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Is property supply really to big and demand to small.
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How do you know these figures of "half a million 25-34 year-olds (Protential FTB) "
Where do you get the assumption of " I would assume the majority of these 25-34 year-olds are still living with parents or Renting rooms ect."
Sorry, but you have to be questioned to the source of your stats on this segment as potential FTB's(prudent ones for the banks) and their current living arrangements.
From census reports 2011.
They may not all be FTB or Living at home ect.
However this age group are the people who with with more finance available and more confidence . Would be active in the property market.
The proprety market relies on mortgage approval.banks issued about 13,000 mortgages in 2011 and 25% of all home sales are now cash .
I would love to know how many was declined (protential FTB) or had been approved, but have no confidence to buy right now.0 -
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Marcanthony wrote: »Wages 25k or more for a single person can create activity in the market. If finance is more available and confidence increases in the market.
So the two things you don't have, and are unlikely to have for a number of years.0 -
So the two things you don't have, and are unlikely to have for a number of years.
Yes. However
The Government can do a lot to sort this out. By providing info on any possible future property tax increases and by confiming by how much and publishing sale agreed prices and by changing how banks fund mortgages.
This will remove the lack of confidence and allow more finance be available.Problem solved!
So are supply of properties in the right location really to big or is the demand to buy just to small?0 -
I'm one of these, I am in a rental in a rural area. Houses in my estate are still asking 180k, a rent multiple of € 550 p.m. (r.s. max) x 150 - 200 means the value of these units should be between € 82k to € 104k. Add to that that they are poorly finished with little insulation means that I would probably need to put in another 20k-30k to make it a long term liveable home. There are 130+ units for sale in the small town where I live, and believe me this is not an anomoly, many small towns are in the same situation. I firmly believe these sort of units will be available for 60k-90k in the next few years once sellers realise that no FTB fairy is going to rescue them from their bad investment. I am very lucky to be in good and reasonably secure employment and could probably get a mortgage if I looked around, but not at current prices. Obviosly I am talking about rural Ireland however, and the example above has no bearing in Dublin or Cork. Rural Ireland is awash with shyte properties thrown up by apprentices during the boom which have very little value, these place will cause major headaches for owners into the future and I for one will be keeping my money in my pocket for now. Of course the stupid Irish addiction to property will see alot of these rubbish units sold to FTB's when credit becomes available, good luck to them. And on demand vs supply, there is a good demand for decent rental properties at the moment, I was in the market for one a few months back and was appauled by the properties I viewed. All the good properties are already rented, and any that do come up are snapped up straight away. I actually lost a bidding war on one as I felt the price went too high and pulled out.
@ Marcanthony there is no reason that I can see why prices should even stabilise never mind recover, wages are being ground down over time and banks have no money. The only saving grace is that the x-factor / xpose watching FTB demographic who grew up with ballooning house prices are largely financially inept and may just be thick enough to pay over the odds.
Allowing that the average industrial wage at present is approx €690 per week and your rent been €550 per mth. You should (in theory) qualify for a Mortgage to fund this property (@ 15 times its rent value) €99k and would be cheaper than renting.
However you confirm my point. The property is not realistically priced and The property and area you live in fall in to the criteria that are bad investments and most likly will probably never sell. These properties still make up a large number of the satistics of vacant units.
You are correct. Rental properties in good condition and in the right location. Dont be to long on the market and I can give confirmation of that.
The market can stabilise. If you read my last post. I explained how it could stabillise.0 -
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Snakeblood wrote: »So they are housed. It may be temporary shelter, but it is housing.
Temperory . Means ?0 -
Marcanthony wrote: »From census reports 2011.
They may not all be FTB or Living at home ect.
However this age group are the people who with with more finance available and more confidence . Would be active in the property market.
The proprety market relies on mortgage approval.banks issued about 13,000 mortgages in 2011 and 25% of all home sales are now cash .
I would love to know how many was declined (protential FTB) or had been approved, but have no confidence to buy right now.
Provide a link to such census reports. Also provide a link to prove that this age group have the finance available.
You have to agree that the vast majority of FTB's would not have the cash for a cash only home purchase.0 -
I'm in the age 25-35 age group. I have means to buy a house and plan to at some point. However when I do, the house I rent will then be empty. So while I'll take one house off the market, I'll be effectively putting another one back on it. It's a bit of a zero sum game.
There is also a relatively strong possibility that instead of buying a house here I'll emigrate again and buy one elsewhere. Leaving this house empty and not filling another one.0 -
Marcanthony wrote: »...The market can stabilise. If you read my last post. I explained how it could stabillise.
