'Market has gone mad in Dublin' Any truth?

LowKeyReturn

I'm back looking in D7 (Cabra) and around D3 - actually seeing some half decent (as far as I'm concerned) stuff for about €150K. I think thats more of my league rather than a 1840's listed building!

dazberry

LowKeyReturn wrote: »

I'm back looking in D7 (Cabra) and around D3 - actually seeing some half decent (as far as I'm concerned) stuff for about €150K. I think thats more of my league rather than a 1840's listed building!

Up to 12 months ago in the D8 area - (which I understand was part of your original search) you would have had a lot of choice. 18 months ago when we bought, I think we had a list of about 10 properties in the same estate. Now there is very little, and all this "madness" appears to be simply down to a very limited supply at the moment. I've seen it go in cycles so it's possible in a years time things **may** calm down???

D.

Outkast_IRE

I would personally hold tight for another year and hope that some repossessions start happening .

pburns

Speaking as someone recently gone sale agreed (because for personal reasons it was time & not a permanent home)...

It's all about supply - the end of MIR hoovered up a lot of properties and got the ball rolling. There are people on good incomes who have been saving the last 4 yrs and have excellent credit ratings and/or a wad of cash.

The 'madness' is really only effecting houses and larger apts in a few of the fashionable areas (asking prices in Gallery Quay have sky-rocketed for example, above-and-beyond what I personally would consider nicer areas a short walk away).

However the banks are more stringent than ever about giving out money, much more so even than 9 months ago. That's a good thing, it should prevent prices spiralling in the long term. The only reason things are 'mad' at the moment is because there is a shortage and there is a spiral of mild panic.

NAMA/vested intersts have a certain amount of control to manipulate the market but I think it'll hinge on other factors. There needs to be more mobility for mortgage-holders to trade up from apts>houses and let younger people into the cycle to replace them.

I think early 2012 was the bottom and 2013 is a mini-boom. I don't think there is the impetus or finance avalable for huge rises in the coming years.

techdiver

Citycap wrote: »

A lot of couples who moved into apartments are now looking for houses due to having kids or intending to have kids.
A competitive market is no harm as long as mortgages are approved on the basis of genuine income and not made up figures of commission, occasional overtime etc.
There will always be begrudgers who don't want anyone to be better off then them

Are you serious?

It's nothing to do with begrudgers! If we have learned anything over the last number of years is that a frenzied property market is detrimental to the wider economy. If anything if people are paying over the odds for houses it means they are less well off than the rest as they have leveraged themselves to the eyeballs for overpriced property.

Personally I thin the banks calculations for mortgages are too lenient still. 4 - 5 times joint income is not prudent!

L1011

Citycap wrote: »

There will always be begrudgers who don't want anyone to be better off then them

This insane attitude was a major cause of the problems of the boom. Treat everyone calling for sanity as a "begrudger" and ignore the actual problem.

If that's coming around again I presume we can start buying penthouses in Bulgaria and taking shopping trips to Dubai again?

astrofool

techdiver wrote: »

Personally I thin the banks calculations for mortgages are too lenient still. 4 - 5 times joint income is not prudent!

The banks are being very coy about lending at the moment, and it's based on what you've been saving and % of pay that is not consumed by ongoing costs rather than simple multiples. They also seem to be looking at what people spend their money on, e.g. gambling websites = unlucky to get a loan.

techdiver

astrofool wrote: »

The banks are being very coy about lending at the moment, and it's based on what you've been saving and % of pay that is not consumed by ongoing costs rather than simple multiples. They also seem to be looking at what people spend their money on, e.g. gambling websites = unlucky to get a loan.

I hope so.

Just from anecdotal reading of threads here and on thepropertypin, it seems some are getting approved for larger multiples.

I'd just love to know where all this money is coming from to fund so many bidding wars on property prices in the range of 350K+.

BostonB

Back in 2000 it was 2.5x one salary + 1x another salary, what was with interest rates of 3~5%. Only a few years before that people had rates of 8% and even more. 4~5x joint income seems high.

I'm sure there's people with money, who've done well, who are able to pick up choice properties in select areas at the moment. Very few I'd guess (hope) are people borrowing to their eye balls to get into property.

If you did have money, its probably a good time to buy. But only in the best locations, and the best properties. Which I think is reflected in the sales reported above.

LowKeyReturn

BostonB wrote: »

If you did have money, its probably a good time to buy. But only in the best locations, and the best properties. Which I think is reflected in the sales reported above.

I simply don't understand the desire to spend €500,000-€600,000 on a property in 'the best area' when you can get a four bedroom house somewhere else for 150K. Now don't get me wrong, there are places I've looked at and though - not a chance - but there are certain areas that are grand.

I am from a working class background so maybe this explains it?

