Why Irish houses are still massively overpriced

gaius c

Farmer Pudsey wrote: »

Bar Dublin most houses are selling for less than the cost of construction. Some one gave an example of Dingle at ptresent if you check on daft.ie there are over 1000 properties(yes i know that some are sites etc) for sale at less than 125K in Kerry. A good portion are good suitable family homes. Taking a mortgage of 80% of this would be 100K and an average intrest rate of 4.5% thiis equates to montly payments of 600 euro.

For an average working couple this would equate to less than one week pay for the two of them. At present housed selling below 100K (60-80K) are in small towns in kery are being snapped up by investors as the yield is near or above 10%. Yes some NAMA properties are over priced and peopler will ignore them until either they reduce the price or the market reaches this point.

Limerick is an intresting study on one hand a high unemployment rate in certain area's of the city but in the envoirn's and outside limerick city there are good employment prospects. With the By pass it is very easy to commute 20+ mile into work and with the tunnell workers can criss cross through the tunnell to commute from/or work in Ennis, Shannon. You have a workforce in Co Clare, Co Limerick, North Cork, Half of Tipperary and part of Kerry that find copmmuting easy. Yes propery and rental prices are not crazy. Houses in the sorroundind towns are easily affordable and even rural housing is available at arounf 200K within 10 miles of the city.

I think there is a perception by some people that you should not have to make an effort to own you own house. That it should be as cheap as renting and that everything should be handed on a plate. Be careful you could get left behind.

Actually in a mature & stable market, renting is actually more expensive than buying the equivalent home. Landlords wouldn't be able to make a profit otherwise.

AlekSmart

gaius c wrote: »

Actually in a mature & stable market, renting is actually more expensive than buying the equivalent home. Landlords wouldn't be able to make a profit otherwise.

That may be so,however I would suggest that this comparison is based solely upon the purchase cost vs the rental outgoing.

I would also suggest that when we start to factor in the new (to Ireland) ongoing taxes and charges, along with maintenance and upkeep,that the comparison becomes less clear-cut.

I'm not sure if Farmer Pudsey has his tongue in his cheek somewhat when he sez....

I think there is a perception by some people that you should not have to make an effort to own you own house. That it should be as cheap as renting and that everything should be handed on a plate. Be careful you could get left behind.

I feel that the principle of universal home Ownership is not for everybody,particularly in a country whose economic structure may not be able to support it.

However,ensuring that a readily available supply of Rental Properties is achieved and maintained should be a Government priority.

Currently anybody attempting to rent their residence in Ireland has very little support when it comes to being part of a well regulated and monitored sector....

For far too long Private Rental Accomodation in Ireland has been seen as a bit of a sideline for Gardai,Teachers,and assorted other "professional" groupings......:o

ballyharpat

Farmer Pudsey wrote: »

Bar Dublin most houses are selling for less than the cost of construction. Some one gave an example of Dingle at ptresent if you check on daft.ie there are over 1000 properties(yes i know that some are sites etc) for sale at less than 125K in Kerry. A good portion are good suitable family homes. Taking a mortgage of 80% of this would be 100K and an average intrest rate of 4.5% thiis equates to montly payments of 600 euro.

For an average working couple this would equate to less than one week pay for the two of them. At present housed selling below 100K (60-80K) are in small towns in kery are being snapped up by investors as the yield is near or above 10%. Yes some NAMA properties are over priced and peopler will ignore them until either they reduce the price or the market reaches this point.

Limerick is an intresting study on one hand a high unemployment rate in certain area's of the city but in the envoirn's and outside limerick city there are good employment prospects. With the By pass it is very easy to commute 20+ mile into work and with the tunnell workers can criss cross through the tunnell to commute from/or work in Ennis, Shannon. You have a workforce in Co Clare, Co Limerick, North Cork, Half of Tipperary and part of Kerry that find copmmuting easy. Yes propery and rental prices are not crazy. Houses in the sorroundind towns are easily affordable and even rural housing is available at arounf 200K within 10 miles of the city.

I think there is a perception by some people that you should not have to make an effort to own you own house. That it should be as cheap as renting and that everything should be handed on a plate. Be careful you could get left behind.

I live in Kerry and am keeping an eye for properties with the potential to return anywhere above 8%. Believe me, these houses that are selling for 100k are not going to give that return. Killarney is the most expensive place in Kerry to rent or purchase. You would be paying e575 per month in Killarney for a 2 bed apt. A 2 bed in Tralee can be had for 3-350 per month. A 3 bed that is 5 miles from Killarney would probably make e350-400 per month. if you go 10 miles out of town, or to somewhere in Dingle or waterville/Cahirciveen/Kenmare/Killorglin you would be lucky to get someone to rent your property for e300 per month, if at all. I am looking to move to a quiet area away from town, but I will not be doing it until I am comfortable enough financially to be able to only have to work 1 or 2 days per week. The price of petrol is going up, commuting costs and travel time need to be factored in to these purchases. There is little to no employment in some of these beautiful scenic areas, hence the low cost of houses and the reason they are really only suitable for retired people or as holiday homes.

maninasia

It's all about employment at the end of the day. Is there a big enough grouping of employers to justify moving and settling in a certain area. I mean one partner might be able to get a decent job but the other one no. Maybe you can get a decent job with the one big local employer but if that falls South what are you going to do then?

In the future (whenever that is), improved telepresence and better broadband (whenever that is) MAY make living in certain areas a much more viable option.

On the other side of that trend are increased fuel and commuting costs. I also wouldn't expect any new train lines, improved train lines or motorways for a long long time.

Farmer Pudsey

I think some posters think that houses will fall in price forever and that we will reach prices that are as low or lower than the European average. I suspect we will not (maybe I am wrong). I think we are at or near the price floor. If prices drop below precieved value they will correct very fast and you may again get a boom type hype.

