Where do you see the property market?

blops2013

Now i know this question is like asking how long is a piece of string but i thought id ask it anyway because everyone has theyre own opinion and it would be good to hear it. Im wanting to know, what do you think the irish property market will be like in 10 yrs time.

The reason for this question is that im sitting on the dole at the moment and i have the chance to sell my house and buy 3 cheap properties that ill let out for an income rather than taking money of the government. Im thinking were near the bottom and will stagnate for a year or 2 then will very slowly start to rise again.

The properties im looking at would be under 50k that should bring in 1200 euro a month. The reason why i ask 10yrs is that id sell on then when teh country is back up and running again and make a profit when it does.

D3PO

three cheap properties wont yield you a reasonable income to live on tbh.

1200 a month is a pittance minus expenses and tax you would be left with sweet feck all

jmayo

blops2013 wrote: »

Now i know this question is like asking how long is a piece of string but i thought id ask it anyway because everyone has theyre own opinion and it would be good to hear it. Im wanting to know, what do you think the irish property market will be like in 10 yrs time.

The reason for this question is that im sitting on the dole at the moment and i have the chance to sell my house and buy 3 cheap properties that ill let out for an income rather than taking money of the government. Im thinking were near the bottom and will stagnate for a year or 2 then will very slowly start to rise again.

The properties im looking at would be under 50k that should bring in 1200 euro a month. The reason why i ask 10yrs is that id sell on then when teh country is back up and running again and make a profit when it does.

All I will say is check out Japan's property bubble and see how their prices haven't recovered 20 odd years later even though the world has had a worldwide dotcom tech bubble and a property bubble during that time.

Ritchi

My view is that it'll be 5 years before we see a noticeable rise. It'll be 20 years before you could actually make a profit off the value of a house. And that's assuming we don't have another disaster, which we well could do.

riclad

WE may see a rise in 4 years time,IN areas, where theres,strong rental,demand, eg busy urban areas,
Unless an apartment is cheap,its risky to buy, as theres 100s of empty apartments,even in dublin.
And theres apartment blocks that are 90 per cent complete,mostly owned by nama.
EG look at clonsilla,dublin 15months ago average price was 180k, now its closer to 140k.
I assume you mean rental units,outside dublin, theres no gaurantee,they,ll rise in value,in the next 10 years.IN most areas prices are still falling.
IF a house is 50k, now ,in a years time,it,ll probably be 43k.

noxqs

blops2013 wrote: »

The reason why i ask 10yrs is that id sell on then when teh country is back up and running again and make a profit when it does.

Will you really? Have you looked at Japans curve? They crashed in the 80es, and are still dropping in real prices to this very day! Which means a buyer in 1990 lost, 2000, lost, 2010, lost. How do you figure Ireland is better off as an economy to Japan?

The property bubble will not return in our lifetime, and we're back to meager with-inflation rises if any, and certainly none in the short term (again if they go up 10% and inflation was 20% in 10 years - you lost money. Think about that for a second when you see inflation numbers on CSO and then see meager below that "rises" in Dublin prices).

Remember to factor in lost oppertunity cost, inflation etc - always think about all the sums. Stocks/bonds has ups and downs as well but they dont cost EA fees, insurance, taxes and maintenance hassle just to own. And you can sell as many or as little as you like if you need to free up money or move to better oppertunities. With no EA fees again etc.

Sigh.

EricPraline

blops2013 wrote: »

what do you think the irish property market will be like in 10 yrs time.

I think if anybody could answer the above, they'd make a killing. But I'd be surprised if a property "expert" could even accurately predict prices in 10 months time, far too many variables and unknowns. You just have to look at the events of last week.

One thing that is becoming increasingly is that there's no such thing as an "irish property market". There are many different markets in Ireland, depending on location. Some will naturally recover faster than others, if indeed they do recover. There are considerable differences in demand right now between Dublin suburbs, even a few kilometres apart.

StillWaters

Just for balance here.... It's no secret on here that I am optimistic about the Irish property Market, and the Irish economy in general. I think 12 months down the line is hard enough to predict, but I'd wager a small bet on a small increase, maybe a 3-6% increase nationally.

There was a good article in the Economist last week or the week before stating the Irish Market was under value by 4%, and I would concur.

I couldn't say if your plan is good as I have no idea what the houses you are looking at are like, or where they are. I think It could potentially be a good idea, but that's with a big caution.

Scortho

Op buy for %yield than for potential price in 10 years when it comes to property. If the property rises its a bonus and could give you some leverage then if you wish to go down that route. Who knows what way properties will go over the next 10 years. Yes it could go like Japan and bounce along the bottom.

