Property Market 2015

El_Dangeroso

The_Conductor wrote: »

Here we go again.........
Is no-one going to pull up the Minister on this lark.........
Its not a 'starter home'- if you can't progress beyond it.........
How many of us are trying to bring up children in wholly unsuitable properties- because we bought 'starter homes'?
I'm actually getting really angry at this stage.

I understand your anger. I too am looking for something of a 'forever home' because of a fear of getting stuck in another crash.

But we do need a range of home sizes to meet people's needs at different stages of their life. We need to get used to the idea that we should move at least twice, first when start to have kids and then again when the kids have left home.

Otherwise we'll continue to have a housing shortage.

'Starter' homes do need to be at least 900sq ft. though, with adequate communal storage and good soundproofing.

The_Conductor

For central Dublin- the proposal is to relax the apartment sizes significantly- allowing units of slightly over 400 square feet (i.e. an overall size of perhaps 6m by 7m in size- into which you'd squeeze a bedroom, bathroom, livingroom/dining room/kitchen (everything else) room.........

It just doesn't work- in that space.

Have a look at Dublin City Council's proposals to relax the sizes for 'starter homes'- they're startling...........

relax carry on

Isn't it time we moved away from using terms such "starter homes" and "ladder" as they give a false sense of progression through houses as the norm. Or am I mistaken. Is that the way a functioning property market should be?

The_Conductor

relax carry on wrote: »

Isn't it time we moved away from using terms such "starter homes" and "ladder" as they give a false sense of progression through houses as the norm. Or am I mistaken. Is that the way a functioning property market should be?

Having a 'starter home' is entirely normal in a properly functioning market- however......... there is then a subsequent progression into different properties at different life stages- as your needs change. Its all well and good building 20,000 'starter homes' in central Dublin- however, if there is no progression route as people's needs and circumstances change- you're creating an event bigger mess than you'd have had by not building the 20,000 'starter homes' in the first instance.........

April 73

The key is a properly functioning market.

There should actually be circular movement as people progress through life from starter home, family home(s), retirement home (could be the same or similar as starter homes).

Salaries tend to rise with experience and age & that lends itself to buying bigger houses as children arrive. Buying a forever family home as your first house is financially tricky. The problem with buying & selling is when the market crashes. People become stuck in a property which is unsuitable for that particular time of their life.

My first purchase was a small terrace with three bedrooms (one optimistically called a bedroom, more a storage space). Then came a 4-bed semi, four bed detached, second four bed detached & I would see this current house as the family home for the next 15-20 years. In later life I think we'll downsize & realise some cash (hopefully) and finish in a modern, easily maintained smaller house or apartment close to amenities & shops.

My finances could not have run to the house I have now when I first bought. But each house has suited that particular time of my life. Progression & aspiration are part of life.

Cuddlesworth

April 73 wrote: »

The key is a properly functioning market.

There should actually be circular movement as people progress through life from starter home, family home(s), retirement home (could be the same or similar as starter homes).

Salaries tend to rise with experience and age & that lends itself to buying bigger houses as children arrive. Buying a forever family home as your first house is financially tricky. The problem with buying & selling is when the market crashes. People become stuck in a property which is unsuitable for that particular time of their life.

My first purchase was a small terrace with three bedrooms (one optimistically called a bedroom, more a storage space). Then came a 4-bed semi, four bed detached, second four bed detached & I would see this current house as the family home for the next 15-20 years. In later life I think we'll downsize & realise some cash (hopefully) and finish in a modern, easily maintained smaller house or apartment close to amenities & shops.

My finances could not have run to the house I have now when I first bought. But each house has suited that particular time of my life. Progression & aspiration are part of life.

Could you put timeframes on those house purchases.

I'm 32 now, in a well paid job and only beginning to get to the point where I can start considering a property.

April 73

Cuddlesworth wrote: »

Could you put timeframes on those house purchases.

I'm 32 now, in a well paid job and only beginning to get to the point where I can start considering a property.

I started young! Plus timing helped us a lot. Bought the first house in 1996 when I was 23 with a mortgage of 3 times my then salary. University town (not Dublin) so I rented out the other bedroom & converted one of the downstairs rooms to another bedroom.

Moved to Dublin in 1999 & put a deposit down on a house with my fiancé & moved in in 2000. 90% mortgage & 3 times joint salary - which seemed daunting at the time. We had debated a three-bed semi in a different area but pushed ourselves to go for the four bed.

Moved after 4 years in 2004. House had increased in value by 80% by then. Crazy times!!!

Next house had a mortgage of less than 60% because of that crazy increase. Stayed for ten years & sold earlier this year. We got back what we had paid for it in 2004. We had spent money on it including an extension & new kitchen in 2012 but felt we did ok getting back to what we'd paid considering the housing market over the last number of years.

This current house needs work & our mortgage invluding the costs to renovate is under 60% LTV. When we've completed the renovations I hope we'll add value and be at about 50% LTV. Low LTI rate too.

To be honest we have been lucky with the houses & with our timing. I don't think many 23 year old these days would be a position to buy a house.

I Am The Law

April 73 wrote: »

I started young! Plus timing helped us a lot. Bought the first house in 1996 when I was 23 with a mortgage of 3 times my then salary. University town (not Dublin) so I rented out the other bedroom & converted one of the downstairs rooms to another bedroom.

