Property Market 2015

johnnyskeleton

helimachoptor wrote: »

House i'm looking at requires some stuff done, some cosmetic work, but some infrastructure work too but nothing too bad. Frankly 600K its priced way too high. A house in the same estate went for 430K late last year but it was about 60 sq m smaller.

Tbh i would be prepared to pay 500K, but would hope to pay 470 but we'll see how it goes.
Its a nice house but if the price isn't right i wont be buying it.

It is a house that will likely be still on the market in 6 months time.

With the aid of the propertypriceregister I can see that several properties I bid on in 2010/11 went for what I offered (or in some cases less) but whether that was because the vendor was not yet ready to sell at that price when i offered, or some side deal was done e.g. someone was selling to a relative/friend and used an estate agent to value it by getting the highest offer and rejectednit, ill never know.

In any event, my point being that even if the prperty is going to sell for 470k, unfortunately that might not mean it is sold to the first person who offers that.

gaius c

handlemaster wrote: »

with the ecb about to start printing money and the euro value going down this is going to have an affect also. investors and people entering ireland will have more cash. people in ireland will see savings eroded more with devaluation also inflation will rise. In order to retain savings some people will invest in property

That pretty much assumes a couple of important things:
1. Wages will keep pace with inflation. Bank balance sheets have been expanded massively in the last few years but the money is not "trickling" down in any shape or form.
2. That the same catastrophe that is bringing about the currency weakness has no negative impact on house prices.

gaius c

yankinlk wrote: »

anyone else noticing sale agreed signs popping up on large tracts of land lately?

Whereabouts?

Barely Hedged

The_Conductor wrote: »

Wage growth hasn't occurred in the civil service though- the public sector wage bill is down over 30% since 2007. This has also disproportionately affected rural communities- as a far higher proportion of employment in rural populations are in the public sector, than in Dublin, Cork, Galway and the other cities and towns. For example- 2/3 of the civil service is decentralised (which many people don't realise) and in the public sector in general- in some rural areas- up to 100% of employment is public sector. This has depressed rural property prices- as the money is not there.

Wage growth will return this year. Leading up to an election, unions mentioning it in public and 8 year of stagnation.

The_Conductor wrote: »

I would classify it as a correction on over pessimistic drops in prices. Dublin prices are still North of most London areas- and the 'correction' has been very localised (as Developers trying to get developments in West Dublin and North Dublin off the ground are discovering). People want to live in South Dublin (in general- but even this is overly simplistic- its particular postcodes that people want to live in). People are not willing to pay 'corrected prices' for new developments in Lucan, Blanchardstown and Coolock. There are over 40,000 new homes on hold- because developers aren't sure that they are worth building- and this in a market as parched of property- as Dublin.........

I find it hard to believe that Dublin is higher than most London areas - very hard indeed. I would need examples from Rightmove v Daft to even consider that.

From personal experience in Tallaght a house that was 69k in 2012 is selling for 90k now. 200k now 270k

The_Conductor wrote: »

The biggest issue- and the biggest driver of price rises- has been perception- alongside people all wanting to live in very high demand areas. There was a knock-on effect in Dublin West/Kildare/Meath etc- but even this is cooling rapidly- to the extent that several planned developments have been put on hold- and some developments in Lucan and Blanchardstown (from NAMA) are being sold at significantly below their cost of development.

I agree that perception plays a part but if the market stalled with very little sales for 5 years do you not thing demand builds up? Demand far outweighs perception.

The_Conductor wrote: »

Sentiment and the herd mentality- are very hard things to shake- and until sacred cows are slaughtered on the alter of development- like highrise and densities- we are not going to break the vicious cycle.

I agree - people flock to areas with good public transport. We need to make that a priority and the development of denser accommodation in parallel

The_Conductor wrote: »

Dublin has now stagnated- with the exception of South Co. Dublin- where people are still willing to tear lumps out of each other to purchase at pretty much any cost. The rest of the country will surely follow in due course- wage rises for the first time in a decade, notwithstanding.

Its just my opinion and i think for the simple reasons outlined, it will change this year.