You proposed a fantasy that doesn't exist. You want to buy something, so you're trying to convince yourself.Marcanthony wrote: »W...Is now not the best time to buy?...
...i think there is some great investments out there right now.
We don't know how many Nama properties are going to flood the rental market, RA is reduced, may even reduce again, so its going to effect rents, they may start enforcing Ber Certs, so if you want to rent to buy, you're going to have hard time convincing any bank for a mortgage. You are also want to have a surplus income to cover any shortfall in the rent, if you can't rent, or a tenant doesn't pay for some reason. If you are renting to buy thats probably very unlikely. A bank isn't going to be interested.
If you can put up 50% of the money you might have some hope and have large salart to back it up.0 -
Provide a link to such census reports. Also provide a link to prove that this age group have the finance available.
You have to agree that the vast majority of FTB's would not have the cash for a cash only home purchase.
www.cso.ie and you can google search for yourself.
I can not provide prove this age group has finance. Thats not the point I am making.I state there is half a million 25-34 year-olds and state the majority are in employment and that this is the age group that with more finance available and more confidence would be active in the market.
I agree. Thats why I stated mortgage approval determains sales. However 25% of sales are still cash buys.Due to the fact maybe (finance is harder to obtain) due to certain criteria placed on the banks by the government.0 -
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I'm in the age 25-35 age group. I have means to buy a house and plan to at some point. However when I do, the house I rent will then be empty. So while I'll take one house off the market, I'll be effectively putting another one back on it. It's a bit of a zero sum game.
There is also a relatively strong possibility that instead of buying a house here I'll emigrate again and buy one elsewhere. Leaving this house empty and not filling another one.
The oposite can be said for those you are living in bedsits. With the new legislation been passed or when sons/daughters leave their folks.
The grass is not as green on the other side of the fence. WORLD wide economic problem.0 -
Marcanthony wrote: »The grass is not as green on the other side of the fence. WORLD wide economic problem.
See where I've said emigrate again? I'm well aware of what the world outside Ireland in like.:cool:0 -
You proposed a fantasy that doesn't exist. You want to buy something, so you're trying to convince yourself.
We don't know how many Nama properties are going to flood the rental market, RA is reduced, may even reduce again, so its going to effect rents, they may start enforcing Ber Certs, so if you want to rent to buy, you're going to have hard time convincing any bank for a mortgage. You are also want to have a surplus income to cover any shortfall in the rent, if you can't rent, or a tenant doesn't pay for some reason. If you are renting to buy thats probably very unlikely. A bank isn't going to be interested.
If you can put up 50% of the money you might have some hope and have large salart to back it up.
I do not think what I propose is to much to ask a government to make a few statments and decisions.
Are namas vacant properties not part of the stats that make up the 300,000?
RA will be reviewed at some stage this year. Which will have an effect on rents. However rent values and todays sale prices dont match anyway . Probably help stabillise the market. (15 times rent value).
BER certs are a requirement buying property. Buy from the pick of the crop or use its rating as another bargaining tool.
Peoples finance will always determain their purchasing. Thats why some people will always be in rented accomadation ect.0 -
See where I've said emigrate again? I'm well aware of what the world outside Ireland in like.:cool:
Well if you emigrate again and If you leave the property vacant. Just another unit that may be needed for the rental market going forth.As I said The oposite can be said for those Who are living in bedsits. With the new legislation been passed or when sons/daughters leave their folks.
Best of luck with your travel arrangements and employment prospects and living arrangments.0 -
Marcanthony wrote: »Allowing that the average industrial wage at present is approx €690 per week
I would like to see a well documented and reliable source for that figure please as I sincerely doubt its that high.Marcanthony wrote: »So are supply of properties in the right location really to big or is the demand to buy just to small?
You would seem to be repeatedly asking that question but I'm not sure it really makes a whole lot of sense to me. When considering the supply and demand model I don't think it would be a very good idea to isolate one from the other....Supply will not exist without demand and visa versa. The model is used to determine price. There is certainly supply there and no doubt in my mind that there is demand there. However, the fact that there is so little activity in the market would seem to suggest to me that asking prices are generally too high. I'm not fully sure of the context of your question so I'm not sure if the few lines I wrote are of any relevance.
Also you mention "right location"....as opposed to wrong location? Sorry but "right location" seems very very vague to me. Take totally scummy areas out of it, then there are locations which are run of the mill perhaps, common maybe if you like, strictly average neighbourhoods, generally considered safe enough to live in, notwithstanding that you can be the victim of a crime in a top notch address. There is no doubt in my mind that these properties make up the bulk of properties out there. People will pay a premium for a top notch address. Having said that I think it would be unrealistic to assume that the prices of these more premium homes bears no relevance to the prices of more average homes.
