June sees highest monthly property rise since crash

The Spider

Trying to do this without anyone accusing me of trolling, but CSO results are out and show 3 months of rises first time since 2007, I know there's enough people around these parts to be interested.

http://www.irishtimes.com/business/economy/ireland/june-sees-highest-monthly-property-rise-since-crash-1.1472501

the_syco

It shows a demand. But only where there isn't space to build more; as there's plenty of houses where there is land.

gaius c

Worth noting the caveat:

While the CSO figures are viewed as the most accurate data series on the property prices, they include only properties that have been purchased by bank-supplied mortgage finance. With approximately half of transactions being conducted on a cash basis, there remains a gap in the comprehensiveness of the data.

Also, transaction volume is tiny.

Since the PPR data is now available, the CSO should be using that instead of the potentially misleading data from mortgage transactions only. Also I have to check but when I did my excel spreadsheet for PPR data, I remember one sale in Galway skewing the Galway data for the entire month.

buyer95

The figures are skewed, outside of Dublin there has been no improvement.

StillWaters

buyer95 wrote: »

The figures are skewed, outside of Dublin there has been no improvement.

That's not true. Did you read the article?

Frank Lee Midere

its just the tiny amount of transactions. This tells us nothing. When the supply increases prices will continue to fall.

hfallada

Doesnt the CSO exclude cash purchases which are quite common at the moment. But I do believe apartments and houses prices are rising. Renting is so expensive that its nearly cheaper to buy

Bigcheeze

hfallada wrote: »

Doesnt the CSO exclude cash purchases which are quite common at the moment. But I do believe apartments and houses prices are rising. Renting is so expensive that its nearly cheaper to buy

It does but the PPR does not and Daft.ie analysis found that the PPR when launched was largely in line with the CSO.

Hands up who is prepared to sell their house for less to a cash buyer ?

The Spider

More evidence that the bottom was reached last year, they may fall again, in fact will fall, but you are looking at 15 to 20 years down the road. People who are looking to buy know that depending on their age time mightn't necessarily be on their side, for instance it's harder to get a mortgage the older you get.

Waiting for an even bigger drop may not be advisable, as it doesn't look likely, at the height of the bubble a crash looked very likely, now not so much.

murphaph

Frank Lee Midere wrote: »

its just the tiny amount of transactions. This tells us nothing. When the supply increases prices will continue to fall.

How will supply increase without new house building? Or do you also believe that a repossession frees up a property and adds to supply (as if the occupants all vanish into thin air)?

The Spider

murphaph wrote: »

How will supply increase without new house building? Or do you also believe that a repossession frees up a property and adds to supply (as if the occupants all vanish into thin air)?

Exactly a repossessed house goes on the market the previous owners still have to be housed in more than likely rented accommodation, this will put a further squeeze on supply of rental accommodation, and rents will increase.

Everyone talks about these big blocks of apartments controlled by NAMA, even if they do exist they won't be dumped onto the market to please a minority of renters, or to depress house prices.

The clue is in the name NAMA, NATIONAL ASSETS MANAGEMENT AGENCY! It's job is to maximise the return on these apartments, houses, whatever, for the government and the taxpayer, higher a price these sell for or the higher rents they generate, more money comes in and the less cuts have to be made in public spending, and the possibility of a tax cut in the budget (not this budget) it's all connected.

Brussels Sprout

I see the Independent have led with this today heralding a new dawn in the Irish property market. A big piece on page 4 from Charlie Weston (of course) saying how this was great news for the economy. They also have a large graphic showing the massive drop in prices since 2007 with a flat section at the end and a tiny rise titled something like "The rise and fall and rise again of Irish property prices". Nauseating stuff

Scortho

murphaph wrote: »

How will supply increase without new house building? Or do you also believe that a repossession frees up a property and adds to supply (as if the occupants all vanish into thin air)?

