Property Market 2015

sarachryan

Are they all mad over on the property pin? I've been reading it and becoming convinced we're on a downturn

Jaketherake

sarachryan wrote: »

Are they all mad over on the property pin? I've been reading it and becoming convinced we're on a downturn

There is never an upturn on that site.
Its known as the stopped clock website for a reason

The_Conductor

sarachryan wrote: »

Are they all mad over on the property pin? I've been reading it and becoming convinced we're on a downturn

Ireland is a series of markets- some of which are rising rapidly- and probably will continue to do so for the forseeable future- others which are plateau'ed and not really going anywhere, some which are slowly falling- and some which are rapidly falling (notably apartments in some parts of Dublin- which unusual volumes have been hitting the market- but bank valuations are limiting prospective purchasers to what the purchasers consider to be artificially low prices.........

There isn't an 'Irish' property market- its segmented and striated all over the place. Some places are plainly over-priced (even some regional places)- other places probably have steam in them yet.

Thargor

Jaketherake wrote: »

There is never an upturn on that site.
Its known as the stopped clock website for a reason

Thats complete bollocks, how can you even say a website with hundreds of users is only right twice a day? It was set up to predict the crash (as per title) because pessimistic posts from people who actually knew what they were talking about were being censored and deleted on Askaboutmoney and other places and it did so perfectly, it was the only good source of analysis from 2008 to 2012 and beyond, pretty much everything they worried about was spot on.

In more modern times it was the first place I ever saw predicting what this governments disastrous housing policies would do to supply and houses as well, this was a year or two before the current hysteria. Its the only place I see the true cause of the current situation being discussed aswell, vested interests pursuing higher prices for personal gain.

The pension threads outlining how completely screwed the current generation in the workplace are going to be when they have to pay for the commitments to the previous generation in a couple of years time are well worth a read aswell, its why Ill always be ready to up sticks anyway, Property Pin serves me well anyway compared to the abysmal news/analysis/opinion sources elsewhere, theres literally nowhere else discussing this stuff in the country.

Villa05

Jaketherake wrote:

There is never an upturn on that site. Its known as the stopped clock website for a reason

Ronan Lyons seems to use the site quiet a bit to gauge opinions, Karl Deter was also a frequent poster.
Namawinelake also came from that stable

Extremly intelligent posts backed up with data and research, very informative.

OfflerCrocGod

Construction sector keeps growing http://www.rte.ie/news/business/2015/1109/740560-construction-pmi/

Activity in the housing market continues to be the strongest in the sector

Although we keep hearing about the low number of houses being built, it does look as it's ticking up. It's almost as if the industry is recovering from some horrible collapse and it will take years to get back up to speed or something...

gaius c

over_leveraged wrote: »

thats not a rule of thumb , its a banal cliche which those over at the likes of the property pin , think are pearls of wisdom

if you low ball to an absurd degree , you risk being dismissed as a crank , if the property is anywhere in dublin , kildare , wicklow , meath , galway city , cork city ( all markets with plenty of demand ) , dont bid any lower than 15% below the asking and thats assuming the asking is in line with the property price register

If I took your advice, I'd have wasted tens of thousands of euro. ;-)

For anyone wondering why the property market in Dublin is in logjam...

Twenty well-located Dublin development sites are among 42 due to be sold by Ulster Bank when it offloads a portfolio of distressed loans next month.

.......................................................................................

The Dublin-based land represents 17 per cent of all the space zoned for residential use in Dublin

Linky
That's 1850 acres of shovel ready sites that have been just sitting there.
It would also imply that there's 10,882 acres of land zoned for residential use in Dublin.

Edit: need coffee

Villa05

Replace the building taxes with a use it or loose it tax would go along way to solving many of the problems

Greyian

gaius c wrote: »

If I took your advice, I'd have wasted tens of thousands of euro. ;-)

For anyone wondering why the property market in Dublin is in logjam...

Linky
That's 1850 acres of shovel ready sites that have been just sitting there.
It would also imply that there's 10,882 acres of land zoned for residential use in Dublin.

Edit: need coffee

Does it not say that the total for the 42 lots is 1850 acres? So the 20 lots that are based in Dublin would be lower than that, so the 17% of residential zoned land in Dublin isn't 1850, but something lower.

gaius c

Greyian wrote: »

Does it not say that the total for the 42 lots is 1850 acres? So the 20 lots that are based in Dublin would be lower than that, so the 17% of residential zoned land in Dublin isn't 1850, but something lower.

It does read that way on second reading.

Archaeoliz

The_Conductor wrote: »

I'm not sure what the moral of that is- perhaps that the valuation for mortgage purposes should be done earlier in the equation- before you've wasted too much of your time?

Well quite, you live, you learn!

It is telling though- the bank is valuing the property at 20% less than the OMSP- which is quite a significant divergence.

Were you bidding against other parties- were they legitimate prospective purchasers- and realistically- what would they have been willing to pay for the property.

No other parties, just price determination between the vendor and ourselves.

Ignore the seller's asking price- thats pie in the sky- a figure they have magic'ed out of thin air. The fact that your offer of 10% less than asking was accepted- simply validates that their asking price was something purely hypothetical.