Perhaps you meant "right location" as in nearer to towns and cities, places of higher industry, employment and amenities? Ditto, all other things being equal, people will pay a premium for properties in such locations....again though how much of a premium? They will hardly pay through the nose for such properties when the other option is to commute from areas with much lesser employment but much more affordable homes...we have very much seen this in the past. Its not a massive country. I knew of people commuting from Wexford to Dublin on a daily basis in the mid 2000's and am sure there are areas in between the two locations which could probably be considered back arse of beyond, to coin the phrase. Hardly a sustainable long term scenario but just for the sake of high-lighting my afore mentioned point.0 -
Ouside the issues of a lack of finance available and a lack of confidence in the market. (I gave an opinion on this already) . Another factor playing a big role in properties not selling. Is because a lot of people are under the opinion property is in abundance every where for sale in Ireland .But this is not the case.johndaman66 wrote: »I would like to see a well documented and reliable source for that figure please as I sincerely doubt its that high.
You would seem to be repeatedly asking that question but I'm not sure it really makes a whole lot of sense to me. When considering the supply and demand model I don't think it would be a very good idea to isolate one from the other....Supply will not exist without demand and visa versa. The model is used to determine price. There is certainly supply there and no doubt in my mind that there is demand there. However, the fact that there is so little activity in the market would seem to suggest to me that asking prices are generally too high. I'm not fully sure of the context of your question so I'm not sure if the few lines I wrote are of any relevance.
Also you mention "right location"....as opposed to wrong location? Sorry but "right location" seems very very vague to me. Take totally scummy areas out of it, then there are locations which are run of the mill perhaps, common maybe if you like, strictly average neighbourhoods, generally considered safe enough to live in, notwithstanding that you can be the victim of a crime in a top notch address. There is no doubt in my mind that these properties make up the bulk of properties out there. People will pay a premium for a top notch address. Having said that I think it would be unrealistic to assume that the prices of these more premium homes bears no relevance to the prices of more average homes.
Perhaps you meant "right location" as in nearer to towns and cities, places of higher industry, employment and amenities? Ditto, all other things being equal, people will pay a premium for properties in such locations....again though how much of a premium? They will hardly pay through the nose for such properties when the other option is to commute from areas with much lesser employment but much more affordable homes...we have very much seen this in the past. Its not a massive country. I knew of people commuting from Wexford to Dublin on a daily basis in the mid 2000's and am sure there are areas in between the two locations which could probably be considered back arse of beyond, to coin the phrase. Hardly a sustainable long term scenario but just for the sake of high-lighting my afore mentioned point.
Using Dublin as an example
Only about 2% of properties in the capital are for sale and ghost estates are more of a problem outside Dublin with only about 2% of Dublin properties (mostly apartments) that make up these ghost estates .
The supply in Dublin therefore has a greater demand to be bought or rented than the back arse of beyonds.Asking prices in Dublin are approx 60% of their peak value and a lot more activity is in that market than other areas in Ireland. Yield on property in Dublin city centre for example has risen in the last few years.
So taken into account the property price falls (60% from peak) in Dublin and the increase of yield in Dublin City Center. Would I be Correct to say.Its only a matter of time before Supply will equal demand for properties for sale been purchased as a family home or a buy to let in the Dublin area. Excluding the apartments that make up the ghost estates.(These could be used as local authority housing)
Where as the area another poster mentioned. Will for a long time to come have a supply higher than its demand for sales or rentals.
Supply and demand as a model can not be used for the country as a whole. It will have to be different Categories as Supply and demand will not now or any time soon be on par for sales or rentals in Ireland. Due to the supply been built in the wrong locations in abundance during the boom and making them bad investments due to the fact people just dont want to live there and the population does not match its supply (or even close). Whereas other areas have a supply less than its demand for a home.
Properties in the right location with more finance and confidence will sell eventually and demand for a home will only grow in them locations.
So my original question .Is the supply really to big or the demand to low for sales rather than for homes in the right location ?
We could fill all the vacant properties that are in the right locations at present. But we will not or probably never will sell / rent / fill all the houses in ireland. Supply outbeats demand for buyers in the right location at present. But not for the amount of homes needed.
