What is your opinion of the future of property prices?

dizzymiss

You're right makeorbrake, people are deluded. A house we looked at in early Feb went sale agreed at 166k (it wad worth that, no more. Needed good bit of work),we got a call mid April from EA saying it was back on the market as the bank had changed their mind and think they'd get more for it and the couple who had put in original offer couldnt afford above that. The banks again. Doing what they do best, screwing people over.

We spoke to an auctioneer at the weekend, who actually said a house we were looking was priced too high, about 60k too high but that's what the client wanted it at. Suffice to say it's on the market a while and we were only the second people to look at it. Others never got back to him.

bidiots

makeorbrake wrote: »

Galway prices have been ridiculous over the past 12 months. Galway is a nice city and place to live but clearly many people are deluded - as it's not this good - not good enough to justify current pricing.

It's hard to believe this is happening only 7 years after the peak of the boom.

For the past year there has been a mini bubble in certain area's of Galway, people thought I was doting when I said it but it's becoming pretty clear now. I think I seen a house in Roscam go for over 300k in one of the auctions. For the life of me I can't figure out how it reached the price it did, the scary truth is that people will not learn from past mistakes.

That said, if I could get my hands on a tracker I'd be jumping on the bandwagon

dizzymiss

300k in Roscam, oh please. What is wrong with people? Seriously. It makes me worry that we'll rush into something because of fear of being priced out.

bidiots

dizzymiss wrote: »

300k in Roscam, oh please. What is wrong with people? Seriously. It makes me worry that we'll rush into something because of fear of being priced out.

Actually, 330k!
https://propertypriceregister.ie/website/npsra/PPR/npsra-ppr.nsf/eStampUNID/UNID-FF370F804782D1B780257C8B004CF958?OpenDocument

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dizzymiss wrote: »

What people think their house is worth and what they would actually sell their house for are so so different!

We are first time buyers and looking on the outskirts of Galway. Some of the listing prices are imho and the opinion of most people I know, ridiculous. A lot of houses in areas we are looking have increased their prices in the last number of weeks for no real reason other than the frenzy that is being communicated through media about increading property prices. Depand in galway is high because people are holding out on putting their houses for sale because they think the frenzy will get them a better price. And it probably will because people are stupid and succumb to frenzy.

A house is only worth what someone serious is willing to pay. Asking prices are going up but the amounts people are able to get a mortgage for arent so an entire section of buyers are going to get priced out. It's all an illusion. A dangerous one at that.

Hi, I am from Galway city and I don't necessarily agree with your thoughts on people only holding out because they think they will get better prices. A good few of my friends who own houses in areas like Knocknacarra, Roscam, Doughiska, few in Salthill would all LOVE to sell their houses. They would all be houses aimed at the first-time-buyer market. We were out as a group of friends last Saturday night and we all got talking about this topic and i'd honestly say 10 of the group in Galway city would love to sell but their mortgages are all so far off what the property is worth. So as soon as they get to the point that the mortgage equals what the property is worth they will sell it. They won't have made a profit..they will infact have made a massive loss over the years. Most current first time buyers are looking for properties that people in my age group bought as first time buyer properties between 8-10 years ago and those properties are not on the market because people simply cannot afford to sell them as they are in negative equity.

dizzymiss

Kendall Itchy Flagpole wrote: »

Hi, I am from Galway city and I don't necessarily agree with your thoughts on people only holding out because they think they will get better prices. A good few of my friends who own houses in areas like Knocknacarra, Roscam, Doughiska, few in Salthill would all LOVE to sell their houses. They would all be houses aimed at the first-time-buyer market. We were out as a group of friends last Saturday night and we all got talking about this topic and is honestly say 10 of the group in Galway city would love to sell but their mortgages are all so far off what the property is worth. So as soon as they get to the point that the mortgage equals what the property is worth they will sell it. They won't have made a profit..they will infact have made a massive loss over the years. Most current first time buyers are looking for properties that people in my age group bought as first time buyer properties between 8-10 years ago and those properties are not on the market because people simply cannot afford to sell them as they are in negative equity.