A healthy property price should track the inflation rate. Once the price stabilises which we won't know for sure for another 6-12 months I'd expect to see rises in line with or slightly below inflation. The chances of seeing double digit price rises in percent terms like that of 23% in 1998 I think (I was 6 then so not exactly sure) but it was after 96 and before 2000.

Anyway buy the property that offers you the best yield in an area with high demand for rentals. Future prices isn't as important especially if you buy in an area where their is a demand for rentals as their us less chance of the rent falling. A good % yield is anything above 7 in my opinion.
Below 4/5 you'd be better off putting your money in post office bonds.

StillWaters

Scortho wrote: »

The chances of seeing double digit price rises in percent terms like that of 23% in 1998 I think (I was 6 then so not exactly sure).

every so often a poster like you reminds me of how old I am compared to other posters here. Age does not beget wisdom, but in 1998 I was waiting for a micro housing bubble to burst in London. It does beget experience.

Galego

With the huge uncertainty in the current economy it will be impossible to predict anything further this next month. Ireland has a huge dependency in foreign investments. Would these be there for ever? Any change in the EU taxation system (the Corporate Tax Harmonization idea), Obama revenue repatriation ideas, etc, could wipe all these capitals way from Ireland in a matter of few weeks.

My take is that house prices will keep falling in average in Ireland but not as much as in previous years. Few areas in Dublin may stabilize or even experience a slight increase. But let's face the reality is that the government is starving the market on purpose creating a false reality in the market. I do not understand why they are using resources to delay the inevitable. They should let the market fall to the button and then pick up the pieces productively.

Scortho

StillWaters wrote: »

every so often a poster like you reminds me of how old I am compared to other posters here. Age does not beget wisdom, but in 1998 I was waiting for a micro housing bubble to burst in London. It does beget experience.

Hopefully when I'm your age, ill be waiting on another irish market to crash so I can take advantage of some investors screw-up.
As I joke with friends if i was 5 years older property investment currently would be an option. If i was 10 years older I'd be in the uk crying as id serve my year as a bankrupt. Like everything in life timing is everything.

kennyb3

I have my own opinions but wouldn't be prepared to voice them out loud. Looking back at the 2005/2006 threads still makes me laugh.

The only thing I will say is that it if you believe that the bottom is in, then you have to believe that the mortgage arrears crisis is fully priced in and won't get worse. That's a pretty big assertion given repossessions haven't begun on BTL's or PPR's .

PS I've no doubt i'll see another property bubble in this country in my lifetime

jmayo

StillWaters wrote: »

Just for balance here.... It's no secret on here that I am optimistic about the Irish property Market, and the Irish economy in general. I think 12 months down the line is hard enough to predict, but I'd wager a small bet on a small increase, maybe a 3-6% increase nationally.

3-6% nationally you say.
How much are you willing to bet ?

Scortho wrote: »

Hopefully when I'm your age, ill be waiting on another irish market to crash so I can take advantage of some investors screw-up.

I wouldn't hold my breath.
We have had one major major bubble in our history.
The conditions were ideal and the chances of all those pieces of the jigsaw coming together again for this country again aren't good.
There were buckets of cheap credit available worldwide and it filtered into Ireland.
We had a number of Irish indigenous financial institutions together with some foreign entrants to the market competing, all poorly regulated by our so called authorities.
Added to that we had already had sustained growth for a number of years after we had benefitted hugely from a major worldwide tech bubble.

Looking to the future:
We may have one or two Irish indigenous institutions and very few foreign institutions competing here.
Any here would have been severly burnt from this crisis and carry the scars.
Regulation will or at least should have improved somewhat and besides the ECB/Euro will force some conservatism.

There won't be another cheap credit frenzy worldwide for quiet a while.
Yes the chances are eventually there might be, but don't expect one in the next 20/30 years.

Add in to that mix the fact that for a number of years we are screwed both from a state and personal finance perspective.
Lots of the mammies and daddies of the future won't be able to hand over either saved wads of cash or the cash released from refinancing of their properties to give the kids a leg up in the hosuing market.

There is money to be made in property but it is through yields, not through flippling the property in a few years after capital appreciation.
If you go into it with the mindset you will make wads of cash when you sell a few years down the road then I reckon you are screwed.

hyperborean

But but but the Independent and daft.ie are both very confident the worst is over and its all rosy from here on in? Rents and property prices are rising apparently?

murphaph

hyperborean wrote: »

Rents and property prices are rising apparently?