MarkAnthony

Barely Hedged wrote: »

I find it hard to believe that Dublin is higher than most London areas - very hard indeed. I would need examples from Rightmove v Daft to even consider that.

From personal experience in Tallaght a house that was 69k in 2012 is selling for 90k now. 200k now 270k

I find this hard to believe as well. Is this taking into account wages v house prices?

mickman

MarkAnthony wrote: »

I find this hard to believe as well. Is this taking into account wages v house prices?

This is completely false. London prices are way way ahead of dublin

The_Conductor

mickman wrote: »

This is completely false. London prices are way way ahead of dublin

South Dublin?
I'm not talking about Knocklyon/Firhouse/Tallaght/Clondalkin/Lucan/Clonee/Blach/Coolock etc........

There are entire postcodes- think D2/4/6 which are purely aspirational even for dual income households (and forget it altogether if you have children and childcare expenses to factor into the equation........)

Obviously there are London postcodes that laugh in the face of anything in Dublin- but there are also Dublin postcodes- that give the average prices in London a run for their money.........

MarkAnthony

To be fair to everyone it's apples and oranges I just wondered if it was an affordability thing. For example Oxford is now considered less affordable overall than London because of the lack of a London weighting.

GoodBridge

An interesting thing I saw this morning: http://www.hotukdeals.com/deals/nationwide-10-year-fixed-rate-mortgage-2-94-2122480. In the UK, there are at now at least two banks offering 10 year fixed mortgages for around 3%. Are we likely to see similar offers here?

MarkAnthony

GoodBridge wrote: »

An interesting thing I saw this morning: http://www.hotukdeals.com/deals/nationwide-10-year-fixed-rate-mortgage-2-94-2122480. In the UK, there are at now at least two banks offering 10 year fixed mortgages for around 3%. Are we likely to see similar offers here?

BOI at 4.odd%

Nothing AFIAK at the 3% level - way more competition and (slightly) less mess in the UK.

Barely Hedged

The_Conductor wrote: »

South Dublin?
I'm not talking about Knocklyon/Firhouse/Tallaght/Clondalkin/Lucan/Clonee/Blach/Coolock etc........

There are entire postcodes- think D2/4/6 which are purely aspirational even for dual income households (and forget it altogether if you have children and childcare expenses to factor into the equation........)

Obviously there are London postcodes that laugh in the face of anything in Dublin- but there are also Dublin postcodes- that give the average prices in London a run for their money.........

There will always be enclaves in any capital city in the world that has prices that far exceed the average industrial wage. Entrepreneurs, high ranking professionals, successful investors, successful emigrants. These places, in particular D2/4, are now the places to be for these type of people. Using factors such as income ratios and childcare costs is becoming less and less relevant to the means of the people who are buying here.

There's nothing aspirational about these properties. They're for successful people and you're either successful or not.

Barely Hedged

GoodBridge wrote: »

An interesting thing I saw this morning: http://www.hotukdeals.com/deals/nationwide-10-year-fixed-rate-mortgage-2-94-2122480. In the UK, there are at now at least two banks offering 10 year fixed mortgages for around 3%. Are we likely to see similar offers here?

Max LTV 60%

GoodBridge

Barely Hedged wrote: »

Max LTV 60%

Even so, I've not seen a deal like that here.

Am I right in saying that, basically, they're betting the ECB rate is going to stay below 3% (on average) for the next ten years?

If so, good news for anyone on a tracker here.

makeorbrake

GoodBridge wrote: »

Even so, I've not seen a deal like that here.

Am I right in saying that, basically, they're betting the ECB rate is going to stay below 3% (on average) for the next ten years?

If so, good news for anyone on a tracker here.

ecb rate??

Barely Hedged

GoodBridge wrote: »

Even so, I've not seen a deal like that here.

Am I right in saying that, basically, they're betting the ECB rate is going to stay below 3% (on average) for the next ten years?

If so, good news for anyone on a tracker here.

Im sure at 60% LTV it would be pretty close in Ireland. Its a sizeable amount of equity.

ECB? Its the UK.

