Who's doing what?

spockety

With the news today that the CSO index is showing Dublin prices up over 22% in a single year, I'm curious as to what people who currently in the market are feeling...

_Kaiser_

(C) Didn't get involved first time round, but due to changed personal circumstances, and mainly the mess that is the private rental sector (with no sign of it EVER being taken seriously), have decided that in the medium-long term, buying is really the only option in this country

Ironic eh?.. Those who don't want/need to "get on the property ladder" are ultimately forced into it because of the knock-on effects the herd mentality has on other options

Caliden

Kaiser2000 wrote: »

(C) Didn't get involved first time round, but due to changed personal circumstances, and mainly the mess that is the private rental sector (with no sign of it EVER being taken seriously), have decided that in the medium-long term, buying is really the only option in this country

Ironic eh?.. Those who don't want/need to "get on the property ladder" are ultimately forced into it because of the knock-on effects the herd mentality has on other options

It's got to a point where rental prices are going above and beyond what you would be paying for a decent 25 year mortgage.

People may say "oh but you're then stuck with a 25 year debt" but if you continue to work in Dublin (realistically speaking the majority of people will) you are still stuck with a constant debt that is rent without any security.

jay0109

I stopped viewing about 6 months ago as too many people showing up at them and most had offers over asking there and then.
Houses that were going 450k in SCD around late 2011 are now asking 650k+, and it just makes no financial sense to jump in at those levels especially if only 1 can work while the OH is at home with kids- and who wants their young kids going to creche/child minders after a day in school or having to let themselves in if old enough to do so. Thats just not worth it

So am prepared to sit this out and it either blows up again in the next 2 years or so, or I'll move out to the sticks and commute in by train. But I'm not spending 3/4's of a mill on a 1,500sq ft semi-d in an average estate, in a country with a national debt of Sudan!

Ray Palmer

Caliden wrote: »

It's got to a point where rental prices are going above and beyond what you would be paying for a decent 25 year mortgage.

That is actually the normal situation for rental in Ireland. You pay a premium to rent over purchasing. It has only been the other way for a very short time. It is one of the reasons why Ireland has such a desire to own a property, historically it has been cheaper to buy.

Senecio

Needs another selection in the poll

- Stopped looking on Daft/MyHome. Now looking on Zillow.

Just the small matter of getting a work transfer.

Idbatterim

just took a look at some of the asking prices on daft, I have said it before and will say it again, anyone who had the ability to buy and didnt 1.5-2 years ago, was out of their mind and has seriously f**cked up. LOL at the prices now compared to then, they have nearly doubled in some cases.

I wasnt and still am not in a position to buy, but when decent semi d houses in D.14 were going for a tad over 300k, if I had the ability to buy, that would have been it, whatever if prices dropped another bit...

Ray Palmer

Idbatterim wrote: »

just took a look at some of the asking prices on daft, I have said it before and will say it again, anyone who had the ability to buy and didnt 1.5-2 years ago, was out of their mind and has seriously f**cked up. LOL at the prices now compared to then, they have nearly doubled in some cases.

In fairness it was difficult to get a mortgage and a lot of job insecurity going about. Things haven't changed that much but at the end of this year the removal of CGT exemption will not be there so investment may suddenly stop.

It is a all still a risk but the new assumption seems to be that property price rises mean a bubble and can only mean that when the reality is prices dropped too much in a very similar way to a bubble.

Theboinkmaster

Idbatterim wrote: »

just took a look at some of the asking prices on daft, I have said it before and will say it again, anyone who had the ability to buy and didnt 1.5-2 years ago, was out of their mind and has seriously f**cked up. LOL at the prices now compared to then, they have nearly doubled in some cases.

I wasnt and still am not in a position to buy, but when decent semi d houses in D.14 were going for a tad over 300k, if I had the ability to buy, that would have been it, whatever if prices dropped another bit...

Question is though if you're in a position to buy now should you.....comprimise and leave Dublin or hope the SCD prices come back a bit.

Idbatterim

Question is though if you're in a position to buy now should you.....comprimise and leave Dublin or hope the SCD prices come back a bit.