As for the ghost estates and bad investments . What ever can be used as social houses may aswell be given to the councils and the rest bulldozed and this will help stabillise the market. If this is done. The statistics for vacant units will be a lot,lot less than 300,000 and put a more realistic look on the property market.0 -
http://www.cso.ie/quicktables/GetQuickTables.aspx?FileName=EHQ03.asp&TableName=Earnings+and+Labour+Costs&StatisticalProduct=DB_EHjohndaman66 wrote: »I would like to see a well documented and reliable source for that figure please as I sincerely doubt its that high..0 -
There is money to be made if you have the means to build or refurbish to high quality standards, especially insulation.0
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In my view, there is a pent up demand out there. If banks were to start offering 100% mortgages tomorrow, a large portion would be snapped up (some people never learn). The thing is, this isn't going to happen any time soon, and I pray will never again. Availability of finance is a huge issue. The difficulty in obtaining a mortgage and the need for a deposit will dampen the realisation of the demand. As mortgage offers are continually revised downwards to reflect decreases in take home pay, prices of houses will also need to fall.
Some additional factors influencing the supply/demand dynamic would be:-
A good portion of the market is locked up with negative equity i.e. those who want to sell, can't
- There are people keeping property off the market because they will not get the price that it is "worth". Without any pressure to sell, they'll just sit back and wait. This also includes houses that are on the market but unrealistically priced (effectively not on the market).
- Location - demand for certain areas will be higher than others. Access to local amenities, proximity to jobs etc.
- Uncertainty - job security, future pay vs future mortgage repayments
- Prices are still falling - why catch a falling knife? (principal will be cheaper, overall cost with interest rate changes debateable)
- Wariness - seeing friends and family burned by the bubble.
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In my view, there is a pent up demand out there. If banks were to start offering 100% mortgages tomorrow, a large portion would be snapped up (some people never learn). The thing is, this isn't going to happen any time soon, and I pray will never again. Availability of finance is a huge issue. The difficulty in obtaining a mortgage and the need for a deposit will dampen the realisation of the demand. As mortgage offers are continually revised downwards to reflect decreases in take home pay, prices of houses will also need to fall.
Some additional factors influencing the supply/demand dynamic would be:- A good portion of the market is locked up with negative equity i.e. those who want to sell, can't
- There are people keeping property off the market because they will not get the price that it is "worth". Without any pressure to sell, they'll just sit back and wait. This also includes houses that are on the market but unrealistically priced (effectively not on the market).
- Location - demand for certain areas will be higher than others. Access to local amenities, proximity to jobs etc.
- Uncertainty - job security, future pay vs future mortgage repayments
- Prices are still falling - why catch a falling knife? (principal will be cheaper, overall cost with interest rate changes debateable)
- Wariness - seeing friends and family burned by the bubble.
All your points have valid reasons for property not selling. However the point I am trying to get across is. The properties that are vacant in certain locations can be filled to use as homes.
Its not that the supply outbeats the demand for a home in certain areas. just that it outbeats a buyer.
Some properties in Ireland will never be required for use and may as well be bulldozed.therefore supply and demand does not reflect the country as a whole.0 -
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Marcanthony wrote: »Ouside the issues of a lack of finance available and a lack of confidence in the market. (I gave an opinion on this already) . Another factor playing a big role in properties not selling. Is because a lot of people are under the opinion property is in abundance every where for sale in Ireland .But this is not the case.
Using Dublin as an example
Only about 2% of properties in the capital are for sale and ghost estates are more of a problem outside Dublin with only about 2% of Dublin properties (mostly apartments) that make up these ghost estates .
The supply in Dublin therefore has a greater demand to be bought or rented than the back arse of beyonds.Asking prices in Dublin are approx 60% of their peak value and a lot more activity is in that market than other areas in Ireland. Yield on property in Dublin city centre for example has risen in the last few years.
So taken into account the property price falls (60% from peak) in Dublin and the increase of yield in Dublin City Center. Would I be Correct to say.Its only a matter of time before Supply will equal demand for properties for sale been purchased as a family home or a buy to let in the Dublin area. Excluding the apartments that make up the ghost estates.(These could be used as local authority housing)
Where as the area another poster mentioned. Will for a long time to come have a supply higher than its demand for sales or rentals.
Supply and demand as a model can not be used for the country as a whole. It will have to be different Categories as Supply and demand will not now or any time soon be on par for sales or rentals in Ireland. Due to the supply been built in the wrong locations in abundance during the boom and making them bad investments due to the fact people just don't want to live there and the population does not match its supply (or even close). Whereas other areas have a supply less than its demand for a home.
Properties in the right location with more finance and confidence will sell eventually and demand for a home will only grow in them locations.
So my original question .Is the supply really to big or the demand to low for sales rather than for homes in the right location ?
