Property Market 2015

ezra_pound

johnp001 wrote: »

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.

The world economy is shaky yes

But our main trading partner is growing, forecast 2.9% this year.

http://m.ft.com/cms/s/0/0c395a70-9f10-11e4-ba25-00144feab7de.html

Also the euro rate v USD and GBP is going to be good for Ireland.

I don't know when oil prices will go up again but it's not necessarily going to happen in the near future. Do you have information to the contrary? OPEC seems opposed to losing market share to other producers.

A deflationary spiral has in no way set in although qe has come too late, and there is a danger of deflation.

johnp001

relax carry on wrote: »

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 figures for the Mayo market show a consistent decline - graph here:

so I wouldn't worry about the pricing on that house. The world is full of dreamers...

yankinlk

johnp001 wrote: »

so I wouldn't worry about the pricing on that house. The world is full of dreamers...

Certainly is. For as many dreamers that think prices will only rise, there are just as many (or more) that think prices will never rise.

You can go to that house, and offer 33% less. Try it. The seller wont sell to you though. Wether or not he finds a bidder at the new price or close to it time will tell...

relax carry on

yankinlk wrote: »

Certainly is. For as many dreamers that think prices will only rise, there are just as many (or more) that think prices will never rise.

You can go to that house, and offer 33% less. Try it. The seller wont sell to you though. Wether or not he finds a bidder at the new price or close to it time will tell...

Fair enough. I can't force anyone to sell to me at the price I want but in an estate of identical houses where only 4 houses have sold in three years showing a decline from 200,000 to 165000 to an asking price of 220000 in a fragile economy such as ours makes no sense to me.

What I'm trying to wrap my head around is how a valuation like that is arrived at.

johnp001

relax carry on wrote: »

Fair enough. I can't force anyone to sell to me at the price I want but in an estate of identical houses where only 4 houses have sold in three years showing a decline from 200,000 to 165000 to an asking price of 220000 in a fragile economy such as ours makes no sense to me.

What I'm trying to wrap my head around is how a valuation like that is arrived at.

Not really a problem for you what the valuation is. Go and see the house and offer what you think it is worth, taking into account that the market is falling.
The crazy valuation will only work in your favour as it will put off other bidders from even going to look at it.

yankinlk

johnp001 wrote: »

Not really a problem for you what the valuation is. Go and see the house and offer what you think it is worth, taking into account that the market is falling.
The crazy valuation will only work in your favour as it will put off other bidders from even going to look at it.

wowsers.

Bob24

ezra_pound wrote: »

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

Undercover Indo journalist? ;-)

30 years is a very long time in economic terms.

In the 1970s, who would have predicted that 30 years later Ireland would have one of the highest GDPs in Europe and that a house in a Dublin suburb would be worth way more that its equivalent in Paris?

ElizKenny

Bob24 wrote: »

Undercover Indo journalist? ;-)

30 years is a very long time in economic terms.

In the 1970s, who would have predicted that 30 years later Ireland would have one of the highest GDPs in Europe and that a house in a Dublin suburb would be worth way more that its equivalent in Paris?

The only thing worse than a long term prediction is a short term one

Bob24

ElizKenny wrote: »

The only thing worse than a long term prediction is a short term one

Maybe not when predicting that a specific thing *will not* happen within a given timeframe ;-)

I certainly would feel more confident saying there won't be a world war in the next year than saying there won't be one in the next 30 years.

ElizKenny

Bob24 wrote: »

Maybe not when predicting that a specific thing *will not* happen within a given timeframe ;-)

I certainly would feel more confident saying there won't be a world war in the next year than saying there won't be one in the next 30 years.

What I had in mind was
Predicting property prices will fall over 3 or 4 years. Against predicting that they wont fall over 30 years.

Bob24

ElizKenny wrote: »

What I had in mind was
Predicting property prices will fall over 3 or 4 years. Against predicting that they wont fall over 30 years.

Sure.

Anyway my comment was with regards to a post saying there will not be another situation with restrained mortgage availability and uncertainty about Ireland's ability to repay its debt in the next 30 years. I don't think any honest economist would dare making that predictio -, especially at a time when the ECB is starting to experiment with new monetary policies which have never been used before in the context of a currency shared by different sovereign states with different interests.

Villa05

Bob24 wrote: »

especially at a time when the ECB is starting to experiment with new monetary policies which have never been used before in the context of a currency shared by different sovereign states with different interests.

Your comment is screaming RISK

handlemaster

There was a prof from the US talking at Davos on Bloomberg regarding trending property cycles of 7 years

alias no.9

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.

Anybody who was looking at houses in 2010 through to 2013 in the areas that have experienced price rises in recent times will testify as to how bad supply was, it's just a case of demand having been lower too.

Apart from executor sales, marriage breakups and occasional repossession, there was precious little on the market. Your hypothesis falls flat on this point. Sure credit was limited but supply in places that demand existed was far from large.