There would always be the option of compromising on the property i.e. 3/4 bed semi to 3 bed terrace or simply move from the likes of D.4>D.6, D.14>D.12, D.16>D18 etc. Leaving Dublin all together wouldnt be something I would personally entertain when I am in a position to buy... Or wait for new builds to come on the market, at least with them you dont have all the messing around with, "oh well the vendor wont take that or X other bid has been lodged"... then again it depends if these are going to come on-stream in your area...

who_me

Haven't seen the source of that figure, but would be curious what the nationwide figure is; I'd imagine it's still fairly stagnant outside of Dublin? If so, that must make it a nightmare setting economic policy - the city with ~25% of the population overheating and the rest of the country seeing little or no growth.

murphaph

who_me wrote: »

Haven't seen the source of that figure, but would be curious what the nationwide figure is; I'd imagine it's still fairly stagnant outside of Dublin? If so, that must make it a nightmare setting economic policy - the city with ~25% of the population overheating and the rest of the country seeing little or no growth.

This is actually a common problem globally. Just look at our nearest neighbour where interest rates are totally out of kilter between London and the regions. In Germany there are definitely bubbles forming in the likes of Munich but many regions are experiencing depopulation and property price falls. It'll always be a balancing act for most countries.

desertcircus

I can't find it now, but there was an analysis of figures done recently that indicated that when you allowed for changes in average earnings, taxation levels and the end of tracker mortgages being offered, an average house in Dublin on a 25-year term costs the same per month now as it did in 2006.

Even aside from that, 22% rises in Dublin just seem utterly deranged. That's a figure that should be setting off alarm bells; it's simply not sustainable. Assuming prices right now are at 55% of the peak, we'd hit about 66% by summer 2015, 80% by summer 2016, and a return to credit-fuelled, tracker-led, Ponzi-scheme peak prices by the autumn of 2017. 22% is, I think, a faster annual growth rate than we had during the peak of the bubble - except without banks lending to any great extent, new tracker mortgages having vanished off the face of the earth, virtually zero wage growth for the last five years, a population growth rate that's barely breaking even and a huge cohort of the next generation of buyers having emigrated. Something has to give (the effect of the end of the CGT exemption in December on the 50+% of the market comprised of cash buyers being a serious potential banana skin), and when it does, the question is whether it merely spikes growth or triggers further falls.

jay0109

desertcircus wrote: »

I can't find it now, but there was an analysis of figures done recently that indicated that when you allowed for changes in average earnings, taxation levels and the end of tracker mortgages being offered, an average house in Dublin on a 25-year term costs the same per month now as it did in 2006.

Even aside from that, 22% rises in Dublin just seem utterly deranged. That's a figure that should be setting off alarm bells; it's simply not sustainable. Assuming prices right now are at 55% of the peak, we'd hit about 66% by summer 2015, 80% by summer 2016, and a return to credit-fuelled, tracker-led, Ponzi-scheme peak prices by the autumn of 2017. 22% is, I think, a faster annual growth rate than we had during the peak of the bubble - except without banks lending to any great extent, new tracker mortgages having vanished off the face of the earth, virtually zero wage growth for the last five years, a population growth rate that's barely breaking even and a huge cohort of the next generation of buyers having emigrated. Something has to give (the effect of the end of the CGT exemption in December on the 50+% of the market comprised of cash buyers being a serious potential banana skin), and when it does, the question is whether it merely spikes growth or triggers further falls.

Lack of mortgage affordability now rivals the bubble era

http://www.thejournal.ie/readme/mortgage-affordability-ireland-2014-1533195-Jun2014/

Tigger

jay0109 wrote: »

I stopped viewing about 6 months ago as too many people showing up at them and most had offers over asking there and then.
Houses that were going 450k in SCD around late 2011 are now asking 650k+, and it just makes no financial sense to jump in at those levels especially if only 1 can work while the OH is at home with kids- and who wants their young kids going to creche/child minders after a day in school or having to let themselves in if old enough to do so. Thats just not worth it

So am prepared to sit this out and it either blows up again in the next 2 years or so, or I'll move out to the sticks and commute in by train. But I'm not spending 3/4's of a mill on a 1,500sq ft semi-d in an average estate, in a country with a national debt of Sudan!