Surely repossessions would free up property's to be sold?
Or are the banks going to allow them pay a nominal rate of rent?
I'd go for the first option.

who_ru

Brussels Sprout wrote: »

I see the Independent have led with this today heralding a new dawn in the Irish property market. A big piece on page 4 from Charlie Weston (of course) saying how this was great news for the economy. They also have a large graphic showing the massive drop in prices since 2007 with a flat section at the end and a tiny rise titled something like "The rise and fall and rise again of Irish property prices". Nauseating stuff

no attempt at analysis of house price increases were made during the bubble by any media in ireland, it was all property porn, pure and simple.

now after the readjustment no serious analysis is being made in ireland by any media as to why, in an economy with little or no credit supply, asking prices are rising.

it's like groundhog day here every day. never ending short termism.

Ray Palmer

who_ru wrote: »

no attempt at analysis of house price increases were made during the bubble by any media in ireland, it was all property porn, pure and simple.

now after the readjustment no serious analysis is being made in ireland by any media as to why, in an economy with little or no credit supply, asking prices are rising.

it's like groundhog day here every day. never ending short termism.

Anybody who says that obviously wasn't about or paying attention. While there was a lot of pro property articles there were plenty warning about what could happen and the overheated market.

What is odd about such revisionary views it ignores what the public were doing and demanding at the time.
People were screaming about the banks not giving them enough money, falsify records, getting parents to chip in etc...

It seems to me that those screaming then are now blaming the banks for doing as the public wanted. The whole housing is a right movement seems to have disappeared now too.

Wonder when credit disappeared because I know people are still getting mortgages. Wait maybe you are grand standing as well as ignoring the actual truth.:rolleyes:

Frank Lee Midere

murphaph wrote: »

How will supply increase without new house building? Or do you also believe that a repossession frees up a property and adds to supply (as if the occupants all vanish into thin air)?

No I don't believe any of that nonsense. In non-functional markets, like Ireland, where there are very few transactions - where cash buyers dominate, a small number of transactions will skew the picture in any one quarter. This is what is happening.

If there were a few thousand more apartments and houses for sale - which there will be when the repossessions start, then the demand would be nowhere near supply. Prices will therefore collapse. As for rent increases, thats happening because people are staying in the rental market either waiting for prices to fall, or unable to get a mortgage.

Look you can believe that a property market with 20% of the mortgage holders in arrears, which is in recession, and which is seeing negative population growth amongst the next generation of house buyers would see property increase because of supply constraints - but if so I have a 800K house to sell you in Cabra in 2006. We'll just need a time machine.

Frank Lee Midere

The Spider wrote: »

Exactly a repossessed house goes on the market the previous owners still have to be housed in more than likely rented accommodation, this will put a further squeeze on supply of rental accommodation, and rents will increase.

No it won't. In the best case scenario there there is just a swap. Most repossessions will be of BTL housing and there are plenty out there not paying their mortgages, and not renting either. Just letting it lie there.

Everyone talks about these big blocks of apartments controlled by NAMA, even if they do exist they won't be dumped onto the market to please a minority of renters, or to depress house prices.

The clue is in the name NAMA, NATIONAL ASSETS MANAGEMENT AGENCY! It's job is to maximise the return on these apartments, houses, whatever, for the government and the taxpayer, higher a price these sell for or the higher rents they generate, more money comes in and the less cuts have to be made in public spending, and the possibility of a tax cut in the budget (not this budget) it's all connected.

At the moment according to your insane analysis they are making no money because the government is sitting on them, and not renting them out.

The Spider

Frank Lee Midere wrote: »

No it won't. In the best case scenario there there is just a swap. Most repossessions will be of BTL housing and there are plenty out there not paying their mortgages, and not renting either. Just letting it lie there.



At the moment according to your insane analysis they are making no money because the government is sitting on them, and not renting them out.

Probably too much overhead to manage, either way anyone waiting for a massive wave of repos on the market will be still waiting in five years time.

It's in no ones interests to sell NAMA properties at a loss, the taxpayer loses if they sell for below cost that simple. Any repos on BTL's will not all be put on sale at once, seriously basic economics, control the supply and let the demand go up.