Rents in certain parts of Dublin are anyway.

kennyb3

Be nice to keep this to an opinion thread re the future rather than talking about now (which is done on numerous other threads)

stedabee

I suppose the easiest way to answer this is to check of a graph from the central statistics office, this will show exactly how the market is performing and at what rate prices are falling, to my knowladge every month that minus sign is getting smaller and smaller especially in Dublin. I'd say by December next year we'll be at a point were it will be -1% -2% +1 +2% each month ther after. Anyone that thinks there will be a huge drop over the next 5 years please check the graphs and statistics ......they are falling big time!

jmayo

stedabee wrote: »

I suppose the easiest way to answer this is to check of a graph from the central statistics office, this will show exactly how the market is performing and at what rate prices are falling, to my knowladge every month that minus sign is getting smaller and smaller especially in Dublin. I'd say by December next year we'll be at a point were it will be -1% -2% +1 +2% each month ther after. Anyone that thinks there will be a huge drop over the next 5 years please check the graphs and statistics ......they are falling big time!

IMHO checking a graph from CSO as to where we are with regards to our property market is misleading.
We don't have a proper functioning market and I mean numbers of transactions and turnaround time.

Yes things picked up in the latter stages of 2012, but how much of that was the governments tactic of frightening FTBs into jumping to avail of mortgage interest relief.
What are they going to do this year to counteract property taxes ?

There isn't just one elephant in the room that those talking up property appear to ignore, but several.

We have property taxes coming based on value and no one really will know what this will do sentiment and prices.
We have a huge number of residential mortgages in arrears with people either incapable of repaying their massive loans or even worse unwilling to repay their massive loans since they now see themselves in negative equity.

We have a huge number of BTLs who are sitting with properties that they can't afford and sooner or later banks are going to have to do something.

And add into that the overhang of unfinished, finished properties with more going into receivorship every week, which are sitting out there either on the market or possible to put on the market.

Until these issues are put to bed and we start having a normal functioning market again with more accessible lending, then there is no way we will even have a national market where prices are not decreasing.

Of course we may have mini markets like the ubiquitous South County Dublin 3/4 bed house market where there is not enough supply to meet demand.
But prices settling or even slightly increasing in a small section of the market will not drag the rest of the market up.

blops2013

Right so it looks that my pipe dream wouldnt be a good idea so what do you think a guy sitting on the dole do with 135-150k(down from 350k but is worth 180k maybe) from a sale of his own home. Should i just sit on it for another few years or take the gamble and maybe generate some income from the money rather than sitting collecting money of the government every week.

murphaph

blops2013 wrote: »

Right so it looks that my pipe dream wouldnt be a good idea so what do you think a guy sitting on the dole do with 135-150k(down from 350k but is worth 180k maybe) from a sale of his own home. Should i just sit on it for another few years or take the gamble and maybe generate some income from the money rather than sitting collecting money of the government every week.

Use the money to retrain in a sector with employment prospects. That's a long term investment in yourself.

Scortho

jmayo wrote: »

I wouldn't hold my breath.
We have had one major major bubble in our history.
The conditions were ideal and the chances of all those pieces of the jigsaw coming together again for this country again aren't good.
There were buckets of cheap credit available worldwide and it filtered into Ireland.
We had a number of Irish indigenous financial institutions together with some foreign entrants to the market competing, all poorly regulated by our so called authorities.
Added to that we had already had sustained growth for a number of years after we had benefitted hugely from a major worldwide tech bubble.

Looking to the future:
We may have one or two Irish indigenous institutions and very few foreign institutions competing here.
Any here would have been severly burnt from this crisis and carry the scars.
Regulation will or at least should have improved somewhat and besides the ECB/Euro will force some conservatism.

There won't be another cheap credit frenzy worldwide for quiet a while.
Yes the chances are eventually there might be, but don't expect one in the next 20/30 years.

Add in to that mix the fact that for a number of years we are screwed both from a state and personal finance perspective.
Lots of the mammies and daddies of the future won't be able to hand over either saved wads of cash or the cash released from refinancing of their properties to give the kids a leg up in the hosuing market.

There is money to be made in property but it is through yields, not through flippling the property in a few years after capital appreciation.
If you go into it with the mindset you will make wads of cash when you sell a few years down the road then I reckon you are screwed.

If you read my first post to the op both the opening and closing was advising him to buy based on the yield.