People who think that massive dumping of house's onto the market will benift ordinary Joe or Joan Soap( or Sixpack as Morgan Mcdowell once refered to them as) do not relise that there will not be credit available to benifit these people. Rather it will benifit the large cash investor who will hoover up the house's and rent with either the intention of a longterm capital gain or a profitabal rental buisness based on a cheap purchasse price.

The housing supply market has gone through huge rationalisation. there are only 1/3 the builder suppliers that were there during the boom less in number than preboom. Some of these are high cost DIY such as B&Q. The same with concrete suppliers. Yes there will be cheaper trades people but building product will get more expensive over the next few years. There will be fewer developers around as well as those that are broke go through the bankrupty process so there will be little new product coming on market for the next 2-5 years.

The ordinary carpenter/blocklayer/plasterer will not build you a house it takes a different skill set. We could well ender a situtation like in the farming sector where we get large volitility in prices

Duggys Housemate

Except in weird situations - maybe the present situation in Ireland - housing prices can never be set by the "cash buyer". There aren't enough of them.

What's happening is what the OP suggests , NAMA is sitting on a housing bank and non payers of mortgages are not being evicted. Even if we forced the people with 2 properties to pay, or we wrote off their debt but seized the (2nd) property and sold them prices would plummet, especially apartments.

vinylbomb

washman3 wrote: »

i take it you mean rent prices in any capital city are nowhere near €400 a month?

Please show me ANY capital city in Western Europe where a reasonable 3 bed semi is 400 a month.

enigmatical

I find the commentary in the media about the housing market really strange too in the way that it talks about "Dublin" and "The Rest of the Country" prices as if say the most expensive parts of Cork or Galway were on exactly the same market cycle as a ghost estate in Leitrim.

The comparisons between Dublin and huge cities is also ridiculous. It's a small/medium size capital city with relatively good but not spectacular salaries and completely dysfunctional banks that can't really lend to stimulate the market.

I would like to see comparisons between Dublin and say Bordeaux or Hannover or maybe Munich at a push.

It's not comparable to these megapoles that it's being pitted against all the time.

Metropolitan populations:

Paris : 12.1 million
London : 11.9 million
Brussels has over 5 million people within the Brussels/Antwerp/Ghent triangle so its small population is actually totally misleading.
Madrid : 6.3 million

etc etc etc.

We tend to take the largest population estimate for the Greater Dublin area, which in some cases seems to become absolutely ludicrous and takes in scattered populations across the whole 'Pale' which isn't really the GDA and then compare them with the really narrowest definition of a city like Paris which excludes all of its agglomeration.

House price wise, we should be looking at comparisons with similarly sized regional capitals in comparably wealthy countries with similar living standards to Ireland, not these huge metropolises.

....

Also, there'll always be a few expensive areas in Dublin, Cork, Galway, Limerick etc but they're not necessarily representative of the whole trend in the housing market.

I think we're becoming over-excited about little blips in the market to be honest and the media's doing its usual irresponsible let's all try and get hyped back to 2007 thing!

We don't seem to get that overpriced property actually hinders the economy as all the money is being drained away to landowners, landlords, banks and others instead of being spent on something useful.

If we had a lot more disposable income i.e. not slashing it on huge mortgages and ridiculously high commercial rents, we'd have a far more vibrant economy as that money would be spent on goods, services and maybe invested into companies and R&D instead of bricks and mortar!

(/rant)

Farmer Pudsey

Duggys Housemate wrote: »

Except in weird situations - maybe the present situation in Ireland - housing prices can never be set by the "cash buyer". There aren't enough of them.

What's happening is what the OP suggests , NAMA is sitting on a housing bank and non payers of mortgages are not being evicted. Even if we forced the people with 2 properties to pay, or we wrote off their debt but seized the (2nd) property and sold them prices would plummet, especially apartments.

If houses prices collapse and morgatge money is not accessible (due to banks dumping housed on market) then the only people that can really but is cash investors. When i say cash investors it is those people that have access to sums over 50K these will tend to be people over 50 years old with a bit of money put away they may be able to access smalls loans easy fròm credit unions etc in the short term and may have relationships with bank loan officials and have a record of being able to pay back money. Small buisness owners etc who have cash flow and access to money if the house market collapses could readily invest for pension purposes.

Joe/Joan Soap will not be the winner

Go to an Alsop auction and look at the buyers.

Duggys Housemate

Farmer Pudsey wrote: »

If houses prices collapse and morgatge money is not accessible (due to banks dumping housed on market) then the only people that can really but is cash investors. When i say cash investors it is those people that have access to sums over 50K these will tend to be people over 50 years old with a bit of money put away they may be able to access smalls loans easy fròm credit unions etc in the short term and may have relationships with bank loan officials and have a record of being able to pay back money. Small buisness owners etc who have cash flow and access to money if the house market collapses could readily invest for pension purposes.

Joe/Joan Soap will not be the winner

Go to an Alsop auction and look at the buyers.

You're not making much sense. Someone with 50k is not a cash investor - he's a guy with a deposit.

Farmer Pudsey

Duggys Housemate wrote: »

You're not making much sense. Someone with 50k is not a cash investor - he's a guy with a deposit.

In Dublin no down the country yes all he needs is access to money either through a credit union or small buisness loan from a bank. He will not have to jump through hoops to get a morgtage. Also I am talking about where housed maybe drop another 20-30% from present values. Dublin no long counts as house prices have stabilised there and in other large urban centres they are approching stability.

This idea that a cash buyer has all the money is nonsence it is the ability to access money with easy that makes a cash buyer. It is the same as buying a car if you have a loan arranged and are willing to sell your own car yourself then you are a cash buyer. It is not necessarly that you have the money in cash.

Some houses are now only twice the value of a bigish BMW or Merc.

Duggys Housemate

Farmer Pudsey wrote: »

In Dublin no down the country yes all he needs is access to money either through a credit union or small buisness loan from a bank. He will not have to jump through hoops to get a morgtage. Also I am talking about where housed maybe drop another 20-30% from present values. Dublin no long counts as house prices have stabilised there and in other large urban centres they are approching stability.

