Property Market 2015

murphaph

I am a landlord in both countries so I have a fair idea.

world_weary

murphaph wrote: »

I am a landlord in both countries so I have a fair idea.

and would you agree that tennants in ireland have more rights than many believe ?

murphaph

world_weary wrote: »

and would you agree that tennants in ireland have more rights than many believe ?

Absolutely.

Barely Hedged

murphaph wrote: »

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.

I dont doubt you and i know the same exists in France. All im explaining are the costs and capital charges associated with long term financing for mortgages. I dont know if the governments are subsidising it or there is some whacky tax write off scheme in Germany and France but what ive explained are the commercial realities of banking.

Im in complete agreement on long term fixes. Most companies in the world hedge their floating interest rate exposure using a variety of derivatives. Taking the mortgage exposure of a Ireland as a whole, its a massive floating rate exposure thats not hedged (excluding 2y - 5y fixed). If you were to apply the situation to a company the size of Ireland the people in charge of their finance departments and board would be out on their ear.

Taylor365

world_weary wrote: »

and would you agree that tennants in ireland have more rights than many believe ?

Who believes they don't?

They can refuse to pay rent and you can't even evict them!

Bob24

world_weary wrote:

and would you agree that tennants in ireland have more rights than many believe ?

Taylor365 wrote: »

Who believes they don't?

They can refuse to pay rent and you can't even evict them!

Well someone would first have to define what "more rights than many believe" means :-)

Surely life for tenants is not awful, but I believe two points are behind compared to many European countries:
- There are very few restrictions in the way landlords can increase rents. In a number of continental European countries there are clear and hard limits to the annual increase based on inflation, a certain percentage increase, or guide prices set by city councils - whereas to my knowledge here the limits are loosely defined as not being to much over current market price. This is encouraging rapid price hikes as soon as demand is slightly higher than offer as even established tenants (and not only prospective ones) are fully exposed to market pressure.
- The rental market pushes many people to enter into informal agreements (more than I have seen in France for example), and either due to lack of knowledge of their rights or lack of proper contracts some of them are getting abused by bad landlords.

murphaph

Bob24 wrote: »

- There are very few restrictions in the way landlords can increase rents. In a number of continental European countries there are clear and hard limits to the annual increase based on inflation, a certain percentage increase, or guide prices set by city councils - whereas to my knowledge here the limits are loosely defined as not being to much over current market price. This is encouraging rapid price hikes as soon as demand is slightly higher than offer as even established tenants (and not only prospective ones) are fully exposed to market pressure.

In Germany the system is as follows:
LL can only increase rent up to local market value and he may not increase more than 20% in any 3 year period, even if the 20% increase means the rent is still below market value. The LL can increase beyond the 20% limit if certain measures have been taken to refurbish the property in a way likely to reduce its energy requirements (eg adding insulation, triple glazed windows etc.). I don't have a problem with this actually and think it would be generally a good idea in Ireland too.

Bob24 wrote: »

- The rental market pushes many people to enter into informal agreements (more than I have seen in France for example), and either due to lack of knowledge of their rights or lack of proper contracts some of them are getting abused by bad landlords.

Well, a lack of knowledge of their rights is their own fault. Irish tenants are really quite well protected under law and certainly have the upper hand in the relationship with their LL as ultimately they can stop paying and it will take significantly longer to remove them than in Germany (new laws introduced here last year make evictions of rent nomads much easier and faster and close many loopholes these leaches used to use).

Irish tenants could have it much worse...at present in Germany the TENANT pays the estate agent's fee (this is set to change, finally, this year, but the law is still a bill) and this could be several thousand in the bigger cities (it's 2.4 times the monthly rent!!). The tenant in Germany is generally also subject to a small repairs clause, so will have to mend things up to a value of €410 a year himself (though no single repair may cost more than €200 IIRC)...so no ringing the LL about that leaking tap!

makeorbrake

Bob24 wrote: »

- There are very few restrictions in the way landlords can increase rents. In a number of continental European countries there are clear and hard limits to the annual increase based on inflation, a certain percentage increase, or guide prices set by city councils - whereas to my knowledge here the limits are loosely defined as not being to much over current market price. This is encouraging rapid price hikes as soon as demand is slightly higher than offer as even established tenants (and not only prospective ones) are fully exposed to market pressure.