You're right. That is to be considered too and something we as a group have discussed. I didnt include it in my post. We always say if we were 7/8 years older we would be caught in the same net.

But there are some people out there that are holding back. And then there are all the vacant properties held by the banks that arent online because they too are trying to control the market. The estate in which the previous property I spoke about (166k) is full of empty houses and when I asked the different EAs about them, I was told the bank hasnt authorised them for sale yet.

gaius c

bidiots wrote: »

For the past year there has been a mini bubble in certain area's of Galway, people thought I was doting when I said it but it's becoming pretty clear now. I think I seen a house in Roscam go for over 300k in one of the auctions. For the life of me I can't figure out how it reached the price it did, the scary truth is that people will not learn from past mistakes.

That said, if I could get my hands on a tracker I'd be jumping on the bandwagon

Not borne out by data from the PPR.

bidiots

What area of Galway does this represent?

jmayo

murphaph wrote: »

Not being able to buy the property you live in is certainly not restricted to Dublin or Ireland. My sister in law and her family recently moved out of Munich city centre and bought in a commuter town 25 miles outside because the flat they could afford to rent in Munich would have cost over a million to buy. They wanted to stay in the area but realised long term it would be a poor financial decision and moved out. I imagine it's the same story in many cities. Economic prosperity brings with it such changes and Ireland is much more prosperous now than 30 years ago, despite the national debt we voted upon ourselves.

Please tell me you are not comparing one of Germany's major cities with Dublin ?

Is Ireland much more prosperous now than 30 years ago ?
I don't think so.
Yeah we have some better roads, and we might have a fair chunk of people with better standard of living all due to the number of high profile multinaitonals now here.

But then take a look at our national debt.
Look at our level of personal indebtedness today compared to 30 years ago.
There are thousands of people stuck in this limbo for the rest of their lives.

And while you are at it, how many functioning non taxpayer drip fed banks have we today in comparison to 30 years ago.

Frank Lee Midere wrote: »

What happened in Dublin is the prices just about hit the long term average (relative to wages) and then backed up. Given the overhang from the last bust we should have seen an undershoot of larger proportions and for longer.

The Economist metric on average prices is a weak one, firstly because the average is affected by the very bubble you are trying to model ( that is before 2000-2007 the 30 year average much be lower) and because a proper metric would be average house price to post tax income.

I firmly believe that property prices did not reach the bottom that normally would follow such a large bubble as ours.
Prices started increasing mid 90s, granted they started from a low base.
But prices did not go back to those levels in most cases.
They might have in the ass end of nowhere, but property was never a runner there in the first place and only occurred due to our bubble.

Supply was constricted and all the repossessions that should have occurred were prevented and thus we have had a distortion of the market.
To paraphrase what some others have said here, you can delay the inevitable for so long.

I also wonder how things are going to pan out in the UK where there is now also a bubble in London.

Villa05

bmwguy wrote: »

I can access Dublin city centre in 30 minutes by a choice of 2 train stations and 3 dublin bus routes. Its not even in county Dublin. We have commuter towns here too, Ireland isnt all bad!

As a daily user of public transport, reliability is a major issue. The private operators are much better, but are prevented from providing a more comprehensive service
Ireland is a great country, one of the most beautiful in the world unfortunately her rulers, not so great. Her people are amongst the most friendly and trusting. Ireland's rulers and powerful try to take advantage of that

jmayo

Villa05 wrote: »

As a daily user of public transport, reliability is a major issue. The private operators are much better, but are prevented from providing a more comprehensive service
Ireland is a great country, one of the most beautiful in the world unfortunately her rulers, not so great. Her people are amongst the most friendly and trusting. Ireland's rulers and powerful try to take advantage of that

I wouldn't have said trusting and even at this stage friendly, well certainly not late at night in most of our towns and cities at least. The uncurrent of violence and threatening behaviour all due to alcohol is sad to see.

We are more apathetic than anything.
If you want a good example, I give you the fact that bertie got voted back into power in 2007, even though we already knew he was a chancer, he had very dodgy finances, how much money he and his arrogant colleagues had wasted and how cr** things like our health service was after a litany of wastage, misdiagnosis and avoidable deaths.

