Shortage of houses...

Galego

My experience is, where I live (just outside Dublin,) the shortage is a bit of a false feeling. I know of few family houses being repossessed which then are held by the banks and not released back to the market. Also 2 finished estates of apartments (NAMA owed now) which are sitting abandoned.

gurramok

pwurple wrote: »

I am sure there are loads of unsellable apartments in the middle of nowhere, but there is a definite shortage of trader-ups / trader-downs from where I am sitting.

Where?

irishguy

Just to add another anecdote, a person I know who owns a 3 bed semi d in south Dublin (not that far from sandyford) put there house on the market recently hoping to trade up to place closer to town. They assumed it would take a while to sell, but with 2 weeks they had 10 people view 5 second viewings and an offer near enough to the asking, which they are considering at the moment. They were a bit shocked at how quickly it all happened.

riclad

There,s probably a shortage of houses of houses for sale ,on the southside,Alot of people there would be in negative equity,
eg a 2bed house was 400k, so many people are stuck ,cant afford to sell up.
And prices are now 50 per cent lower.SO some people with high savings ,good income are ready to buy a 3bed house, in certain areas.

Shedite27

CreepingDeath wrote: »

Another MAJOR reason why people aren't selling houses to trade up/down is they'll lose their tracker mortgages.

I've been looking into this recently. I've a house in West Dublin on a tracker mortgage and am considering moving to Drogheda. If I borrow the exact same amount to sell up and buy another similar house, then my mortgage interest rate goes from 1.9% to 4.7% immediately.

That works out at an extra €250 per month for 15 years. At least €55k extra in interest fees. So even people in positive equity are trapped by tracker rates especially with AIB raising them more, and the possibility of them rising to 6 - 7% in the mid-term future.

Wouldn't say you're "trapped" - you're just not willing to pay the amount of money to buy the new house.

quad_red wrote: »

If the house had appreciated by 25% they would not be volunteering any of that profit back. Flipside should apply.

Dead right!

murphaph wrote: »

I don't think downsizing has ever been the done thing in Ireland though. There's no culture or history of it that I am aware of, not that it is a bad thing, quite the contrary it allows a more efficient use of housing stock.

Yeah we're very nostalgic in Ireland. To our detriment quite a bit

riclad

There was no need to downsize,houses were not so expensive.
Most people would pass away, the house was given to the children,or relatives in the will.
IT was hardly worth it in financial terms to downsize.
AT least up to before the housing boom started.

CreepingDeath

Shedite27 wrote: »

Wouldn't say you're "trapped" - you're just not willing to pay the amount of money to buy the new house.

I'd be willing to pay at todays prices, but not to risk 3 years time when it might be 6 or 7% interest rates. That's the difference between paying €250 extra per month in interest, and €500 extra in interest.

Until the building societies and banks wake up and realise that people on trackers are costing them money and they need to start offering incentives to move off the trackers... they're going to continue to lose money.

If they offered a sort of preferential rate to current tracker mortgage holders to move, they might reduce their loss making loan book.

RATM

I think when discussing this topic it is important to realise that South County Dublin isn't the only housing market in Dublin or Ireland for that matter. And nor should we draw national conclusions from a regional property market.

SCD is however the one property market that is discussed the most. So for what it is worth I'll add my own 2 cents. One of the primary reasons why demand is (anecdotially at least) beginning to outstrip supply here is that the people who can afford these homes in the €400k-€700k bracket are actually doing marginally better financially in this recession than the population at large. Yes they have faced the same tax hikes and stealth charges as everyone else but also their salaries have gone up to compensate.

This is just my own theory but is based on a few things. One was a survey (sorry can't remember who it was by) that was out last year showing basically the trend of the richer getting richer to be continuing. This is I feel primarily because when we talk about 'the rich' what we are talking about is professionals who do jobs that are highly qualified and they can demand pay rises or threaten to jump ship. A post over on the Pin spoke of how HR managers were saying to the poster that the only way to retain senior IT managers is to increase their wages, often by increments of 10-15% at a time. Mainly because salaries are much higher in London and they know they can jump ship at any time. The people at the top of other professions are also gaining in salaries- the likes of KPMG, Ernst & Young, etc are busier than ever with the amount liquidations they're pushing through and there is huge demand for insolvency and tax experts to fill roles there. These are specialist positions and qualified candidates (who are rare) can, up to a point, name their price. If the govt increases taxation then this type of person will demand a pay rise to cover the loss and they'll get it too. This again means upward pressure on salaries which, when combined with a shortage of houses in SCD will translate to upward pressure on prices.

