Property Prices

rodento

Will a greek default lead to another major drop in house prices

not yet

rodento wrote: »

Will a greek default lead to another major drop in house prices

I really don't think people give a fcuk anymore, I know I don't.

What's the difference being 100 or 150k in negative equity. Most people at this stage are just trying to pay the bills and stay afloat.

liammur

No, we're very close to the bottom now.

rodento

If you think back to the property prices in the mid/late eighties, I'd say we are nowhere near the bottom

FreudianSlippers

rodento wrote: »

If you thick back to the property prices in the mid/late eighties, I'd say we are nowhere near the bottom

Ignoring inflation I suppose.

MadsL

liammur wrote: »

No, we're very close to the bottom now.

Based on what?

washman3

liammur wrote: »

No, we're very close to the bottom now.

So say the auctioneers,bankers,politicans and all the other various vested interests. And they are always correct.!! so we must be very close to the bottom. :D:D

rodento

If you take the old mortgage rule of three times your salary, prices are still way to high

spagboll

More a political issue than an economic one, either way it will happen.

The Euro is in incredibly bad shape. All that is certain is that house prices will continue to fall, and your savings will be worth less than they are now.

leonidas83

I wouldnt say major but issues like the Greek debt crisis do nothing for consumer confidence here at home and that along with the banks reluctance to give out mortgages continually ebbs away at house prices with the more owners that get desperate

Crazy Horse 6

I don't think we are anywhere near the bottom. Unemployment is still increasing at an alarming rate and the banks are still not lending to anyone lucky enough to be in a position to have savings. A lot of delusion out there in our nation i'm afraid.

bbam

Crazy Horse 6 wrote: »

I don't think we are anywhere near the bottom. Unemployment is still increasing at an alarming rate and the banks are still not lending to anyone lucky enough to be in a position to have savings. A lot of delusion out there in our nation i'm afraid.

Spot on...
I doubt prices will stop falling until other factors cause more stabilization first..With more and more out of work and those working getting less and less pay I couldn't see how prices couldn't slip further...

I'd more imagine there will be a huge gulf round the country... Poorer less desirable counties/areas will continue to fall while I'd imagine some of the major urban centres where employment is may bottom out first, eventually..

I'd give my own county of Cavan as an example... I'd say there is no end in sight to the slide in property prices here..

doc_17

rodento wrote: »

If you take the old mortgage rule of three times your salary, prices are still way to high

remind me again....is that 3 times gross or net income?

washman3

doc_17 wrote: »

remind me again....is that 3 times gross or net income?

Another common formula thats usually applied is 14 times the annual rent for the particular property.
But take into account that Government rent allowance will probably be at least halved in the forthcoming budget(budgets) and we get a better picture of where prices are heading.
Rent allowance has so far been untouched thanks to the various lobbyists and vested interests to keep property prices artifically high, but the likes of ALLSOPS and other firesale auctions,coupled with the TROIKA's insistance that NAMA starts selling assets are putting enermous pressure to alter this.

antoobrien

I heard some time in the past year that the historical average was about 5 times the average industrial wage (this would have been before the apartment boom) - sorry no source.

The current average is somewhere about 35k, that would put the "normal" price at about €175k-€185k. Given that the current average asking price is about 215k we've probably got a bit to go yet.

MadsL

http://www.newstalk.ie/2011/news/house-prices-see-fall-by-over-14/

...and freefall it seems.

Not at the bottom yet by a long way...

Senna

antoobrien wrote: »

I heard some time in the past year that the historical average was about 5 times the average industrial wage (this would have been before the apartment boom) - sorry no source.

The current average is somewhere about 35k, that would put the "normal" price at about €175k-€185k. Given that the current average asking price is about 215k we've probably got a bit to go yet.

It was 35k back in 2008, i'd guess its lower now, (coupled with a huge amount of job insecurity) and just as the housing market overshot (by a huge amount) on the way up, it will overshoot by a huge amount going down.
Assuming we dont have massive inflation, i cant see any reason for the average house price (current just over 200k) dropping down to around 120k or lower.
We are years away from anything like a bottom to the market and it'll be years after that before there is even inflation growth.

washman3

David McWilliams makes a useful point. he takes an example of Oranmore village in Galway where there is a huge overhang of unsold 3 bed semis.
Many of these semis were built on a speculative basis, ie for rent purposes
Take rent in Oranmore at €600 per month,thats being extremely generous given the amount of "empties"
So its basic maths really, 600 x 12(months) x 14 (years rent) is a little over €100k. And thats in the slim hope that prices will not overshoot on the way down like they overshot up during the "boom"
Asking prices for these would have at least been €250-€280k around 6 yrs ago. That "formula" was based on the crazy prices these speculators paid for the land.
Different areas of the country will vary as will house type but this is a general indicator of where we are headed.
The days for obtaining a mortgage for 8-10 times salary are long gone,and will not return. 3-4 times would be considered extremely lucky.

catbear

Follow collapso in your local area. When it records three months of mostly price increases then you've probably hit some kind of bottom.
http://www.collapso.net/search.html
Personally I think it's a long way off. While there is inflation in energy costs, that's more the developing world catching up and it won't have a huge impact on our oversupply of property.