You yourself have set a market price for the property- the valuer obviously disputes that anyone other than you would be willing to pay what you offered- which is where you are at...........

On what basis did you offer what you offered (aka- did you look at the Property Price Register for the area- and base it on what other property in the area has achieved- or was your approach to try and knock the seller down to a level you felt more comfortable with- but the bank obviously disagree with.........)?

Yes we did look at the PPR but where we are looking at there may only be one or two houses in the couple of mile radius which sell every year. Plus each property is completely unique so comparators are definitely difficult. We weighed it up and thought the asking price was reasonable then tried to negotiate below, which is what we did.

The EA was trying to make us pay for another valuation or move banks which we refused to do. They wouldn't budge on price and we wouldn't pay more than a bank was prepared to take on as risk so we gently walked away and wish them good luck.

Another house we had been interested in came on the market just as we had paid our booking deposit so we've gone back to that and negotiated there. Went sale agreed there yesterday. I did tell the EA what happened with the last one and said that we wouldn't pay more than a bank valuation for a property. She said it was incredibly unusual for it to happen and very, very rare for such a disparity. It did come from an estate agent so I don't know how true it is but, for us, the merry go round is starting again. Mortgage valuation has been requested asap!

Mumha

seamus wrote: »

To a certain extent it's a pretty typical McWilliams piece, "Ireland is screwed, it's the little guy who's paying for it, and it would be easily fixed if people just listened to me".

But he's not really laying out a framework except, "It works elsewhere, why not here". Which is funny when he spent the first 75% of the article talking about how crazy and unique the Irish market is and how "The economy is not a mathematical equation that delivers scientific answers and obeys rigid laws."

At the end he also seems to indicate that rent controls *are* an interference with the free market, and then explains how we can correct our market to make it freer. But doesn't a freer market conflict with introducing rent controls?

And also, "One thing is clear: the present system in Ireland isn’t working. So why pretend it is?". I don't think anyone is pretending that it is. Far from it.

In short it seems to be David saying, "You overpaying renters are propping up the entire property market because greedy landlords, greedy bankers and greedy developers won't let the greedy politicians do anything to reduce your rent."

I was looking at some US tv stations the other day and one was a news channel in Chicago, where the top news story was the big rise in rents, in the local area. It happens.

johnp001

Mortgage limits must stay in place - Central Bank

Deputy governor says new rules are working and it is too soon to review them

handlemaster

http://m.independent.ie/business/personal-finance/property-mortgages/landlords-pile-on-rises-ahead-of-new-rent-controls-34206919.html

As predicted by many rents have shot up with the government interference

Bob24

handlemaster wrote: »

http://m.independent.ie/business/personal-finance/property-mortgages/landlords-pile-on-rises-ahead-of-new-rent-controls-34206919.html

As predicted by many rents have shot up with the government interference

Indo -> Take with a fistful of salt.

No doubt there is a bit of a rush to review some rents before the measures come into force, but in the long term I don't see any reason for this to be sustained (and the rents which just increased are now guaranteed for 2 years whereas without the rules they would likely have increase next year).

Changing the review period from 1 year to 2 years will just mean that rents increase less frequently but when they do the increase will be a larger one. Average variance over 5 or 10 years will be the same. Just some and mirrors if they don't ensure there is enough supply and landlords can make profits with lower rents.

gaius c

Let's talk about the empties.

Dublin has about 500,000 houses in total and currently about 7 per cent of those, roughly 35,000, are vacant. This is well above the international norm, with the vacancy rate generally around 3 to 4 per cent.

That's 17,500 houses in Dublin that are not being utilised as they would in other cities.

Wouldn't it be smarter to adjust policy to ensure they got used rather than build an extra 17.5k houses?

Thargor

gaius c wrote: »

Let's talk about the empties.

That's 17,500 houses in Dublin that are not being utilised as they would in other cities.

Wouldn't it be smarter to adjust policy to ensure they got used rather than build an extra 17.5k houses?

How many of these houses are unfit for human habitation and how many would be cheaper to knock and rebuild than try to salvage? Tbh if its empty anywhere central in Dublin these days Id be instantly suspicious.

handlemaster

gaius c wrote: »

Let's talk about the empties.

That's 17,500 houses in Dublin that are not being utilised as they would in other cities.

Wouldn't it be smarter to adjust policy to ensure they got used rather than build an extra 17.5k houses?

Wouldnt that advocate giving an incentive to investors which you are against.

Villa05

handlemaster wrote:

Wouldnt that advocate giving an incentive to investors which you are against.

Tax unused sites, houses

handlemaster

Villa05 wrote: »

Tax unused sites, houses

How much ? How do you calculate it ? Who polices it ? How much will it cost to administer that tax scheme ?

gaius c

Villa05 wrote: »

Tax unused sites, houses

The article itself suggested allowing more than 20% of rental income to be left over after defraying nursing home costs. On the face of it, it seems like an eminently sensible suggestion.

