The Property market has reached the bottom!

whizzbang

~Trixiebelle~ wrote: »

Hi all,

Im new on this so forgive me if i ask stupid questions (very likely i will!!) or go through things that have already been discussed!! But i could really do with some advise and i very much welcome your opinions!!!:)

but i'm seriously confused!!

Myself, partner and 2 kids are currently living in a council house in north wicklow and have been looking to buy for the last year.. we have viewed several houses particulary in the last six months. We liked a couple of them but thought best to not put in any offers to buy, so we have sat back and just watched the market. In the last couple of weeks now houses have come on the market and have gone sale agreed within 3 weeks!!!

My logic tells me that these houses are overvalued (most of them only dropping in value from 395k to 345k!) for 3 bed semi's... but people are still buying!!

I hate living in the house we are in now and we are eager to purchase our own home but surely we haven't come anywhere near the bottom yet?? It would be all well and good to buy now and have a mortgage we could afford but if any paycuts are on the cards?! Everything in this country just seems so unstable..

We have got a decent bit of savings, (60k earning no interest in our current account) we just really haven't a clue about any of it anymore!!

so question is... do i stay put in council house where rent is €575 pm and spend a few quid making it more comfortable for the next 2-3years or just buy a 3bed semi and have a mortgage for 900pm ??

Thanks guys!!


signed:

truly bewildered!!:o

A few things to be aware of:
Sale agreed doesn't really mean anything, watch to see when they are actually sold. Sale agreeds are falling through all the time as people can't get the mortgage.
Any house can shift quickly if they accept offers well below the asking price.
If you have a nice house with cheap rent I would stay where you are and keep saving. House prices will keep dropping as long as people are losing jobs and bank scandals are being uncovered. Don't worry, the market won't turn around in the space of a few weeks, it will bottom out for a some time (6 months at least I'd say) before climbing again.
Take a look at http://daftwatch.atspace.com/ to see how many places are for sale in your county. When the number 'for sale starts to seriously drop, that's when prices will start to firm up again.

Good luck holding out, with a 60k+ saving you will have a lot of nice houses to choose from when the time comes.

spockety

~Trixiebelle~ wrote: »

Hi all,

Im new on this so forgive me if i ask stupid questions (very likely i will!!) or go through things that have already been discussed!! But i could really do with some advise and i very much welcome your opinions!!!:)

but i'm seriously confused!!

Myself, partner and 2 kids are currently living in a council house in north wicklow and have been looking to buy for the last year.. we have viewed several houses particulary in the last six months. We liked a couple of them but thought best to not put in any offers to buy, so we have sat back and just watched the market. In the last couple of weeks now houses have come on the market and have gone sale agreed within 3 weeks!!!

My logic tells me that these houses are overvalued (most of them only dropping in value from 395k to 345k!) for 3 bed semi's... but people are still buying!!

I hate living in the house we are in now and we are eager to purchase our own home but surely we haven't come anywhere near the bottom yet?? It would be all well and good to buy now and have a mortgage we could afford but if any paycuts are on the cards?! Everything in this country just seems so unstable..

We have got a decent bit of savings, (60k earning no interest in our current account) we just really haven't a clue about any of it anymore!!

so question is... do i stay put in council house where rent is €575 pm and spend a few quid making it more comfortable for the next 2-3years or just buy a 3bed semi and have a mortgage for 900pm ??

Thanks guys!!


signed:

truly bewildered!!:o

I posted this a few weeks ago on another thread here, but I think it's worth posting again. Yes there are people buying houses at the moment, and there always will be, but I think it works like I said before:

"I think there will always be some movement at every price point. The problem is there are not enough buyers at the current price point to make the market function normally. It's kinda like a reworked musical chairs.

Let's say the entire market is 20 houses. And those 20 houses are all asking 500 grand each. And let's say there are 20 people out there who want to buy a house, but only 2 of them are willing to pay 500 grand. So they buy. Now there are 18 houses on the market at 500k, but no willing buyers. So they drop their asking price to 450k. Now there are another 2 people who are interested in buying at 450k, so they take them off their hands. So the remaining 16 properties still at 450k but with no buyers willing to spend that much have to drop to 400k.. and so on.

Sure there might be some transactions going on, but the market is still falling, and the homeowners left standing when the proverbial music stops in the 'current round' of buying are left standing in a non-existant market until they drop their own prices again, and hope they get bought when the music starts up again.

