Bouncing along an Artifical Bottom in the Capital

Zamboni

0% change in Dublin Residential in May

http://www.cso.ie/en/media/csoie/releasespublications/documents/prices/2013/rppi_apr2013.pdf

There are reasons why prices would decline further in a normal functioning market but the property market in Ireland is not normal.
It operates with state interference and state owned bank interference.
So for right or for wrong I see the below happening.

• Normal levels of repossession - won't happen. There will be a managed trickle.
  
• Bank writes downs - widespread abuse by bank officials in writing off debt for family and friends crystalising in banks balance sheets for the tax payer.
  Complete lack of transparency already illustrated at recent PTSB AGM.
  
• Thousands of NAMA controlled residential empties in Dublin not on the market - probably be allowed to rot and be demolished intentionally to destroy the remaining oversupply or sold at a loss to investors. Again left for future tax payers to deal with.
  
• New talk of construction already starting due to the (manufactured) lack of supply.

So are we at the (artificial) bottom?

lima

ahh now sure prices are rising in Dublin!

http://www.independent.ie/irish-news/property-prices-rise-in-dublin-29319379.html

the_syco

Zamboni wrote: »

0% change in Dublin Residential in May

http://www.cso.ie/en/media/csoie/releasespublications/documents/prices/2013/rppi_apr2013.pdf

lima wrote: »

ahh now sure prices are rising in Dublin!

http://www.independent.ie/irish-news/property-prices-rise-in-dublin-29319379.html

The Indo has a habit of shouting about dead cat bounces, etc, whilst the CSO lists stats, so I'd believe the CSO over the Indo. But of course you knew this already, and are just taking the piss, yes?

Victor

Zamboni wrote: »

0% change in Dublin Residential in May

That doesn't mean anything other than 0% change in Dublin Residential in May.

Statistically, you will have some ups, some downs and some no changes.

lima

the_syco wrote: »

The Indo has a habit of shouting about dead cat bounces, etc, whilst the CSO lists stats, so I'd believe the CSO over the Indo. But of course you knew this already, and are just taking the piss, yes?

yeah of course!

lima

aw, poor indo are really getting desperate!


http://www.independent.ie/irish-news/return-of-the-home-movers-shakes-up-house-market-29329251.html

Lantus

From talking to a few EA's I know what is happening at the minute is that investors are purchasing property in the sub 100k range selectively and there is a reasonable amount of interest in that range. Rentals are also strong.

House movers? There may be some grain of thruth as families would be under a lot of presure to repsond to a growing brood and the baby boom is a reality. I dont think the extent of that is enough to warrant the article by the Indo as above. No data, no proof and nothing to back up what is being 'suggested'.

cook_my_sock

houses are being sold in Dublin right now , I know of several ive been following in the Dublin 9 area which have sold above the asking price in the past month , the bottom was reached in most of Dublin a year ago

a lot of people have become irrational about the market in the same way they were during the boom , some people seem to think a day will come when a three bed in rathmines can be bought for 150 k , that's not going to happen

lima

cook_my_sock wrote: »

houses are being sold in Dublin right now , I know of several ive been following in the Dublin 9 area which have sold above the asking price in the past month , the bottom was reached in most of Dublin a year ago

a lot of people have become irrational about the market in the same way they were during the boom , some people seem to think a day will come when a three bed in rathmines can be bought for 150 k , that's not going to happen

Considering the amount of BTL's in Rathmines, that may happen.

You are not going to get a redbrick in ranelagh for under 300k, but then again, I still wouldnt pay over 400k for one, I'd just live somewhere else. But I guess there are different people with different perceptions of price, who are willing to pay more for property.

In general, property is still very expensive in Dublin, especially for the low quality that you get.

engineermike

Lantus wrote: »

From talking to a few EA's I know what is happening at the minute is that investors are purchasing property in the sub 100k range selectively and there is a reasonable amount of interest in that range. Rentals are also strong.

House movers? There may be some grain of thruth as families would be under a lot of presure to repsond to a growing brood and the baby boom is a reality. I dont think the extent of that is enough to warrant the article by the Indo as above. No data, no proof and nothing to back up what is being 'suggested'.