We could fill all the vacant properties that are in the right locations at present. But we will not or probably never will sell / rent / fill all the houses in ireland. Supply outbeats demand for buyers in the right location at present. But not for the amount of homes needed.
I would tend to suggest that your being somewhat selective on the information you choose to take into account and that which you tend to disregard. Lots of factors influence house prices. It would be considered unwise to ignore certain highly relevant factors in order to qualify a particular argument. There is a school of thought out there that the primary driver of the bubble was the availability of cheap credit to the world and his wife...so to brush that thought under the carpet and ignore it hardly seems logical. Most would probably tend to agree that such availability of cheap finance will not be seen again in the future, at least in the future of anybody alive and kicking today.
Yes I would probably tend to agree with you that supply and demand are at a most likely at equalibrium point in Dublin than would seem to be the case in most other parts of the country. To a certain extent I do feel that you need to differentiate the Dublin market but you should bear in mind that it does not exist in complete isolation to the rest of the country, in particular surrounding counties. Remember, many were commuting to and from Dublin city centre from far afield in the better times, many still are no doubt. If demand were to start outstripping supply in Dublin in the near future and prices were to spiral upwards why assume we wont see a return to the mega mileage commuting culture that was so prevalent in recent years?
Anyway I think its highly unlikely we will see such a scenario unfolding in the near future. Such is the size of Dublin city and the number of employers in it there will always be a certain amount of activity and new jobs being created. However, I doubt any Economist worth his salt will predict net job creation in the greater Dublin area for the foreseeable future, at least to any noteworthy extent. Looks like college fees are on the way up. Trinity/ UCD etc will most likely loose a large number of the non national students who were attracted by the once relatively low college fees. Ditto for students who travelled from all over the country to UCD/ Trinity/ DIT etc.
You mention 2% of the properties in Dublin are for sale. On the face of it this would seem to suggest a pretty healthy market. But that figure ignores the vacant properties not for sale or even for rent. There is other vacant property other than what you term ghost estates too you know. You seem to ignore this point and until we ascertain the precise number of vacant properties in Dublin one cannot precisely evaluate how healthy/ unhealthy or close to equalibrium the market is there. And yes there will always be greater ongoing demand in Dublin for the afore mentioned reasons. But as I mentioned in my previous post you cannot view supply and demand in isolation to one another if you are to make use of the model.
I'm sure you could fill all the property in Dublin and more if it was sold at a certain price....a hell of a lot less than current asking prices. Sorry now but your mandate seems a bit silly to me and lacks any real foundation or credability. Its a public internet form where people draw upon for advice and opinions and act upon them. Where the advice or opinions are at best questionable I like many previous posters feel something needs to be said. Questionable advice or opinions such as yours could end up being very very costly if acted upon. Nothing personal at all...Marcanthony wrote: »As for the ghost estates and bad investments . What ever can be used as social houses may aswell be given to the councils and the rest bulldozed and this will help stabillise the market. If this is done. The statistics for vacant units will be a lot,lot less than 300,000 and put a more realistic look on the property market.
Could you elaborate on what exactly you mean by stabilize the market please? Theres a moral hazard involved in going on a wholesale bulldozing frenzy of vacant housing units when such a high percentage of the population yearn a house of their own at an affordable and realistic price. Should these houses be handed over to junkies and freeloaders? I don't think so. Yes some of them are in very poor locations and will ultimately need to be knocked, more for being uncomplete and open to the elements for so long. But I would suggest not as high a figure as you might tend to assume or at least convey.
Also a cost benefit analysis would need to be completed on a case by case basis. The cost of demolishing the houses and returning the land to its former self or fit for commercial purposes versus the cost of selling the units on the open market....everything will sell if its priced to sell....simple as....it may be a hell of a lot less than their current asking prices but believe me they will sell. The cost of demolishing a house, taking up roadways and services is quite high, higher than you might imagine....who pays for that?0 -
Marcanthony wrote: »www.cso.ie and you can google search for yourself.
Can't find them. Why can you not provide them to back up your claim?Marcanthony wrote: »I can not provide prove this age group has finance. Thats not the point I am making.I state there is half a million 25-34 year-olds and state the majority are in employment and that this is the age group that with more finance available and more confidence would be active in the market.
Where are they getting the 'more finance' from? Have you taken into account how many of these in jobs that have bought already, are in debt already, do not want to buy and in council housing?Marcanthony wrote: »I agree. Thats why I stated mortgage approval determains sales. However 25% of sales are still cash buys.Due to the fact maybe (finance is harder to obtain) due to certain criteria placed on the banks by the government.
This factor is neglected as FTB's won't have 100k+ lying in their bank accounts.0
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