So as a seller, you have to be ahead of the curve. Your property has to be the cheapest on the market for it's type.
As a buyer, you have to ask yourself if you're willing to dive in when the music stops in this particular round of the property market musical chairs, or are you gonna wait until the next round? "

EKRIUQ

spockety wrote: »

So as a seller, you have to be ahead of the curve. Your property has to be the cheapest on the market for it's type.

Exactly, when selling a house you have to look at your competition ie. other houses for sale, and forget about your nice curtains, kitchen and tiles. Two things at the moment sell houses price and location and your better off pricing below the market average to get viewings.

blast05

60k earning no interest in our current account

You can definitely do better than that. You can get an APR of 4.65% for a 3 month fixed period in Irish Nationwide (or 4.5% for a 1 or 2 month fixed). By my calculations, this should earn you about €181 per month after DIRT .....

~Trixiebelle~

blast05 wrote: »

You can definitely do better than that. You can get an APR of 4.65% for a 3 month fixed period in Irish Nationwide (or 4.5% for a 1 or 2 month fixed). By my calculations, this should earn you about €181 per month after DIRT .....

Thanks guys!! this is the kind of advice i need!!

Blast, I know its been crazy having our money just sitting around and not working for us!! I will be looking into Irish Nationwide on monday, do you think that they have the best returns around??

Cheers!!:D

The_Conductor

~Trixiebelle~ wrote: »

Thanks guys!! this is the kind of advice i need!!

Blast, I know its been crazy having our money just sitting around and not working for us!! I will be looking into Irish Nationwide on monday, do you think that they have the best returns around??

Cheers!!:D

There are rumours about Irish Nationwide- I'd go with the state owned Anglo Irish if I were you......

blast05

There might be 1 or 2 others on a par with Irish Nationwide but would be only .1 or .2% of a difference. I only know the IN figures cos i have money on deposit there.
And re the IN figures, i got them slightly wrong, the 3 month fixed is 4.5% (4.65% is for 1 year fixed). It would aso be worth checking out what the penalty clause is for taking the money out before the expiry of the penalty clause. From my own experience, it tends to be quite small, i.e.: you might be better off putting the money on a 1 year fixed at 4.65% and pay any penalty clause after say 3 months if you want to withdraw the money rather than putting it at 4.5% on a 3 month fixed.
And and ..... make sure that if you put it in for 3 months that you have a reminder to look at moving it again after the 3 month period - otherwise it will revert to a next to nothing rate. I had money on a 12 month fix and only checked it 2 months after the 12 months had elapsed to find it was earning about .1% for those 2 months.
And finally, be aware of course that there is a small risk that the whole financial sector in Ireland could collapse with runs on all banks covered under the government guarantee if the country goes bankrupt. In such a scenario, you would be better off having your money in say National Irish Bank which is guaranteed by the Danish government, a government which certainly is not near as likely to go bust as Ireland is. Of course the NIB rate is not as competitive as IN - more or less at ECB rate of 1.5% meaning your monthly return would be about €60

couerdelion

spockety wrote: »

I posted this a few weeks ago on another thread here, but I think it's worth posting again. Yes there are people buying houses at the moment, and there always will be, but I think it works like I said before:

"I think there will always be some movement at every price point. The problem is there are not enough buyers at the current price point to make the market function normally. It's kinda like a reworked musical chairs.

Let's say the entire market is 20 houses. And those 20 houses are all asking 500 grand each. And let's say there are 20 people out there who want to buy a house, but only 2 of them are willing to pay 500 grand. So they buy. Now there are 18 houses on the market at 500k, but no willing buyers. So they drop their asking price to 450k. Now there are another 2 people who are interested in buying at 450k, so they take them off their hands. So the remaining 16 properties still at 450k but with no buyers willing to spend that much have to drop to 400k.. and so on.

Sure there might be some transactions going on, but the market is still falling, and the homeowners left standing when the proverbial music stops in the 'current round' of buying are left standing in a non-existant market until they drop their own prices again, and hope they get bought when the music starts up again.

So as a seller, you have to be ahead of the curve. Your property has to be the cheapest on the market for it's type.
As a buyer, you have to ask yourself if you're willing to dive in when the music stops in this particular round of the property market musical chairs, or are you gonna wait until the next round? "

You're assuming that the property market functions like a commodity market and can have a pure economic mapping. Sure, for the develoers it may work like that, but for the vast majority of the market it doesn't. As much as buyers are willing to sit it out and wait for prices to drop, so owners are willing to wait for prices to rise again.

