True price of apartments in South Dublin

kmac20in

Hi,
I plan to buy a two bedroom apartment in the near future in inner South Dublin, as in D4, D6 or miltown, dundrum area. I've been keeping an eye on daft and myhome and the average price advertised seems to be about 275k to 310k but I'm wondering what is the true reflection of its market value or more to the point what price should I enter a bid with? Am well aware that the price estage agents are looking for is above real market evaluation.

So for example if a 2 bedroom apt is advertised at 300k would 250k be a realistic initial bid?

Thanking you in advance.

listermint

kmac20in wrote: »

Hi,
I plan to buy a two bedroom apartment in the near future in inner South Dublin, as in D4, D6 or miltown, dundrum area. I've been keeping an eye on daft and myhome and the average price advertised seems to be about 275k to 310k but I'm wondering what is the true reflection of its market value or more to the point what price should I enter a bid with? Am well aware that the price estage agents are looking for is above real market evaluation.

So for example if a 2 bedroom apt is advertised at 300k would 250k be a realistic initial bid?

Thanking you in advance.

TBH, I would be going in lower again. The market is completely Stagnant, and will remain so, there is a glut of apartments to go and frankly there are not enough mortgage approvals to get rid of th overs stock. Prices are artificially high. Nama are sitting on batches in the thousands over south dublin which will see market in the next 18 months.

For me id be going in with a 220K starting point and work from there, Its a buyers market so dont be afraid to be crude.

jimmmy

you can get newish apartments for well less than € 100k in many parts of the country - places with less crime + social problems + closer to nature than Dublin. Dublin prices will fall to close to that yet.

randombar

Capital cities always have higher prices, more of a housing need etc. I very much doubt that apartments in D4,6 or Milltown will fall to 100k. Isn't there some figure of x times the yearly rent or something? The nama property release will reduce prices but nama (not the government) are no fools, they will sell off the properties slowly I reckon.

ntlbell

GaryCocs wrote: »

Capital cities always have higher prices, more of a housing need etc. I very much doubt that apartments in D4,6 or Milltown will fall to 100k. Isn't there some figure of x times the yearly rent or something? The nama property release will reduce prices but nama (not the government) are no fools, they will sell off the properties slowly I reckon.

People always say I can't see prices going to X but don't really back up it up with any reasonable to suggestion to why.

Rents in the vast majority of areas in Ireland are contining to drop. we still have a huge over hang of properties with no real demand. Banks are lending less, people are earning less and the amount of people working continues to drop. people who are working a lot are taken reduced hours/less pay. Janaury is going to see everyones disopable income hit from this month on with tax increases/levy's etc reducing drastically the amount that can be borrowed.

so with the amount of debt the country is in and the 4 year plan we can make a reasonable guess that the increases in taxes/levy's etc is going to increase over that period of time. There is a greater risk of one person in the siutation of a couple being out of a job etc again reducing the amount to be borrowed.

I think in "normal" markets the avg 3 bed house in an average housing estate will be priced around 3-4 times the avg ind wage. which at the height of the boomw as around 35-37k, I don't have the exact stat for what it is now but you can assume it's a lot lower. so if we call it 32k and will drop over the next few years to about 30k this would bring the avg 3 bed house to about 90k. I've seen some houses in Daft pretty damn close to this all ready, granted not in the areas mentioned above but we're still basically 60% of the boomy boom prices.

but you have some reasoning for your assertions I'm sure we'd all love to hear em

randombar

First of all I don't think you're right saying rents in the majority of areas in Ireland are continuing to drop, My friends and I have actually seen rents in Dublin actually starting to rise again due to the lack of mortgages being granted.

How long do you think it will take for an apartment in lets say mount st annes to drop to 100k?

I have heard that the rate of decline of property prices is linked to the amount of time properties in that area are for sale. The average sale time of properties in Dublin according to daft is roughly four months whereas the average in Galway is 12 months. Indicating that property prices in Galway have another bit to go whereas in Dublin they might be reaching a stable figure.