MadsL

The days for obtaining a mortgage for 8-10 times salary are long gone

Why would anyone in their right mind take out a mortgage for 8-10 times salary??? :eek:

catbear

MadsL wrote: »

Why would anyone in their right mind take out a mortgage for 8-10 times salary??? :eek:

A few years ago there were a few people muttering on about how they weren't making any more land and that if ye didn't get on some ladder then you were a right langer or something......

washman3

MadsL wrote: »

Why would anyone in their right mind take out a mortgage for 8-10 times salary??? :eek:

Given the opportunity, you may well be surprised.
They did during the "boom". Even went 10-12 times salary.
The banks were willing.!!

Personally, im sorry i didnt get one for 20 times salary and moan to Joe Duffy every day that i've been wronged in the hope of getting "forgiveness"

washman3

catbear wrote: »

A few years ago there were a few people muttering on about how they weren't making any more land and that if ye didn't get on some ladder then you were a right langer or something......

Cant stop laughing at this....:):):):):)

You're dead right of course.
Remember Donie Cassidy of FF and cathaoirleach of the Seanad making a pitch to sell his own houses in the Seanad. incredible..!!!

MadsL

washman3 wrote: »

Cant stop laughing at this....:):):):):)

You're dead right of course.
Remember Donie Cassidy of FF and cathaoirleach of the Seanad making a pitch to sell his own houses in the Seanad. incredible..!!!

Any chance you could dig that out of www.kildarestreet.ie - cheers

washman3

MadsL wrote: »

Any chance you could dig that out of www.kildarestreet.ie - cheers

Just watched it on youtube.! what a brass neck.
you just have to watch it, and dont throw your computer against the wall.
I dont know how to post the link here,maybe someboby reading can.

its, Donie Cassidy FF speaking on prices... on youtube. Thanks

MadsL

https://www.youtube.com/watch?v=7RaNqMzVIE0

MadsL

Sure, you would have lost just €100k following his advice...

Here's his development in Mullingar. 2008 = €260k, now €160k. Wánker of the highest order...

http://www.daft.ie/searchsale.daft?id=459463

take everything

MadsL wrote: »

https://www.youtube.com/watch?v=7RaNqMzVIE0

Oh my God.
It would be funny if it weren't so appallingly stupid.

books4sale

Fair play for digging that one out there. Must have missed it at the time.

They never stop do they...FFailers!

FreudianSlippers

Of course the big point people seem to be missing here is that the question is not how much of a mortgage can you afford, it's how much can you afford depending on your down payment.

You can afford a €5mil home if you can put down €1mil and you make €750,000 a year.
It's all relative.

rodento

rodento wrote: »

If you take the old mortgage rule of three times your salary, prices are still way to high

Depends on your salary really, people forget that the low paid traditionally got social housing, that's how there are corporation estates in every town and city in the country.

MadsL

Two words.

100% Mortgage.

washman3

FreudianSlippers wrote: »

Of course the big point people seem to be missing here is that the question is not how much of a mortgage can you afford, it's how much can you afford depending on your down payment.

You can afford a €5mil home if you can put down €1mil and you make €750,000 a year.
It's all relative.

Can you go into greater detail on this?
just checked daft.ie website: they have 19 houses with an asking price of over €5 million and 30,0017 three bed houses.
We certainly know which of these 2 groups of house-seekers read boards.ie

FreudianSlippers

washman3 wrote: »

Can you go into greater detail on this?
just checked daft.ie website: they have 19 houses with an asking price of over €5 million and 30,0017 three bed houses.
We certainly know which of these 2 groups of house-seekers read boards.ie

What do you mean? All I'm saying is that putting a significant down payment on a house and you make enough money to pay all of your bills and living costs as well as make your mortgage repayments and save a good percentage of your income, then you can buy as much of a house as you want.

washman3

FreudianSlippers wrote: »

What do you mean? All I'm saying is that putting a significant down payment on a house and you make enough money to pay all of your bills and living costs as well as make your mortgage repayments and save a good percentage of your income, then you can buy as much of a house as you want.