This idea that a cash buyer has all the money is nonsence it is the ability to access money with easy that makes a cash buyer. It is the same as buying a car if you have a loan arranged and are willing to sell your own car yourself then you are a cash buyer. It is not necessarly that you have the money in cash.

Some houses are now only twice the value of a bigish BMW or Merc.

No a cash buyer is a buyer who doesn't need a mortgage. And they never set the price of housing in general because there aren't enough of them.

In the general thread it's clear that housing will fall if people have to sell to get debt write offs.

GCU Flexible Demeanour

TimeToShine wrote: »

House prices for a three bedroom semi in any capital city are nowhere near 400 euro <...> Going onto Daft the average 3 bed semi around town and the south of Dublin is over a thousand euro, with some hitting 1500 a month.

Fair point. I just had a quick look at Manchester:

http://www.rightmove.co.uk/

I've no idea as to areas or such, but a quick browse suggests that a three bed semi might be had for between £650 to £1,200 pm there. So that might be €750 to €1,400 - suggesting Dublin rents aren't really that special. I'm picking Manchester just because (mostly) I find people don't bridle at the comparison by saying "Oh, you can't compare Dublin to a major global capital like, err, Manchester."

However, I do agree that the rule-of-thumb calculation of 14 times annual rent does give a hint of the shape of things to come - once we base it on actual rents paid (or rent sought, if that's all we have). Actual rents paid simply do reflect real demand - it's what real people have really paid.

jmayo

igorbiscan wrote: »

And where will all the evictees go and how much will that cost the state and the banks?

Why should it cost the state anything if the evictee is in piad employment and can afford to rent ?
I know to some renting is a dirty word and of course is for fools and losers. :rolleyes:

Rabbo wrote: »

Surely, at the most fundamental level, property values should be linked to construction costs and rental rates linked in turn to property prices and not the other way around.

our construction costs went out the window and just because a house cost 200,000 to build does not mean it costs 200,000 to buy.
It is all about supply and demand.
Oh and the access to finance.

washman3 wrote: »

.
Which just goes to prove to point of who NAMA was set up to protect.
Lenihan constantly spoke of putting a 'floor' on the residential market and how NAMA would achieve this. All seems like a massive smokescreen to protect commercial entities, and we all know who is behind these.!
NAMA will boast from time to time how it has returned a 'profit' for the Government. Simply put, it cannot and will not ever make a profit as its definition of a profit is making a gain on the re-sale of 30-50% of the original value. We are led to believe that speculators/developers will be 'chased to the end of the Earth' for the shortfall..:D
Yet strangely, apologists will hail this as a major success and label anybody who dares to question it as economically ignorant.!!

Even if NAMA made a profit the taxpayer will have made a loss.
Or are people forgetting the billions put into the banks in recapitalisation ?

Farmer Pudsey wrote: »

I think some posters think that houses will fall in price forever and that we will reach prices that are as low or lower than the European average. I suspect we will not (maybe I am wrong).

Why do we have to fit a European average ?
What or who are you averaging against ?
Would some of these other Western European countries have lower debt levels (both soverign and personal), lower unemployment, better growth and semi solvent financial institutions capable of lending to buyers ?

Farmer Pudsey wrote: »

I think we are at or near the price floor. If prices drop below precieved value they will correct very fast and you may again get a boom type hype.

What is percieved value ?

Farmer Pudsey wrote: »

People who think that massive dumping of house's onto the market will benift ordinary Joe or Joan Soap( or Sixpack as Morgan Mcdowell once refered to them as) do not relise that there will not be credit available to benifit these people. Rather it will benifit the large cash investor who will hoover up the house's and rent with either the intention of a longterm capital gain or a profitabal rental buisness based on a cheap purchasse price.

So basically you think we should keep an artifical floor on property prices and interfere in the market to keep the status quo ?

Farmer Pudsey wrote: »

The housing supply market has gone through huge rationalisation. there are only 1/3 the builder suppliers that were there during the boom less in number than preboom. Some of these are high cost DIY such as B&Q. The same with concrete suppliers. Yes there will be cheaper trades people but building product will get more expensive over the next few years. There will be fewer developers around as well as those that are broke go through the bankrupty process so there will be little new product coming on market for the next 2-5 years.

Our local suppliers were too expensive, often were not viable once the bubble was removed and a wake up call was needed IMHO.
I could use sean gallaghers great entrepreneurial smart homes company as an example of this.

Why do we need new product coming on the market in the next 2-5 years ?
Oh wait, yes we need houses in certain desirable areas of Dublin to meet the demand.
But wait a minute, where are we going to build the new houses in these desirable areas ?

Farmer Pudsey wrote: »

The ordinary carpenter/blocklayer/plasterer will not build you a house it takes a different skill set. We could well ender a situtation like in the farming sector where we get large volitility in prices

What are you on about ?
You seem to be lamenting the lot of construction workers and developers.
Perhaps you want to kickstart house building to keep these people in work ?

AFAIK volatility in farming prices had nothing to do with numbers capable of farming or numbners needing to eat.
It had a lot to do with global trade, cheaper imports, supermarkets, loss of EU intervention, etc.

vinylbomb

jmayo wrote: »

Why


Why....?

What or who ...?

Would ... ?



What ... ?



..you think .. ?

Why ...?

.. where ...?



What ...?

Perhaps .... ?

Why do you ask so many rhetorical questions?

You're quoting someones answer to the question you're asking.

jmayo

Farmer Pudsey wrote: »

In Dublin no down the country yes all he needs is access to money either through a credit union or small buisness loan from a bank. He will not have to jump through hoops to get a morgtage. Also I am talking about where housed maybe drop another 20-30% from present values. Dublin no long counts as house prices have stabilised there and in other large urban centres they are approching stability.