Yet people were happy out because they were doing ok.
I could drag out multiple posts around here who couldn't care about his affaires or the state of the health service as example, as he had presided over the good times.
Who cared if a few old people had to suffer trolleys or maltreatement in a tax haven nursing home.

We get the politicans we deserve and it isn't some grand conspiracy visited upon us by some malevolent very smart political class.

The political class and the connected ones get away with it, not because we are trusting, but because often half of us couldn't give a shy*e because it doesn't affect us directly.

As evidenced by the whole church abuse saga too many people in this country turn a blind eye and let things slide, all for an easy life.

NZ_2014

Can`t believe this is happening again. Absolute madness and bedlam. Feic it, I`m going to live in a caravan in my parents garden.

Ray Palmer

jmayo wrote: »

Please tell me you are not comparing one of Germany's major cities with Dublin ?

Is Ireland much more prosperous now than 30 years ago ?
I don't think so.
Yeah we have some better roads, and we might have a fair chunk of people with better standard of living all due to the number of high profile multinaitonals now here.

.

I remember the 80s and yes we are much better off. The vast majority are better off. You think unemployment is bad now it was worse then and effected many more people of different age groups.

I don't know what figures you are using for debit but have you index linked them?

What was always going to happen as Ireland became more international the country would adjust to be more like other countries. That would include lowering our home ownership rate to be closer to that of other countries.

Property prices could easily stay high stopping people from owning forever. Expecting them to return to rates everybody can buy could be a false assumption as it is not the norm internationally.

Personal debit is also the norm in many western countries so for it to increase is not something unique to Ireland that has to disappear but could be the new reality.

People are complaining that the government's failure to reposes is the cause but that isn't new it is old law. You can't have house prices forced to be low and no repossessions in a vacuum. There are inter-dependencies. Just like people claimed rent allowance was keeping rent up in Dublin. It wasn't and has been proven by reality. I suspect most of the people claiming house prices have to drop believed rent allowance was keeping rent high.

GavMan

A think at this point in time, I'd settle for adequate stock. Nevermind prices dropping..

Villa05

Agree on the 80's with regard to now, more people suffered. This time round the suffering is targeted and more concentrated at our younger citizens. House prices reflect our older citizens more comfortable position, eventually it will have to reflect our childrens lower income as they grow older

If we were playing catch-up on debt levels with the rest of the western world, we have achieved with quiet a bit of change Linky

Home-ownership rates are not that different to the rest of the western world

gaius c

bidiots wrote: »

What area of Galway does this represent?

All of it.

bidiots

gaius c wrote: »

All of it.

Aye.... and as I said, 'certain areas', which deems that graph irrelevant.

thestar

Villa05 wrote: »

Dublin and commuter areas are in a bubble and it will not end well. Prices are out of reach of the majority of people working in Dublin. This Property is marketed as an affordable Dublin city family property for those priced out of the market. The property require considerable refurbishment and has an asking price of €365,000 which is 10 times average salary and nearly 20 times average disposable income (Income - State deductions)

Those that tried to hide the last bubble are saying "You cannot have a bubble without credit" are wrong. While credit is scarce we have central banks around the world printing money. This money is not filtering down to Joe or Jane public so it needs to find a home. This home includes Greek, Irish Debt and Dublin property. Someone is going to get burned, where Ireland is concerned when someone important gets burned. Taxpayer bails them out

It is hard to predict where prices go from here in the short term as the market is rigged, however the fundamentals would point to a considerable fall in prices when the rigged market is found out. These fundamentals include:

Upcoming significant drop in the population of young people in the FTB, renter category.
Emigration amongst our younger people at family creating age
Continuing lower salaries for people entering the workforce in the past 4 years
Ageing population leading to a pension crisis

Zombie de-leveraging banks meaning new mortgage loans will be close to historic lows for some time
40,000 mortgages 2 years or more behind in repayments. The most likely solution in this scenario is repossesion + write off on the remaining debt. This will create a double whammy of increased supply of property on the market + increased losses for the banks meaning less credit for new mortgages.
I know people will say this has not happened to date, but the longer you leave a problem fester the greater the after affects are

excellent post but would only disagree with the fact that if families were going to go, they would be well gone at this stage in my opinion

Monife

bmwguy wrote: »

I can access Dublin city centre in 30 minutes by a choice of 2 train stations and 3 dublin bus routes. Its not even in county Dublin. We have commuter towns here too, Ireland isnt all bad!