Yes, quite true. though many people simply dont know where they stand now with job security and how the forthcoming budgets will effect their financial situation.
My point was that the €5 million house people have not or will not be affected by stealth taxes etc. They simply absorb these extra charges with little difficulty.
The OPs query was; do we think property prices will fall more.
General consensus is that they will.

jmayo

rodento wrote: »

Will a greek default lead to another major drop in house prices

A full Greek unorderly default will lead to much more than a drop in house prices.
The ar** would fall out of most things.
The one to worry about coming down the tracks is Italy and Spain.
One of these goes and all bets are off.

catbear wrote: »

A few years ago there were a few people muttering on about how they weren't making any more land and that if ye didn't get on some ladder then you were a right langer or something......

Thank God he had given me enough sense to be one of those langers

FreudianSlippers wrote: »

What do you mean? All I'm saying is that putting a significant down payment on a house and you make enough money to pay all of your bills and living costs as well as make your mortgage repayments and save a good percentage of your income, then you can buy as much of a house as you want.

Doh.
Thanks for explaining the obvious but you neglected to mention that most buyers are not sitting on big wads of cash and are not in guaranteed jobs anymore.

BTW I see you are mod of Legal Discussion so would that make you a solicitor or some such, which might explain your rosey outlook ?

McTigs

Greek default or not we are way off the bottom. Every which way i look at it points downwards.

Essentially to reach the bottom you need demand. That demand will come from three different types of buyer, FTBs, Trader uppers, and Investors.

A huge proportion of prospective FTBs are now living in Australia and Canada and i imagine the planes will continue to remain fuller on the way out than the way in for quite some time. Prospective Trader uppers are largely stuck in negative equity and can't move. Investors aren't getting involved cos the rental yield (about 4% at todays prices) just isn't there to justify it and they can hardly expect any capital appreciation beyond inflation when it does bottom out eventually. So that just leaves a few cash rich types you see at the Allsop auctions, not enough to swing the market by a long shot.

The banks will give any excuse not to give you a mortgage, those of us lucky enough to be still working have either taken paycuts or are paying higher taxes or both and so it will continue, and of course there is, all the while, a massive inventory of empty gaffs.

Formulas using rental yeilds and multipliers of salary all show property to be over priced so couple that with the above and there is just no other conclusion that can be drawn. End of. That's it and that's all.

Scofflaw

...but, but, everything's fine! The IT has a piece on how smarter people than you are secretly buying up the nice houses: http://www.irishtimes.com/newspaper/property/2011/1027/1224306557878.html?via=mr

cordially,
Scofflaw

Some of the ads on daft.ie would have you thinking everything is back to 2006. Pretty delusional people out there...

meditraitor

antoobrien wrote: »

I heard some time in the past year that the historical average was about 5 times the average industrial wage (this would have been before the apartment boom) - sorry no source.

The current average is somewhere about 35k, that would put the "normal" price at about €175k-€185k. Given that the current average asking price is about 215k we've probably got a bit to go yet.

I think the average industrial wage has lowered in the last 2 years, can find a link though. Closer to 30K now.

meditraitor

Scofflaw wrote: »

...but, but, everything's fine! The IT has a piece on how smarter people than you are secretly buying up the nice houses: http://www.irishtimes.com/newspaper/property/2011/1027/1224306557878.html?via=mr

cordially,
Scofflaw

That piece is brilliant, the writer must have made some money working in the advertising department during the boom.

“Buying now stacks up financially,” says Ronan O’Hara of Savills.

Peter Kenny of Colliers has a handful of clients who are on a waiting list for the super A-list streets. “They are cash rich and looking for quality family homes in good locations. One has €10 million to spend. There are several others in the €2 million to €4 million bracket.”

These trophy homehunters want period redbricks, says David Byrne of Lisney. The houses change hands quietly, with a lot of the €1 million-plus transactions being done off-market, says O’Hara. It’s a small market but he estimates as much as 30 per cent of business done is below the radar. “It suits buyers who don’t want to be seen to be spending. And it suits the vendors who may not wish to sell in the first place.”

But while €3 million goes a long way in the current market, there are a handful of roads where you’ll have to pay more. Entry prices are more or less determined by the most recent sale on a road (although with few auctions and no property price register, this can be difficult to find out.)

Thus entry level on Shrewsbury Road is set at the €7 million paid earlier this year for Derek Quinlan’s house Derrymore, 6 Shrewsbury Road. Quinlan’s properties at 1 and 3 Shrewsbury are jointly on the market through agent Sherry FitzGerald for €7.5 million.

Meanwhile entry level on nearby Ailesbury Road is €2.35 million, following the sale of number 35 at an Allsop/Space auction in July, which made that price.

Elsewhere in Dublin 4, Park Avenue in Sandymount is a prestigious address where John O’Sullivan of Lisney estimates you can now buy one of its smaller, three-bed end-of-terrace houses for just over €1 million. He sold 37 Park Avenue at auction in May for €1.705 million. “The catch is that they rarely come up,” he says.