Well I guess no problem in making such a change so long as it's equitable. By that, I give the example of a couple of years after the crash when landlords were being challenged re. rent reductions by tenants. It's a two way street.

Bob24 wrote: »

- The rental market pushes many people to enter into informal agreements (more than I have seen in France for example), and either due to lack of knowledge of their rights or lack of proper contracts some of them are getting abused by bad landlords.

Informal agreements? Isn't there a default contractual position in any event - in this instance?

murphaph wrote:

Irish tenants could have it much worse...at present in Germany the TENANT pays the estate agent's fee (this is set to change, finally, this year, but the law is still a bill) and this could be several thousand in the bigger cities (it's 2.4 times the monthly rent!!).

Yes, had this scenario many years ago in Heidelberg. Sourced an apartment. The agent took me round to the owner. I handed over the first 1-2 months rent (can't remember which) and then was told this is for the agent (makler). Told them to give me my money back - and walked back out the door. This scenario was common - but there are still places you can get without agents fees.

murphaph

makeorbrake wrote: »

Well I guess no problem in making such a change so long as it's equitable. By that, I give the example of a couple of years after the crash when landlords were being challenged re. rent reductions by tenants. It's a two way street.

Indeed! You will never hear of a German tenant looking for a rent reduction "because the market is lower" or whatever. If rent increases are to be regulated, so should rent decreases.

Bob24

makeorbrake wrote: »

Well I guess no problem in making such a change so long as it's equitable. By that, I give the example of a couple of years after the crash when landlords were being challenged re. rent reductions by tenants. It's a two way street.

Whether it is a two way street is a question to address as a society.

Being a landlord in France myself I can say that:
- The way I can increase the rent is very strictly controlled and is nowhere near as flexible as the rules in Ireland.
- My tenant is free to ask for any rent reduction he wants. Of course (similar to here) I don't have to accept - but if demand is low in the area he will have no issue in getting me to accept as he can end the lease any time he wants (even a fixed term one) with a 3 months notice.

Moreover, while a tenant can always end any tenancy agreement with a 3 months notice (reduced to 1 month in cases such as loss of employment), it is pretty much impossible for the landlord to do this as long as the rent is paid. Combine this with the strict rules I was mentioning related to rent increase, a friend of mine was forced to rent an apartment in Paris for years at half the market price, until needed it for his own family to live in (one of the few clauses for a landlord to end the agreement is when they need the property to accommodate themselves or family members).

Of course if the rent is not paid you have legal ways, but you can literal get ready for years of legal proceedings, end even when a court order is issued to evict the tenants, you'd better hope it doesn't not happen in September of October as no eviction is allowed during the winter months and you'll have to wait for another 6 months.

I am certainly not saying we need all these restrictions in Ireland, but when comparing the balance of power between landlords or tenants it probably is a good idea to put it in perspective with what is done elsewhere in Europe.

Again there are questions that needs to be discussed as a society. I think the way the balance is very much on the tenants' side in France is pretty bad and has perverse effect for everyone:
- landlords are stuck with bad tenants
- many feel like they need to get insurance against bad payers which adds additional cost and will be reflected on rent prices
- landlords and agencies are asking for much more references and financial garantees as what is done in Ireland as they are afraid of bad payers, which makes it much more difficult for people in less stable employment situation to rent decent places

makeorbrake wrote: »

Informal agreements? Isn't there a default contractual position in any event - in this instance?

I do think so as well. But I am aware of people I know personally who got evicted at very short notice by dodgy landlords and found no meaningfull assistance from the PTRB.

makeorbrake

Bob24 wrote: »

Whether it is a two way street is a question to address as a society.

