
It is so tragic. But that means there will be economic opportunities for those who have access to cash. Property is always a good long term investment if you buy during a recession when there is hyper deflation in house prices.

guyfawkes5 · 31-03-2020 2:16am

Maitguel wrote: »

Not sure if this is the right thread but what way do people see interest rates going in the 12-24 months?

I think the general consensus is that the Central Bank's rate can only go down, although Irish banks may be slow to pass this saving onto you.

garhjw · 31-03-2020 6:42am

cd76 wrote: »

.. with 25% unemployment and a global recession this is not a 6 to 12 month impact. We're looking at a 3 year recession and in such a case the property low is still 12 to 18 months away. People try and make ends meet and their house is the last thing they will abandon. UK and US is likely to pickup first. Ireland will see massive youth emigration to the UK like in the 50s and the 80s.
It is so tragic. But that means there will be economic opportunities for those who have access to cash. Property is always a good long term investment if you buy during a recession when there is hyper deflation in house prices.

Do you have a link to analysis supporting your proposed scenario? Or did you just make things up as in your previous posts??

Bada Bing Boy · 31-03-2020 6:48am

Reversal wrote: »

LOL. Opinion aside, the facts tell us that prices already dropped by 5% in Dublin during 2019. So that trend will remain unchanged? This crisis, the job losses, lending restrictions and the impending recession are to have no impact then?

Ebxwidh

Assetbacked · 31-03-2020 11:14am

https://www.irishtimes.com/business/media-and-marketing/ad-giant-wpp-pulls-dividend-buyback-and-outlook-1.4216684?mode=amp

To put this in context for the Irish rental market, there are thousands of employees employed in Dublin carrying out online sales for multinationals who are in an extremely vulnerable position right now. Online marketing revenue will be obliterated in the near term at least, with many of the employees not having any work to do consequently. The vast majority of the younger people employed by the multinationals are renters who, should they lose their job, will have to return home as they could be renting at 800+ their room in an apartment in Dublin and social welfare won't cover that. It is likely that no movement will happen on the jobs front until these stringent stay-at-home measures are eased as everything is essentially on hold right now, but once people start returning to work, there are likely to be job losses in the tech multinationals. This will be a hit to the demand for rentals which is going to put even more pressure on the rental return bubble to deflate.

However, it is important to say again that the rental market is different to the home purchasing market, where there is chronic undersupply due to the lack of new builds the past decade, meaning there is pent up demand from FTBs in particular who are (for the most part at least) not the non-national employees of the big multinationals. Looking at the share price of Cairn and Glenveagh, the homebuilding entities, they are maybe 40% lower than what they were three months ago. This probably means that the return on shares is expected to be 40% less (although, it is possible that this drop is more significant due to the initial panic and uncertainty that followed Covid19 measures being brought in), which translates to a drop in profit on new builds of up to 40% from a few months ago. Importantly, that does not mean house prices dropping by 40%; for example, cost to build of 400k and selling for 450k 3 months ago would be a drop in house price amounting to 4.4%. This is the market view in respect of homebuilders such as Glenveagh and Cairn.

Property Market 2020

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