Pushed out of the market

Glenbhoy

Aemtler wrote: »

My take on the PTSB change to mortgage policies is it will actually put more price pressure on family homes. My guess is that is a lot of people in negative equity who want to move are stuck in apartments and wanting to move to houses as they are starting families etc. If they can take their negative equity with them, there will be more people looking for the 3-4 bed semi.

My take on PTSB policy is that it will make zero difference, they will not offer any more credit than they have been, which is very, very little. They will offer this deal to exactly the same very small cohort of people who would always have been offered it, ie. very high earners with excellent prospects (I know of one potential partner in a large accountancy firm who was offered one of these by BOI last year).

They, and all the banks have a history of making promises re new products and volumes which have not been even nearly delivered on over the past 3/4 years.

delthedriver

There must be lots of cash buyers / investors entering the market too????

handlemaster

Ray Palmer wrote: »

Yeah you missed something. The bank is allowing you to carry your negative equity to you new house. Say you bought a 2 bed house for €400k and now it is worth €300k so €90k neg equity ( you will have paid off some principle)
I
You now see a 4 bed house and it is €450k sell your old house and get a top up from your bank for the further €150k. You now have a mortgage of €450k but no negative equity and depending on what way you agreed it you may have €400k on a tracker and 150k on regular rates. However I suspect the bank will have it as €300k on tracker and €250k regular. Either way you would be much better off than if you did it and lost your tracker by about €600 a month. Although it is cheaper to build an extension if you can

Plus the 90k also therefore 300 + 150 + 90

handlemaster

Has the Dublin market cooled off ? I don't see as many posts as there were before about high price rises.

delthedriver

handlemaster wrote: »

Has the Dublin market cooled off ? I don't see as many posts as there were before about high price rises.

Perhaps it is time for some price rises outside Dublin. Major Cities , Cork, Galway and Limerick have been stagnant for some time.

P. Breathnach

handlemaster wrote: »

Has the Dublin market cooled off ? I don't see as many posts as there were before about high price rises.

It's not "the Dublin market". Dublin has a number of markets.

In some parts of Dublin, prices seem to be climbing fast (I use the word "seem", because what I say is based on my own experience, a limited data-set). I saw a place on Saturday; the asking price looked a little on the low side, and I thought it might go to about €30k over. I would have been prepared to consider it at that level. Yesterday (Monday) evening, it was almost €80k over, and the EA thought there might be more to come.

I saw another place on Saturday, and the EA told me that a bid about €15k under asking would probably get it. It was pretty well "Offer <asking -15k> and the vendor will sign on Monday".

The properties are not easily compared. One is an apartment, and the other is a house. But I think the main difference is location.

Herself and I are modifying our search parameters so as to include locations that are "desirable" as well as "highly desirable". That might save us about €50k, perhaps more.

I have an unresearched opinion that rental market appeal inflates the price of many properties.

GavMan

P. Breathnach wrote: »

It's not "the Dublin market". Dublin has a number of markets.

In some parts of Dublin, prices seem to be climbing fast (I use the word "seem", because what I say is based on my own experience, a limited data-set). I saw a place on Saturday; the asking price looked a little on the low side, and I thought it might go to about €30k over. I would have been prepared to consider it at that level. Yesterday (Monday) evening, it was almost €80k over, and the EA thought there might be more to come.

I saw another place on Saturday, and the EA told me that a bid about €15k under asking would probably get it. It was pretty well "Offer <asking -15k> and the vendor will sign on Monday".

The properties are not easily compared. One is an apartment, and the other is a house. But I think the main difference is location.

Herself and I are modifying our search parameters so as to include locations that are "desirable" as well as "highly desirable". That might save us about €50k, perhaps more.

I have an unresearched opinion that rental market appeal inflates the price of many properties.

Which was which? Where was each property?
Was the house the 80k over or was the Apartment 80k over....

P. Breathnach

GavMan wrote: »

Which was which? Where was each property?
Was the house the 80k over or was the Apartment 80k over....

I don't like saying too much about particular properties for a number of reasons. Our preference would be to find a good-quality apartment in D4 or D6, and we don't want a refurbishment project. We would consider a small house.

It looks to me as if the market for quality apartments in D4 and D6 is going mad. That's why I formed the opinion that rental market appeal is a price driver. A lot of couples have been scared out of the market for apartments because they see the danger of being trapped if they start a family.

My eye is now on an apartment where the present owners have two small children. I can see why they might want to move. A lot of apartment developments in Dublin are unsuitable for families.