Having been speaking to a couple of EA and the advice here does seem to suggest a supply issue. I think it's just a case of hanging on as some have suggested. I've heard some stories of Landlords having issues which may provide some properties in the places, price and condition I'm looking for.

techdiver

LowKeyReturn wrote: »

Having been speaking to a couple of EA and the advice here does seem to suggest a supply issue. I think it's just a case of hanging on as some have suggested. I've heard some stories of Landlords having issues which may provide some properties in the places, price and condition I'm looking for.

I agree.

I think it is best to hold off at the moment until this idiocy cools down once again. All indicators point towards downward pressure on prices in the near future.

1. Emigration (300,000 in the past 4 years, mostly young people who would be prime FTB's)
2. Economy still in the doldrums
3. Unemployment remaining high
4. Lack of credit from banks
5. Property tax (it will increase in the coming years)
6. Interest rates are at a record low and can't stay that way for ever
7. More money to be taken out of the economy in next next few budgets

With all this happening, I firmly believe this is a classic dead cat bounce, being fueled by cash buyers and people who are displaying bubble type behavioural patterns (lessons not learned!).

LowKeyReturn

To be fair every place I've now rung up for that was sale agreed has gone for under asking. Then if you looked at the state of some of the places I'm after :eek:

nudger

There are quite a few people out there with money ready to go.
I put up a property for sale and had it sold in under a month 10% above the price I would have been happy with.
In fairness the EA we used done a great job, there were 2 other houses for sale on the same road, 1 went for €80000 less than mine and the other is still for sale.
We had 3 couples bidding against each other all with cash no loans involved.

LowKeyReturn

After getting badly stung in the boom in a bidding war, lesson learned. If it goes above what I want to pay I'm walking away. Thankfully this time because we're going mortgage free I'm pretty constrained in that regard.

BostonB

LowKeyReturn wrote: »

...I simply don't understand the desire to spend €500,000-€600,000 on a property in 'the best area' when you can get a four bedroom house somewhere else for 150K. ...

Can't help you with that. The factors at play are simple enough. Desirability, location, convenience, location, quality and size of property, catchment of schools and transport links, location.

LowKeyReturn

BostonB wrote: »

Can't help you with that. The factors at play are simple enough. Desirability, location, convenience, location, quality and size of property, catchment of schools and transport links, location.

But it really only comes down to desirability? Some of the worst areas in Dublin are the most convenient. Surely is you save 300K on the property you are buying the children can be packed off to a very nice public (private here?) School?

Okay to be fair quality and size are also important but again nice sized houses are out there.

nudger

Plenty of good buys in D7, old area with owners dieing, families selling off cheap.
A 4 bed that was €500,000 6 years ago went for €180,000 around Christmas last, big gardens room to improve.

RATM

techdiver wrote: »

I agree.

I think it is best to hold off at the moment until this idiocy cools down once again. All indicators point towards downward pressure on prices in the near future.

1. Emigration (300,000 in the past 4 years, mostly young people who would be prime FTB's)
2. Economy still in the doldrums
3. Unemployment remaining high
4. Lack of credit from banks
5. Property tax (it will increase in the coming years)
6. Interest rates are at a record low and can't stay that way for ever
7. More money to be taken out of the economy in next next few budgets

With all this happening, I firmly believe this is a classic dead cat bounce, being fueled by cash buyers and people who are displaying bubble type behavioural patterns (lessons not learned!).

Couldn't agree more with this, I also reckon it is a DCB since the end of MIR in 2012. In fact over 100 years of economic analysis of property crashes in countries around the world shows us that it is almost unheard of not to have a dead cat bounce in a long bear. A 4 year backlog since credit stopped flowing means there is a large backlog of buyers and the available stock has shrunk due to a combination of no new building and family break-ups, divorces, which place additional pressure on supply.

Other factors to consider are the avalanche of repos that have yet to begin. Although this is likely to mainly effect apartment prices it will undoubtedly have an overall effect on the market.

Interest rates are another factor. We at least know that they are at a historic low and can now only head in one direction.

LowKeyReturn

I just don't get this South Co. Dublin lark - that said each to their own and housed out there will always be desirable so it's not bad advice to buy out there if you can afford it. I'll be quite happy in a nice Semi-D until I can build up a practice down the country and get the dream:

http://www.daft.ie/searchsale.daft?id=599024

and

http://www.cata-lagoon.com/lagoon_421_amenagement_uk.php

Shedite27

In my opinion a lot of the "desirable" areas are for people who aren't familiar with Dublin. I've been in Dublin about 3 years, and wouldn't know half as much as locals. Every "non-dub" friend I have would be looking for the traditional areas (Luas green line), whereas dub would know areas mentioned here (Dub 7, 3, 5 etc).

RATM wrote: »

Interest rates are another factor. We at least know that they are at a historic low and can now only head in one direction.

I agree that interest rates will likely rise in the next few eyars, but I've also heard that at least one major financial institution is making an IT change to their system to be able to handle negative interest rates. Not sure how that would work in practice.