You also have people like my sister who is a consultant who works 20 hours in the public system and can then pick and choose how much she works in the private system, which is lucrative. So although she is in vast negative equity by simply working an extra 10-12 hours a week she can add a further €100k per year to her salary and then afford to purchase a house that is worth more than the one she is in presently. A lot of her colleagues are weathering this recession by giving up the Friday afternoons on the golf course and simply working more hours- and when you can command over €300 per hour it doesn't take much extra work to rack up an extra €100k per year gross.

i also know of a surveyor who did very well for himself during the boom. But in the bust he is doing even better than he ever has- all his work comes from Nama and last year he billed them over €110k which is much in excess to the €70k he was making during the boom. He is doing even better now than ever and is on the lookout for one of these elusive SCD houses and has the extra money to afford one.

So while we hear lots of stories of hardship during the recession I think that it is important to realise that at the top end of the market some people are doing extraordinarily well during the recession. They often are in industries that are booming right now (Pharma, Medical, IT, ancillary property services, etc) and have the negotiating power to up their salaries and thus make the SCD market even more competitive.

All of the above to me points to upward pressure on prices in the SCD 3/4 bed house market. I don't see it as a recovery in the overall property market, it is direct evidence that the rich are getting richer but the people in this category are only a fraction of a % of the overall house buying public. The likes of the Indo and Times will continually point to SCD as evidence of a property recovery as they seek to increase their own advertising revenues but not for one moment does that mean that the overall market is recovering because by and large the spending power of the general population is decreasing, not increasing. The SCD set are an anomaly in the grander scheme of things and should be treated as such.

Tragedy

One slight problem: The SCD bubble is primarily middle class. Stillorgan, Templeogue, Knocklyon, Blackrock, Deansgrange, Killiney, Foxrock, Cornelscourt, Dundrum, Ballinteer, Churchtown are not the home of the rich getting richer, nor are 3-4 bed semi-ds in those areas where consultants, barristers or finance people are looking to buy.

Ranelagh, sure. Donnybrook, Milltown, Rathgar? Sure. But the SCD bubble is primarily middle class driven, and I've experienced that anecdotally at a whole lot of viewings over the last 6 months.

Shedite27

Tragedy wrote: »

One slight problem: The SCD bubble is primarily middle class. Stillorgan, Templeogue, Knocklyon, Blackrock, Deansgrange, Killiney, Foxrock, Cornelscourt, Dundrum, Ballinteer, Churchtown are not the home of the rich getting richer, nor are 3-4 bed semi-ds in those areas where consultants, barristers or finance people are looking to buy.

Ranelagh, sure. Donnybrook, Milltown, Rathgar? Sure. But the SCD bubble is primarily middle class driven, and I've experienced that anecdotally at a whole lot of viewings over the last 6 months.

They're all "upper class" by my definition.

strandroad

Tragedy wrote: »

One slight problem: The SCD bubble is primarily middle class. Stillorgan, Templeogue, Knocklyon, Blackrock, Deansgrange, Killiney, Foxrock, Cornelscourt, Dundrum, Ballinteer, Churchtown are not the home of the rich getting richer, nor are 3-4 bed semi-ds in those areas where consultants, barristers or finance people are looking to buy.

Ranelagh, sure. Donnybrook, Milltown, Rathgar? Sure. But the SCD bubble is primarily middle class driven, and I've experienced that anecdotally at a whole lot of viewings over the last 6 months.

That's your IT project managers, pharma logistics etc.

Tragedy

Shedite27 wrote: »

They're all "upper class" by my definition.

Then I'm afraid that you're unequivocally wrong

davet82

Shedite27 wrote: »

They're all "upper class" by my definition.

Fur coat, no knickers in my book

Shedite27

Tragedy wrote: »

Then I'm afraid that you're unequivocally wrong

What would you class upper class as? All those areas are the top 5% of house prices in the country.

Tragedy

Shedite27 wrote: »

What would you class upper class as?

Upper class in modern times tends to be defined as disproportionate wealth relative to the greater population.

For example, excluding housing assets the top 1% in Ireland control 34% of the wealth. Research has also shown that net financial assets in Ireland is well below the EU average due to the disproportionate 'investment' in housing in Ireland, primarily that spent on the PPR.

