Dublin House Prices

apricotpie

So the stats are out and house prices have risen 22 percent in the last year. I don't think we even saw such an increase during the boom years. One explanation is a shortage of supply in South Dublin, but does this account for such an exuberant increase given that purchasing power has not increased by the same amount. Another explanation is that it is investors buying in cash - if memory serves didn't government provide an tax incentive whereby speculators would have to pay no tax in profits.

Either way, does anybody have insight into the trajectory of property prices. If prices rise by the same amount this year, a lot of people will be locked out of the market?

Also has the silly proposal to guarantee deposits nbow been shelved given the IMF's reaction?

2013Lara

It's not only Dublin. I bought (currently waiting to close after a years wait, that's another story) in Wicklow June 2013. House was priced at 185 and we got it for 165, and were the only ones bidding. A house in the same estate went up for sale at 245 this week. It's a 3 bed house, like my own but about 100 sq ft bigger.I have an end house with double the garden. Two new housing estates are being built at the moment, both 5 mins from my house. One estate is sold out, prices started at 235. They have only started building them. There is an estate being finished across the road, and as soon as one goes up online its down as sale agreed. Things have gone crazy down here.

handlemaster

Whats with peoples fixation on SOUTH DUBLIN ?

nc19

handlemaster wrote: »

Whats with peoples fixation on SOUTH DUBLIN ?

Its not NORTH Dublin

kefir32

the cynic in me tells me this will not end well.

ezra_pound

nc19 wrote: »

Its not NORTH Dublin

Yes. We know that . we know south because it is the opposite of north, cold because it is the opposite of hot etc. But prices are soaring north of the Liffey too. The supply is not only constrained on the southside. In places northside prices have nearly doubled.

Arthur Beesley

nc19 wrote: »

Its not NORTH Dublin

Well spotted, poindexter.

I'm sure the residents of Malahide, Clonrarf and Howth among others would agree. Let's not mention Clondalkin though.

The_Conductor

Arthur Beesley wrote: »

Well spotted, poindexter.

I'm sure the residents of Malahide, Clonrarf and Howth among others would agree. Let's not mention Clondalkin though.

Tallaght and Clondalkin have in the last 3 months experienced the highest percentage increases in achieved prices, in the country. They're closely followed by Lucan and the Dublin 15 sprawl.

by the seaside

kefir32 wrote: »

the cynic in me tells me this will not end well.

The optimist in me tells me this will not end well.

The_Conductor

by the seaside wrote: »

The optimist in me tells me this will not end well.

Of course it won't.
Even estate agents are now telling the dog on the street that current prices bear no basis on, well anything.

Investors are cheerfully being told that a reasonable ROI for properties is now less than 5%- where previously anything under 7% would have been sneered at.

Prices have broken with all fundamentals- and are poor value for money.
Unfortunately- the sole fundamental driving this insane demand- is lack of supply- and current policies from councils are only stoking this lack of supply even further.

Bepolite

I dont really understand why people keep failing to relaise at the bottom of the market large % rises are common as 100% of sod all is sod all in itself.

There's alot of silliness going on with cash buyers that's begining to filter out but I don't expect prices to drop, just stabalise and continue to rise.

As for to Soco Dublin thing, I wish I could find that Billy Connelly skit about the middle classes.

ted1

handlemaster wrote: »

Whats with peoples fixation on SOUTH DUBLIN ?

Leafy suburbs, good schools, nice villages, good sports facilities, abundance of parks, lots of people from the area want to stay in the area. E.g a family of 6 will have 4 kids who want to remain the area so this causes good competition among houses and keeps the pushes the price up.
I only know one couple who moved from south dublin to north dublin, and now there in the process of moving back

ted1

Arthur Beesley wrote: »

Well spotted, poindexter.

I'm sure the residents of Malahide, Clonrarf and Howth among others would agree. Let's not mention Clondalkin though.

Malahide clontarf and howth are more east coast than Northside.

ezra_pound

ted1 wrote: »

Malahide clontarf and howth are more east coast than Northside.