National debt of Sudan is only 36billion

jay0109

I was being sardonic!

kennyb3

jay0109 wrote: »

http://www.thejournal.ie/readme/mortgage-affordability-ireland-2014-1533195-Jun2014/

Except the figures are fudged as discussed here by esselte and bml.

jay0109

kennyb3 wrote: »

Except the figures are fudged as discussed here by esselte and bml.

Some would say that they are fudged alright, but in both directions. The very conservative purchase price of 161k used in his workings for example.
Not too many bunfights right now over properties in that price region

kennyb3

jay0109 wrote: »

Some would say that they are fudged alright, but in both directions. The very conservative purchase price of 161k used in his workings for example.
Not too many bunfights right now over properties in that price region

I think it's a fact he fudged the figures not an opinion tbh.

No doubt in both directions - but it renders the article pointless unless the correct statistics are used to actually analyse what he is attempting to.

Even if affordability was exactly equal I'd much prefer a smaller capital on the loan to repay than a large amount. Much easier to pay back 400k (on 4.5% SRV) than 600k (tracker) if you come into inheritance/want to repay earlier.

jay0109

kennyb3 wrote: »

I think it's a fact he fudged the figures not an opinion tbh.

No doubt in both directions - but it renders the article pointless unless the correct statistics are used to actually analyse what he is attempting to.

Even if affordability was exactly equal I'd much prefer a smaller capital on the loan to repay than a large amount. Much easier to pay back 400k (on 4.5% SRV) than 600k (tracker) if you come into inheritance/want to repay earlier.

Give it another 12 months Kennyb with those 20%+ rises, and you'll be getting close to that 600k capital on the 4.5% SRV

kennyb3

jay0109 wrote: »

Give it another 12 months Kennyb with those 20%+ rises, and you'll be getting close to that 600k capital on the 4.5% SRV

Hopefully the market will cool off - I'm not sure when, or by how much but it's pretty evident things can't go on like that.

Affordability at present in a lot of Dublin locations is shocking, just not quite as shocking as 2007 yet.

anyway I only posted to point out the inaccuracies in that article.

Mr.McLovin

Ray Palmer wrote: »

In fairness it was difficult to get a mortgage and a lot of job insecurity going about. Things haven't changed that much but at the end of this year the removal of CGT exemption will not be there so investment may suddenly stop.

It is a all still a risk but the new assumption seems to be that property price rises mean a bubble and can only mean that when the reality is prices dropped too much in a very similar way to a bubble.

I don't think the bottom overshot as people expected action taken against people not paying their mortgage or at least the BTLs and there would have been a presumption even in the media that prices would have bounced along 'the bottom' for some time, which it probably should have.

I reckon the CGT has people over optimistic the same way MIR end had. The reality is there is a small pool of buyers in our economy that are doing well but there is a smaller pool of houses available and until that levels out they'll just keep competing for the same houses, in turn raising the prices.

DebDynamite

Idbatterim wrote: »

just took a look at some of the asking prices on daft, I have said it before and will say it again, anyone who had the ability to buy and didnt 1.5-2 years ago, was out of their mind and has seriously f**cked up. LOL at the prices now compared to then, they have nearly doubled in some cases.

I wasnt and still am not in a position to buy, but when decent semi d houses in D.14 were going for a tad over 300k, if I had the ability to buy, that would have been it, whatever if prices dropped another bit...

So true. If only we knew at the time that was the bottom. I think we all expected things like the introduction of the Property Price Register, ending of MIR, repossessions, etc to have an effect and make prices drop even further, but that didn't happen. I myself was a price-rise denier on here when certain posters here we're telling us prices were rising. Turns out they were right.

Not at you directly Idbatterim, but are prices really so crazy now? They're not at "bottom" prices, but nor are they at "boom" prices either. Ignoring the current rises, and the price of houses when we were at the bottom, could you say prices at the moment at a normal level?

_Kaiser_

DebDynamite wrote: »

Not at you directly Idbatterim, but are prices really so crazy now? They're not at "bottom" prices, but nor are they at "boom" prices either. Ignoring the current rises, and the price of houses when we were at the bottom, could you say prices at the moment at a normal level?

No they're not because you can't take them in isolation.