Anyhow I agree with what you're saying however i think you musunderstood what i meant.
if there is a property bubble again, of which yield will act as a great indicator off (low) there'll be a collapse again. And if I can get in on the back of the collapse all the better.

Villa05

Scortho wrote: »

If you read my first post to the op both the opening and closing was advising him to buy based on the yield.

Anyhow I agree with what you're saying however i think you musunderstood what i meant.
if there is a property bubble again, of which yield will act as a great indicator off (low) there'll be a collapse again. And if I can get in on the back of the collapse all the better.

Buying on yield in this country is still a waste of time because of taxes. Suppose u get 10% gross, taxes will bring it down to 5. Add in the extra charges and the very real possibility of getting problematic tenants and u will find that this business is not worth the hassle

StillWaters

jmayo wrote: »

3-6% nationally you say.
How much are you willing to bet ?



I wouldn't hold my breath.
We have had one major major bubble in our history.
The conditions were ideal and the chances of all those pieces of the jigsaw coming together again for this country again aren't good.
There were buckets of cheap credit available worldwide and it filtered into Ireland.
We had a number of Irish indigenous financial institutions together with some foreign entrants to the market competing, all poorly regulated by our so called authorities.
Added to that we had already had sustained growth for a number of years after we had benefitted hugely from a major worldwide tech bubble.

Looking to the future:
We may have one or two Irish indigenous institutions and very few foreign institutions competing here.
Any here would have been severly burnt from this crisis and carry the scars.
Regulation will or at least should have improved somewhat and besides the ECB/Euro will force some conservatism.

There won't be another cheap credit frenzy worldwide for quiet a while.
Yes the chances are eventually there might be, but don't expect one in the next 20/30 years.

Add in to that mix the fact that for a number of years we are screwed both from a state and personal finance perspective.
Lots of the mammies and daddies of the future won't be able to hand over either saved wads of cash or the cash released from refinancing of their properties to give the kids a leg up in the hosuing market.

There is money to be made in property but it is through yields, not through flippling the property in a few years after capital appreciation.
If you go into it with the mindset you will make wads of cash when you sell a few years down the road then I reckon you are screwed.

The Market has no memory.

I can't see any change to the neo liberal agenda in Europe, and I have no doubt we will continue on the boom bust economic cycle for many years to come. I definitely think your prediction of another 20/30 years before cheap credit is sloshing around is way too long.

This is not the first banking crisis, and it certainly won't be the last.

I concur of course with the importance of yield.

Scortho

Villa05 wrote: »

Buying on yield in this country is still a waste of time because of taxes. Suppose u get 10% gross, taxes will bring it down to 5. Add in the extra charges and the very real possibility of getting problematic tenants and u will find that this business is not worth the hassle

And if its a company?

Villa05

StillWaters wrote: »

The Market has no memory.

I can't see any change to the neo liberal agenda in Europe, and I have no doubt we will continue on the boom bust economic cycle for many years to come. I definitely think your prediction of another 20/30 years before cheap credit is sloshing around is way too long.

This is not the first banking crisis, and it certainly won't be the last.

I concur of course with the importance of yield.

30 years on from the bust in japan, there is still little sign of a boom. Our bust is larger than japans and japan were not tied to a multinational currency so they had a far wider range of tools arrest the decline.

Remember more losses are made trying to predict a bottom than there is in the intial bust.

StillWaters

Villa05 wrote: »

30 years on from the bust in japan, there is still little sign of a boom. Our bust is larger than japans and japan were not tied to a multinational currency so they had a far wider range of tools arrest the decline.

Remember more losses are made trying to predict a bottom than there is in the intial bust.

I really dont understand this regular comparison to Japan. Our economic model and demographics are entirely different. If I were to draw paralllels, and I dont like doing so as we had fairly unique contributors such as a massive expansion of dual income families, I would look to the Nordic countries.

RATM

StillWaters wrote: »

I really dont understand this regular comparison to Japan. Our economic model and demographics are entirely different. If I were to draw paralllels, and I dont like doing so as we had fairly unique contributors such as a massive expansion of dual income families, I would look to the Nordic countries.

Me neither. However if you look at the economy of Japan and how advanced it is they seem to be in a far better position than Ireland. They manufacture high ticket items like cars, mobile phones, tablets, cameras, camcorders, all of which are bought in huge numbers by Western markets. They're world leaders in semi-conductors, fibre optics and biochemistry. They can move their citizens around at 300kph on bullet trains. And they're pretty energy independent with a vast number of nuclear power plants and don't have to reply on the oil industry as much as we do. Finally they also have vast fishing rights in all four directions so they can feed their people a lot cheaper than we can. Finally they have their own currency and can adjust interest rates or print money at will.