Lol. Likewise ballsbridge dalkey and sandymount are more east coast than south. Cop the x on.

The_Conductor

Bepolite wrote: »

I dont really understand why people keep failing to relaise at the bottom of the market large % rises are common as 100% of sod all is sod all in itself.

There's alot of silliness going on with cash buyers that's begining to filter out but I don't expect prices to drop, just stabalise and continue to rise.

As for to Soco Dublin thing, I wish I could find that Billy Connelly skit about the middle classes.

The issue at the moment is- fundamentals- that is how much a property might be reasonably expected to rent for- are indicating that current prices have risen significantly higher than can be supported.

Just looking out my kitchen window- a small 2 bed in poor repair in Lucan village has a current offer of 185 on it. Its last tenant was paying 700 a month rent- and the property immediately next door to it in good condition is currently making 825.

We're at hallucinogenic property prices- and yes, it is being driven by cash buyers- as no-one else can finance purchases at current prices.

How many cash buyers are there- why are they suddenly making an appearance- and how come they seem to think current valuations have any grounding in reality?

Personally- I don't think a return-on-investment of 4.5% is worth the risk of letting a property to a tenant- hell, its hardly worth getting up in the morning for that rate of return- much less bursting your arse as a landlord keeping properties in good condition.

The figures do not add up. They are insane. Its Irish Property Bubble Mark 2- and by-god people are insisting on bailing in with all they've got.........

murphaph

You have to view the falling yield in light of the dreadful rates for deposits. 4.5% even given the risks in Ireland is a lot more attractive to many than 1.5% on deposit. There are plenty of properties in Berlin right now that offer no more than 2% yield but investors still buy them. Probably not interesting for small time investors but institutions maybe.

ted1

murphaph wrote: »

You have to view the falling yield in light of the dreadful rates for deposits. 4.5% even given the risks in Ireland is a lot more attractive to many than 1.5% on deposit. There are plenty of properties in Berlin right now that offer no more than 2% yield but investors still buy them. Probably not interesting for small time investors but institutions maybe.

Don't forget to take away 60% dirt on the 1.5% deposit

ezra_pound

murphaph wrote: »

You have to view the falling yield in light of the dreadful rates for deposits. 4.5% even given the risks in Ireland is a lot more attractive to many than 1.5% on deposit. There are plenty of properties in Berlin right now that offer no more than 2% yield but investors still buy them. Probably not interesting for small time investors but institutions maybe.

Absolutely. 5% is a good yield, especially in times of low interest rates.

markpb

ted1 wrote: »

Malahide clontarf and howth are more east coast than Northside.

ezra_pound wrote: »

Lol. Likewise ballsbridge dalkey and sandymount are more east coast than south. Cop the x on.

He's right though. People fixate on north vs south but the real divide in Dublin is east vs west. Almost all the nicer areas, more expensive areas and good public transport are on the east side of the city. Almost all the negative incidents which make the press happen on the west side. Almost all the growth in the last decade was on the west side which means it's the part of the city with the most pressure on local facilities and schools.

Arthur Beesley

ted1 wrote: »

Leafy suburbs, good schools, nice villages, good sports facilities, abundance of parks, lots of people from the area want to stay in the area. E.g a family of 6 will have 4 kids who want to remain the area so this causes good competition among houses and keeps the pushes the price up.
I only know one couple who moved from south dublin to north dublin, and now there in the process of moving back

One couple....that's all the evidence I need.

Bepolite

markpb wrote: »

Almost all the negative incidents which make the press happen on the west side.

True but the stuff that comes out of the South is usually truly horrific!