Yeah, i'm in complete agreement with Lantus there. The Dublin market (and to a lesser extent other parts of the country) has been strongly investor driven since late last year, noticeably so even when you take out the rush of first time buyers trying to close before MIR ran out.
Similarly in construction the extension / attic conversion sector has been doing quite well for some - with that being the only option left for growing families. The added space & upgrading not only lends itself to short term living in the same home but gives extra marketability to a home if it has to be sold in the next 5 years/ 10 years. It would give value to the selling price as long as you focus on the current value & its current value when extended or converted. (if you do the sum while looking at the value during the boom you'd probably end up crying or something).

The thing about the indo. and the other papers, you only have to listen to the business news of late to know that the papers / print media are struggling with depreciating advertising revenues. Recent examples being the Sunday business post & the Irish examiner.
So its not surprising the amount of 'fluff pieces' relating to property that are coming out lately when you consider what a large chunk of advertising spend comes from (or used to come from) the EA / property sector.
I do think it plays a bit on what must be still a 'twitchy' segment of the property buyers who still remember the constant growth in prices during the boom and are afraid that a home or property in a certain area will be forced out of their price bracket by the market and demand.
You only have to read some posts on here to know their are people that have those concerns - I just hope the stricter controls in place now by the banks will prevent people over spending or going beyond their means to get 'that particular home'. Thing could change again in a minute even in Dublin.
mf

cook_my_sock

lima wrote: »

Considering the amount of BTL's in Rathmines, that may happen.

You are not going to get a redbrick in ranelagh for under 300k, but then again, I still wouldnt pay over 400k for one, I'd just live somewhere else. But I guess there are different people with different perceptions of price, who are willing to pay more for property.

In general, property is still very expensive in Dublin, especially for the low quality that you get.

property is cheap in Dublin right now , its not cheap for most people in exclusive areas but everything is relative

when the banks start functioning close to normal again ( banks are for the most part not lending ) , property in Dublin will rise quite sharp

everywhere else , forget about it for a decade

lima

cook_my_sock wrote: »

property is cheap in Dublin right now , its not cheap for most people in exclusive areas but everything is relative

when the banks start functioning close to normal again ( banks are for the most part not lending ) , property in Dublin will rise quite sharp

everywhere else , forget about it for a decade

Compared to other countries, property in Dublin is of a low quality, such to the extent that I will keep on renting for the next while.

Massive Repossessions are on the way, and once they happen, we will see property falling again in Dublin, and only then will their true value be realised.

There are probably many like me, who have a large deposit (circa. 80k) and 300k approval who are sitting on the fence waiting for the banks to sell off houses from people who have stopped paying their debts.

There are thousands of people who have buy to lets who stopped paying their mortgages years ago and are just pocketing the rent. This wont last forever and once repos happen I expect to be able to buy for eg a two br apartment in dublin city centre for 12k

lima

lima wrote: »

Compared to other countries, property in Dublin is of a low quality

+1
Dublin apartment blocks build in the past 20 years will become the slums of the future.
The average size is around 50% too small to build stable communities.

hfallada

Buying a house is cheaper than renting with low interest rates at the moment. Maybe in more working class/lower middle class areas there will be huge repossessions. But in fairly wealthy areas in which few people have lost their jobs. According to the census where I live, there was 10 unemployed people out of the area of 1000 people. Meaning the chances of a defaulting mortgage is pretty small.

There is a market for good homes in good areas and I can't see a huge amount of repossession in those areas are they are mature areas with a lot of mortgage less houses. If you paying a €1400 a month for a €100,000 aparement. The logical thing to do is to buy it

murphaph

lima wrote: »

Compared to other countries, property in Dublin is of a low quality, such to the extent that I will keep on renting for the next while.

What does the poor quality of Irish construction have to do with how long you rent for?

lima wrote: »

Massive Repossessions are on the way, and once they happen, we will see property falling again in Dublin, and only then will their true value be realised.

Massive repossessions aren't on the way. They probably should be but they won't. It'll be fudged so it doesn't happen.

lima wrote: »

There are probably many like me, who have a large deposit (circa. 80k) and 300k approval who are sitting on the fence waiting for the banks to sell off houses from people who have stopped paying their debts.

There are thousands of people who have buy to lets who stopped paying their mortgages years ago and are just pocketing the rent. This wont last forever and once repos happen I expect to be able to buy for eg a two br apartment in dublin city centre for 12k

I think your plan will backfire on you but best of luck with it.