Frank Lee Midere

The Spider wrote: »

Probably too much overhead to manage, either way anyone waiting for a massive wave of repos on the market will be still waiting in five years time.

It's in no ones interests to sell NAMA properties at a loss, the taxpayer loses if they sell for below cost that simple. Any repos on BTL's will not all be put on sale at once, seriously basic economics, control the supply and let the demand go up.

Whats this NAMA malarky? NAMA own the assets of the bankrupt developers vanity projects and overseas investments. They may be sitting on some new property in Dublin, but I doubt it.

Banks, on the other hand, will repossess and sell houses. They need to recapitalise. Banks don't wait to sell houses, they are not landlords. They don't like rent, they need to have capital to loan out capital.

Ray Palmer

Frank Lee Midere wrote: »

No it won't. In the best case scenario there there is just a swap. Most repossessions will be of BTL housing and there are plenty out there not paying their mortgages, and not renting either. Just letting it lie there.

So you reckon places that can't be rented out will be snapped up by buyers. That is interesting model to work off. Why most repossessions will be BTL is an interesting statement. Only 1 in 5 BTL are in arrears. The amount isn't mentioned so I don't see why missing one payment makes somebody instantly lose the property. A one to one swap is highly unlikely there is no logic to thinking it would happen.

Now I would think logically the places that can't be rented won't be in great locations and as such very low rental/housing demand. Why would buyers rush to buy them? You can be pretty sure the higher portion of repossessed house will be in low demand areas otherwise the property could be afforded because they would be easy to rent and people are likely to get employment locally.

Frank Lee Midere wrote: »

At the moment according to your insane analysis they are making no money because the government is sitting on them, and not renting them out.

Actually I don't think he said that. Nama are renting properties but rents are still going up in high demand areas. Does Nama have more properties to dump in high demand areas to rent? I doubt it even when they go to sell what they are renting you don't increase the number of properties in the market as they are in the rental market already. You are displacing the people renting there and they don't disappear.

The_Conductor

Ray Palmer wrote: »

Only 1 in 5 BTL are in arrears.

Do you have a source for this?
The last statement I saw indicated that in excess of 40% of buy-to-let properties were in arrears of over 90 days. Given this figure was from January- unless there has been a complete sea change in the rental market, which I can assure you, there hasn't- something somewhere doesn't add up......

OMD

The_Conductor wrote: »

Do you have a source for this?
The last statement I saw indicated that in excess of 40% of buy-to-let properties were in arrears of over 90 days. Given this figure was from January- unless there has been a complete sea change in the rental market, which I can assure you, there hasn't- something somewhere doesn't add up......

http://www.centralbank.ie/press-area/press-releases/Pages/MortgageArrearsandRepossessionsStatisticsQ12013.aspx

There were 29,369 (19.7 per cent) residential mortgage accounts for buy-to-let (BTL) properties in arrears of over 90 days at end-March 2013, up from 28,366 (18.9 per cent) at end-December 2012.

desertcircus

Any article on the property market that doesn't acknowledge that the size of said market is less than 10% of what it was in the boom isn't telling the truth. The number of transactions is virtually zero compared to what it should be in a healthy market; at the moment, we're seeing sales of less than 9,000 properties a year, which would mean it would take nearly two centuries for the entire housing stock of the country to change hands. Of the transactions that are taking place, 40% are cash purchases, which means that about five thousand mortgages were drawn down last year. Five thousand. Talking about 4% rises in south Dublin while ignoring these issues is simply deranged.

The_Conductor

Thanks for the link. A few things stick out-

Over 20,000 BTL mortgages have been restructured.
Of the 18.9 of mortgages over 90 days in arrears- they represent just shy of 30% of the o/s loan balance
The number of under 90 day in arrears loans, has fallen significantly- but at a slower rate than the number of mortgages greater than 365 days in arrears increased.