Piriz

I am hoping to buy in about a year but only if i feel i am getting decent value for money... I have hopes that the prices in Dublin will fall again...as one boards poster said recently: if they can go up rapidly they can fall rapidly.
My hopes for price drops are based on the following:
3000+ repossession proceedings in first 1/4 of this year compared to 300+ in first 1/4 of last year... It is about time that this happened and we could see this figure grow exponentially in the next few years... i.e. 100,000 long term non performing mortgages...
The cash buyer accounting for 50% of purchases last year will not last, the value is not as good anymore and i expect to see this figure lower to about 30% in the coming year or two..
Building has started again so there will be new supply hitting the market later this year... this should also grow exponentially...
If the government do not extend the capital gains tax exemption on property if sold after seven years we will see less interest from investors after the budget 2014.
And I reckon the the next generation / demographic of younger people as first time buyers will have less income, less access to mortgages, smaller deposits, and overall be a much smaller cohort of eligible purchasers due to the impact the resession has had on this generation...thus impacting demand.
Finally, another austerity budget pending could further impact disposable incomes..

I am fearful of the rental crisis at the moment and the government interfering in the market...Michael Noonan stated he wants to see property prices increase further...and ideas to give FTB's deposit support are nuts...

any thoughts?

ted1

Piriz wrote: »

I am hoping to buy in about a year but only if i feel i am getting decent value for money... I have hopes that the prices in Dublin will fall again...as one boards poster said recently: if they can go up rapidly they can fall rapidly.
My hopes for price drops are based on the following:
3000+ repossession proceedings in first 1/4 of this year compared to 300+ in first 1/4 of last year... It is about time that this happened and we could see this figure grow exponentially in the next few years... i.e. 100,000 long term non performing mortgages...
The cash buyer accounting for 50% of purchases last year will not last, the value is not as good anymore and i expect to see this figure lower to about 30% in the coming year or two..
Building has started again so there will be new supply hitting the market later this year... this should also grow exponentially...
If the government do not extend the capital gains tax exemption on property if sold after seven years we will see less interest from investors after the budget 2014.
And I reckon the the next generation / demographic of younger people as first time buyers will have less income, less access to mortgages, smaller deposits, and overall be a much smaller cohort of eligible purchasers due to the impact the resession has had on this generation...thus impacting demand.

I am fearful of the rental crisis at the moment and the government interfering in the market...Michael Noonan stated he wants to see property prices increase further...and ideas to give FTB's deposit support are nuts...

any thoughts?

What part of Dublin are you looking at? FTB in south Dublin will have incomes close to or in excess of 100k.
I think that the prices are close to settling from being seriously undervalued in 2012

quadrifoglio verde

ted1 wrote: »

Don't forget to take away 60% dirt on the 1.5% deposit

Don't forget the income tax, prsi and usc that a landlord has to pay on their rental return......id sooner keep the money on deposit, that be a feckin landlord for a 4.5% yield.

Piriz

ted1 wrote: »

What part of Dublin are you looking at? FTB in south Dublin will have incomes close to or in excess of 100k.
I think that the prices are close to settling from being seriously undervalued in 2012

Hi ted,

Im a northsider and luckily looking to stay on the northside, Dublin 7 most likely... close to the Phoenix Park... willing to spend 350k max i think...

who_ru

ted1 wrote: »

What part of Dublin are you looking at? FTB in south Dublin will have incomes close to or in excess of 100k.
I think that the prices are close to settling from being seriously undervalued in 2012

I presume you mean a couple on a joint income of €100k. What do they have left after tax? Plus higher insurances across the board, property tax increasing as house prices do, no trackers available, water charges coming 2015. Plus there may or not be kids, child are costs are brutal.

€100k sounds like a lot, and would be in most EZ countries, but not Ireland where anything in excess of €32800 is taxed at 52%.

ezra_pound

Piriz wrote: »