Piriz

It was reported on Newstalk FM that mortgage arrears dropped a % point in the last 1/4. However, the number of long term arrears non-payment of 720 days or more has increased by 1700 in the last 1/4.

I would argue that banks are doing deals and restructuring mortgages that have some potential but there is a cut off point mostly for loans in long term arrears.
Banks will be seen to offer reasonable time periods and restructuring to mortgage holders. The courts will view them as meeting the criteria laid out by the Central Bank..
At some point in the future they will have restructured the loans with potential and they will repossess in reasonably large quantities the loans with no-potential..

D3PO

Piriz wrote: »

It was reported on Newstalk FM that mortgage arrears dropped a % point in the last 1/4. However, the number of long term arrears non-payment of 720 days or more has increased by 1700 in the last 1/4.

I would argue that banks are doing deals and restructuring mortgages that have some potential but there is a cut off point mostly for loans in long term arrears.
Banks will be seen to offer reasonable time periods and restructuring to mortgage holders. The courts will view them as meeting the criteria laid out by the Central Bank..
At some point in the future they will have restructured the loans with potential and they will repossess in reasonably large quantities the loans with no-potential..

bang on assesment tbh.

The_Conductor

handlemaster wrote: »

Has the Dublin market cooled off ? I don't see as many posts as there were before about high price rises.

Dublin prices (massive generalisation) have been slowing their rate of increase for almost 8 months now- and we were predicting falls by March (in this forum). The recent CSO figures suggest that prices have already turned south, however I'm not sure how much credence to put in figures that exclude cash sales, when cash sales comprise over half the market.

As a massive generalisation- the 'Dublin' market has stratified into a few different segments.

Apartments/multi-unit developments (which contrary to what you'd imagine, are in fact still climbing, albeit slowly).

Ye semi-d with a garden in the 300-500k bracket- continues to rise, based purely on lack of supply.

Expensive trophy homes (in excess of 600k)- are showing significant falls- there isn't a market for them (even in the exclusive South Dublin areas- you can't sell them).

So- yes, there has been a cooling- and there continues to be a cooling- however, certain segments are behaving differently to others.

P. Breathnach

The_Conductor wrote: »

...
As a massive generalisation- the 'Dublin' market has stratified into a few different segments.

Apartments/multi-unit developments (which contrary to what you'd imagine, are in fact still climbing, albeit slowly).
...
Expensive trophy homes (in excess of 600k)- are showing significant falls- there isn't a market for them (even in the exclusive South Dublin areas- you can't sell them)....

I'm picking on two points from your list.

Yes, I agree with your reading of the market. It's becoming bizarre.

Some good-quality 2-bedroom apartments are selling for prices in the region of €400k. For that money, you don't get a garden space of your own; you might get only one parking place; you take on a commitment to pay management fees that might be quite high.

Yet if you can fund a purchase at €650k, what you can get is so much more appealing that comparing properties is verging on the ludicrous. I'm not sure it is fair to categorise all properties at €600k+ as trophy homes: some are simply very good quality family homes.

ezra_pound

P. Breathnach wrote: »

I'm picking on two points from your list.

Yes, I agree with your reading of the market. It's becoming bizarre.

Some good-quality 2-bedroom apartments are selling for prices in the region of €400k. For that money, you don't get a garden space of your own; you might get only one parking place; you take on a commitment to pay management fees that might be quite high.

Yet if you can fund a purchase at €650k, what you can get is so much more appealing that comparing properties is verging on the ludicrous. I'm not sure it is fair to categorise all properties at €600k+ as trophy homes: some are simply very good quality family homes.

You're not pat Kenny by any chance, are you?

Shedite27

Ray Palmer wrote: »

Yeah you missed something. The bank is allowing you to carry your negative equity to you new house. Say you bought a 2 bed house for €400k and now it is worth €300k so €90k neg equity ( you will have paid off some principle)

You now see a 4 bed house and it is €450k sell your old house and get a top up from your bank for the further €150k. You now have a mortgage of €450k but no negative equity and depending on what way you agreed it you may have €400k on a tracker and 150k on regular rates. However I suspect the bank will have it as €300k on tracker and €250k regular. Either way you would be much better off than if you did it and lost your tracker by about €600 a month. Although it is cheaper to build an extension if you can

They have a mortgage of €550k so no? For a house valued at €450k

400+150 = 550
300+250 = 550

lima

handlemaster wrote: »

Has the Dublin market cooled off ? I don't see as many posts as there were before about high price rises.