They may have hedged up to 5 or 10 years. They are saying the rate at which they fund themselves has allowed them to finance loans at 3% and still make a margin on it. What it means about central bank rates is technically another thing

marathonic

Barely Hedged wrote: »

Im sure at 60% LTV it would be pretty close in Ireland. Its a sizeable amount of equity.

It's nowhere near close. The UK rate for the one with no fee is 3.04% over 10 years.

Of KBC/AIB/BOI, only Bank of Ireland offer a 10 year fix and it's at 4.5% for the lower LTV product.

Even the cheapest 5 year rate of the three lenders is significantly higher at 3.9%.

It's unfortunate - Ireland really does need more competition.

murphaph

The interest rate a bank charges is a function of the risk they enter in to. If repossession of the minority who default remains difficult, then the majority who never default will pay the price of that difficulty (added risk for the bank).

Here in Germany (remember, same central bank, same currency as Ireland!) you will get 10 year fixed rates as low as 2%, even lower with a favourable LTV. We've just exchanged contracts on a site for a new build later in the year. We are lucky in that we have a contact in a bank who can get us a preferential rate and he reckons we will be able to borrow the 250k that we intend spending on the build itself (the site we've just bought counts as our deposit) at just under 1% for 10 years...though that is a special rate and we'd be looking at around 1.7% 1.4% on the open market)

So long as Ireland "defends the family home", banks won't be in any position to offer such low rates to the vast majority who pay off their mortgages and just want a quiet life. People need to realise that supporting owner's "rights" means supporting higher interest rates for all.

handlemaster

no reason banks cant borrow long term and lend the same. fixed terms for life of the mortgage

Barely Hedged

handlemaster wrote: »

no reason banks cant borrow long term and lend the same. fixed terms for life of the mortgage

Mainly to do with the capital charges a bank attracts to the underlying if it were to offer a long term fixed rate mortgage

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handlemaster wrote: »

no reason banks cant borrow long term and lend the same. fixed terms for life of the mortgage

No incentive in that for them. They can borrow now long term at low rates and then make a nice margin by lending to you short term at a high rate. More profit in it.

The_Conductor

Barely Hedged wrote: »

Mainly to do with the capital charges a bank attracts to the underlying if it were to offer a long term fixed rate mortgage

If all the banks on the continent and in the UK can do it (on the continent they normally fix for the entire term of the mortgage)- why the hell can't we do the same here?

Barely Hedged

The_Conductor wrote: »

If all the banks on the continent and in the UK can do it (on the continent they normally fix for the entire term of the mortgage)- why the hell can't we do the same here?

A lot of them are government sponsored schemes - remember Fannie Mae and Freddie Mac. Lighter versions of those, but ultimately who's on the hook? Not that 2010 was any different

world_weary

mickman wrote: »

This is completely false. London prices are way way ahead of dublin

the average price of a house in london is half a million pounds

london is more than twice as expensive as dublin and has double in value in the past eight years where as dublin is still around 30% below where it was in 2006

handlemaster

Barely Hedged wrote: »

A lot of them are government sponsored schemes - remember Fannie Mae and Freddie Mac. Lighter versions of those, but ultimately who's on the hook? Not that 2010 was any different

Government sponsored schèmes ? Their private companies these banks. No government backing.

johnp001

world_weary wrote: »

the average price of a house in london is half a million pounds

london is more than twice as expensive as dublin and has double in value in the past eight years where as dublin is still around 30% below where it was in 2006

I don't think 2006 dublin property prices are in anyway a valid baseline.
I listened to the section on Central Bank rules on this broadcast
http://www.rte.ie/radio1/today-with-sean-o-rourke/
and Ronan Lyons had some figures on Irish house price inflation - can't remember the exact figures but it was something like 300% inflation between 1995-2006 with 180% of that directly attributable to loose credit conditions.

The figures were 350% of which 170% was attributable to loose credit.

Barely Hedged

handlemaster wrote: »

Government sponsored schèmes ? Their private companies these banks. No government backing.