You explain your figures by talking about an average 3 bed in a housing estate when the OP and myself talk about apartments but that's besides the point, you also talk about the average ind. wage when everyone knows wages are higher in Dublin than any other part of the country due to the higher cost of living (coming full circle to the higher property prices)

I don't think you can use average figures here to generalize what is going to happen in different areas of the country. I believe the property price decline that we have seen will slow down and stop a lot faster in Dublin than other areas of the country.

gurramok

GaryCocs wrote: »

First of all I don't think you're right saying rents in the majority of areas in Ireland are continuing to drop, My friends and I have actually seen rents in Dublin actually starting to rise again due to the lack of mortgages being granted.

Rents where I am have stabilised for the past year due to Rent allowance as well as a large employer in the region. (Google), thats D4/D2 in the Docklands southside. They have not risen nor fallen in this small area. Maybe other areas have risen, I do not know as I do not know where Mount St Annes is for example

On mortgages, thats a bit of a half myth. Figures from the Banking Federation show that buyers of all sorts are still getting mortgages, its the numbers thats getting them that are down. Thats sustainability for future numbers to base on in my opinion rather than mania numbers of the bubble years which will never return for a generation at least as the people getting mortgages now are the prudent ones not ones with no saving history for example.(100% mortgage types).

For the true price of apts in South Dublin, they have not reached it yet. Just have a look at lovely Sandyford, still asking ridiculous prices and not shifting. The sooner Nama firesales all the vacant apts in Sth Dublin and with the push of a non-vested interest based new govt, then we'll know the true prices.

ntlbell

GaryCocs wrote: »

First of all I don't think you're right saying rents in the majority of areas in Ireland are continuing to drop, My friends and I have actually seen rents in Dublin actually starting to rise again due to the lack of mortgages being granted.

You and your friends noticing something != majority of Ireland.

In the last daft report the "worst" or "best" depending on what side of the fence you're on was a leveling off. Yes less banks are lending but the supply of rented property to the demand is just not there. The ESRI estimate 50k people to leave the country this year alone, which will also have a huge affect on the demand.

GaryCocs wrote: »

How long do you think it will take for an apartment in lets say mount st annes to drop to 100k?

I have no idea how long it will take or if they will go that low, all I can point to is what we see now and that's a continuation of the drops, there is nothing to suggest the drops will stop anytime soon. do you have anything to suggest that?

GaryCocs wrote: »

I have heard that the rate of decline of property prices is linked to the amount of time properties in that area are for sale. The average sale time of properties in Dublin according to daft is roughly four months whereas the average in Galway is 12 months. Indicating that property prices in Galway have another bit to go whereas in Dublin they might be reaching a stable figure.

Galway did seem a bit late to show in the start of the redcution in house prices. House prices are falling as steadiliy now as they were two years ago, there is nothing to suggest this is going to stop and as I have mentioned in a previous post a never ending list of reasons as to why they will continue.

GaryCocs wrote: »

You explain your figures by talking about an average 3 bed in a housing estate when the OP and myself talk about apartments but that's besides the point, you also talk about the average ind. wage when everyone knows wages are higher in Dublin than any other part of the country due to the higher cost of living (coming full circle to the higher property prices)

I used houses as an example, so if the average 3 bed house is at 90-120k are you suggesting apartments in the same area will be more exspensive? that doesn't make any sense.

Not sure what your point is houses are more generally more exspensive in dublin as people are on higher wages but what's that go to do with the over all point? house pirces in dublin will generally be higer than outside? no one's arguing.

GaryCocs wrote: »

I don't think you can use average figures here to generalize what is going to happen in different areas of the country. I believe the property price decline that we have seen will slow down and stop a lot faster in Dublin than other areas of the country.

That will definitley be the case, but that doesn't mean an apartment won't be drop to a certain amount, it just means the apartment outside dublin will drop to even less?

Theboinkmaster

GaryCocs wrote: »

Capital cities always have higher prices, more of a housing need etc. I very much doubt that apartments in D4,6 or Milltown will fall to 100k. Isn't there some figure of x times the yearly rent or something? The nama property release will reduce prices but nama (not the government) are no fools, they will sell off the properties slowly I reckon.

Average rule of thumb quoted is 14 x annual rent. IMO there's a long way to go before we're at bottom.

I wouldn't buy any apartment in Dublin for more than €150k.

OP - you have nothing to lose but everything to win if you continue to wait and see.

kmac20in

Many thanks guys for yere input/insight into this.