MouseTail

handlemaster wrote: »

There was a prof from the US talking at Davos on Bloomberg regarding trending property cycles of 7 years

Not just property cycles, the 7 year economic cycle is a well known theorey. We have tended to follow it more or less in Ireland.

world_weary

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.

if sinn fein and the rest of the left gain power , its quite likely this country will face another economic crisis , if not , its unlikely houses in dublin will reach the lows of late 2010 again for many years

early 2011 was when dublin house prices hit the bottom and they started to really get going towards the end of 2012 , those were generational lows and what prevented most people from seeing the outstanding value in the market was group think , at that stage it was fear , no different than the group think exuberance which dominated the market in 2006

world_weary

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.

if sinn fein and the rest of the left gain power , its quite likely this country will face another economic crisis , if not , its unlikely houses in dublin will reach the lows of late 2010 again for many years

early 2011 was when dublin house prices hit the bottom and they started to really get going towards the end of 2012 ( though the media were still stuck in armageddon mode and didnt report on a resurgence of the housing market until nearly a year after it began humming ) , those were generational lows and what prevented most people from seeing the outstanding value in the market was group think , at that stage it was fear , no different than the group think exuberance which dominated the market in 2006

ezra_pound

alias no.9 wrote: »

Anybody who was looking at houses in 2010 through to 2013 in the areas that have experienced price rises in recent times will testify as to how bad supply was, it's just a case of demand having been lower too.

Apart from executor sales, marriage breakups and occasional repossession, there was precious little on the market. Your hypothesis falls flat on this point. Sure credit was limited but supply in places that demand existed was far from large.

Well I was looking during that time and supply over demand was high. Yes it was mainly executor sales, which is what I bought, in 2012. There was still a considerable amount of supply and I knew that I would be able to get a house without considerable bidding. It was rare that there were more than two groups at viewings.

makeorbrake

ezra_pound wrote: »

Well I was looking during that time and supply over demand was high. Yes it was mainly executor sales, which is what I bought, in 2012. There was still a considerable amount of supply and I knew that I would be able to get a house without considerable bidding. It was rare that there were more than two groups at viewings.

People don't offload in a trough unless they have to - hence, your executor sale property.

yankinlk

makeorbrake wrote: »

People don't offload in a trough unless they have to - hence, your executor sale property.

exactly. Plenty of pent up sellers/buyers/trade uppers ... just waiting in the wings for the market to balance out.

People see a price, and assume a seller is somehow motivated to dump out cheap, or even cheaper than advertised. For MOST they would only be making themselves homeless if they settled for less than asking.

ezra_pound

makeorbrake wrote: »

People don't offload in a trough unless they have to - hence, your executor sale property.

My point is that there WAS SUPPLY - LOTS OF IT. The motivation for the sellers is beside the point. The fact is that the bottom of the Market in Dublin in 2012 is unlikely to be undershot for a very long time, for the reasons I outlined earlier.

It is very unlikely that we will need another IMF programme within the next 30 years. It is unlikely that our banks will be in complete meltdown during that time.

ezra_pound

yankinlk wrote: »

exactly. Plenty of pent up sellers/buyers/trade uppers ... just waiting in the wings for the market to balance out.

People see a price, and assume a seller is somehow motivated to dump out cheap, or even cheaper than advertised. For MOST they would only be making themselves homeless if they settled for less than asking.

This doesn't make any sense.

What do you mean?

ezra_pound

makeorbrake wrote: »

People don't offload in a trough unless they have to - hence, your executor sale property.

But many people believed that property could continue to fall or stagnate for a long time.

makeorbrake

ezra_pound wrote: »

My point is that there WAS SUPPLY - LOTS OF IT. The motivation for the sellers is beside the point. The fact is that the bottom of the Market in Dublin in 2012 is unlikely to be undershot for a very long time, for the reasons I outlined earlier.

Motivation of sellers is very much relevant in disproving the point that you are making. Executor sales and marriage break-ups - that's the bulk of what was ACTIVELY on the market back then. There were also people who were those who had listed properties but were still clinging to tiger era pricing and those that wanted to sell up and get out (but in reality they couldn't because their bank wouldn't and didn't permit sale with negative equity).
Perhaps in whatever micro-market you were prospecting in, you found supply...or - your criteria for property selection cast a very wide net - but I am one of a few who have confirmed to you on this thread that was just a trickle in terms of supply at that time.

ezra_pound wrote:

This doesn't make any sense.

What do you mean?

He's saying that people won't sell in a trough unless their circumstances force them to - and he's dead right.

ezra_pound wrote:

But many people believed that property could continue to fall or stagnate for a long time.