I am hoping to buy in about a year but only if i feel i am getting decent value for money... I have hopes that the prices in Dublin will fall again...as one boards poster said recently: if they can go up rapidly they can fall rapidly.
My hopes for price drops are based on the following:
3000+ repossession proceedings in first 1/4 of this year compared to 300+ in first 1/4 of last year... It is about time that this happened and we could see this figure grow exponentially in the next few years... i.e. 100,000 long term non performing mortgages...
The cash buyer accounting for 50% of purchases last year will not last, the value is not as good anymore and i expect to see this figure lower to about 30% in the coming year or two..
Building has started again so there will be new supply hitting the market later this year... this should also grow exponentially...
If the government do not extend the capital gains tax exemption on property if sold after seven years we will see less interest from investors after the budget 2014.
And I reckon the the next generation / demographic of younger people as first time buyers will have less income, less access to mortgages, smaller deposits, and overall be a much smaller cohort of eligible purchasers due to the impact the resession has had on this generation...thus impacting demand.
Finally, another austerity budget pending could further impact disposable incomes..

I am fearful of the rental crisis at the moment and the government interfering in the market...Michael Noonan stated he wants to see property prices increase further...and ideas to give FTB's deposit support are nuts...

any thoughts?

I don't see why the investment value of property is due to decrease.

Are interest rates going to increase rapidly and in the short term? No.

Is rental supply due to increase rapidly in the short term? No.

On account of these two factors the investment potential in Irish property is due to wax not wane.

Piriz

ezra_pound wrote: »

I don't see why the investment value of property is due to decrease.

Are interest rates going to increase rapidly and in the short term? No.

Is rental supply due to increase rapidly in the short term? No.

On account of these two factors the investment potential in Irish property is due to wax not wane.

I said that the capital gains tax exemption when properties are kept for seven years is due to end this year and if it is not extended this incentive will not exist.... thus remove some of the incentive remove some of the demand.

when it comes to property its best to take a medium to long term view of interest rates...and considering they are seriously low..as Yazz would say: the only way is up.

As i stated in my post...im worried about the rental crisis....

oh yields on property are down!

who_ru

Piriz wrote: »

I said that the capital gains tax exemption when properties are kept for seven years is due to end this year and if it is not extended this incentive will not exist.... thus remove some of the incentive remove some of the demand.

when it comes to property its best to take a medium to long term view of interest rates...and considering they are seriously low..as Yazz would say the only way is up.

As i stated in my post...im worried about the rental crisis....

oh yields on property are down!

If there is a perception in Govt that ending the capital gains tax exemption will have the effect of taking the heat out of the property market they will act accordingly. I'll leave it up to you to interpret what accordingly might mean.

Piriz

who_ru wrote: »

If there is a perception in Govt that ending the capital gains tax exemption will have the effect of taking the heat out of the property market they will act accordingly. I'll leave it up to you to interpret what accordingly might mean.

true, i mentioned in my earlier post how a few months ago Michael Noonan publicly stated he wants to see house prices rise further. Chances are he will extend the capital gains tax exemption...However, i think that Bubble2.0 will destroy this government if they don't act to control their measures that inflate it...

on reflection it appears that their measures are in conflict...increasing property prices yields greater property tax revenues, nevertheless the more people have to pay for property the more disgruntled they become and there is less disposable income in the economy... but Noonan wants the banks to look good for the stress tests and the rest of us will pay for it...again.

murphaph

quadrifoglio verde wrote: »

Don't forget the income tax, prsi and usc that a landlord has to pay on their rental return......id sooner keep the money on deposit, that be a feckin landlord for a 4.5% yield.

You're possibly missing the main advantage of BTL over other investment classes. You can get a mortgage and let someone else pay it off for you over time, leaving you with an expensive asset as well as the rental return. You generally won't get a loan for any other type of investment unless you're Warren Buffet or the like.

All things being equal, nobody should buy an investment property outright with their own reserves. They should use a portion of their available funds and leverage the rest. Does this sound like Celtic Tiger speak? Yes, but it's still true if you know what you are doing. Some people can also borrow at much lower rates than the Irish banks lend at to normal schmucks working a 9-5 job. Even in my own case (and I'm certainly a small time landlord and I know it!) I can borrow against my German property at rates that would make Irish people cry (think a little over 3% FIXED for 20 YEARS!!) and use it to finance whatever I like. My brother and I have a semi derelict property that we intend renovating using such finance.