I'm almost at the stage to begin the initial bidding/bargaining for apartments with estate agents and its the false reflection of the true market value for apartments that's making unsure what to start off at. 14 x annual rent for my rented apartment in D6 at the moment would make it 150k but there is no way it would be sold for that, definitely a lot dearer and that's most likely because of location.
I suppose my biggest fear would be to give a bidding price that would be laughed out the door by estate agents, as in I would think 200k for a 300k two bedroom apartment.

heybaby

While i can understand your desire to get your own place i think it would be folly to purchase right now. We havent seen the full impact of mama acquired properties hitting the market yet and when ecb interest rates increase by a minimum of 1% which will be passed onto irish mortgage holders you will see an increase in defaults and further downward pressure on house prices.

It will cost you nothing to sit and wait, the very fact that you are unsure about what level to start bidding at gives me the impression that you dont really understand the forces at play.

It is very likely that properties, even those in south dublin will continue to fall in price, the longer you wait the more money you will save yourself both in terms of the sale price and the mortgage repayments, even if there is an increase in interest rates in the interim. Sit and Wait, be patient.

randombar

gurramok wrote: »

Rents where I am have stabilised for the past year due to Rent allowance as well as a large employer in the region. (Google), thats D4/D2 in the Docklands southside. They have not risen nor fallen in this small area. Maybe other areas have risen, I do not know as I do not know where Mount St Annes is for example

On mortgages, thats a bit of a half myth. Figures from the Banking Federation show that buyers of all sorts are still getting mortgages, its the numbers thats getting them that are down. Thats sustainability for future numbers to base on in my opinion rather than mania numbers of the bubble years which will never return for a generation at least as the people getting mortgages now are the prudent ones not ones with no saving history for example.(100% mortgage types).

For the true price of apts in South Dublin, they have not reached it yet. Just have a look at lovely Sandyford, still asking ridiculous prices and not shifting. The sooner Nama firesales all the vacant apts in Sth Dublin and with the push of a non-vested interest based new govt, then we'll know the true prices.

Dont really think the mortgages thing is a myth.

The banks can make the numbers look like what they want, i.e. providing letters of offer but making it really difficult, near impossible to check off all the conditions so their figures show x amount of mortgages being offered but how many people can actually draw down is a different story.

For example, my girlfriend and I, building a house, looking for 200K, had 100K of savings and redundancy and both of us working could barely get the 200K (my dad had to go guarantor), that was with BOI, according to the valuers etc. AIB are just not giving out mortgages in Cork at the moment.

Obviously there are still some crazy people out there still clinging on to their crazy values but I reckon a two bed apartment in the likes of Mount St Annes (sorry to go back to it but I lived in 3 different apartments there) should probably be worth about 200 - 250

randombar

ntlbell wrote: »

You and your friends noticing something != majority of Ireland.

In the last daft report the "worst" or "best" depending on what side of the fence you're on was a leveling off. Yes less banks are lending but the supply of rented property to the demand is just not there. The ESRI estimate 50k people to leave the country this year alone, which will also have a huge affect on the demand.

If an average is leveling off that means some are on the rise while others are in decline.

50k leaving but what about the people who have to foreclose etc (lots more this year) they will need houses to rent.

The supply to demand is not there all right when you take the country as a whole but when I was looking for a place in south dublin last year I found there was more than enough demand and not too many places available.

ntlbell wrote: »

I used houses as an example, so if the average 3 bed house is at 90-120k are you suggesting apartments in the same area will be more exspensive? that doesn't make any sense.

Do you really think you will be able to buy a decent 3 bed house in D2 or D4 for 120K????

oflahero

GaryCocs wrote: »

First of all I don't think you're right saying rents in the majority of areas in Ireland are continuing to drop, My friends and I have actually seen rents in Dublin actually starting to rise again due to the lack of mortgages being granted.

I usually see this in the weeks following a DAFT report that says anything other than 'rents have dropped like a stone'. Showing signs of stabilization... levelling off... approaching value... anything like this and there's a spike in the askings as if this were taken to mean '2006 is here again'. This lasts for a month or so as the gaffs languish in the ads, until a more competitively-priced offering gets posted and reality kicks in again.

OP, the non-reliable and anecdotal conventional wisdom has it that completions are happening at 10-15% below asking. If you accept that, you'll know where to start offering. That said, I don't see the attraction in jumping in now and watching my hard-fought deposit get wiped out by further drops in a matter of months.