I live in Dublin about 9km from work and it takes me an hour on the bus! No access to DART. And I can't walk due to rheumatoid arthritis.

Villa05

thestar wrote: »

excellent post but would only disagree with the fact that if families were going to go, they would be well gone at this stage in my opinion

Still are families leaving in much smaller numbers. My original point referred to young couples with no children and single people. They are, likely to lay down roots abroad and not return

Villa05

Monife wrote: »

I live in Dublin about 9km from work and it takes me an hour on the bus! No access to DART. And I can't walk due to rheumatoid arthritis.

That would have been my opinion on commuting times in dublin using public transport.

gaius c

bidiots wrote: »

Aye.... and as I said, 'certain areas', which deems that graph irrelevant.

Well if it's up in "certain areas" then it must be down in "the other areas" and Galway is tiny so such increases would show up on the data set.

However, they are not so in the absence of you demonstrating your assertion to be correct, it's safe to say that the PPR shows you to be wrong.

jmayo

Ray Palmer wrote: »

I remember the 80s and yes we are much better off. The vast majority are better off. You think unemployment is bad now it was worse then and effected many more people of different age groups.

I don't know what figures you are using for debit but have you index linked them?

Well for a start our soverign debt is now much worse than in the 1980s.

BTW here are some figures for you since you appear to disbelieve me.
Ireland recorded a Government Debt to GDP of 123.70 percent of the country's Gross Domestic Product in 2013.

Irish debt peaked (for 1980-1999 period) in 1987 at 109.24% of GDP.

Here is current comparison chart.

http://1.bp.blogspot.com/-6NjjsSiirbg/UHWaOLTwQhI/AAAAAAAAJLg/TLG9ARf3GuQ/s1600/Screen+shot+2012-10-10+at+16.51.48.png

And here is the breakdown of that debt.
Notice the level of household debt in the composition.

http://2.bp.blogspot.com/-qH83_0mR8ug/UHWaNSPqCTI/AAAAAAAAJLY/rS0rgkfKWmg/s1600/Screen+shot+2012-10-10+at+16.51.38.png

Ray Palmer wrote: »

What was always going to happen as Ireland became more international the country would adjust to be more like other countries. That would include lowering our home ownership rate to be closer to that of other countries.

Property prices could easily stay high stopping people from owning forever. Expecting them to return to rates everybody can buy could be a false assumption as it is not the norm internationally.

The country is fooked with a massive level of debt, we have no proepr functioning standalone indigeneous banks (BOI is about the nearest) and the foreign ones have been leaving, we have a huge chunk of people in property they are not paying for with no repossessions and yet you think we should have high property prices.
Who exactly do you think should be able to afford a property, particularly in Dublin ?
Should it only be people on or above 100k ?

Ray Palmer wrote: »

Personal debit is also the norm in many western countries so for it to increase is not something unique to Ireland that has to disappear but could be the new reality.

So does that mean we should have the highest level of personal debt ?
Ireland's Household debt levels are 64.8% above the euro area.

Ray Palmer wrote: »

People are complaining that the government's failure to reposes is the cause but that isn't new it is old law. You can't have house prices forced to be low and no repossessions in a vacuum. There are inter-dependencies. Just like people claimed rent allowance was keeping rent up in Dublin. It wasn't and has been proven by reality. I suspect most of the people claiming house prices have to drop believed rent allowance was keeping rent high.

Ah come on we had one of the biggest property bubbles and thus bursts in history which resulted in huge jump in defualts and yet we have one of the lowest levels of repossession in the western world.
Something is not right there.

See this littel snippet.