Freddie59

EKRIUQ wrote: »

Exactly, when selling a house you have to look at your competition ie. other houses for sale, and forget about your nice curtains, kitchen and tiles. Two things at the moment sell houses price and location and your better off pricing below the market average to get viewings.

You definitely sound like an auctioneer. Care to declare yourself?:)

That database question above?;)

gurramok

blast05 wrote: »

And finally, be aware of course that there is a small risk that the whole financial sector in Ireland could collapse with runs on all banks covered under the government guarantee if the country goes bankrupt. In such a scenario, you would be better off having your money in say National Irish Bank which is guaranteed by the Danish government, a government which certainly is not near as likely to go bust as Ireland is. Of course the NIB rate is not as competitive as IN - more or less at ECB rate of 1.5% meaning your monthly return would be about €60

To sum up, does a depositor trust the Irish banking system or a foreign one?

I trust the latter as the Irish banking system has not fully realised its debts yet. I'd rather forego a few hundred on interest than lose many thousands if an Irish bank folds.

couerdelion wrote:

As much as buyers are willing to sit it out and wait for prices to drop, so owners are willing to wait for prices to rise again.

Thats many years they will be waiting. A seller needs the cash more than a buyer in some circumstances as deflating prices has made the buyer king/queen!.

blast05

I trust the latter as the Irish banking system has not fully realised its debts yet. I'd rather forego a few hundred on interest than lose many thousands if an Irish bank folds.

The pension reserve fund still has about 13 billion after the last re-cap for the banks. The National Treasurey Management Agency had about 20 billion in cash by end of 2008 and sold another 4 billion of paper on the markets a couple of weeks ago (which was greatly over-subscribed). So allowing for the overspend in 2009 to date (probably about 4 to 5 billion), it means the government has about 30 to 35 billion of readily available assets to keep the country going without out having to go back to the markets.
So given the governments policy of ensuring the banking system does not collapse above all else, its very safe to say imho that the Irish banks will not collapse in the next 12 months ........ and thus what cash i have is sitting in Irish Nationwide rather than National Irish or any other foreign government backed bank to gain from the higher interest rates.

~Trixiebelle~

blast05 wrote: »

The pension reserve fund still has about 13 billion after the last re-cap for the banks. The National Treasurey Management Agency had about 20 billion in cash by end of 2008 and sold another 4 billion of paper on the markets a couple of weeks ago (which was greatly over-subscribed). So allowing for the overspend in 2009 to date (probably about 4 to 5 billion), it means the government has about 30 to 35 billion of readily available assets to keep the country going without out having to go back to the markets.
So given the governments policy of ensuring the banking system does not collapse above all else, its very safe to say imho that the Irish banks will not collapse in the next 12 months ........ and thus what cash i have is sitting in Irish Nationwide rather than National Irish or any other foreign government backed bank to gain from the higher interest rates.

Thanks for the info blast, i checked with our potential mortgage broker and she advised us of the same... she said they have a instant sign off??(sorry forget what its called but basically we dont need to give notice and have no penalties should we require funds straight away!!)...

I really have a fear of many of the banks going bust and the government issuing IOU's!! I think we can safely say that i don't have a clue of economics but whats the worst case scenario and what measures can we put in place to protect ourselves??

Freddie59

blast05 wrote: »

The pension reserve fund still has about 13 billion after the last re-cap for the banks. The National Treasurey Management Agency had about 20 billion in cash by end of 2008 and sold another 4 billion of paper on the markets a couple of weeks ago (which was greatly over-subscribed). So allowing for the overspend in 2009 to date (probably about 4 to 5 billion), it means the government has about 30 to 35 billion of readily available assets to keep the country going without out having to go back to the markets.
So given the governments policy of ensuring the banking system does not collapse above all else, its very safe to say imho that the Irish banks will not collapse in the next 12 months ........ and thus what cash i have is sitting in Irish Nationwide rather than National Irish or any other foreign government backed bank to gain from the higher interest rates.

national Irish Bank have one of the LOWEST deposit interest rates around, so there is no incentive to deposit there for that reason. However, as per the comment above, there would be a far stronger possibility of Ireland going bankrupt ahead of Denmark.

The Irish Government banking guarantee is 250% of GDP - in UK, Germany, etc it is around 17%. Not sure about Denmark, but I would imagine it is similar.

Worth bearing in mind.:)

is_that_so

An article in the Independent claims that we are at or near the bottom on the basis of one auction, although one expensive house selling is hardly convincing. Puzzling that they would come to that conclusion.

Link

€1.6m house is first auction sale of year

By Yvonne Hogan, Property Editor
Friday March 27 2009

THREE months into the year, a house in Dublin finally sold at an auction yesterday.