RATM

hfallada wrote: »

Buying a house is cheaper than renting with low interest rates at the moment. Maybe in more working class/lower middle class areas there will be huge repossessions. But in fairly wealthy areas in which few people have lost their jobs. According to the census where I live, there was 10 unemployed people out of the area of 1000 people. Meaning the chances of a defaulting mortgage is pretty small.

There is a market for good homes in good areas and I can't see a huge amount of repossession in those areas are they are mature areas with a lot of mortgage less houses. If you paying a €1400 a month for a €100,000 aparement. The logical thing to do is to buy it

This argument that the rich are somehow insulated from repossessions keeps coming up. If anything people who were given access to more money than most are in more financial trouble than most. There are lots of people in places like South County Dublin who are up to their necks in buy to let investments, some of them went nuts and bought 10+ apartments on interest only mortgages and now they can't service the loans. Others lost their entire pension funds on bank shares. Tons of the countries top accountants, judges, barristers and surgeons lost their shirts in the Custom House Capital debacle. We have a Minister of Health who is listed in Stubbs Gazette as owing €1.9m.

The notion that the wealthy somehow aren't in financial trouble and won't be seeing repossessions is daft. The lucky few who borrowed more than €5m got into NAMA, anyone owing below that isn't afforded the same level of protection- it doesn't matter if they can't pay their €200,000 mortgage or their €2m one, the banks will have to repossess them to get their balance sheets back in order. I say this with confidence because it is all at the insistence of the Troika who are the real power players in Ireland right now. Our Dail has been demoted to a talking shop where the detail of Troika policy is thrashed out, nothing more.

Scortho

lima wrote: »

Compared to other countries, property in Dublin is of a low quality, such to the extent that I will keep on renting for the next while.

Massive Repossessions are on the way, and once they happen, we will see property falling again in Dublin, and only then will their true value be realised.

There are probably many like me, who have a large deposit (circa. 80k) and 300k approval who are sitting on the fence waiting for the banks to sell off houses from people who have stopped paying their debts.

There are thousands of people who have buy to lets who stopped paying their mortgages years ago and are just pocketing the rent. This wont last forever and once repos happen I expect to be able to buy for eg a two br apartment in dublin city centre for 12k

12k Lima?
In Dublin city centre?
I don't think so. Did you leave out a zero by any chance?

Using the market rent x 12 (months) x 13 years would give a rent of 76 euro a month for a 2 bed in the city centre. This would require a fall of over 90 % to justify a 12k value. in monthly rents at a time when the demand for rentals are increasing.

Yes btls will be repossessed. But not all of them. And of the btls in arrears, how many of them are outside Dublin.
There were a lot of section 23s bought down in the likes of carrick on Shannon in the later years of the boom. These may pop up at 12 k alright.

engineermike

Scortho wrote: »

12k Lima?
In Dublin city centre?
I don't think so. Did you leave out a zero by any chance?

Using the market rent x 12 (months) x 13 years would give a rent of 76 euro a month for a 2 bed in the city centre. This would require a fall of over 90 % to justify a 12k value. in monthly rents at a time when the demand for rentals are increasing.

Yes btls will be repossessed. But not all of them. And of the btls in arrears, how many of them are outside Dublin.
There were a lot of section 23s bought down in the likes of carrick on Shannon in the later years of the boom. These may pop up at 12 k alright.

I read the post earlier & i 2 thought it was missing a 0 at the end also. In what reality would apartments go for 12 K in dublin ?
If its because of the buy to let / or repossessions going up do you really think Lima that the banks are going to drive that many repossessions to saturate the market to that point? In itself it would break the mortgage lending market for the same banks - putting them out of business on one of their staple lending products / sectors.
The "shooting yourself in the foot" saying would be apt here. Its not going to happen like that.
Granted there are unfinished apartments in the arse end of Donegal to be had for 12 / 15 K, but you'd have to deal with putting another 20k in to get the apartment finished, no guarantee that the rest of the apartments are sold / sold & let and therefore leaving you in an underfunded management company & a badly maintained building and property going forward.
Not to mention that there are very little employment oppertunitys in counties that far out, and commuting is a b*t*h.