Davy estimates that if Ireland had pursued repossessions at the same rate as Britain, 20,000 houses would have been taken from borrowers in arrears by now. Instead there have been just 1,350 since 2009. That means nearly 19,000 properties have been kept out of the market - at what would most likely be ‘market clearing prices’.

http://www.businesspost.ie/#!story/Home/News/Repossession+rate+key+to+house+price+%22recovery%22/id/19410615-5218-5089-3549-161384323718

So if we were to follow the UKs repossession rate we would have had 20,000 houses repossessed yet upto last quarter 2012 when this article appeared we had 1350.

We know you are a property investor and thus it is in your interest that property prices remain buoyant, rents continue to provide a good yield and property ownership remains outside the remit of a large chunk of the population to guarantee those rental yields.

All of the above is not in the interest of most people in this country.

bidiots

gaius c wrote: »

Well if it's up in "certain areas" then it must be down in "the other areas" and Galway is tiny so such increases would show up on the data set.

However, they are not so in the absence of you demonstrating your assertion to be correct, it's safe to say that the PPR shows you to be wrong.

Nope, you're wrong.
What's happening in other areas has nothing to do with what I have said.

Potatoeman

There is also the question of what will happen when interest rates go up again. I'm looking into buying at the moment as I stayed out of the market but if I want to buy I need to buy in the next few years in order to get a mortgage also Im almost paying someones mortgage now and no sight of rents dropping.

makeorbrake

Potatoeman wrote: »

There is also the question of what will happen when interest rates go up again. I'm looking into buying at the moment as I stayed out of the market but if I want to buy I need to buy in the next few years in order to get a mortgage

chicken and egg....

If rates rise, surely property prices should go down or at least there shouldn't be any price inflation? I know this is just one facet - there are others - but definitely a significant one.

Potatoeman wrote: »

Im almost paying someones mortgage now and no sight of rents dropping.

The old 'rent is dead money' mantra (although one I have to admit I bought into prior to my own purchase...).

Potatoeman

makeorbrake wrote: »

chicken and egg....

If rates rise, surely property prices should go down or at least there shouldn't be any price inflation? I know this is just one facet - there are others - but definitely a significant one.

The old 'rent is dead money' mantra (although one I have to admit I bought into prior to my own purchase...).

If rent was a chunck cheaper it would be better renting but Ive been living in Dublin for ten years and paid over 100k already. With ownership you have an asset, it decreases as capital is payed off and you have definate stability where you wont have to move.

makeorbrake

Potatoeman wrote: »

If rent was a chunck cheaper it would be better renting but Ive been living in Dublin for ten years and paid over 100k already. With ownership you have an asset, it decreases as capital is payed off and you have definate stability where you wont have to move.

100K? Hmm...I guess that is a lot ...point taken.

Ray Palmer

jmayo wrote: »

We know you are a property investor and thus it is in your interest that property prices remain buoyant, rents continue to provide a good yield and property ownership remains outside the remit of a large chunk of the population to guarantee those rental yields.

All of the above is not in the interest of most people in this country.

I assume you are connected to that blog and didn't you also claim that RA kept rents artificially high?
I have no idea where those figure come from or their accuracy. They are just charts which I assume come from some blog where you are somebody with a set view has already got a view is using them to make a point. In other words not an independent rational analysis of the issue.

I don't really care when people start saying what the government is preventing or how something is their fault and what should, could, must be done. The reality is all that counts. Repossessions haven't happened there doesn't look like there is going to be a sudden move any time soon. Wild speculation on what could happen IF they followed some plan that they have no plans to do is really pointless.

Negative equity and debit of the country are similar no problem if you can service. I have no idea if the rate is better now then back in the 80s. I know the banking system is now different to back then as is the entire EU. The fact we are in a single currency market has changed the game.

I am well able to make money on my property and have done for a couple of decades. Rent drops won't effect me much so the instance that is why I have certain views is wholly incorrect.

So many things have changed that people ignore. The population is larger, the increase of double income families, the increased break up of families, people marrying later etc... All of this stuff gets ignored. Yes a sole teacher's salary could buy a 3 bed house in Dublin , that probably won't happen again. Is it a terrible thing or just a natural result of the changes in society.

gaius c

bidiots wrote: »

Nope, you're wrong.
What's happening in other areas has nothing to do with what I have said.

Citation please.