Whether it's addressed or not, it simply is!


(anyway, we're probably steering this thread off course - so will leave it at that).

world_weary

Taylor365 wrote: »

Who believes they don't?

They can refuse to pay rent and you can't even evict them!

the common narrative out there ( and the media do nothing to quench it ) is that tenants in ireland have no rights

handlemaster

How much is your home worth 2015 ?

Indo link

http://m.independent.ie/business/personal-finance/property-mortgages/how-much-is-your-house-worth-in-2015-30926584.html

Barely Hedged

makeorbrake wrote: »

Correct.

Three things to say on that...

- Perhaps there was, but not a whole lot to take advantage of when there was little in the way of actual supply in that time.

- I found myself in a scenario whereby I was gathering up funds. I seem to have been chasing this i.e. if I had the funds available to me back in 2011 that I have now, I think there's a greater likelihood I would have ended up picking something up.

- The other thing is that I never envisaged such a quick turn around - and not just the pace of that turnaround but the total lack of value we now see (obviously, that's just my opinion. Evidently, plenty of others don't agree...or else this scenario wouldn't exist).

There's no perhaps about it. You have seen house prices experience a drop to a level which won't be seen for another good few generations. Then prices have increased around 30% off a low base and still you don't see "value". I think you need to reassess your understanding of the term value.

dubrov

handlemaster wrote:

How much is your home worth 2015 ?

handlemaster wrote:

Indo link

Buy, buy, buy before it is too late 😀.

Articles on property in the Indo always make me laugh

relax carry on

Mayo market powering away according to the article/advertisement? Not so sur. Is it the stuff of estate agents wet dreams or is there some truth to it?

A house in an estate I've had my eye on for the last few years has just come onto the market at 33% above the last recorded selling price for the exact same style of house. The last house sold in the estate in mid 2014. It was in better condition than the one currently advertised. Going to have a look at it, but can't figure out a 33% rise in 6 months.

http://m.independent.ie/business/personal-finance/property-mortgages/mayo-townhouses-and-3bed-semis-wise-investments-30926833.html

The_Conductor

Its not really a 33% rise in 6 months in all fairness- you are looking at two isolated sales. If it was a normally functioning market- with ongoing sales- and you could see a progression up to the 33% as opposed to 2 single sales- you might be onto something- but taking a sample of 2 and suggesting it represents a trend would have you laughed out the door by anyone who actually understands statistics- its not a valid sample.

The entire Indo article- is based on the premise of individual sales somehow being a barometer for the market as a whole- when this patently is not the case........

Wait until there is a normal functioning market again- then look at trends. As it stands- sure- the neighbouring property 2 doors up may get 33% more than the other one. However- its meaningless. Another 2 doors in the opposite direction may only get hald as much- for whatever reason- pointing at single examples- is very bad science.

dearg lady

The_Conductor wrote: »

Its not really a 33% rise in 6 months in all fairness- you are looking at two isolated sales. If it was a normally functioning market- with ongoing sales- and you could see a progression up to the 33% as opposed to 2 single sales- you might be onto something- but taking a sample of 2 and suggesting it represents a trend would have you laughed out the door by anyone who actually understands statistics- its not a valid sample.

The entire Indo article- is based on the premise of individual sales somehow being a barometer for the market as a whole- when this patently is not the case........

Wait until there is a normal functioning market again- then look at trends. As it stands- sure- the neighbouring property 2 doors up may get 33% more than the other one. However- its meaningless. Another 2 doors in the opposite direction may only get hald as much- for whatever reason- pointing at single examples- is very bad science.

Agreed, and I'm not loving the way they're portraying it as fact, 'Find out how much your house is worth in 2015'. I can only see the word 'estimate' hidden away at the end of a paragraph, not prominently displayed on their table as it should be.