Idbatterim

i live in D14 and work in D.6 so am familiar with the areas you are talking about. The price of a 2 bed apt in these areas, compared to a house is a joke. I hope you have lived in an apartment before and are not going in blind. You realise that you will now be paying stamp duty is a FTB? also management fees? etc etc etc. I was looking at houses and apartments in the D14 area the other night, and the houses make the apartments look like fairly crap value! see below

http://www.daft.ie/searchsale.daft?id=545146
http://www.daft.ie/searchsale.daft?id=564141
http://www.daft.ie/searchsale.daft?id=566615

Jo King

kmac20in wrote: »

Hi,


So for example if a 2 bedroom apt is advertised at 300k would 250k be a realistic initial bid?

That is the wrong approach. An apartment might be advertised at 300k because the owner can't get his head around the fact that the market has tanked and it is really worth 200k.
On the other hand it might be worth 325k but advertised at 300k because the owner wants a quick sale. .

windsurfer99ie

Theboinkmaster wrote: »

Average rule of thumb quoted is 14 x annual rent. IMO there's a long way to go before we're at bottom.

I wouldn't buy any apartment in Dublin for more than €150k.

OP - you have nothing to lose but everything to win if you continue to wait and see.

I have never seen this 14 x annual rent approach and was going to post about my approach, which is based on a 7% return on capital (e.g. if you expect the property to yield €7,000 pa rent then it's underlying value is around €100,000). I now realise that this is the same as 14 x annual rent !

ntlbell

GaryCocs wrote: »

If an average is leveling off that means some are on the rise while others are in decline.

It wasn't an average, everywhere was in decline, bar a small number that leveled off.

GaryCocs wrote: »

50k leaving but what about the people who have to foreclose etc (lots more this year) they will need houses to rent.

I'm not sure how this works? the rental supply which can you see is growing all the time, the demand is not there, hundreds of thousands have left the country in the last number of years we can't keep filling that gap. (not to mention, we're still actually building houses)

GaryCocs wrote: »

The supply to demand is not there all right when you take the country as a whole but when I was looking for a place in south dublin last year I found there was more than enough demand and not too many places available.

Really? what area exactly in south dublin? I bet if we look now we can find plenty pretty much anywhere in dublin. and if not in a very specific area, very close to it

GaryCocs wrote: »

Do you really think you will be able to buy a decent 3 bed house in D2 or D4 for 120K????

As I said, I have no idea how low they will go, it's impossible to say, but the indicators are not looking good.

gurramok

GaryCocs wrote: »

Dont really think the mortgages thing is a myth.

The banks can make the numbers look like what they want, i.e. providing letters of offer but making it really difficult, near impossible to check off all the conditions so their figures show x amount of mortgages being offered but how many people can actually draw down is a different story.

For example, my girlfriend and I, building a house, looking for 200K, had 100K of savings and redundancy and both of us working could barely get the 200K (my dad had to go guarantor), that was with BOI, according to the valuers etc. AIB are just not giving out mortgages in Cork at the moment.

Obviously there are still some crazy people out there still clinging on to their crazy values but I reckon a two bed apartment in the likes of Mount St Annes (sorry to go back to it but I lived in 3 different apartments there) should probably be worth about 200 - 250

Its based on mortgage drawdowns, nothing to do with letters of offer. They are actual mortgages lended out. Whats happening is the refusal area is that people who have no record of savings, no secure employment and have outstanding debts like car loans are being refused mortgages of their wish. Thats a good thing as it shows prudence on the banks side.

randombar

gurramok wrote: »

Its based on mortgage drawdowns, nothing to do with letters of offer. They are actual mortgages lended out. Whats happening is the refusal area is that people who have no record of savings, no secure employment and have outstanding debts like car loans are being refused mortgages of their wish. Thats a good thing as it shows prudence on the banks side.

Trust me, I'm in the middle of this at the moment.