It was standing room only at Lisney's on St Stephen's Green as No 49 Eglinton Road became the first Dublin residential property to change hands at a public auction this year.

The house in Donnybrook, Dublin 4, sold for €1.6m, well above its advised minimum value (AMV) of €1.3m.

The landmark sale comes despite new figures which show the average house price has now plunged by €55,000 since February 2007. The drop of 18pc means the average price of a house sold nationally has fallen to €256,573.

In the first two months of this year, some €5,000 was wiped off the value of the average house, according to the latest house price index from Permanent TSB and the Economic and Social Research Institute. There were four or five serious contenders in yesterday's auction, after the bidding opened at €1m.

The property is a two- storey 185.7sqm Edwardian home with five bedrooms and a 10m x 33m garden.

Auctions of such properties are unusual these days, but at the height of the boom, auctions were 10 a penny, particularly in areas such as Eglinton Road, which had quite a few houses for sale in 2006.

Among them were: No 58 Eglinton Road, a four- bedroom property, which went to auction in November with an AMV of €6m; No 53 had an AMV of €4.5m in October; in July, No 75 was also asking €4.5m; and in June, No 39 was asking €4m. All failed to sell at auction. What did sell, however, was the more reasonably priced No 45 Eglinton Road. It sold above the AMV of €2.5m.

Auctions are the best way of gauging the market and when a property like this sells at €1.6m, it indicates we are at or close to the bottom of the market.

The_Conductor

Last property to sell on Eglington Road was EUR2.75m for no. 45 last September. This implies that no.49- which is actually about 52m2 larger- EUR1.6m, has fallen by just over 40% in the past 6 months- which is disastrous in my opinion.

I have no idea how or why the Indo suggest that this achievement is anything to guage the health of the market on- it was a firesale.....

To suggest that the very first successful auction of the year- almost in April, is any measure of the health of the market- is delusional in the extreme (totally irrespective of the sale price......)

S.

MyHat.ie

Yes, it is a bizarre conclusion from such scant evidence, isn't it? And such a naked statement, with hardly any qualification proffered (such as "unless this is a blip"): "we are at or close to the bottom of the market." Hogan is either clairvoyant or just doesn't take seriously what she writes at the end of such an article. Coincidentally, the Permanent TSB figures came out yesterday and the word over there is: "while affordability is improving for customers due to the series of rate reductions and two consecutive years of reductions in house prices, customers seem unconvinced that the market has bottomed out yet.”

The Indo performed a similar slight of hand with our press release regarding one week of price increases on our index, by sticking a Signs of Recovery headline on an article in which they quote me as saying that we don't think this is the bottom of the market: http://myhat.ie/blog/?p=317

Hmmm.

thewing

I've notice in the past month the media are trying to talk up the property market again

Article in the Sindo saying that FTB's are beginning to nibble again at the lower-end of the market due to 'bargains' on offer

Then you have the article re Eglington road today and the article that is the subject of this thread

This recession is only going to lengthen whilst the VI's of the property market trying to pull the housing market out of it's deserved grave.

Move on, forget it, it's done. Time to invent, engineer, entrepenuer.

bangersandmash

MyHat.ie wrote: »

Yes, it is a bizarre conclusion from such scant evidence, isn't it? And such a naked statement, with hardly any qualification proffered (such as "unless this is a blip"): "we are at or close to the bottom of the market."

Same thing yesterday in the Times. Apparently the bottom has been heralded. By whom and based on what evidence we're not told.

http://www.irishtimes.com/newspaper/property/2009/0326/1224243437547.html

Seems to be a concerted effort this week to coincide with the spring selling season.

I think it says something about the state of the market that so much is made of a single auction sale on one of the most popular roads in D4 at a price that's comparatively far below most South Dublin asking prices. These articles smack of desperation not optimism.

who_ru

thewing wrote: »

Move on, forget it, it's done. Time to invent, engineer, entrepenuer.

well said!

ZYX

smccarrick wrote: »

Last property to sell on Eglington Road was EUR2.75m for no. 45 last September. This implies that no.49- which is actually about 52m2 larger- EUR1.6m, has fallen by just over 40% in the past 6 months- which is disastrous in my opinion.



S.