Sala

Asking prices don't mean much. A house I kind of liked the look at was too dear for what it was at 495k, but fell to 450k then 399k. I might see it now!! Estate agents and sellers probably think the last house sold for X, prices went up, so I'll price it X plus 30%. Or, what what I suspect is happening with quite a few properties is that seller has to sell on bank instructions so prices it not to sell, or seller hopes to clear the mortgage but can only do so if it achieves a certain price and won't sell below that

johnp001

dearg lady wrote: »

Agreed, and I'm not loving the way they're portraying it as fact, 'Find out how much your house is worth in 2015'. I can only see the word 'estimate' hidden away at the end of a paragraph, not prominently displayed on their table as it should be.

It shows the media bias that EA "advertisements" like this are reported like news.
In an alternate reality where the role of an estate agent was to work on behalf of the buyer and go around property sellers and bargain them down on the buyers behalf the article would read "sell, sell, sell. Before its too late"
Except in this case they would be able to back up their viewpoint with statistically valid macro-statistics instead of the anecdotal rubbish about supply shortages in roscommon etc...

The_Conductor

dearg lady wrote: »

Agreed, and I'm not loving the way they're portraying it as fact, 'Find out how much your house is worth in 2015'. I can only see the word 'estimate' hidden away at the end of a paragraph, not prominently displayed on their table as it should be.

Even calling it an 'estimate' is misleading.
I've just had to produce some statistics for work- I have estimated a particular population size- I have produced 38 pages of statistics and calculations to support my estimations- alongside a detailed executive summary which explains all the caveats associated with the data.......

An 'estimate' is not a figure you pluck out of thin air- estimates are associated with confidence intervals- and even creating estimates is a scientific process.

The manner in which 'estimates' are used here- is complete witchcraft black magic baloney- completely meaningless.

Thank christ the guys in Revenue have a better finger on things- than Charlie Weston and his friends have...........

makeorbrake

Barely Hedged wrote: »

There's no perhaps about it. I think you need to reassess your understanding of the term value.

Instead of singling out the word 'perhaps' from what I've written, you might do me the courtesy of considering the context of the text as a whole.

makeorbrake wrote:

- Perhaps there was, but not a whole lot to take advantage of when there was little in the way of actual supply in that time.

- I found myself in a scenario whereby I was gathering up funds. I seem to have been chasing this i.e. if I had the funds available to me back in 2011 that I have now, I think there's a greater likelihood I would have ended up picking something up.

- The other thing is that I never envisaged such a quick turn around - and not just the pace of that turnaround but the total lack of value we now see (obviously, that's just my opinion. Evidently, plenty of others don't agree...or else this scenario wouldn't exist).

Barely Hedged wrote:

You have seen house prices experience a drop to a level which won't be seen for another good few generations.

Ha..ha..
"another good few generations"?! That's a good one. In a banana republic where just today a 64 page magazine has been published titled "what is my house worth?" in a national daily? In a country where only seven years after the bust, we're in bubble territory again - meaning that as a nation, we have the collective memory of a goldfish? ...and you think this will take 'generations' to repeat itself?

Barely Hedged wrote:

You have seen house prices experience a drop .....Then prices have increased around 30% off a low base and still you don't see "value".

"have seen" = past tense. "don't" = present tense negative.

So if you are saying I don't (present tense) see value, damn right I don't.

ciartastix

We originally looked at a house feb last yr 3 bed semi priced at 260 thousand. unfortunately the phase sold out the week later. the next phase has just been released priced at 335 thousand. We were prepared for an increase of 20-30 thousand but not 75 thousand!

handlemaster

dubrov wrote: »

Buy, buy, buy before it is too late 😀.

Articles on property in the Indo always make me laugh

if your singing the same tune the whole time that prices are going up your going to be right some of the time. The market will always go up and down people don't except that. Housing is an asset like any other no matter how much emotional BS buyers/sellers or fence sitters what to throw at it.

Barely Hedged

makeorbrake wrote: »

Instead of singling out the word 'perhaps' from what I've written, you might do me the courtesy of considering the context of the text as a whole.