100K savings, part of it regular, no loans, no credit cards, 2 secure jobs and we barely got 200K

A few of my friends are in this situation too and finding it very tough, I agree with prudence but at this stage they've gone from one extreme to the other.

randombar

ntlbell wrote: »

I'm not sure how this works? the rental supply which can you see is growing all the time, the demand is not there, hundreds of thousands have left the country in the last number of years we can't keep filling that gap. (not to mention, we're still actually building houses)

We are?? Don't see to many housing estates or apartment blocks being built in Cork or Dublin?

ntlbell wrote: »

Really? what area exactly in south dublin? I bet if we look now we can find plenty pretty much anywhere in dublin. and if not in a very specific area, very close to it

Terenure, templeogue, harolds cross, was looking for a two bed or about 1000 was very surprised with the lack of affordable apartments or houses, this was last year, had to go up to 1100 to get something half decent.

gurramok

GaryCocs wrote: »

Trust me, I'm in the middle of this at the moment.

100K savings, part of it regular, no loans, no credit cards, 2 secure jobs and we barely got 200K

A few of my friends are in this situation too and finding it very tough, I agree with prudence but at this stage they've gone from one extreme to the other.

Did they give any particular reason for refusal? Having 100k in the bank when applying for a mortgage of 200k joint, there has to be a reason for either the refusal or the reduced amount you(ye) expected.You had also mentioned "redundancy".

Also, as in other thread, a work colleague of mine just got a 160k mortgage as a IT contractor for 6 yrs. Thats just an example for 2011

randombar

Finally got it in the end but Dad had to go guarantor. No real reasons given, would have gotten 160 without much hassle I'd say but we were looking for 220, just crazy to go from ringing me offering one (2 years ago got that phone call) to the complete opposite, that's BOI, AIB are supposed to be worse.

Got a bit of "redundancy" from Ericsson a couple of years back but I was delighted with that, steady job since etc. etc.

P.S. Sorry for thread stealing!!!

Treehouse72

Don't think it's been mentioned, but there were recent changes in the loan-to-value offered on 1-bed apartments in Dublin by BoI and ICS to 80% and 75% respectively.

http://www.irishtimes.com/newspaper/ireland/2010/1111/1224283089638.html

So, for a €250,000 apartment you'd need €50,000 deposit and would be borrowing €200,000 from BoI. ICS would be more stringent again.

I don't know if these are the latest figures on LTV, but if not the situation has only tightened since then.

So the question is how many people looking to borrow €200,000 for a 1-bed apartment have €50,000 saved? I would suggest hardly any.

gonedrinking

Treehouse72 wrote: »

Don't think it's been mentioned, but there were recent changes in the loan-to-value offered on 1-bed apartments in Dublin by BoI and ICS to 80% and 75% respectively.

http://www.irishtimes.com/newspaper/ireland/2010/1111/1224283089638.html

So, for a €250,000 apartment you'd need €50,000 deposit and would be borrowing €200,000 from BoI. ICS would be more stringent again.

I don't know if these are the latest figures on LTV, but if not the situation has only tightened since then.

So the question is how many people looking to borrow €200,000 for a 1-bed apartment have €50,000 saved? I would suggest hardly any.

Just read that article. While banks are making it more difficult for people buying 1 bedroom apartments (which is sensible), they are actually making it easier for people buying properties over 550k to get a loan, while properties costing up to 550K will continue to have a 92 per cent LTV rate. Absolutely incredible, have banks learnt absolutely nothing from the current crises? Heres the quote in the article:

"On properties costing up to €550,000, Bank of Ireland will continue to lend up to 92 per cent LTV; the equivalent figure for ICS is 90 per cent. First-time buyers and those trading up who can afford a property costing €550,000- €750,000 will benefit from an increase in LTV ratio at both institutions from 75 per cent to 85 per cent.
On properties costing more than €750,000, the ICS will lend up to 75 per cent of the value, up from 65 per cent."

ntlbell

GaryCocs wrote: »

We are?? Don't see to many housing estates or apartment blocks being built in Cork or Dublin?

You seem to have this weird outlook on life, if you or your friends don't see it, it's not happening, of course we're still building homes, obviously not at the rate we were but we are.

GaryCocs wrote: »

Terenure, templeogue, harolds cross, was looking for a two bed or about 1000 was very surprised with the lack of affordable apartments or houses, this was last year, had to go up to 1100 to get something half decent.