Are you sure that wasn't in July 2006
http://www.independent.ie/unsorted/property/results-earlier-this-week-provincial-88967.html


Dublin 4 Lennox Estates: 45 Eglinton Road, Donnybrook, Dublin 4. AMV €2.5m, semi-detached, 6 bed, odd street parking. Withdrawn at €2m, sold after for higher then AMV.

blast05

~Trixiebelle~ wrote: »

Thanks for the info blast, i checked with our potential mortgage broker and she advised us of the same... she said they have a instant sign off??(sorry forget what its called but basically we dont need to give notice and have no penalties should we require funds straight away!!)...

I really have a fear of many of the banks going bust and the government issuing IOU's!! I think we can safely say that i don't have a clue of economics but whats the worst case scenario and what measures can we put in place to protect ourselves??

Trixiebelle - an update for you ..... i see National Irish Bank are now doing an instant access e-banking account which yields 3%. In your case it means €117 per month and your money is definitely guaranteed cos the Danish government isn't going to go bankrupt.

population

thewing wrote: »

I've notice in the past month the media are trying to talk up the property market again

Article in the Sindo saying that FTB's are beginning to nibble again at the lower-end of the market due to 'bargains' on offer

Yeah funny that. Was watching TV3 News last week and they interviewed a builder who is apparetly selling the cheapest apts in Dublin (150k 1 bed in Ashtown if memory serves me right).

Anyway he actually came across alright and was fairly realistic about his prospects of shifting units in this market, but then the report ended with Tv3's silly reporter donig a blathering wrap up about how economists are definite prices will rise gradually in 2010 and that now is a good time to buy???

Could not beleive what I was hearing on a so called "news report"

Firetrap

It doesn't surprise me really. A goodly proportion of the mainstream media cheerleaded the property bubble for years.

dan_d

Just to burst in on this thread (sorry!), the majority of the mainstream media cheerleaded the property bubble for the last ten years, bar one or two commentators, who got to write a column once every couple of months. It actually makes me quite angry to open the Times or the Indo, and read their property supplements at the moment. Prime example of the pure hypocrisy of the media.This time a year and a half ago their pages were full of " splash out on a new kitchen to sell your house", or information on where to buy designer furniture, or why you should employ a landscape gardener and how you couldn't possibly decorate your house without consulting an interior designer. Now it's all about how to save money on decorating, and why a lick of paint is a cheap way of making your house look fresh before showing to potential viewers; don't splash out, because didn't you know we're in a recession???
Rant over. Anyway, I've noticed aswell that they are starting to say the property market is going up again. I wish they'd just get over it. It's done.It doesn't prop up an economy. They are getting old and tired and boring.And showing exactly how hypocritical and un-informed they are.Let's move on. Maybe they'll follow!
(And before the suggestions come in....I don't read the paper anymore)

Borzoi

population wrote: »

Yeah funny that. Was watching TV3 News last week and they interviewed a builder who is apparently selling the cheapest apts in Dublin (150k 1 bed in Ashtown if memory serves me right).

Anyway he actually came across alright and was fairly realistic about his prospects of shifting units in this market, "

Sold out, according to this thread

http://www.boards.ie/vbulletin/showthread.php?t=2055517028&page=2


maybe there is stabilisation

population

Maybe that is not the same place. All I remember is the builders were called Capel Construction

Borzoi

population wrote: »

Maybe that is not the same place. All I remember is the builders were called Capel Construction

That's them alright.

~Trixiebelle~

blast05 wrote: »

Trixiebelle - an update for you ..... i see National Irish Bank are now doing an instant access e-banking account which yields 3%. In your case it means €117 per month and your money is definitely guaranteed cos the Danish government isn't going to go bankrupt.

Cheers Blast!!:)

Do you think its our best option???

I would rather the money be safe and get a small bit of interest rather than deposit in a higher interest but riskier bank...

I am due to withdraw the money out of our current account on Friday and meet with our broker but I'm a bit unsure of her suggestion of Anglo IB?

Freddie59

Sold our house in November. Proceeds lodged with NIB. Was considering a move to a safety deposit box, but the more threads I read the more assured I am about NIB. I hope I'm right!

The_Conductor

~Trixiebelle~ wrote: »

Cheers Blast!!:)

Do you think its our best option???

I would rather the money be safe and get a small bit of interest rather than deposit in a higher interest but riskier bank...

I am due to withdraw the money out of our current account on Friday and meet with our broker but I'm a bit unsure of her suggestion of Anglo IB?

I'd go with Anglo Irish- its still the best rate around, and its not just government guaranteed, its government owned. NIB is all well and good- but keep in mind the Danish government are not in the Euro zone- and if there was a run on their banks (which is unlikely) foreign subsidiaries would likely be very low on their list of priorities.