Irish Property Market 2020 Part 2

fliball123 wrote: »

It all depends on if they find a vaccine for Corona

Positive murmurings coming from both the UK and US vaccine teams, human trials going well apparently. We're not over the line yet, but some serious experts whose opinion I'd value on the matter are quite optimistic.

mcsean2163 wrote: »

? Seriously, if there's a big recession people will have less money and be able to afford less expensive houses.

For example, people get paid less in Nairobi Kenya and prices are cheaper despite demand

[url]htTps://www.buyrentkenya.com/houses-for-sale/nairobi[/url]

OK well off you go and buy a house in Nairobi then . I would hazard a guess if you asked 1000 people around the world if they preferred to live in Nairobi as apposed to Dublin I reckon nearly all would say Dublin..Same goes with Dublin and Sligo and then if you compared say Dublin to New York then you would have New York with the majority of people wanting to live there and you can see the prices over there as globally more people would want to live there. Also I dont think there are too many REITS coming in and buying 85% of new properties off the plan from developers in Nairobi. Also have you also compared the return on rent between Nairobi and Dublin?

Shelga wrote: »

Presuming there are others who can/will pay it.

If not I would wait till the pandemic is over, the economy is going again and wait till I get the price I want

BEdS_83 wrote: »

I also think that there is plenty evidence that the price are going down, some times you can see people dropping ads from daft and myhome and then creating new ones.
I remember seeing one house here in Dun Laoghaire, what got my attention was the location, because it was close to the vet from my dog, that house was priced at 745k, now the same house is priced at 695k, and it's funny because you can still see the price if you google the address + daft, google's cache is still showing as it was back then.

I bought my house in 2019 for €65k less than it was first listed for in 2018.

Maybe the original EA did a bad job
Maybe the owner wanted too much
Probably a bit of both

Statistically though it means nothing. Its just a single piece of anecdotal evidence.

I withdrew a bid on a fixer upper house, which has since been reduced by €10k on Daft, but I think it's far too early to tell if there are going to be any significant price drops. It seems to vary wildly.

Supply is still abysmal.

Shelga wrote: »

I withdrew a bid on a fixer upper house, which has since been reduced by €10k on Daft, but I think it's far too early to tell if there are going to be any significant price drops. It seems to vary wildly.

Supply is still abysmal.

Fixer uppers have been the hardest to shift, since long before Covid19

Builders are expensive and everything has to be done to such a high standard in terms of energy efficiency these days - its daunting for a lot of people to take on such projects - having to live somewhere while work is done, fear of unforseen costs etc, finding a good builder and not a cowboy....

While the market was going up aggressively YoY, it felt to me that some sellers of fixer uppers were being unrealistic in their asking prices anyway.

Houses in good nick are still moving though.

fliball123 wrote: »

It all depends on if they find a vaccine for Corona

That and only that will be the only way out of a recession .
Even if a successful one is found it will depend on how much economic scarring the pandemic will leave in its wake

fliball123 wrote: »

If not I would wait till the pandemic is over, the economy is going again and wait till I get the price I want

People said the exact same thing in 2007

brisan wrote: »

I think I would take the word of an economic expert who works for a bank rather than some randomer on the internet.
KBC have skin in the game.
its not in their interest for house prices to drop

Half of economist working for KBC Ireland now were preaching in 07 that there is no bubble. Genuinely look up senior economist/analysts on linkedIn, then google them.

KBC has no skin in the game. The worst thing you can do is to believe a forecast from economists/financial advisors. Mortgages would be bundled into fin products and sold off.

mcsean2163 wrote: »

Good for you, presumably you can carry that risk. We sold and bought in the last recession. We sold for half the 2007 price and bought for half the 2007 price.

Prices before covid19 were still not back to 2007, so you may not have to wait as long. Personally, I think a seller would be mad to pull a sale for the sake of 20k, we've been considering another move, our asking price would be a lot lower than before Christmas!

KBC was saying 12% drop, that's more than 20k for average house in Dublin.