You have to remember the ass fell out of the rest of the economy too - wage cuts, massive job losses, extra taxation and a cost of living that didn't really drop all that much either.

Despite what Enda and co would have us believe, the "recovery" - if there even is one! - is extremely fragile. We still have a massive problem with mortgage arrears, huge unemployment, banks still aren't really lending, SME's are still in trouble (saw a report today that over 40% of SME loans are in arrears) and of course we still have water charges on the way and another massive budget adjustment (whether it's 800 million, or 2 billion it's still coming out of an already delicate economy).

The current prices are being driven by limited supply and cash-rich buyers IMO - people who cashed out with generous redundancy packages back in 2009/2010 - but neither is sustainable long term.

The difference this time is that when it crashes again, it'll be "real" money that's lost not the "free money"/endless credit of the Good Times

Idbatterim

So true. If only we knew at the time that was the bottom. I think we all expected things like the introduction of the Property Price Register, ending of MIR, repossessions, etc to have an effect and make prices drop even further, but that didn't happen. I myself was a price-rise denier on here when certain posters here we're telling us prices were rising. Turns out they were right.

Not at you directly Idbatterim, but are prices really so crazy now? They're not at "bottom" prices, but nor are they at "boom" prices either. Ignoring the current rises, and the price of houses when we were at the bottom, could you say prices at the moment at a normal level?

the thing is, where the bottom was, was never going to be obvious until a few months if not a year or so later. It isnt an exact science. The logic was, why buy when prices keep dropping, I will wait for them to hit bottom, that way, yeah they might rise a few percent, but better than another potential 10-15% fall if I buy now. Problem was / is, the prices didnt creep back up, they jumped up and secondly, there is virtually no supply.

The current prices are being driven by limited supply and cash-rich buyers IMO - people who cashed out with generous redundancy packages back in 2009/2010 - but neither is sustainable long term.

The difference this time is that when it crashes again, it'll be "real" money that's lost not the "free money"/endless credit of the Good Times

Public servants are retiring every year and getting generous tax free lump sums, people are also getting inheritances or gifts from parents, or as part of a couple are on fairly serious salaries, anyone thinking this is going to run out of steam or change are in for serious disappointment IMO.

People mostly middle aged lost their shirts on shares, the old saying "safe as houses" leads me to believe that this is where more so than ever, this time around, people will be investing their wealth and speculating... I mean look how quick the turnaround has been, biggest bust in the history of the state and we are back to square one 5/6 years later...

One thing is for sure, being gun ho can cost you a lot of money, so can being overly cautious!

Not at you directly Idbatterim, but are prices really so crazy now? They're not at "bottom" prices, but nor are they at "boom" prices either. Ignoring the current rises, and the price of houses when we were at the bottom, could you say prices at the moment at a normal level?

I wouldnt say they are crazy, the problem is a huge amount of people want to live in an area with a landmass of what % of the state? .5% maybe? these are the people with money, virtually no supply. I mean yeah it looks crazy / sick compared to what they were going for 18-24 months ago. Lets say prices rise 10% on average for another 4 years. At that stage they would be at boom prices, less 10% deposit, you wouldnt be in negative equity IF they dropped 50% from now, also you would factor in 4 years worth of repayments. There are a lot of ifs and buts, but one thing is for sure, if you are paying rent, that will be X amount for sure over the next X years. It also depends on if you are going to be paying market rent or like some fortunates, have had your rent frozen for years and are paying well below it. There are so many factors...

iguana

Idbatterim wrote: »

The logic was, why buy when prices keep dropping, I will wait for them to hit bottom, that way, yeah they might rise a few percent, but better than another potential 10-15% fall if I buy now.

I'm not sure that was the logic. There are certain ways of calculating the actual value of a property and, apart from the occasional rarity, prices in Dublin never came close to value. And if you were buying with a mortgage, buying an overpriced house while interest rates are still so very, very low is incredibly foolhardy, risky behaviour. A lot of people who are now derided for missing the bottom, were just being prudent and sensible.

Our perception of what property is actually worth is still warped by the boom. I'm sale agreed on a house in Limerick and if it all goes through I'll be paying a price that as far as I can work out is value. It's not a bargain, not what I believe the bottom should/will be, as traditionally bottoms go below value, just what it's probably worth. Yet I can't help but feel that it's 'cheap' because despite what I know about value, emotionally, I'm still swayed by peak prices.