All those areas are the top 5% of house prices in the country.

House prices have little to do with wealth which is why any meaningful study excludes the value of the PPR from measuring wealth (and let's not talk about mortgages).

Cuddlesworth

Having come from and lived in half of those areas(the better half :cool:), they are middle-upper class.

400k 3-4 bed semi-d houses are not in a normal price range for anybody earning close to the average industrial average.

Tragedy

Cuddlesworth wrote: »

Having come from and lived in half of those areas(the better half :cool:), they are middle-upper class.

400k 3-4 bed semi-d houses are not in a normal price range for anybody earning close to the average industrial average.

What does the average industrial wage have to do with the price of houses in SCD?

Shedite27

Cuddlesworth wrote: »

Having come from and lived in half of those areas(the better half :cool:), they are middle-upper class.

400k 3-4 bed semi-d houses are not in a normal price range for anybody earning close to the average industrial average.

Yeah I agree with Cuddlesworth Tragedy (weird sentence). 400k for a house is "upper-class" by today's standards (which most of the areas you've listed are).

Nobody ever thinks they are upper class, but those areas are well above average.

riclad

SO it sounds like supply is limited in those areas,due to people stuck in negative equity.AS far as i can remember people on the highest incomes have always bought in those area,s , You, d probably need to be in the top ten per cent of income earners,to buy a large house in tempelogue,killiney etc
Certain people do very well even in a recession ,eg doctors, people who work for nama,
ie We might have rising prices in areas where Rich people want to live,which will have a limited effect on the rest of the housing market.
I Think we have working class,middle class ,and people who are on very high incomes ,
in ireland ,and live in certain areas.

Tragedy

Shedite27 wrote: »

Yeah I agree with Cuddlesworth Tragedy (weird sentence). 400k for a house is "upper-class" by today's standards (which most of the areas you've listed are).

Nobody ever thinks they are upper class, but those areas are well above average.

Sure, feel free to disagree. You're still factually wrong labeling them as upper class

D3PO

Tragedy wrote: »

Sure, feel free to disagree. You're still factually wrong labeling them as upper class

There is no exact definition of upper class. Regardless we all agree that in general the persons living in these areas are highly qualified professionals earning significantly more than the industrial average salary which is therefore reflected in the house prices of said areas and also generally in the demand as these are the kind of places that other high earning professionals want to live in.

Kosseegan

there is a considerable difference between Foxrock and Ballinteer.There are few houses coming on the market in SCD. Trading up to the bigger piles is not happening because of higher running costs with the result that the smaller houses are not being sold. A lot of the market is being supplied by executor sales.
There is unlikely to be significant building of new houses in those areas so there will be pressure on supply for as long as current demographics hold. It is quite feasible for people in those areas to make an upmarket move if they can find a house. Many people in their 40s have paid or almost paid off the loans on their houses and many are also at an age when they inherit money on the death of their parents. Added to the fact that credit is still relatively cheap means there are people prepared to did on most house which come to market in SCD.

Tragedy

D3PO wrote: »

There is no exact definition of upper class. Regardless we all agree that in general the persons living in these areas are highly qualified professionals earning significantly more than the industrial average salary which is therefore reflected in the house prices of said areas and also generally in the demand as these are the kind of places that other high earning professionals want to live in.

Indeed there isn't, but a definition of upper class as "someone just a bit above the average industrial wage" is so far from any common definition as to be tragic.

I'm also not sure where you're getting that the people living in those areas are 'highly qualified professionals" - all we know is that the people buying there have either above average wealth or above average salaries, want to settle in those areas, and are willing to pay a significant price premium to do so.

@Kosseegan: There is a considerable difference between Beechpark Road and Hainault Road, both are still Foxrock

D3PO

Kosseegan wrote: »

there is a considerable difference between Foxrock and Ballinteer..

There are BUT there are also considerable similarities. What I mean by that is that they are both mature areas, with middle age demographics and little or no new builds.

They are also at varying levels albeit seen as good areas to live in meaning people living there are generally satisifed with where they live and in no rush to ever consider moving.

which means no supply but demand is there as their childeren move into the workforce and generally want to stay in areas local to where they grew up.

riclad

ITS probably taboo to say you are upper class in ireland,
but you,d need to be on a high income to buy a 3bed house in those area,s.
IT s much harder for people to trade up,eg move from an apartment
to a house ,unless you,r income is high.