What risk that as night follows day and falls follow rises and rises follow falls and so on all you have to do is wait its always been a cycle. I think a seller if he thinks his/her property is worth that 20k extra would be mad to sell for less. If I had a house and putting it on the market and it was in a desirable area and in good condition I would be putting it up at what the prices where pre-covid.

brisan wrote: »

People said the exact same thing in 2007

Yeah but there was a lot more choice for buyers back in 2007 as in you had people having to sell due to distressed mortgages, this wont happen this time as family home wont be touched the whole left learning homeless narrative in this country means no Political party will force a family out of the family home. Lot less houses built, a lot more people in the population 2020 this is a different beast to 2007 as the fundamentals of supply and demand are still skewed away from supply

The_Brood wrote: »

So basically it is safe to say that no matter how bad things get for the broader economy (and this is even in the worst case scenario if a vaccine is not found soon), the supply is so little and demand so great in Ireland that there can be no realistic expectations of significant house price drops?

That is how it is looking at the moment I mean if you believe KBC we should be somewhere down the line in that 12% price drop it is almost coming into August??

brisan wrote: »

And with the upcoming credit squeeze there will be a lot less choice for sellers

True that will dampen some demand but remember at the moment demand is competing on a global level and REITS and other investors looking globally at the rental yeilds in Ireland will be thinking its a safe enough bet being able to give your property to the gov who will look after it for 10 to 25 years guaranteed from the time you give to them and give you 85% of the rental income. That to me is a no brainer for me if I was investing and this is what is happening

fliball123 wrote: »

That is how it is looking at the moment I mean if you believe KBC we should be somewhere down the line in that 12% price drop it is almost coming into August??

The Government subsidies are propping up the economy
Practically every day we are seeing job losses.
Come September when subsidies end we will see a lot more.
Houses being bought now are with mortgage approvals given earlier in the year.
Mortgage approvals for April and May at record low levels (for various reasons ) both in volume and in amounts.
Things could go bad very fast
Every First world country has said they are going into recession,some saying the worst since the great depression (USA),some saying since the foundation of the state (iRELAND) and some saying the biggest recession in the last 300 years (Britain )
Add Unknown outcome of Brexit into the mix and who knows where we will end up.
Banks will apply very strict rules to mortgages and the Central Bank will ensure this
Supply might stay low but if demand is even lower than prices and rents have to fall.
In every recession house prices fall
Its up to the Government now to put its money where its mouth is and actually build not buy houses.
If they do not SF are waiting at the ballot boxes and FF-FG know this
They got away at the last election ,they may not be so lucky the next time

brisan wrote: »

The Government subsidies are propping up the economy
Practically every day we are seeing job losses.
Come September when subsidies end we will see a lot more.
Houses being bought now are with mortgage approvals given earlier in the year.
Mortgage approvals for April and May at record low levels (for various reasons ) both in volume and in amounts.
Things could go bad very fast
Every First world country has said they are going into recession,some saying the worst since the great depression (USA),some saying since the foundation of the state (iRELAND) and some saying the biggest recession in the last 300 years (Britain )
Add Unknown outcome of Brexit into the mix and who knows where we will end up.
Banks will apply very strict rules to mortgages and the Central Bank will ensure this
Supply might stay low but if demand is even lower than prices and rents have to fall.
In every recession house prices fall
Its up to the Government now to put its money where its mouth is and actually build not buy houses.
If they do not SF are waiting at the ballot boxes and FF-FG know this
They got away at the last election ,they may not be so lucky the next time

I agree with all of that but how much of that stops REITS and global investors looking for a return on their money from buying? What stops people who are still working from buying? People still need somewhere to live what is the alternative to buying?

Buying cheaper and further away from where you want
Renting - sometimes paying more than a mortgage
moving back in what mam and dad (not really an option for a couple with a few nippers)

As I said this is a different beast and while you rightly point to what will affect demand as in driving it down . other things will drive it up and will also decrease supply as in:

No option for emigration
Houses currently being built are at a very slow rate and a high % being snapped up off the plans by REITS
Current stock of supply is p1ss poor anything half decent is being snapped up
From 2007 to 2020 a lot more people to house as the population has increased year on year
Family homes are protected meaning very few evictions.
Government cannot afford to build houses they cant afford the current expenditure sure we only started breaking even last year before this happened.
Banks have already had strict lending practices the last decade they have been a lot more prudent in their lending.


Like there are a lot of what ifs, and the biggest factor will be a cure for the virus and every top scientist in the world is working on solving this with billions being pumped into finding a cure.