That could be debatable.
The losses are dropping off and there is anecdotal evidence backing up impressin prices are on rise for certain desriable locations, but it is little small portion of the actual Dublin property market.

Also "this stablisation" has ocurred before any meaningful clean up in the numbers of mortgages in default or arrears, both in the investor and homeowner markets.
If this thorn is grasped then more properties will have to come on the market
and this will have a knock on affect.
And before anyone claims it is all apartments they might want to think again.

Farmer Pudsey wrote: »

This idea that a cash buyer has all the money is nonsence it is the ability to access money with easy that makes a cash buyer. It is the same as buying a car if you have a loan arranged and are willing to sell your own car yourself then you are a cash buyer. It is not necessarly that you have the money in cash.

I think you are getting mixed up.
You seem to be thinking of someone not in a chain who thus would not be dependent on their house/car being sold in order to purchase the new one.
I think most people using the term cash buyer means someone not in need of any borrowing.

Farmer Pudsey wrote: »

Some houses are now only twice the value of a bigish BMW or Merc.

So what ?
A Maybach or Bugatti is worth more than a house in Foxrock.

You appear to keep forgetting the property market is a market, or at least should be, where prices are dependent on supply and demand.
Ulitmately the price of a house doesn't depend on how much it cost to build , how much the one next door cost two years ago, how much a new 7 series BMWer costs.
It depends on whether or not someone wants to buy it and if that person has the money and the desire to buy it.

jmayo

vinylbomb wrote: »

Why do you ask so many rhetorical questions?

You're quoting someones answer to the question you're asking.

Perish the thought I would ask some questions ????????????????????
And they weren't rethorical questions I would like the poster to answer the points.

Here's me thinking that the whole idea of debate is to question someone elses viewpoint.

washman3

vinylbomb wrote: »

Please show me ANY capital city in Western Europe where a reasonable 3 bed semi is 400 a month.

See post #59 by enigmatical. Explains this perfectly and is also the most sensible post of this thread so far.!!

vinylbomb

washman3 wrote: »

i take it you mean rent prices in any capital city are nowhere near €400 a month? well i never said that they are.! read my posts. what i did say is €400/month is what it should be

washman3 wrote: »

See post #59 by enigmatical. Explains this perfectly and is also the most sensible post of this thread so far.!!

YOU are the one who has decided what rents in Dublin are worth with your X time Y plus the hairs on my chinny chin chin valuation method.

washman3

vinylbomb wrote: »

YOU are the one who has decided what rents in Dublin are worth with your X time Y plus the hairs on my chinny chin chin valuation method.

Like i said, read the posts. it will explain it better to you. with the added bonus that you mat also learn something.;)

Duggys Housemate

washman3 wrote: »

Like i said, read the posts. it will explain it better to you. with the added bonus that you mat also learn something.;)

We've all read your posts and no one understands where that figure comes from.

Farmer Pudsey

jmayo wrote: »

That could be debatable.
The losses are dropping off and there is anecdotal evidence backing up impressin prices are on rise for certain desriable locations, but it is little small portion of the actual Dublin property market.

Also "this stablisation" has ocurred before any meaningful clean up in the numbers of mortgages in default or arrears, both in the investor and homeowner markets.
If this thorn is grasped then more properties will have to come on the market
and this will have a knock on affect.
And before anyone claims it is all apartments they might want to think again.



I think you are getting mixed up.
You seem to be thinking of someone not in a chain who thus would not be dependent on their house/car being sold in order to purchase the new one.
I think most people using the term cash buyer means someone not in need of any borrowing.



So what ?
A Maybach or Bugatti is worth more than a house in Foxrock.

You appear to keep forgetting the property market is a market, or at least should be, where prices are dependent on supply and demand.
Ulitmately the price of a house doesn't depend on how much it cost to build , how much the one next door cost two years ago, how much a new 7 series BMWer costs.
It depends on whether or not someone wants to buy it and if that person has the money and the desire to buy it.

If or a bank or Joe/Joan Soap are selling a house a cash buyer is someone that can access the money fast. In the case of a housing price collapse where the banks dump them onto the market then only those with access to money either in the form of cash or access to borrowed money without jumping through hoops will be the winners.

There seem to be a perception that Joe/Joan Soap will in the case of a house price collapse where the banks have issue as well will be able to buy a cheap house and live happily ever after. Sorry to burst your bubble but it will not work that way.

If houses droped another 20-30% would Pudsey buy a holiday home in Kerry( by the way I only own the house I live in so the prices of house's is of no economic interest to me) there is a good chance he would see it as a no brainer. Who would get the money from the Bank quickest I bet on old Pudsey getting it before a young couple looking for a loan.

Is it in the banks interest to support the market yes it is. What is the advantage of kicking someone out of a house taking a hit of 50-80% when you may be able to do a deal at less than a 40% discount.

Yes there will be a few kicked out of there houses. With the personnel insolvency legislation all the aces are in the banks hands. In a house dumping scenario they hold a busted flush and Pudsey wins again.

Duggys Housemate

Farmer Pudsey wrote: »

If or a bank or Joe/Joan Soap are selling a house a cash buyer is someone that can access the money fast. In the case of a housing price collapse where the banks dump them onto the market then only those with access to money either in the form of cash or access to borrowed money without jumping through hoops will be the winners.

There seem to be a perception that Joe/Joan Soap will in the case of a house price collapse where the banks have issue as well will be able to buy a cheap house and live happily ever after. Sorry to burst your bubble but it will not work that way.

If houses droped another 20-30% would Pudsey buy a holiday home in Kerry( by the way I only own the house I live in so the prices of house's is of no economic interest to me) there is a good chance he would see it as a no brainer. Who would get the money from the Bank quickest I bet on old Pudsey getting it before a young couple looking for a loan.

Is it in the banks interest to support the market yes it is. What is the advantage of kicking someone out of a house taking a hit of 50-80% when you may be able to do a deal at less than a 40% discount.