D3PO

Tragedy wrote: »

Indeed there isn't, but a definition of upper class as "someone just a bit above the average industrial wage" is so far from any common definition as to be tragic.

I'm also not sure where you're getting that the people living in those areas are 'highly qualified professionals" - all we know is that the people buying there have either above average wealth or above average salaries, want to settle in those areas, and are willing to pay a significant price premium to do so.

@Kosseegan: There is a considerable difference between Beechpark Road and Hainault Road, both are still Foxrock

Most people in those areas are earning at lease double the average industrial wage which is more than just a bit.

as for calling them highly qualified professionals im taking on the experience of the people i socialise with from said areas. accountants, doctors, physios, managing directors of large multinational companies, solicotors, a fund manager and a microbiologist etc all what i would consider highly qualified

yes i do also know firemen and electricians living in those areas, both in their own rights experts in their fields and on very high salaries.

RATM

D3PO wrote: »

There is no exact definition of upper class. Regardless we all agree that in general the persons living in these areas are highly qualified professionals earning significantly more than the industrial average salary which is therefore reflected in the house prices of said areas and also generally in the demand as these are the kind of places that other high earning professionals want to live in.

I'd agree with this. It is difficult to classify 'upper class' in the Irish sense as we were relatively classless up until 50 years ago. Culturanlly also most of us would be proud to say we're middle class but if we announced ourselves as upper class (even if a millionaire) there is a stigma attached to doing so.

For me 'upper class' has connotations of the British aristocracy, high society in London, Lords and Barons, etc. For me it is not just to do with how much money you've got but also the people you associate with and the annual events you attend. If you're getting invited to Balmoral for the Queens annual Garden Party then for sure you're 'upper class' But in the Irish context what is the equivalent ? I don't think there is one on a par with how society in the UK is organised.

I'm sure even the wealthiest of people in Ireland like Denis o'Brien wouldn't describe himself as upper class, more so upper middle class. Whereas in the UK someone with a title of Lord or Baron would look down their nose at the upper middle class.

Shedite27

RATM wrote: »

I'd agree with this. It is difficult to classify 'upper class' in the Irish sense as we were relatively classless up until 50 years ago. Culturanlly also most of us would be proud to say we're middle class but if we announced ourselves as upper class (even if a millionaire) there is a stigma attached to doing so.

For me 'upper class' has connotations of the British aristocracy, high society in London, Lords and Barons, etc. For me it is not just to do with how much money you've got but also the people you associate with and the annual events you attend. If you're getting invited to Balmoral for the Queens annual Garden Party then for sure you're 'upper class' But in the Irish context what is the equivalent ? I don't think there is one on a par with how society in the UK is organised.

I'm sure even the wealthiest of people in Ireland like Denis o'Brien wouldn't describe himself as upper class, more so upper middle class. Whereas in the UK someone with a title of Lord or Baron would look down their nose at the upper middle class.

Nail on the head.

You don't have to live in Downton Abbey to be upper class. I realise people aren't going to admit/broadcast that they are "upper class", but at least admit that buying houses in the areas described above are the "top class".

Definitely not middle class.

Ray Palmer

I really think people are over talking the SCD area and ignoring other Dublin areas with the same issue. I live in north Dublin and family homes are selling within 4 weeks. Prices higher than asking prices. Areas with easy commutes to the city centre are selling.
So houses at the peak were 550k are selling at 300k but they have been from deceased owners. Nothing else is on the market for family homes.
I suspect the people who inherit are selling as they have mortgage issues. Before many held on to them.
My mother is living in a 5 bed house on her own. She won't sell as all her friends/family live close by. If there was a option to downsize in the area she would.
A tax incentive would create buildings in the area and free up ideal family homes.

D3PO

Ray Palmer wrote: »

My mother is living in a 5 bed house on her own. She won't sell as all her friends/family live close by. If there was a option to downsize in the area she would.
A tax incentive would create buildings in the area and free up ideal family homes.

But herin lies the problem. Your mother cant downsize in the area so a tax incentive has no benefit. If your mother could downsize in the area she would with or without a tax incentive.

the same way others in her position would remain or downsize in their large homes based on what they want to do. Generalisation perhaps but most people of your mothers vintage will be living mortgage free and are in no pressing need for freeing up capital by downsizing.

They like where they live, they like their friends , neighbours the area its completely understandable why these people wouldnt move house.