Scortho i'd buy in Carrick if there was an apartment for 40 / 50K, its a lovely town and just hard hit because of that change in decentralization policy. But know ppl in the town that have bought and sold recently (seasoned property owners) but even they admit they were lucky to convey there properties in this current climate, and had really good homes to market. Still a beautiful town and place to live in my mind.

In fairness though if I got wiff of properties on the Shannon or east of , selling for 12 K - you'd move back in with mammy for 12 months and save your rent & buy one at the end of the year ! I would.

lima

murphaph wrote: »

What does the poor quality of Irish construction have to do with how long you rent for?

There is nothing of worthy quality available at the moment, therefore I will keep on renting until something of good quality becomes available in the future.

Massive repossessions aren't on the way. They probably should be but they won't. It'll be fudged so it doesn't happen.


I think your plan will backfire on you but best of luck with it.

I meant 120k by the way

I don't think it'll backfire. There you go, two opinions.

lima

Scortho wrote: »

12k Lima?
In Dublin city centre?
I don't think so. Did you leave out a zero by any chance?

Using the market rent x 12 (months) x 13 years would give a rent of 76 euro a month for a 2 bed in the city centre. This would require a fall of over 90 % to justify a 12k value. in monthly rents at a time when the demand for rentals are increasing.

Yes btls will be repossessed. But not all of them. And of the btls in arrears, how many of them are outside Dublin.
There were a lot of section 23s bought down in the likes of carrick on Shannon in the later years of the boom. These may pop up at 12 k alright.

Apologies, e120k.

Victor

engineermike wrote: »

Similarly in construction the extension / attic conversion sector has been doing quite well for some - with that being the only option left for growing families. The added space & upgrading not only lends itself to short term living in the same home but gives extra marketability to a home if it has to be sold in the next 5 years/ 10 years. It would give value to the selling price as long as you focus on the current value & its current value when extended or converted. (if you do the sum while looking at the value during the boom you'd probably end up crying or something).

Spending €50,000 on an extension won't increase the value of the property by €50,000.

Scortho

lima wrote: »

Apologies, e120k.

Thats a bit more reasonable and realistic.

2 beds are very close to that level, in fact some are!
http://www.myhome.ie/residential/dublin/property-for-sale-in-dublin-1?minbeds=2&maxbeds=2&sort=price&direction=asc

The Spider

There won't be massive repossessions, in Dublin at least you can easily rent out any btl and cover the mortgage.

Family homes won't be affected by any repossessions, if you think this government or any government is going to allow that to happen you are nuts, apart from the family being protected by the constitution, any government would be quickly ejected, if this happened forcibly.

The Irish don't like evictions, it's a part of our psyche.

lima

The Spider wrote: »

There won't be massive repossessions, in Dublin at least you can easily rent out any btl and cover the mortgage.

Family homes won't be affected by any repossessions, if you think this government or any government is going to allow that to happen you are nuts, apart from the family being protected by the constitution, any government would be quickly ejected, if this happened forcibly.

The Irish don't like evictions, it's a part of our psyche.

Don't underestimate the amount of people who completely against any type of debt forgiveness. There are many voters who didn't get involved in stupidity in the 'Boom'

Why on earth would someone under 30 want to buy a home for x when some person over y doesn't pay their debts for 2 years and also gets let off 100k? x needs to come down to a price that seems like value, especially IF some people get some sort of debt forgiveness (and that's not going to happen as much as some people think it will).

There are literally 1000's of homes empty in Dublin, they will come on to the market sooner of later.

As for apartments, I'm sure there are hundreds of middle class who are in mega-arrears on their 'investment properties' and will be forced to sell because the rent doesn't cover the arrears too. I for one am more interested in apartments because of my lifestyle, but would only be willing to buy one for e120-140k for a city centre apartment.

jmayo

cook_my_sock wrote: »

property is cheap in Dublin right now , its not cheap for most people in exclusive areas but everything is relative

when the banks start functioning close to normal again ( banks are for the most part not lending ) , property in Dublin will rise quite sharp

everywhere else , forget about it for a decade

Is it me or has anyone else noticed how every so often a new poster arrives full of optimism ?
Mind telling us how you worked out property in Dublin is cheap right now ?
Or are you comparing current prices to 2006 ?