In short- arrears are continuing to grow- but at a slower pace- and a significant cadre of borrowers are talking to their lenders and restructuring their finances.

Only just over 400 BTL homes were repossessed. Seems quite remarkable that the number is this low........

OMD

desertcircus wrote: »

Any article on the property market that doesn't acknowledge that the size of said market is less than 10% of what it was in the boom isn't telling the truth. The number of transactions is virtually zero compared to what it should be in a healthy market; at the moment, we're seeing sales of less than 9,000 properties a year, which would mean it would take nearly two centuries for the entire housing stock of the country to change hands. Of the transactions that are taking place, 40% are cash purchases, which means that about five thousand mortgages were drawn down last year. Five thousand. Talking about 4% rises in south Dublin while ignoring these issues is simply deranged.

Are you sure about your figures there? Last year there were about 15,000 mortgages taken out (excluding top ups).
http://www.ibf.ie/Libraries/Research_Statistics/IBF-PwC_Mortgage_Market_Profile_Q1_2013.sflb.ashx

You are saying 40% of sales were to cash buyers. That means total sales last year were 25,000. Do you really still think that is only 10% of what it should be?

Plus, the obvious reason sales are less than you might expect is that prices have been falling. Why buy when the price is falling. Simply wait and you will get it cheaper. Deflation normally affects a market in this way.

desertcircus

OMD wrote: »

Are you sure about your figures there? Last year there were about 15,000 mortgages taken out (excluding top ups).
http://www.ibf.ie/Libraries/Research_Statistics/IBF-PwC_Mortgage_Market_Profile_Q1_2013.sflb.ashx

You are saying 40% of sales were to cash buyers. That means total sales last year were 25,000. Do you really still think that is only 10% of what it should be?

Plus, the obvious reason sales are less than you might expect is that prices have been falling. Why buy when the price is falling. Simply wait and you will get it cheaper. Deflation normally affects a market in this way.

My apologies; misread the original document I was looking at, which was referring to total transactions in Dublin in the six months to end March 2013 as totalling 4,300.

With regard to the 25,000 figure; I don't think we should be going back to boom-level transactions. However, there is a healthy figure for the percentage of housing stock that's bought and sold per year, and it's way more than the one we have at the moment (presuming 25,000 transactions countrywide, we get a figure of one in seventy properties a year at the moment, which seems well below a healthy level.)

who_ru

Ray Palmer wrote: »

What is odd about such revisionary views it ignores what the public were doing and demanding at the time.
People were screaming about the banks not giving them enough money, falsify records, getting parents to chip in etc...

It seems to me that those screaming then are now blaming the banks for doing as the public wanted. The whole housing is a right movement seems to have disappeared now too.

:rolleyes:

You sound exactly like Enda Kenny when he proclaimed to the world in Davos, Switzerland a few years back that the reason Ireland's economy went into meltdown because 'people went mad borrowing'.

so as far as you and Enda are concerned it was the customers who controlled credit supply and not banks. There was never a Fingers Fingleton lending without a question, and the people demanded that foreign banks be given access to the irish mortgage market so as to supply 100% mortgages.

Hell you might as well quote Lenny now and say 'sure everyone partied'.

Ray Palmer

who_ru wrote: »

You sound exactly like Enda Kenny when he proclaimed to the world in Davos, Switzerland a few years back that the reason Ireland's economy went into meltdown because 'people went mad borrowing'.

so as far as you and Enda are concerned it was the customers who controlled credit supply and not banks. There was never a Fingers Fingleton lending without a question, and the people demanded that foreign banks be given access to the irish mortgage market so as to supply 100% mortgages.

Hell you might as well quote Lenny now and say 'sure everyone partied'.

Sorry were you here when people were complaining about the banks not lending them enough? It wasn't a minority of people. I never said the public controlled the market but they certainly influenced it. Are you denying what I said happened? I didn't say it was right or wrong just it happened. You are making the judgment on me for pointing out the reality. Do you get how that is misguided?