LowKeyReturn

Sorry OT but as I'm the OP I feel justified If we go into negative interest rates will it actually cost money to save? Or will we only see a very small negative, almost like a gimmick, of 0.1 or 0.25% and simply see 0% on savings?

astrofool

LowKeyReturn wrote: »

Sorry OT but as I'm the OP I feel justified If we go into negative interest rates will it actually cost money to save? Or will we only see a very small negative, almost like a gimmick, of 0.1 or 0.25% and simply see 0% on savings?

In a bid to get banks to lend out money instead of sitting on it, the ECB would charge the banks interest for holding their money, instead of paying them interest (effectively a negative rate). It would be a way of getting the bank bailout money into people's hands rather than propping up the bank's balance sheets.

D3PO

astrofool wrote: »

In a bid to get banks to lend out money instead of sitting on it, the ECB would charge the banks interest for holding their money, instead of paying them interest (effectively a negative rate). It would be a way of getting the bank bailout money into people's hands rather than propping up the bank's balance sheets.

Edit my bad its not yet. its 0.00% as the overnight right now

proponent

Hi all,
time to wade in here with my tuppence.. had our eye on this
http://www.myhome.ie/residential/brochure/27a-drummartin-park-goatstown-dublin-14/2507827

and EA now tells me offers at €577k

WTF????????????

BostonB

LowKeyReturn wrote: »

But it really only comes down to desirability? Some of the worst areas in Dublin are the most convenient. Surely is you save 300K on the property you are buying the children can be packed off to a very nice public (private here?) School?

Okay to be fair quality and size are also important but again nice sized houses are out there.

Nice theory but the facts and the market don't agree with you. Which prompts the question, why are you disregarding all that. I would worry its to justify some risky property decision. There's a disregard of a whole range of social factors, in this kinda thinking. For example. Kids who live in an area so disparate from where they go to school, run a strong risk of being alienated from both. To their detriment. Its not thinking of how a property is a home, that might have to adapt to changing needs over time.

Shedite27

proponent wrote: »

Hi all,
time to wade in here with my tuppence.. had our eye on this
http://www.myhome.ie/residential/brochure/27a-drummartin-park-goatstown-dublin-14/2507827

and EA now tells me offers at €577k

WTF????????????

Lot of people in that market, not a lot of houses, so it's obviously going to go for more. It's not the sort of house you'd need to trade up from so negative equity or resale value isn't a worry.

BostonB

Shedite27 wrote: »

In my opinion a lot of the "desirable" areas are for people who aren't familiar with Dublin. I've been in Dublin about 3 years, and wouldn't know half as much as locals. Every "non-dub" friend I have would be looking for the traditional areas (Luas green line), whereas dub would know areas mentioned here (Dub 7, 3, 5 etc)....

Don't really agree with that. Dubs would know the areas to choose. The non Dubs wouldn't so they wouldn't know which areas to avoid. At least thats my experience. Of course in the tiger years logic went out the window.

proponent

Shedite27 wrote: »

Lot of people in that market, not a lot of houses, so it's obviously going to go for more. It's not the sort of house you'd need to trade up from so negative equity or resale value isn't a worry.

point taken... but nearly a hundred k above asking?

this is insane.. the EA was rather miffed when i said "if you can find someone to pay 577 for that then take their bloody hand off"

BostonB

proponent wrote: »

Hi all,
time to wade in here with my tuppence.. had our eye on this
http://www.myhome.ie/residential/brochure/27a-drummartin-park-goatstown-dublin-14/2507827

and EA now tells me offers at €577k

WTF????????????

While personally I think thats crazy money. Its its a prime South side Dublin location. I wouldn't be expecting "value" anywhere around there.

LowKeyReturn

BostonB wrote: »

Nice theory but the facts and the market don't agree with you. Which prompts the question, why are you disregarding all that. I would worry its to justify some risky property decision. There's a disregard of a whole range of social factors, in this kinda thinking. For example. Kids who live in an area so disparate from where they go to school, run a strong risk of being alienated from both. To their detriment. Its not thinking of how a property is a home, that might have to adapt to changing needs over time.

I just think we have different ideas on where we want to live and indeed very different budgets. I'm the first to admit being very badly burned in the boom. While some of my posts here have engaged in flights of fancy (11 Waterloo ave.) I'm not as detached from reality as you seem to think.

As for the children aspect; that's not really something I want to engage in as a discussion here. I've spoken to a few people on the subject, reflected on my own and wife's upbringing and to be fair am yet to reach conclusion. It's something that when the time comes we will discuss with the in-laws etc. I do take your point however, that it has to be considered. One thing I would perhaps say without wanting to sound insulting is there is a certain way some people are brought up that might not be something I would want either.

The point about a property adapting over time is well taken but again it varies from person to person.

In the end one has to make their own decisions but I'm always grateful for people's advice (sorry if it doesn't sound like it - I genuinely am however).