The Spider

It's spreading to the commuter towns, as I predicted, they're the next ones to see jumps, as people realise that dream of the 3 bed semi in Dublin 14 is further out of reach. Had a conversation with a guy in work who's doing just that after seeing what he can get an hour outside Dublin as opposed to an hour spent crossing the city.

Idbatterim

I'm not sure that was the logic. There are certain ways of calculating the actual value of a property and, apart from the occasional rarity, prices in Dublin never came close to value. And if you were buying with a mortgage, buying an overpriced house while interest rates are still so very, very low is incredibly foolhardy, risky behaviour. A lot of people who are now derided for missing the bottom, were just being prudent and sensible.

Our perception of what property is actually worth is still warped by the boom. I'm sale agreed on a house in Limerick and if it all goes through I'll be paying a price that as far as I can work out is value. It's not a bargain, not what I believe the bottom should/will be, as traditionally bottoms go below value, just what it's probably worth. Yet I can't help but feel that it's 'cheap' because despite what I know about value, emotionally, I'm still swayed by peak prices.

a house is worth what someone is prepared to pay for it. There is no way you can put a figure on this house should be worth exactly this...

It's not a bargain, not what I believe the bottom should/will be, as traditionally bottoms go below value, just what it's probably worth

yes at this moment in time, if it goes up by 10% next year, I'm sure if you put it up on the market, that the potential purchaser would feel that its not a bargain, but that is the current market value at the time. No point in looking back and saying houses were 50k in 1994 or whatever, what has that go to do with anything?

Ray Palmer

The Spider wrote: »

It's spreading to the commuter towns, as I predicted, they're the next ones to see jumps, as people realise that dream of the 3 bed semi in Dublin 14 is further out of reach. Had a conversation with a guy in work who's doing just that after seeing what he can get an hour outside Dublin as opposed to an hour spent crossing the city.

It's not like it was a genius prediction more like inevitable nature.

What people are failing to predict is commuting by car into Dublin will just continue to get more difficult and expensive.

Congestion charges will come in at some point it is just a matter of time. Petrol will be more expensive. The further out you are the more likely the space between you and the city will become housing making commutes longer.

The people who live in Dublin will get hacked off soon enough. We have to pay higher property tax and that money is used for areas outside Dublin while our streets are full of cars from people who decided they wanted bigger houses in a more rural setting. Look at the traffic of Dublin at think is it reasonable that all the cars taking up the roads should be there considering they only move 35% of the commuters. It is simply idiotic waste of resources.

Idbatterim

I agree ray and thats why its about time those idiots in power got their act together and get the ball rolling on metro north and DU as soon as possible. It will allow for higher densities, increase the property tax take, open up new sites, reduce congestion, pollution etc...

The Spider

Ray Palmer wrote: »

It's not like it was a genius prediction more like inevitable nature.

What people are failing to predict is commuting by car into Dublin will just continue to get more difficult and expensive.

Congestion charges will come in at some point it is just a matter of time. Petrol will be more expensive. The further out you are the more likely the space between you and the city will become housing making commutes longer.

The people who live in Dublin will get hacked off soon enough. We have to pay higher property tax and that money is used for areas outside Dublin while our streets are full of cars from people who decided they wanted bigger houses in a more rural setting. Look at the traffic of Dublin at think is it reasonable that all the cars taking up the roads should be there considering they only move 35% of the commuters. It is simply idiotic waste of resources.

Well the N11 is being upgraded, as soon as that's done petrol costs will go down, motorway driving and all that, there's always the train which I've taken many times, and that's an easy trip in, you can also drive as far as greystones and get the dart, again easy.

As for Dublin people being hacked off? doesn't matter all citizens have the right to travel to whatever part of the country they want.
For people not to commute then businesses need to be spread out across the country, you can hardly complain if there's only one centre of decent jobs in the entire country and people decide to commute to those jobs?

What would happen if they decided to move to Dublin instead, there's already lack of supply of housing for both rental and buying, rents and prices increase further.

Agree about metro north, needs to be sorted out, swords road is a nightmare in the morning.