Yes there will be a few kicked out of there houses. With the personnel insolvency legislation all the aces are in the banks hands. In a house dumping scenario they hold a busted flush and Pudsey wins again.

Once again old pudsey. If you need a loan you are not a cash buyer. Also 50k is bog alll money. And banks loan to young people more readily than old people.

jetfiremuck

The other issue are those older parents who through equity release on their own home borrowed to allow a sibling enter the property market. Sibling loses job,shags off to Nz or Oz. I know of a case where the parents will have to sell their previous paid off house coupled with the shortfall on the sibling sale and will still owe a few thousand to the bank after the sales. So do you blame the parents, the sibling,the job market,auctioneers..........and so on. What i cant comprehend is where did all the money go? (not being silly here)

washman3

jetfiremuck wrote: »

What i cant comprehend is where did all the money go? (not being silly here)

Jetfire, its simple really, it reached a stage where the money didnt really exist, was just based on pretend. But billions had been siphoned off by developers etc. Put it this way, Germany and Switzerland have been largely unaffected.;)

gaius c

GCU Flexible Demeanour wrote: »

Fair point. I just had a quick look at Manchester:

http://www.rightmove.co.uk/

I've no idea as to areas or such, but a quick browse suggests that a three bed semi might be had for between £650 to £1,200 pm there. So that might be €750 to €1,400 - suggesting Dublin rents aren't really that special. I'm picking Manchester just because (mostly) I find people don't bridle at the comparison by saying "Oh, you can't compare Dublin to a major global capital like, err, Manchester."

However, I do agree that the rule-of-thumb calculation of 14 times annual rent does give a hint of the shape of things to come - once we base it on actual rents paid (or rent sought, if that's all we have). Actual rents paid simply do reflect real demand - it's what real people have really paid.

Not sure that Manchester (or anywhere in densely populated England) is a great comparison. The Manchester area is over twice the size of the GDA and is the economic engine of northern England. I think Dublin is around the 40-50th biggest city in Europe and it's either the second or third smallest capital city in a country with the lowest population density in western Europe. Even allowing for Facebook/Google factor, there's plenty of room on this small island for us all so that we don't have to pay Japanese prices for our housing.

323

RATM wrote: »

The salaries of Manhattan are way way out of kilter with anywhere else in the USA. It is not uncommon for a barman on Manhattan to make $100k a year or for a cleaner to make $80,000 annually..

With the level of tax's there they need it.

As to OP, paper today is interesting, according to the OECD, property prices here are now undervalued. Amazing how the media in Ireland bows to these people "prestigious international think tank". Over the years they seem to get thing wrong about as often as they do right.

Seems to lamenting that prices are "back at the levels they were at the end of the 1990s".
Way I remember that time is that we were already well into the property bubble, prices had been rising exponentially for a number or years by then.

creedp

Duggys Housemate wrote: »

Once again old pudsey. If you need a loan you are not a cash buyer. Also 50k is bog alll money. And banks loan to young people more readily than old people.

It won't be bog all money if many people on this thread have their way ... if prices are slashed in compliance with these wishes be it becasue of NAMA et al dumping people out of their houses wholesale or whatever then it won't be long before your basic 3 bed will be had for that sum and a bit of loose change.

GCU Flexible Demeanour

gaius c wrote: »

Not sure that Manchester (or anywhere in densely populated England) is a great comparison. The Manchester area is over twice the size of the GDA and is the economic engine of northern England. I think Dublin is around the 40-50th biggest city in Europe and it's either the second or third smallest capital city in a country with the lowest population density in western Europe.

I'd take it as axiomatic that Dublin has more to it than any UK regional city; but if anyone has a better comparitor, then produce it with reasons. I've no bother with people saying a comparison to London is invalid (but, then, property prices in London are higher than in Dublin). But, tbh, I think denying this comparison is just odd.

gaius c wrote: »

Even allowing for Facebook/Google factor, there's plenty of room on this small island for us all so that we don't have to pay Japanese prices for our housing.

But I rather think this misses the point. The point is that if you build a bungalow in a random field in Westmeath, you're not in Dublin. It doesn't make any sense to sprawl, even if the land is available.

We do sprawl. But it has little impact on the value of city properties. For all those articles about people commuting from Longford, the reality is people generally don't see far distant housing as an option. It doesn't really impact on the market. A house in Manorhamilton is just no use to the overwhelming majority of Irish people. A house in Dublin, or some other city, is.

Maura74

GCU Flexible Demeanour wrote: »

I'd take it as axiomatic that Dublin has more to it than any UK regional city; but if anyone has a better comparitor, then produce it with reasons. I've no bother with people saying a comparison to London is invalid (but, then, property prices in London are higher than in Dublin). But, tbh, I think denying this comparison is just odd.But I rather think this misses the point. The point is that if you build a bungalow in a random field in Westmeath, you're not in Dublin. It doesn't make any sense to sprawl, even if the land is available.

We do sprawl. But it has little impact on the value of city properties. For all those articles about people commuting from Longford, the reality is people generally don't see far distant housing as an option. It doesn't really impact on the market. A house in Manorhamilton is just no use to the overwhelming majority of Irish people. A house in Dublin, or some other city, is.

Houses are being sold in the UK for as little as £25k and some are sold with strings attached for £1. London has the same amount of population as Ireland, therefore many more people available and working to buy houses.

Not sure the links will work as my computer is up the creek, but here they are anyway.

http://money.uk.msn.com/mortgages-and-homes/homes-that-cost-less-than-%c2%a325000.htlm


http://www.huffingtonpost.co.uk/2013/04/23/one-pound-houses-stoke_n_3139306.html

GCU Flexible Demeanour

Maura74 wrote: »

Houses are being sold in the UK for as little as £25k and some are sold with strings attached for £1. London has the same amount of population as Ireland, therefore many more people available and working to buy houses.