Who set them up and who would have to set a similar venture up in Ireland?

murphaph

Barely Hedged wrote: »

A lot of them are government sponsored schemes - remember Fannie Mae and Freddie Mac. Lighter versions of those, but ultimately who's on the hook? Not that 2010 was any different

The banks operating here in Germany offering 1.4% fixed for ten years with the right LTV (up to around 80%) are private entities. They are not being forced to offer such rates. The rates are simply reflecting how cheaply the banks can access this money now and the risk of lending it to end customers. That risk is much lower (or the banks feel it is) in Germany than Ireland.

I know quite a bit about German mortgages and indeed what banks will and won't do because we have family working for a building society and he'll be arranging our mortgage. He told me that so long as we were prepared to stump up enough of a deposit that the society would lend in pretty much all circumstances. I started a new job last year and was concerned about being in probation again....no problem he said, "your deposit is large enough, sure you could be unemployed and they'd lend because they have the security of your large deposit".

Germans don't defend the rights of someone to remain in a property they are not paying for though, so none of this applies in Ireland!

Barely Hedged

murphaph wrote: »

The banks operating here in Germany offering 1.4% fixed for ten years with the right LTV (up to around 80%) are private entities. They are not being forced to offer such rates. The rates are simply reflecting how cheaply the banks can access this money now and the risk of lending it to end customers. That risk is much lower (or the banks feel it is) in Germany than Ireland.

I know quite a bit about German mortgages and indeed what banks will and won't do because we have family working for a building society and he'll be arranging our mortgage. He told me that so long as we were prepared to stump up enough of a deposit that the society would lend in pretty much all circumstances. I started a new job last year and was concerned about being in probation again....no problem he said, "your deposit is large enough, sure you could be unemployed and they'd lend because they have the security of your large deposit".

Its a subtle difference. They have to hold capital for these type of mortgages but this can be offset by large deposits, reducing their credit/capital charge.

I pointed out earlier that the reason for the low fixes was a LTV i.e. 60%. Consumers in Ireland are never going to get these type of mortgages if they cant get over anything less than a 90% deposit. Its simply not in the banks interest to market and publicise these types of loan if theres no appetite for them.

I also know about mortgages and interest rates having worked with trading them for a long number of years.

murphaph wrote: »

Germans don't defend the rights of someone to remain in a property they are not paying for though, so none of this applies in Ireland!

Preaching to the converted!

murphaph

But I can get 1.4% on the open market here with 80% LTV, not 60%. If anyone doubts me they are welcome to use the "Zins-Check" on the Interhyp site for a quick check.

I put in "Kauf einer Immobilie" (buy a property), "Darlehen" (amount to borrow) 240k, "Objektwert" (price of property) 300k, "Sollzinsbindung" (fixed rate period) 10 years and a random postcode in Germany (feel free to use 14656, where we will be building this year!).

It returns "von 1,35% bis 2,11% effektiver Jahreszins" which means from 1.35% to 2.11% APR (depending on which lender you choose-Interhyp are the largest broker, not a lender). So that's 1.35% APR for 80% LTV. Sorry, but no such rates can even be dreamed of in Ireland.

Just for completenes I repeated with the 90% LTV rate (300k property, loan of 270k) and it says: 1.50% to 2.26% APR fixed for 10 years. So, the reason for the low fixes are not the 60% LTV, at least not here in Germany.

world_weary

murphaph wrote: »

The banks operating here in Germany offering 1.4% fixed for ten years with the right LTV (up to around 80%) are private entities. They are not being forced to offer such rates. The rates are simply reflecting how cheaply the banks can access this money now and the risk of lending it to end customers. That risk is much lower (or the banks feel it is) in Germany than Ireland.

I know quite a bit about German mortgages and indeed what banks will and won't do because we have family working for a building society and he'll be arranging our mortgage. He told me that so long as we were prepared to stump up enough of a deposit that the society would lend in pretty much all circumstances. I started a new job last year and was concerned about being in probation again....no problem he said, "your deposit is large enough, sure you could be unemployed and they'd lend because they have the security of your large deposit".

Germans don't defend the rights of someone to remain in a property they are not paying for though, so none of this applies in Ireland!

contary to popular opinion , its very hard to evict someone in ireland , our land lord tennant legal framwork is completely lacking compared to germany but that doesnt mean tennants have no rights in ireland

its just a huge grey area here