On the other side of the city, The Baily in Howth is a top drawer address where Windward, a five-bedroom house on Ceannchor Road, is for sale at €2.5 million through Property Team JB Kelly. However, Gallagher Quigley has Lonethorn, a detached home on a teardrop-shaped site with good views, for sale for €995,000.

In Sutton, entry level is about €1.4 million on Claremont Road, home to U2’s Larry Mullen. Joe Kelly of JB Kelly recently sold Treborth East for close to its asking price of €1.4 million, while Savills is seeking €1.5 million for the three-bedroom Taobh Coille at 21a Claremont Road.

In Malahide, €1.25 million appears to be the entry level price on Church Road, the top period home address. Number 5 Carlisle Terrace, Church Road, is listed as sale agreed on Myhome.ie – it had a price of €1.25 million. Number 2, Windsor Terrace, just off Church Road, is also sale agreed for in the region of €1.5 million through agents O’Farrell Cleere.

Entry level on Castleknock Road – from the Phoenix Park gates up to College Road – is Dublin 15’s so-called golden mile, says Lisney’s Darren Chambers.

Savills’ Ronan O’Driscoll estimates entry level on this section of the road to be €800,000.

Prices on Seafield Road in Clontarf, Dublin 3, start from around €700,000. Savills sold a four-bedroom, semi-detached fixer-upper for just under €700,00 in mid-August while in March, Gunne sold number 39, a three-bed new-build semi, for about €700,000.

Back on the southside, Avoca Avenue in Blackrock trumps other roads for exclusivity. Dunnottar, at 7 Avoca Avenue, sold for well over its €795,000 price says Roseanne deVere-Hunt of Knight Frank. It needed refurbishment.

In Foxrock, Dublin 18, Daphne Kaye lists Westminster Road as a choice address, where entry level – in a development like Cairn Hill, off Westminster – is around €775,000. Savills is seeking this for a four-bed detached house. Meanwhile Hazelmere, a large modern six-bed detached home on Westminster Road, is for sale through Lisney for €2.95 million.

Vico Road in Dalkey (where Bono lives) is another top address – and it’s difficult to get anything for less than €2 million there says Rosie Mulvany of Sherry FitzGerald.

Knight Frank is looking for €3.25 million for Ravello, Krish Naidoo’s house on Sorrento Heights, overlooking Vico Road.

As tenders close, will Walford still be Ireland's priciest pad?

.

Did the hard copy have a heading

ADVERTISEMENT

I wonder

antoobrien

meditraitor wrote: »

I think the average industrial wage has lowered in the last 2 years, can find a link though. Closer to 30K now.

According to the CSO it's just under 36k (€687.24 * 52 weeks=€35,736.48)

Sleepy

Scofflaw wrote: »

...but, but, everything's fine! The IT has a piece on how smarter people than you are secretly buying up the nice houses: http://www.irishtimes.com/newspaper/property/2011/1027/1224306557878.html?via=mr

cordially,
Scofflaw

It's a completely different world at those price levels though. If I won the euro-millions I'm sure I'd buy a house: because I'd have so much money I simply wouldn't care that I was over-paying.

Hayte

The Irish Times property supplement isn't something you ever want to read if you want to maintain even a tenuous link to reality. Theres really only a couple hundred people in the entire country that can afford anything they consider "a bargain".

Villa05

antoobrien wrote: »

According to the CSO it's just under 36k (€687.24 * 52 weeks=€35,736.48)

Nama may not be putting a floor on house prices, but doing its best to put a floor on the average wage

ianuss

Villa05 wrote: »

Nama may not be putting a floor on house prices, but doing its best to put a floor on the average wage

Average wage in NAMA is €100k.

douglashyde

ianuss wrote: »

Average wage in NAMA is €100k.

Maybe we could get some graduates in on 30k a year to do the job; that'll fix it.

washman3

MadsL wrote: »

Sure, you would have lost just €100k following his advice...

Here's his development in Mullingar. 2008 = €260k, now €160k. Wánker of the highest order...

http://www.daft.ie/searchsale.daft?id=459463

This chancer should be taken to task on this. this was a deliberate ploy to con unsuspecting house buyers into paying way over the odds. There is no doubt in my mind that he knew the game was up as he delivered that speech in the Seanad.
Those houses in Mullingar now have an asking price of €160k, still overvalued by €40-60k
Take a look at another TD on youtube, its Frank Fahey on Newstalk 7th July 2010. Fahey also has a large property portfolio.

rodento

Villa05 wrote: »

Nama may not be putting a floor on house prices, but doing its best to put a floor on the average wage

How can it not be creating a floor if its not releasing its massive property portfolio