Not sure the links will work as my computer is up the creek, but here they are anyway.

http://money.uk.msn.com/mortgages-and-homes/homes-that-cost-less-than-%c2%a325000.htlm


http://www.huffingtonpost.co.uk/2013/04/23/one-pound-houses-stoke_n_3139306.html

But, in fairness, that's not really the point. Sure, a guy in Galway put the house he built in a random field on the
market for €1. (http://www.galwaynews.ie/14770-four-bed-house-sale-offers-over-%E2%82%AC1-considered)

The point is finding locations that roughly compare to Dublin. Dublin most certainly doesn't compare to the sale price of derelict Council properties in Stoke-on-Trent. Similarly, Manchester doesn't compare to the sale price of derelict Council properties in Stoke-on-Trent.

Manchester is a large UK regional city. Dublin is a small European capital. They seem to have a not utterly dissimilar similar spread of prices for three bed houses. That suggests house rents in Dublin are not inexplicable.

However, I would repeat that the valuations based on rents (as in actual rents, and not what we think rents should be), are valid and would seem to suggest that a further price reduction is quite possible.

The point of this exchange, you'll understand, was simply to compare rental values.

Geuze

jetfiremuck wrote: »

What i cant comprehend is where did all the money go? (not being silly here)

What do you mean? Is this what you mean?

Buy house in 2005-07 for 300k.

House now worth 160k. Where did the 140k go?

Answer: the seller has it.

Geuze

Geuze wrote: »

What do you mean? Is this what you mean?

Buy house in 2005-07 for 300k.

House now worth 160k. Where did the 140k go?

Answer: the seller has it.

Most sellers were builders/developers who ploughed the money back into building houses as fast as they could and used it to borrow more money. We ended up with nearly 300,000 empty houses that they couldn`t sell. The lack of paying loans meant the banks didn`t have enough money coming in for day to day activities so the government borrowed billions to hand over to the banks so the atms wouldn`t run dry.

Then the govt setup NAMA and bought up all the empty housing and won`t release it to the market - propping up prices.

Irelands loans were extended so long that essentially the taxpayer took out a giant mortgage on hundreds of thousands of empty houses that we aren`t using.

GCU Flexible Demeanour

Deleted User wrote: »

Then the govt setup NAMA and bought up all the empty housing and won`t release it to the market - propping up prices.

Irelands loans were extended so long that essentially the taxpayer took out a giant mortgage on hundreds of thousands of empty houses that we aren`t using.

But is it fair to say that the location of those empties is an issue, along with the fact that an amount of the properties aren't houses. There's loads of empty houses around Leitrim, Longford, Roscommon. There might be vacant apartment blocks in Dublin, being held back by NAMA. But there isn't much by way of houses, and people aren't going to be fooled into buying a house in Longford as a step on the ladder.

jmayo

jetfiremuck wrote: »

... What i cant comprehend is where did all the money go? (not being silly here)

Some smart people still have their money or re invested it in other things that weren't property or bank related.

There is always talk about how some farmers made millions and then on advice promptly invested it in blue chip Irish shares i.e. primarily our irish banks.

Some smart ones, like one fellow I heard of outside Cork city, sold his land which some of our "bright bubble entrepreneurs" reckoned was going to be yet another hotel/golf complex/spa/etc.
A few years after the farmer bought it back pocketing a good few million in the process.

If an award was to go to some of the smartest operators during the bubble then it should go to the daughters of PV Doyle of Doyle Juries hotels fame.
They sold a chunk of their hotels to the celtic high fliers, and now ex pat sleveens seeking bankrupcty elsewhere, like sean dunne, bernie mcnamara and derek quinlan.
They realised they could make a fortune selling their hotels or more precisely the land they sat on, to the well connected high powered visionary developers. (cough cough splutter spit)
Now those developers have dumped their debts on us and we owe the money.

GCU Flexible Demeanour wrote: »

But is it fair to say that the location of those empties is an issue, along with the fact that an amount of the properties aren't houses. There's loads of empty houses around Leitrim, Longford, Roscommon. There might be vacant apartment blocks in Dublin, being held back by NAMA. But there isn't much by way of houses, and people aren't going to be fooled into buying a house in Longford as a step on the ladder.

I can take you to what was termed a Dublin cummutter town i.e. within 50 miles of Dublin with raillink and motorway, and show you an entire empty estate of over 40/50 houses.
So it is not always the ars*hole of Roscommon, Leitrim, etc that have the empties.
What NAMA is sitting on (i.e. sites and apartment complexes) isn't the only thing distorting the market.
A big issue is the amount of people "owning" houses that they are not meeting payments on and this includes owner occupiers and landlords.
If this tranche, or even a small portion, of these properties were put on the market it could have a sizable influence on prices in certain areas.

GCU Flexible Demeanour

jmayo wrote: »

I can take you to what was termed a Dublin cummutter town i.e. within 50 miles of Dublin with raillink and motorway, and show you an entire empty estate of over 40/50 houses.
So it is not always the ars*hole of Roscommon, Leitrim, etc that have the empties.

Indeed, but the issue there is that a town 50 miles from Dublin isn't a commutable distance. I agree that even places like Wexford have, in some contexts, been referred to as the wider Dublin commuter belt. But they just ain't. I'd doubt that, with the exception of apartments, they would be too many ghost estates inside the M50. There are developments around places like Adamstown that don't seem to have sold like hot cakes. But Adamstown isn't SCD.

jmayo wrote: »

A big issue is the amount of people "owning" houses that they are not meeting payments on and this includes owner occupiers and landlords.

If this tranche, or even a small portion, of these properties were put on the market it could have a sizable influence on prices in certain areas.

I'd suspect so - but, bear in mind, that shouldn't change the rental value. The landlord might not be paying the loan, but he's still collecting the rent.

carpejugulum

johnr1 wrote: »

What I think is that I don't know anything about Manhattan property prices and that the poster you quoted obviously does.

It may have been New York city in general thay the guy was on about.