I certainly believed that things would stagnate for a long time - yes. Notwithstanding that, I'm unsure what point you're making? You think that sellers felt they would lose more? I think it's fair to assume that when sales cost is lower than overall build cost - then a seller is going to think - most likely, worst case scenario back then was that things would stagnate. Therefore, if you were a seller, then unless you were happy to take the hit - or you simply had to for whatever reason, then the likelihood is that you would hold on to said property.
Although I was (and to a certain degree I guess I still am..) shopping for a property, ideally I'd like to offload what I have on my hands right now...but I am resigned to holding on to it - probably for 20 years for two main reasons - one being that I'm not prepared to take the hit on it.

ezra_pound wrote: »

It is very unlikely that we will need another IMF programme within the next 30 years. It is unlikely that our banks will be in complete meltdown during that time.

They say that every generation makes this mistake. Back in 2011, I was more likely to believe what you're now stating - but look whats been going on just 7 years later.
There is no way you could make that assumption.

ezra_pound

makeorbrake wrote: »

Motivation of sellers is very much relevant in disproving the point that you are making. Executor sales and marriage break-ups - that's the bulk of what was ACTIVELY on the market back then. There were also people who were those who had listed properties but were still clinging to tiger era pricing and those that wanted to sell up and get out (but in reality they couldn't because their bank wouldn't and didn't permit sale with negative equity).
Perhaps in whatever micro-market you were prospecting in, you found supply...or - your criteria for property selection cast a very wide net - but I am one of a few who have confirmed to you on this thread that was just a trickle in terms of supply at that time.


He's saying that people won't sell in a trough unless their circumstances force them to - and he's dead right.



I certainly believed that things would stagnate for a long time - yes. Notwithstanding that, I'm unsure what point you're making? You think that sellers felt they would lose more? I think it's fair to assume that when sales cost is lower than overall build cost - then a seller is going to think - most likely, worst case scenario back then was that things would stagnate. Therefore, if you were a seller, then unless you were happy to take the hit - or you simply had to for whatever reason, then the likelihood is that you would hold on to said property.
Although was (and to a certain degree I guess I still am..) shopping for a property, ideally I'd like to offload what I have on my hands right now...but I am resigned to holding on to it - probably for 20 years for two main reasons - one being that I'm not prepared to take the hit on it.

They say that every generation makes this mistake. Back in 2011, I was more likely to believe what you're now stating - but look whats been going on just 7 years later.
There is no way you could make that assumption.

My point is that regardless of motivations or causes, there was a glut of supply over demand in the period 2010 - 2012. It was referred to as a " buyers market". It was only later in 2012 that viewings became hectic again. That is simply a fact.

makeorbrake

ezra_pound wrote: »

My point is that regardless of motivations or causes, there was a glut of supply over demand in the period 2010 - 2012. It was referred to as a " buyers market". It was only later in 2012 that viewings became hectic again. That is simply a fact.

Yes, sure it was a buyers market - IF you could find something to buy! In that respect, seller motivation is very much relevant. You maintain there was significant supply. I and a few others have maintained that in reality, there wasn't. Perhaps that's just a difference in experience based on the area that you were prospecting in - in comparison with the one I was looking in? It's either that or one or other of us is mistaken.

MouseTail

You are both arguing the same point surely? There was ample supply over demand, that's what made it a buyers market/the bottom. Certainly where I bought there was plenty to choose from between executor and bank sales, and no one else much buying.

ezra_pound

makeorbrake wrote: »

Yes, sure it was a buyers market - IF you could find something to buy! In that respect, seller motivation is very much relevant. You maintain there was significant supply. I and a few others have maintained that in reality, there wasn't. Perhaps that's just a difference in experience based on the area that you were prospecting in - in comparison with the one I was looking in? It's either that or one or other of us is mistaken.

Well that was really smart of you to be searching in a part of the market with no supply in 2010/2011.

ezra_pound

MouseTail wrote: »

You are both arguing the same point surely? There was ample supply over demand, that's what made it a buyers market/the bottom. Certainly where I bought there was plenty to choose from between executor and bank sales, and no one else much buying.

Now this I agree with you that there was lots of supply.

No. The other guys are saying none of the supply meet their demand, and in effect wasn't real supply.

alias no.9

makeorbrake wrote: »

Yes, sure it was a buyers market - IF you could find something to buy! In that respect, seller motivation is very much relevant. You maintain there was significant supply. I and a few others have maintained that in reality, there wasn't. Perhaps that's just a difference in experience based on the area that you were prospecting in - in comparison with the one I was looking in? It's either that or one or other of us is mistaken.

It wasn't a buyers market though, the Mexican stand off was still very much still on in 2012, one house we were interested in in late 2012 was being sold by the original developer 10 years after the rest of the development all the while the banks were putting the squeeze on. We exited stage left with no other bidders involved when the vendor refused our final offer, which was higher than the previous sale figure recorded on the PPR but reflected the slightly larger floor area and corner site.

When financially distressed sellers can turn down reasonable bids, compared to contemporary transactions, with no other interested parties, a buyers market it ain't. We weren't maxed on budget, just not prepared to bid against ourselves.