Thargor
Plenty of empties around Dublin. In my area, main reasons are 1) elderly people in care 2) arrears/repo. My point is that we're not as short of housing units as the likes of Tom Parlon are keen to make out. When we're running at double the vacancy rate you'd expect in other major cities, there is something clearly wrong and we should address that before we hand out taxpayer goodies to build that same number of houses in Adamstown.

SeanSouth

The commentators out there who continuously promote the idea of a tax on unused development land have absolutely no clue what they are talking about.
You know who I mean "the use it or lose it" brigade and others with similar perils of wisdom. These guys seem to think that the land owners are holding on to the land strategically, hoping for the price to go up. This is completely wrong. People sitting on land are also sitting on massive debt and are just not able to move.

The facts are that most development land in this country is "under water" mortgaged to the hilt and in negative equity. To bring in a law that forces either the mortgagor or mortgagee to sell, develop or suffer taxes on this land just makes a bad situation worse. So for example if I own the land, the government impose the tax on me but I still cant sell or develop because the bank holds the mortgage on it and i cant get finance to build an unprofitable project. If you try to interfere with the banks security, things even get worse.

The problem we've got is NOT that land owners are hoarding. The main problems we have are :

1) The cost of building houses in this country is too high for the market.
2) The taxes on new houses in this country are too high.
3) The regulations surrounding the building of new houses in this country are too onerous. We've gone from one extreme of no regulation to the other extreme of over regulation. Regulation costs money.
4) Builders are not able to build at even a modest profit
5) Legacy debt means that developers cannot secure funding to build. One of the reasons that they cant secure funding is that its not profitable to do so.
6) People's expectations are too high. We have to accept that the new norm for families is an 800sq ft apartment and not a detached house in a leafy suburb

Lets look at an example

2000sq ft house costs 300,000 to build under current regulations and taxes
Cost of land traditionally is 1/3 of build cost , so 100,000
Total build cost 400,000.

Under central bank rules in this example, buyer must pay 80,000 deposit and get a mortgage for 320000 and have a combined income of around 90,000.
So it must be very clear that, not many people have the means to pay for a new 2000sq ft house !!

The only way to resolve the current problem is to reduce taxes on houses,reduce regulation to mid tier european level and increase income tax credit on interest. We also need to build much smaller houses that we can afford and lower our expectations dramatically. If you are Joe average on a modest income, you just cant afford to live in a big detached property in a leafy suburb. No where in the world will you find this. The celtic tiger is dead gone and buried and will never be seen again. It was a once off !! The new reality that we need to adjust to now is much smaller homes that are affordable and this is what we need to start building.

Bob24

SeanSouth wrote: »

The facts are that most development land in this country is "under water" mortgaged to the hilt and in negative equity. To bring in a law that forces either the mortgagor or mortgagee to sell, develop or suffer taxes on this land just makes a bad situation worse.

I am not saying the issues you are mentioning are not valid. However, should society be expected to hold-on as long as it takes because a number of people (and their banks) have purchased land at unreasonable prices hoping to make profit and are now unable to recover their initial investment? Good question and I am not sure the answers is as black and white as you are giving it.

gaius c

Bob24 wrote: »

I am not saying the issues you are mentioning are not valid. However, should society be expected to hold-on as long as it takes because a number of people (and their banks) have purchased land at unreasonable prices hoping to make profit and are now unable to recover their initial investment? Good question and I am not sure the answers is as black and white as you are giving it.

They are "entitled" to make a profit.

What Sean conveniently forgets to mention is that the "strategically held" development land is not being paid for by the folk sitting on it but ordinary people are being held to ransom until they save insolvent developers from the consequences of their own stupidity.

handlemaster

gaius c wrote: »

They are "entitled" to make a profit.

What Sean conveniently forgets to mention is that the "strategically held" development land is not being paid for by the folk sitting on it but ordinary people are being held to ransom until they save insolvent developers from the consequences of their own stupidity.

And what would you think should be done? Take the land off people ? And do what by whom?

gaius c

handlemaster wrote: »

And what would you think should be done? Take the land off people ? And do what by whom?

Well if the original owners are in default of their loans, most definitely.

If they can't service their debt, why are we kicking the can down the road?

Shedite27

Extending the boundaries of the living city initiative would be a good start, make it a lot more efficient for people to develop old homes into a family home, and get tax breaks for up to 10 years for doing so (so long as they continue to live in the home.

handlemaster

gaius c wrote: »

Well if the original owners are in default of their loans, most definitely.

If they can't service their debt, why are we kicking the can down the road?

Agreed on that. That should have been all dealth with by now but then you cant apply that to land owners and then turn around to home owners and say you are different

handlemaster

Shedite27 wrote: »

Extending the boundaries of the living city initiative would be a good start, make it a lot more efficient for people to develop old homes into a family home, and get tax breaks for up to 10 years for doing so (so long as they continue to live in the home.

It would be difficult to get a mortgage on a place that needed to be renovated. Best to give investors an incentive then sell on to home owners.

Sleepy

handlemaster wrote: »

How much ? How do you calculate it ? Who polices it ? How much will it cost to administer that tax scheme ?

Simple: triple the existing property tax on vacant units.