As far as i know during the boom times there wasn't a lot of apartment blocks built in places like templeogue/terenure so it's not much of a suprise that there's not a huge amount for lease, but this is nearly always true for those areas if you're tied down to a very specific type of place. but for places like harlodscross you can get a 2 bed apartment for under 800e

ntlbell

Treehouse72 wrote: »

So the question is how many people looking to borrow €200,000 for a 1-bed apartment have €50,000 saved? I would suggest hardly any.

Right, and they'll often claim they can't afford to save 50k how do they expect to be able to pay back 200k?

randombar

ntlbell wrote: »

You seem to have this weird outlook on life, if you or your friends don't see it, it's not happening, of course we're still building homes, obviously not at the rate we were but we are.

Wouldn't really say this is an outlook on life but ya I would go on what I see and read about my local area or what my friends see and read about in their local areas. I am building myself and a couple of my friends are too (which will do nothing to the rental market as we are moving from family home to new house) but the building you are referring to is the large development projects for housing estates and apartment blocks you claim are still going on which will widen the supply/demand gap. I haven't come across one new one in the past year, I also haven't come across too many existing ones that are actually being finished. Obviously I am only talking about Cork and Dublin here as I have no experience or knowledge of other areas.

ntlbell wrote: »

As far as i know during the boom times there wasn't a lot of apartment blocks built in places like templeogue/terenure so it's not much of a suprise that there's not a huge amount for lease, but this is nearly always true for those areas if you're tied down to a very specific type of place. but for places like harlodscross you can get a 2 bed apartment for under 800e

http://www.daft.ie/searchrental.daft?search=1&s[cc_id]=ct1&s[a_id]=238&s[mnp]=&s[mxp]=&s[bd_no]=2&s[search_type]=rental&s[furn]=&s[refreshmap]=1&offset=0&limit=10&search_type=rental&offset=10&fr=default

Averaging at 980 euro

Looked there too back in the day, lot of the cheaper places were actually kimmage (nothing wrong with kimmage, we just wanted closer to town)

ntlbell

GaryCocs wrote: »

Wouldn't really say this is an outlook on life but ya I would go on what I see and read about my local area or what my friends see and read about in their local areas. I am building myself and a couple of my friends are too (which will do nothing to the rental market as we are moving from family home to new house) but the building you are referring to is the large development projects for housing estates and apartment blocks you claim are still going on which will widen the supply/demand gap. I haven't come across one new one in the past year, I also haven't come across too many existing ones that are actually being finished. Obviously I am only talking about Cork and Dublin here as I have no experience or knowledge of other areas.





http://www.daft.ie/searchrental.daft?search=1&s[cc_id]=ct1&s[a_id]=238&s[mnp]=&s[mxp]=&s[bd_no]=2&s[search_type]=rental&s[furn]=&s[refreshmap]=1&offset=0&limit=10&search_type=rental&offset=10&fr=default

Averaging at 980 euro

Looked there too back in the day, lot of the cheaper places were actually kimmage (nothing wrong with kimmage, we just wanted closer to town)

[/quote]

Your showing a link with a number of apartments in haroldscross for under 800e which you stated when you looked you couldnt find anything under 1k.

i don't really see your point in all of the last few posts. can we clear it up

are you suggesting rent drops are going to stop in the very near future?

becase i don't really know where we're going with this thread.

people have been posting since around nov 06 suggesting prices are about to stbalise etc here we are nearly 5 years later and every month or so someone else comes along and states it.

I don't see and i've stated the reasons why in previous posts.

I guess time will tell

randombar

The link had average of just under 1000

I'm suggesting that rents in certain areas have actually stopped going down and in certain areas will start to rise again, for a number of reasons discussed earlier.

From around Nov 06 people have been talking about prices stabalizing, i.e. property prices not rents, they do not these days go hand in hand.

I do believe property prices will decrease, but not as much in Dublin as other areas, I believe the rate of decline property prices in Dublin will slow down and stop while they will continue to fall in other areas for another while.

randombar

The link had average of just under 1000

I'm suggesting that rents in certain areas have actually stopped going down and in certain areas will start to rise again, for a number of reasons discussed earlier.

From around Nov 06 people have been talking about prices stabalizing, i.e. property prices not rents, they do not these days go hand in hand.

I do believe property prices will decrease, but not as much in Dublin as other areas, I believe the rate of decline property prices in Dublin will slow down and stop while they will continue to fall in other areas for another while.