As I said in my post, he may also have been talking shyte. I dont know.

You need to take management fees and property taxes into account, and they are huge in the US compared with Ireland.

GCU Flexible Demeanour

GCU Flexible Demeanour wrote: »

But is it fair to say that the location of those empties is an issue, along with the fact that an amount of the properties aren't houses. There's loads of empty houses around Leitrim, Longford, Roscommon. There might be vacant apartment blocks in Dublin, being held back by NAMA. But there isn't much by way of houses, and people aren't going to be fooled into buying a house in Longford as a step on the ladder.

I`d tend to agree with you, yes there are plenty of vacant apartment blocks around dublin and new developments with large vacancy rates but these tend to be places like Adamstown with loads of apartments and the houses are 2/3 bed townhouses and duplexes.

Here is some info with links to back it all up:
http://www.thepropertypin.com/viewtopic.php?f=4&t=1861

from here:
http://www.thepropertypin.com/viewtopic.php?f=4&t=13848

note the date of the first thread and note that the screenshots show years going back to 2000. By 2003/04 it was clear there was a problem with the portions.

I mean by 2003 prices were increasing by tens of thousands every month and what Ireland was getting for its money was getting smaller and smaller

By 2008 67% of all new builds in Dublin were apartments. Now remember Dublin county still has farms in places like Lucan and especially in North country Dublin.

It was clear to any planner or government advisor by 2003/2004 that they needed to do something quickly (plenty of things they could have done too).
I know some people like the Dublin city skyline or lack of one but even if we wanted to preserve it we could of designated a portion to preserve and, for the rest, removed the building height restriction.

We`d have skyscrapers in the center with all the economic benefits they bring. Instead we branched out to Leitrim etc!!!!!!!!!!!

ezra_pound

maryishere wrote: »

If decentralisation had happened as the government promised in 2003 / 2004, the housing market in Ireland would be more even. People forget one of the reasons some counties got so overdeveloped was because people expected large government departments to leave the traffic and overpriced congestion of Dublin and relocate to the new areas. The government and planning authorities have a lot to answer for. As regards the OP question, they are not overpriced compared to wages and the cost of construction. Many new houses are for sale at less that it cost / would cost to build them. If you think houses are overpriced then you must accept that wages are too high too.

No if prices are overpriced then wages are too low for the current market price.

Wages are not really going to change much in Ireland the next few years bit house process are adjusting to correct value. This has largely been achieved in Dublin. Outside Dublin prices still have a long way to go.

AlekSmart

Deleted User wrote: »

I`d tend to agree with you, yes there are plenty of vacant apartment blocks around dublin and new developments with large vacancy rates but these tend to be places like Adamstown with loads of apartments and the houses are 2/3 bed townhouses and duplexes.


It was clear to any planner or government advisor by 2003/2004 that they needed to do something quickly (plenty of things they could have done too).
I know some people like the Dublin city skyline or lack of one but even if we wanted to preserve it we could of designated a portion to preserve and, for the rest, removed the building height restriction.

We`d have skyscrapers in the center with all the economic benefits they bring. Instead we branched out to Leitrim etc!!!!!!!!!!!

Good Stuff,and so relevant to the smoke'n mirrors which our Government is currently hoping will shield their shenannigans from too much public study.

Take a stroll around Central Dublin any evening after Close of Business and take in the sheer amount of EMPTY semi-derelict over-the-shop accomodatation rotting away.

Dublin,in the Colonial times may well have been a City of slums and other urban ailments,however all of these were present in most other Capital cities also.

However,our refusal to recognise and treat these ailments,culminating in Neil T Blaney's decision to press ahead with the Ballymun 7 Towers concept against the advice of several Departmental professionals,who correctly noted that the Urban Towers concept had not,at that time proved as successful elsewhere in Europe as was being peddled to the Irish.

Mr Blaney,had,of course,other pressures weighing on his shoulders,not least of them being maintaining his party's contribution stream from the Building and Construction sector.

The real sadness,for me,is how the various Political Leaders and their many subservient City Councils over the decades,simply sat on their hands allowing rot and pestilence to set in to the fabric of Dublin CITY.

Spending a proportion of the newly found €150 Million "Infrastructure Funding" on a trial project to restore and upgrade some of our "Over the Shop" premises might provide a lot more return than Tolling the M50.

However,it might not fit in too well with the NAMA game plan !!!

vinylbomb

ezra_pound wrote: »

No if prices are overpriced then wages are too low for the current market price.

Sorry?


This is very essence of economic nonsense.

AlekSmart

vinylbomb wrote: »

Sorry?

This is very essence of economic nonsense.

Whilst we're on the subject of economic nonsense,I'm trying to make some sense out of this story in todays Indo.....

http://www.independent.ie/irish-news/homeless-family-of-12-may-spend-summer-in-hotel-29327935.html

Whilst individualising the situation may be questionable,the figures being quoted appear to be of interest,even in the context of this thread..

With a 12 person family,I'm assuming the Whitehall house to be quite substantial.

Being forced to leave their home because they couldn’t afford to the €1,250 rent.

The Purcells were evicted last month from their home in Whitehall because they couldn’t afford the €1,250 monthly rent.

The Department of Social Protection refused to breach the maximum €950 rent supplement cap to help them stay in the property.

However perhaps the most pertinent element is left till last...

They have lived for the past four and a half years in Roscommon as part of a rural relocation scheme.

However, when their allowance under the relocation scheme fell behind the cost of their rental accommodation, they returned to the capital in the hope of finding a suitable house there.

By leaving this scheme, they made themselves homeless.

Anybody care to venture an informed (hopefully) opinion on situations such as this ?

Potatoeman

Property is still overpriced including rental rates. We still have a pryamid scheme thats designed to keep prices high. We are a island on the edge of Europe with low population density in a recession with high unemployment.
High house prices devalue earning power and only benefit those with multiple properties. You need to live somewhere so why do you need your home to increase in value? If you trade up you will be paying more for that tradeup in an increasing property market then now and you agree to the repayments when youbuy the property regardless of the price. It should be a home not an investment.