Not cooled off, prices have actually dropped in January.

delthedriver

lima wrote: »

Not cooled off, prices have actually dropped in January.

Any examples?

Shedite27

http://www.rte.ie/news/business/2014/0227/506960-property-price-index/

"Today's figures show that residential property prices in Dublin fell by 1.3% in January. Dublin house prices fell by 1.5% in the month but remain 13.2% higher compared to the same time a year ago."

The_Conductor

Shedite27 wrote: »

http://www.rte.ie/news/business/2014/0227/506960-property-price-index/

"Today's figures show that residential property prices in Dublin fell by 1.3% in January. Dublin house prices fell by 1.5% in the month but remain 13.2% higher compared to the same time a year ago."

What it doesn't do- is a commentary on how the rate of increase has been tapering for 7-8 months- until it finally tipped into negative territory. Aka- January is not a blip- a bad month- its part of a trend (though most of us had predicted it would be March before it tipped negative).

lima

The_Conductor wrote: »

What it doesn't do- is a commentary on how the rate of increase has been tapering for 7-8 months- until it finally tipped into negative territory. Aka- January is not a blip- a bad month- its part of a trend (though most of us had predicted it would be March before it tipped negative).

So I keep mentioning this fall in Jan but I also viewed a number of houses and they were full of cash buyers bidding silly money (30-50k over asking) so I really don't know but I'm going with what they are saying seeing as everyone has been going by them for the recent rises.

The media has been so silent on this it's so funny.

delthedriver

As long as the property market rises and falls, there will be winners and losers.


There is no right time to buy or sell at present.


For first time buyers , they need to remain calm, buy what they can afford in the best area.


The reality is people may need to buy and sell several times to achieve their ultimate property.


Remember to enjoy living too, life is not all about bricks and mortar

The_Conductor

lima wrote: »

So I keep mentioning this fall in Jan but I also viewed a number of houses and they were full of cash buyers bidding silly money (30-50k over asking) so I really don't know but I'm going with what they are saying seeing as everyone has been going by them for the recent rises.

The media has been so silent on this it's so funny.

The cash-buyers have been remarkably resilient- we've already seen transactions a multiple of what was believed to be the free cash floating around. The issue in the greater Dublin area- is a complete and utter lack of supply. This situation is now firmly entrenched in the commuter hinterland- Dublin 15 (Blanchardstown/Damastown/Clonee- all the way out to Dunshaughlin and around to Maynooth/Leixlip/Lucan/Celbridge/Newcastle- hell even Kill/Naas etc- just have a look- you'd be hard-pressed to find anywhere to rent, nevermind buy.

Numerous sites in the greater Dublin urban conurbation have reopened- and there is a steady drip-drip of property hitting the market- but its no-where near sufficient to satisfy demand.

Then we have the midlands- with tens of thousands of vacant units- that no-one wants to touch and the border counties with massive oversupply- and continued plans to demolish.........

To be blunt- allowing planning decisions be decided by councillors at a local level- has been an abject failure. We could well do with abolishing local councils and transferring their powers back to the Department and having national plans drawn up- the parochial politics of old have destroyed the place..........

Cash-buyers in the Dublin area- are really putting their necks out- there is a sentiment that many thought had died with the bubble- they have to buy, or they will get left behind. There are a finite number of options open to them- and many are getting desperate.

PTSB's and KBC's recent announcements on negative equity mortgages- are only going to add to the feeding frenzy.

Enda needs to get out of his Mayo mindset and get his advisors together to come up with a coherent national plan and fast- before we get a FG led destruction of the nascent recovery- through complete and utter lack of comprehension of whats going on.

Ray Palmer

The_Conductor wrote: »

Cash-buyers in the Dublin area- are really putting their necks out- there is a sentiment that many thought had died with the bubble- they have to buy, or they will get left behind. There are a finite number of options open to them- and many are getting desperate.

You make it sound like this isn't possible and hasn't happened in the recent past. It is a legitimate concern. Lost of people have been priced out of their preferred market permanently. Some completely out of the property market in real terms of where they can live. Not much point in being able to buy a house where you can't get a job even if you can buy it outright.

who_ru

The_Conductor wrote: »

The cash-buyers have been remarkably resilient- we've already seen transactions a multiple of what was believed to be the free cash floating around. The issue in the greater Dublin area- is a complete and utter lack of supply. This situation is now firmly entrenched in the commuter hinterland- Dublin 15 (Blanchardstown/Damastown/Clonee- all the way out to Dunshaughlin and around to Maynooth/Leixlip/Lucan/Celbridge/Newcastle- hell even Kill/Naas etc- just have a look- you'd be hard-pressed to find anywhere to rent, nevermind buy.