Who knows all I know is currently if I was putting my gaff up I would want what it is worth before Covid if I got an offer of less I would say "thanks" but "no thanks"

MrMusician18 wrote: »

It's not just demand, as in the numbers of people that need housing, but the capacity to borrow that will fall and drive prices down.

So while it's correct to say that demand, in a raw numbers population sense will remain regardless of covid, that doesn't matter if they can't get mortgages.

Thats basically what I meant
Demand is only proper demand if you have the finances to purchase it
I am sure we would all love to drive Mercs therefore the demand is there unfortunately the finances are not

fliball123 wrote: »

I agree with all of that but how much of that stops REITS and global investors looking for a return on their money from buying? What stops people who are still working from buying? People still need somewhere to live what is the alternative to buying?

Buying cheaper and further away from where you want
Renting - sometimes paying more than a mortgage
moving back in what mam and dad (not really an option for a couple with a few nippers)

As I said this is a different beast and while you rightly point to what will affect demand as in driving it down . other things will drive it up and will also decrease supply as in:

No option for emigration
Houses currently being built are at a very slow rate and a high % being snapped up off the plans by REITS
Current stock of supply is p1ss poor anything half decent is being snapped up
From 2007 to 2020 a lot more people to house as the population has increased year on year
Family homes are protected meaning very few evictions.
Government cannot afford to build houses they cant afford the current expenditure sure we only started breaking even last year before this happened.
Banks have already had strict lending practices the last decade they have been a lot more prudent in their lending.


Like there are a lot of what ifs, and the biggest factor will be a cure for the virus and every top scientist in the world is working on solving this with billions being pumped into finding a cure.

Who knows all I know is currently if I was putting my gaff up I would want what it is worth before Covid if I got an offer of less I would say "thanks" but "no thanks"

How many people on 205 euro a week are going to pay 2k a month for a REIT property
If people have no jobs , no money ,no access to credit what will the REITS do
Leave them empty ?,reduce rents? ,not buy any more because the demand is not there .?
Sell them off as Gannon is doing in the Casino in Malahide ??

brisan wrote: »

How many people on 205 euro a week are going to pay 2k a month for a REIT property
If people have no jobs , no money ,no access to credit what will the REITS do
Leave them empty ?,reduce rents? ,not buy any more because the demand is not there .?
Sell them off as Gannon is doing in the Casino in Malahide ??

Gannon is the origional developer of the Casino. They are not a REIT. Maybe they're selling up to invest elsewhere, who knows. REITs are in the long game.

People on social welfare rent expensive units all the time, its called HAP.

brisan wrote: »

Nephew had a bid on a house accepted
15K over asking
Second hand but in show house condition
Bank valuer would only value it at 20k under asking
His deposit was maxed as it was so he had to walk
This was on Monday

Lucky him! Valuer, saved him paying 35k over fair value

fliball123 wrote: »

I agree with all of that but how much of that stops REITS and global investors looking for a return on their money from buying? What stops people who are still working from buying? People still need somewhere to live what is the alternative to buying?

Buying cheaper and further away from where you want
Renting - sometimes paying more than a mortgage
moving back in what mam and dad (not really an option for a couple with a few nippers)

As I said this is a different beast and while you rightly point to what will affect demand as in driving it down . other things will drive it up and will also decrease supply as in:

No option for emigration
Houses currently being built are at a very slow rate and a high % being snapped up off the plans by REITS
Current stock of supply is p1ss poor anything half decent is being snapped up
From 2007 to 2020 a lot more people to house as the population has increased year on year
Family homes are protected meaning very few evictions.
Government cannot afford to build houses they cant afford the current expenditure sure we only started breaking even last year before this happened.
Banks have already had strict lending practices the last decade they have been a lot more prudent in their lending.


Like there are a lot of what ifs, and the biggest factor will be a cure for the virus and every top scientist in the world is working on solving this with billions being pumped into finding a cure.

Who knows all I know is currently if I was putting my gaff up I would want what it is worth before Covid if I got an offer of less I would say "thanks" but "no thanks"

What if its not your Principal residence
What if its a BTL that you can no longer get a decent rent for
What if its a BTL and you lose your job and cannot afford to subsidise the mortgage anymore.
What if it is your Gaff and you sell it for 20k less and can buy a better property that has reduced by 50k
What if its an inheritance split between 6 people ,little over 3k a head ?
Many reasons people will sell for below asking or sell at all
I/we have bought and sold enough properties to have learned that you never say never