Ha..ha..
"another good few generations"?! That's a good one. In a banana republic where just today a 64 page magazine has been published titled "what is my house worth?" in a national daily? In a country where only seven years after the bust, we're in bubble territory again - meaning that as a nation, we have the collective memory of a goldfish? ...and you think this will take 'generations' to repeat itself?

"have seen" = past tense. "don't" = present tense negative.

So if you are saying I don't (present tense) see value, damn right I don't.

I was discussing your use of the term value so I didn't see the point in copying the irrelevant text.

So you saw value in property when the major statistics to measure a country's economic performance had tanked to a level not seen in many generations and were the reason for the fall in property prices. If that's your yard stick of value, you'll be waiting a very long time for value again

ezra_pound

Barely Hedged wrote: »

I was discussing your use of the term value so I didn't see the point in copying the irrelevant text.

So you saw value in property when the major statistics to measure a country's economic performance had tanked to a level not seen in many generations and were the reason for the fall in property prices. If that's your yard stick of value, you'll be waiting a very long time for value again

This is pretty Indisputable.

The level of lending was at rock bottom. There was a large supply on the market and a major uncertainty if a second bailout was needed, when we would actually succeed in balancing spending, and if the banks were ever going to be returned to any health over the next twenty years.

It is almost impossible that we could end up in such a negative environment over the next thirty years at least.

johnp001

ezra_pound wrote: »

This is pretty Indisputable.

The level of lending was at rock bottom. There was a large supply on the market and a major uncertainty if a second bailout was needed, when we would actually succeed in balancing spending, and if the banks were ever going to be returned to any health over the next twenty years.

It is almost impossible that we could end up in such a negative environment over the next thirty years at least.

I really wish that I believed that.
Global economy is in a major crisis. All our trading partners are verging on recession and the eurozone is taking action far too belatedly to prevent the type of deflationary spiral that has lasted for decades in Japan.
The end game of the current OPEC over-production strategy will lead to far higher oil prices, especially with a much weaker euro/dollar exchange rate.
Ireland's economy has no hope of prevailing against all this.

makeorbrake

Barely Hedged wrote: »

I was discussing your use of the term value so I didn't see the point in copying the irrelevant text.

I can't really help with your comprehension difficulties other than to point out the glaring obvious...

Barely Hedged wrote: »

So you saw value in property when the major statistics to measure a country's economic performance had tanked to a level not seen in many generations and were the reason for the fall in property prices. If that's your yard stick of value, you'll be waiting a very long time for value again

The statistics had tanked, had they?

Did you read the above before you wrote it?...as I now have no idea of what observation you're making.

IF you are claiming that I didn't see 'value' in 2011, that's not how that reads above. Notwithstanding that, did I categorically say that there wasn't 'value' to be had in 2011?...as that's not the case. Just so that we're clear, I said the following (AKA - what you called the "irrelevant text");

- 2011 was the bottom - but you could only access that if there was a property to buy. Have a look at transaction volumes - and tell me if there was necessarily property to buy.

- I said I would have been more likely to have purchased back then if I had the funds available to me that I have now (I wasn't and I am not looking to buy on the drip).

- I also never foresaw such a quick turn around - I foresaw things rolling as they have done in Japan over the past decade +. ....ergo, I didn't see it the way 'intelligent' people like you did/do. I contend there's nothing rational about the irish property market regardless of what you - with the benefit of hindsight- now take issue with.


As regards we won't see 'value' ever again, famous last words..

yankinlk

boring back and forth.

reality check. a house i could not sell the last three years, i will put on again and see whats what. i have seen nearby houses going for more than what i would have settled for the last 3 years. only reason i didnt sell back then, no one had cash, even the low ball buyers bid first, then went to the bank. joke shop of a housing market.

makeorbrake

ezra_pound wrote: »

There was a large supply on the market

No, there wasn't - not in reality. Plenty of properties listed alright - and left sitting there as they were listed with bubble prices.

ezra_pound wrote: »

It is almost impossible that we could end up in such a negative environment over the next thirty years at least.

oh, brother. Will we ever learn!