Numerous sites in the greater Dublin urban conurbation have reopened- and there is a steady drip-drip of property hitting the market- but its no-where near sufficient to satisfy demand.

Then we have the midlands- with tens of thousands of vacant units- that no-one wants to touch and the border counties with massive oversupply- and continued plans to demolish.........

To be blunt- allowing planning decisions be decided by councillors at a local level- has been an abject failure. We could well do with abolishing local councils and transferring their powers back to the Department and having national plans drawn up- the parochial politics of old have destroyed the place..........

Cash-buyers in the Dublin area- are really putting their necks out- there is a sentiment that many thought had died with the bubble- they have to buy, or they will get left behind. There are a finite number of options open to them- and many are getting desperate.

PTSB's and KBC's recent announcements on negative equity mortgages- are only going to add to the feeding frenzy.

Enda needs to get out of his Mayo mindset and get his advisors together to come up with a coherent national plan and fast- before we get a FG led destruction of the nascent recovery- through complete and utter lack of comprehension of whats going on.

there hasn't been a coherent plan since 2008, it's been total fudge, avoid hard decisions, play politics with people's lives "keep everyone in their homes", even when it's obvious many simply cannot afford their properties. overall it has been a massive wasted opportunity, no imagination, no vision other than the least decisive course of action.

iguana

Why do house price figures not include cash purchases? Do cash purchases not appear on the PPR?

roro2

iguana wrote: »

Why do house price figures not include cash purchases? Do cash purchases not appear on the PPR?

The CSO index uses information on the properties that the banks collect in the mortgage process to try and compare like-with-like as much as possible - this level of info is not available for non-mortgage purchases or from the PPR:

The hedonic method is the prevalent statistical process for the measurement of residential price change. In this method, a number of characteristics which influence prices are analysed so that we can estimate and exclude the part of the price change that can be attributed to them. These characteristics are; location, building type, floor area, number of bedrooms, new or old and first time buyer or not. By excluding the price change determined by these characteristics we are left with an index of pure price change for a consistent set of characteristics - or more simply - a residential property price index.

The CSO is currently examining Stamp Duty returns to the Revenue Commissioners, made via the Revenue Online Service (ROS), with a view to assessing both the extent of cash-based full market price transactions and any potential bias in the RPPI that might accrue from their exclusion.

The_Conductor

iguana wrote: »

Why do house price figures not include cash purchases? Do cash purchases not appear on the PPR?

The CSO hoover up their data from the mortgage lenders- not the PPR. The figures from the mortgage lenders would be available a lot more quickly (for example there is data from Oct/Nov only going up on the PPR now- it depends on how quick solicitors are at notifying the information- many of them are piss poor with their paperwork).

PPR figures would be historically more accurate- but you'd have to look at figures from say 6 months previous- to get a good true picture, not the last month or two.

P. Breathnach

iguana wrote: »

Why do house price figures not include cash purchases? Do cash purchases not appear on the PPR?

Data on mortgage approval/drawdown is more or less contemporaneous with the date of sale; the PPR lags behind by weeks or months, depending on how rapidly a transaction is handled.

I think figures based on mortgages are, at best, a crude indicator of the state of the market. If you try to interpolate from them to a small sector of the market, you might mislead yourself. For example, I have been looking at apartments in D4 and D6. I have the impression that prices in that sector are still rising, and a strong supposition that it is driven by cash buyers. But I can't call on statistical evidence to support my beliefs.

Roger_007

iguana wrote: »

Why do house price figures not include cash purchases? Do cash purchases not appear on the PPR?

I don't see why the CSO don't get their data fron Revenue. Stamp duty has to be calculated on all property transactions so they are the only people who have all the info irrespective of whether it was a cash transaction to not.

P. Breathnach

Roger_007 wrote: »

I don't see why the CSO don't get their data fron Revenue....

Time-lag.

Ray Palmer

P. Breathnach wrote: »

Time-lag.

It's a lot more complicated than that. If you use a figure calculated one way for a long time and then change how it is calculated you effect all derived calculations. Further calculations then may already deal with inaccurate aspects of figures.

So you can't just say we have a more accurate figure now without seeing how everything ties together. Quite often the solution is to continue using the old and create a separate report based on the new figures and the old figure.

I have always maintained accounting practices are actually what controls the world more than people are aware.