You heard it here first folks.
Property in Dublin is going to rise sharply.
And not in 10 years, but just as soon as the banks start lending again.

Of course it doesn't matter that we now have less banks and most of them have loan books resembling that of a compulsive gambler after a bad week at Cheltenham. :rolleyes:

RATM wrote: »

This argument that the rich are somehow insulated from repossessions keeps coming up. If anything people who were given access to more money than most are in more financial trouble than most. There are lots of people in places like South County Dublin who are up to their necks in buy to let investments, some of them went nuts and bought 10+ apartments on interest only mortgages and now they can't service the loans. Others lost their entire pension funds on bank shares. Tons of the countries top accountants, judges, barristers and surgeons lost their shirts in the Custom House Capital debacle. We have a Minister of Health who is listed in Stubbs Gazette as owing €1.9m.

The notion that the wealthy somehow aren't in financial trouble and won't be seeing repossessions is daft. The lucky few who borrowed more than €5m got into NAMA, anyone owing below that isn't afforded the same level of protection- it doesn't matter if they can't pay their €200,000 mortgage or their €2m one, the banks will have to repossess them to get their balance sheets back in order. I say this with confidence because it is all at the insistence of the Troika who are the real power players in Ireland right now. Our Dail has been demoted to a talking shop where the detail of Troika policy is thrashed out, nothing more.

I think it is because a lot of these people are so well connected is one of the reasons the debt forgiveness brigade get so much traction in the media.
It is not alone the likes of Custom House Captial, look how many well known figures got burnt by quinlan.

As you said thank God for the Troika who see through the bullsh** and are forcing the Irish governments, be it kicking and screaming, to start getting it's house in order.

murphaph

lima wrote: »

As for apartments, I'm sure there are hundreds of middle class who are in mega-arrears on their 'investment properties' and will be forced to sell because the rent doesn't cover the arrears too. I for one am more interested in apartments because of my lifestyle, but would only be willing to buy one for e120-140k for a city centre apartment.

Where do you think the current tenants in these hundreds of apartments are going to go to? They won't vanish into thin air. They will still need a place to live and will still be prepared to pay the same (or increasing lately) rents as before....so what does this mean?

It means these apartments won't just be there for the taking. They will be of interest to investors if the yield is right. If the yield is not right it means the apartment is too expensive in the first place and your bargain isn't a bargain at all!

lima

murphaph wrote: »

Where do you think the current tenants in these hundreds of apartments are going to go to? They won't vanish into thin air. They will still need a place to live and will still be prepared to pay the same (or increasing lately) rents as before....so what does this mean?

It means these apartments won't just be there for the taking. They will be of interest to investors if the yield is right. If the yield is not right it means the apartment is too expensive in the first place and your bargain isn't a bargain at all!

so you think there are enough buyers out there to keep prices high when 100's of apartments go for sale?? lol

Hopefully the large stock that is being withheld by nama will get released.

Also, places like Clancy Quay are being bought by big US investment companies who are going to rent 100's of apartments, bringing rent down.

Forest Demon

lima wrote: »

so you think there are enough buyers out there to keep prices high when 100's of apartments go for sale?? lol

Hopefully the large stock that is being withheld by nama will get released.

Also, places like Clancy Quay are being bought by big US investment companies who are going to rent 100's of apartments, bringing rent down.

You are 100% right in your logic. Unfortunately logic has no place in the Irish property market or government for that matter. They are dancing on the strings of the banks since the start of this mess and that will continue.

I can see a lot of these bank repossessed units getting transferred to NAMA or sold off in groups (probably behind closed doors). Sure the taxpayer will pick up the losses while these units rot. This creates false demand and artificially high prices. This would be the Irish way. It has worked so far :rolleyes:. After they are repossessed they can be rented by the banks under the name of some kind of government RAS scheme and rent out the units rather than sell them and recognise the full loss on these units.

Look what banks did with hotels. Rather than let them go for the market value they kept them going at a loss and distorted the hotel market. They will be in no hurry to devalue the residential market any further.

Then again maybe the non Irish lenders will have a field day repossessing and flood the market as they are (have) pulled out of Ireland. Time will tell if they can contain the flood of BTL apartments.

Heaven forbid that there would be a transfer of wealth from the old to the young and that the young might have some disposable income left to spend in the economy rather than on mortgage or rent.