So I guess when you take all the above into account and you still see that Japan's economy is on the floor due to the 1990 property crash then it doesn't exactly give you much hope for Ireland.

Maybe it is a case of 20 years of economic mismanagement by successive Japanese politicians. Nonetheless you'd be hard pressed to argue that Ireland hasn't had twenty years of economic mismanagement and is looking like having several more.

davet82

StillWaters wrote: »

Just for balance here.... It's no secret on here that I am optimistic about the Irish property Market, and the Irish economy in general. I think 12 months down the line is hard enough to predict, but I'd wager a small bet on a small increase, maybe a 3-6% increase nationally.

There was a good article in the Economist last week or the week before stating the Irish Market was under value by 4%, and I would concur.

I couldn't say if your plan is good as I have no idea what the houses you are looking at are like, or where they are. I think It could potentially be a good idea, but that's with a big caution.

any link to this article? i'm curious about his views...

jmayo

Scortho wrote: »

If you read my first post to the op both the opening and closing was advising him to buy based on the yield.

Anyhow I agree with what you're saying however i think you musunderstood what i meant.
if there is a property bubble again, of which yield will act as a great indicator off (low) there'll be a collapse again. And if I can get in on the back of the collapse all the better.

I was replying in most to the poster before me who was commenting about price descreases slacking off.

StillWaters wrote: »

The Market has no memory.

I can't see any change to the neo liberal agenda in Europe, and I have no doubt we will continue on the boom bust economic cycle for many years to come. I definitely think your prediction of another 20/30 years before cheap credit is sloshing around is way too long.

I don't think we will ever have the same level of cheap credit as we did post 2001, at least not in the near future and certainly not in this country.
After this the Euro should be better managed and the Germans are trying to put their foot down so that the worse offenders don't go apesh** like they did this time.
There will always be cyclical economic activity, but what happened this time was way beyond that.
IMHO the only thing that it is akin to is the share bubble of the late 20s and the following Great depression.

StillWaters wrote: »

This is not the first banking crisis, and it certainly won't be the last.

I don't think there was ever such a collosal worldwide banking fookup which nearly brought down nation states.
I would hope someone somewhere in positions of power have learned something.
However I believe the Basel accords still aren't going far enough and bankers will fight tooth and nail to keep the ability to make massive bonuses.
And even when the banking in other countries, such as UK, US, etc start dishing out chepa credit don't hold your breath for what purports to be our banking system to start doing the same.
We have shag all of any indigenous banking system left and the few foreign owned ones will do as their parent companies demand.

StillWaters wrote: »

I really dont understand this regular comparison to Japan. Our economic model and demographics are entirely different. If I were to draw paralllels, and I dont like doing so as we had fairly unique contributors such as a massive expansion of dual income families, I would look to the Nordic countries.

I always mention Japan as a lesson to many optimists/bulls as to how the property market doesn't just reach a bottom and then start on an upward curve again.

And what makes the history of Japan even more stark is the fact, as the poster above said, Japan is a major economic powerhouse with huge manufacturing capabilities, massive homegrown multinationals, own currency and a reasonably sized indigenous population/home market.

Also during the time their property market has been dragging itself along the bottom please note there were two major bubbles (tech and property) worldwide that had a positive effects on the property market almost everywhere else.

And then we have Ireland which has shag all bar FDI from foreign multinationals looking for a source of cheap capital gains tax.

And if you do compare us to the Nordic countries and their 90s property bust we still don't come out too well.
Our bust made theirs look like a little blip.

Villa05

StillWaters wrote: »

I really dont understand this regular comparison to Japan. Our economic model and demographics are entirely different. If I were to draw paralllels, and I dont like doing so as we had fairly unique contributors such as a massive expansion of dual income families, I would look to the Nordic countries.

Our economic model is a sham, Investors in badly managed banks are paid off in full and costs passed on to citizens.

We rely on foreign direct investment which is highly mobile an can leave in the morning. Making long term financial commitments in this environment is high risk

Ireland failed to tackle the upward only rent contracts driving retail/small business to the brink.

We are currently having a massive expansion of:
Single low income families
Families with no one working
Families walking away even those with jobs
Families in massive debt with no release mechanism. 1/3 of all mortgages are either in arrears or have been restructured

Nordic countries are pro family, Ireland is anti family (childcare costs, increasing education costs etc)

Ireland's economy is a basket case and getting worse