Potatoeman

GCU Flexible Demeanour wrote: »

But, in fairness, that's not really the point. Sure, a guy in Galway put the house he built in a random field on the
market for €1. (http://www.galwaynews.ie/14770-four-bed-house-sale-offers-over-%E2%82%AC1-considered)

The point is finding locations that roughly compare to Dublin. Dublin most certainly doesn't compare to the sale price of derelict Council properties in Stoke-on-Trent. Similarly, Manchester doesn't compare to the sale price of derelict Council properties in Stoke-on-Trent.

Manchester is a large UK regional city. Dublin is a small European capital. They seem to have a not utterly dissimilar similar spread of prices for three bed houses. That suggests house rents in Dublin are not inexplicable.

However, I would repeat that the valuations based on rents (as in actual rents, and not what we think rents should be), are valid and would seem to suggest that a further price reduction is quite possible.

The point of this exchange, you'll understand, was simply to compare rental values.

Its population density which is similar in Dublin but thats concentrated and excludes the overall population density of the sorrounding areas.
The UK have some housing issues of their own on the way.

hfallada

How come no one has made the point that part of the reason why rents are increasing is that there is massive amount of English language students in the Dublin. They are mainly Brazilian (160 million and most need to learn English) and they are creating a huge demand. Walk through town or go to some of the nightclubs and there is a huge amount of them.

Its so cheap and easy for them to get a visa for the year that most of them dont going to the UK anymore.

Cody Pomeray

hfallada wrote: »

They are mainly Brazilian (160 million and most need to learn English) and they are creating a huge demand. Walk through town or go to some of the nightclubs and there is a huge amount of them.

Its so cheap and easy for them to get a visa for the year that most of them dont going to the UK anymore.

It's not cheap, they have to show they have €7,000 in their bank account, or in any account (in their name exclusively) to which they have immediate access.

They're also young, single, middle class kids who spend a lot of money in Dublin's night scene. A lot of the clubs and bars in the south city centre area who rely on domestic demand are being heavily supported by these language students.

GCU Flexible Demeanour

AlekSmart wrote: »

Anybody care to venture an informed (hopefully) opinion on situations such as this ?

The general observation is simply that the rent supplement scheme acts as a floor on the rental market.

However, as is typical in these cases, sloppy journalism means we don't really know the facts of the case. They seem to have moved from Roscommon to Dublin and received rent supplement in Dublin for a house in Whitehall. Yet the account in the article is quite garbled. Also, this bit doesn't add up

<....> the €1,250 monthly rent. <...>the maximum €950 rent supplement cap to help them stay in the property.<...>
The couple are unemployed and are left with €750 every month to pay for bills after the rent is paid.

Assuming they are on Jobseekers Allowance, they should be getting the full €188 pw for one adult, €124.80 in respect of a dependent spouse and €29.80 for every child. That's €610 pw. Additionally, they should be collecting €1,370 every month in respect of child benefit for 10 children. The child benefit alone would be enough to cover the full rent, leaving over €600 pw for everything else.

However, on top of that, they seem to be getting rent supplement of €950 pm. So they only have to cover €300 net of their rent - meaning they should actually still have €1,000 pm in child benefit, in addition to jobseekers benefit.

So, I'm afraid, my only comment is the journalist needed to ask a few more questions before penning the article.

Dannyboy83

Why Irish property is still overpriced?

Denial ?

For example
http://www.daft.ie/searchsale.daft?id=719558
This house was asking about 240k
Just been reduced to 195k.

But two extremely similar houses across the road, one sold recently for 135k, the other is asking 120k, others have gone for 110k.

Then this point is actually highlighted:

**** Over 50% Off the price this house was 7 years ago! ****

LOL!
a) why would that positively influence your decision?
b) didn't you just tell a potential buyer that their future neighbours are drowning in debt?



It's not hard to see why the house has remained unsold.

Potatoeman

GCU Flexible Demeanour wrote: »

The general observation is simply that the rent supplement scheme acts as a floor on the rental market.

However, as is typical in these cases, sloppy journalism means we don't really know the facts of the case. They seem to have moved from Roscommon to Dublin and received rent supplement in Dublin for a house in Whitehall. Yet the account in the article is quite garbled. Also, this bit doesn't add upAssuming they are on Jobseekers Allowance, they should be getting the full €188 pw for one adult, €124.80 in respect of a dependent spouse and €29.80 for every child. That's €610 pw. Additionally, they should be collecting €1,370 every month in respect of child benefit for 10 children. The child benefit alone would be enough to cover the full rent, leaving over €600 pw for everything else.

However, on top of that, they seem to be getting rent supplement of €950 pm. So they only have to cover €300 net of their rent - meaning they should actually still have €1,000 pm in child benefit, in addition to jobseekers benefit.

So, I'm afraid, my only comment is the journalist needed to ask a few more questions before penning the article.

I dont think you are allowed to make up the difference. They did allow people do this for a few months before cutting them off if they hadnt moved elsewhere.
Not sure what happens now though. These stories are as bad as the ones on prime time with no real explanation.

Potatoeman

Dannyboy83 wrote: »

Why Irish property is still overpriced?

Denial ?

For example
http://www.daft.ie/searchsale.daft?id=719558
This house was asking about 240k
Just been reduced to 195k.

But two extremely similar houses across the road, one sold recently for 135k, the other is asking 120k, others have gone for 110k.

Then this point is actually highlighted:


LOL!
a) why would that positively influence your decision?
b) didn't you just tell a potential buyer that their future neighbours are drowning in debt?



It's not hard to see why the house has remained unsold.

The constant comparison with peak prices is misleading too. Most were never achieved, just asking prices. What were they sold for 15, 20 years ago before the nonsense of the boom.