Moved to Dublin in 1999 & put a deposit down on a house with my fiancé & moved in in 2000. 90% mortgage & 3 times joint salary - which seemed daunting at the time. We had debated a three-bed semi in a different area but pushed ourselves to go for the four bed.

Moved after 4 years in 2004. House had increased in value by 80% by then. Crazy times!!!

Next house had a mortgage of less than 60% because of that crazy increase. Stayed for ten years & sold earlier this year. We got back what we had paid for it in 2004. We had spent money on it including an extension & new kitchen in 2012 but felt we did ok getting back to what we'd paid considering the housing market over the last number of years.

This current house needs work & our mortgage invluding the costs to renovate is under 60% LTV.

To be honest we have been lucky with the houses & with our timing. I don't think many 23 year old these days would be a position to buy a house.

That’s such a breath of fresh air. To see someone take a realistic view of their property value and be happy to move on without moaning and groaning that they can’t sell their house at 2006 prices. IMO this will be the key to a functioning property market but unfortunately I think we have a long way to go for the penny to drop.

Gumbo

I Am The Law wrote: »

That’s such a breath of fresh air. To see someone take a realistic view of their property value and be happy to move on without moaning and groaning that they can’t sell their house at 2006 prices. IMO this will be the key to a functioning property market but unfortunately I think we have a long way to go for the penny to drop.

The problem is that it's not the owners fault. They can't sell at a loss when they have a boom time mortgage on it so there's no point selling for 100k less than you owe. You could be in a worse situation.

Time were different back then, at 25 I bought a 2 bed own door apartment (one under a duplex if your familiar with those) in Finglas, well Meakstown to be posh about it for 225k, moved into it in March 06 and barely had the wrappers off the furniture and sold it for 317k a few months later. Used the "profit" to buy a family home that we could grow into and 2 kids later we are blessed!

We paid over the odds for the new home in Oct 2006 but it's a 4 bed (130 Sq. M) home with ample space, we were lucky and add to that we got a tracker from BOSI (which I hadn't got a clue about back then, it was a case of telling the broker get me what you can!).

Interesting times ahead, and I can't see how young people are gona get started, especially renters, they need some sort of system that fakes the duration of rental terms to be counted as saving and proof of payment capacity.

I bought again in 2015, investment this time, in a very popular estate where prices were double what we paid back in 05ish but long term plan is to get into that house and extend due to location, closed estate and parents nearby.

April 73

I Am The Law wrote: »

That’s such a breath of fresh air. To see someone take a realistic view of their property value and be happy to move on without moaning and groaning that they can’t sell their house at 2006 prices. IMO this will be the key to a functioning property market but unfortunately I think we have a long way to go for the penny to drop.

We were fortunate to have equity in the house so we could afford to be a bit philosophical about it.
We also sacrificed a 0.5% tracker when we moved. I'm certain some people would think we were completely mad - but we've ended up in the kind of house & area that I always hoped we would and we are happy & settled now.

There are really two things that helped us. I bought young on a single salary - getting on the ladder early (even if people decry the property ladder) & we made a good choice in pushing ourselves with our first jointly-purchased house, which then caught the boomtime rise.

If we were even five years younger or bought five years later we'd be in a different situation now. I don't think it would be possible to do now what we managed. It wasn't entirely luck either though - we've worked hard for 20 odd years & we saved very hard in our 20s & 30s and made sacrifices.

There was a period of about 8 years when mortgages were dished out with little thought or stress-testing. Getting a mortgage of almost any crazy amount was possible. It wasn't like that in 1996 when I first bought or even in 1999 - we really had to fight to get those mortgages & show painful savings records. In 2004 it was very different. "How much do you want? Don't you want more?! Why not go for the bigger house? Borrow over 30 years!"

That 8 year boom period was an aberration - we are back to the days when a mortgage takes hard work to secure & hard work to pay off. Without doubt that is painful for a large group of people who are caught by circumstances in negative equity, or who are trying to get a deposit together, or trying to stretch to current house prices & restricted by the new lending rules.

It's a very uneven market place for different people at the moment.

I Am The Law

kceire wrote: »

The problem is that it's not the owners fault. They can't sell at a loss when they have a boom time mortgage on it so there's no point selling for 100k less than you owe. You could be in a worse situation.

Time were different back then, at 25 I bought a 2 bed own door apartment (one under a duplex if your familiar with those) in Finglas, well Meakstown to be posh about it for 225k, moved into it in March 06 and barely had the wrappers off the furniture and sold it for 317k a few months later. Used the "profit" to buy a family home that we could grow into and 2 kids later we are blessed!

We paid over the odds for the new home in Oct 2006 but it's a 4 bed (130 Sq. M) home with ample space, we were lucky and add to that we got a tracker from BOSI (which I hadn't got a clue about back then, it was a case of telling the broker get me what you can!).

Interesting times ahead, and I can't see how young people are gona get started, especially renters, they need some sort of system that fakes the duration of rental terms to be counted as saving and proof of payment capacity.

I bought again in 2015, investment this time, in a very popular estate where prices were double what we paid back in 05ish but long term plan is to get into that house and extend due to location, closed estate and parents nearby.

This is where I have struggled to understand how people think when it comes to property prices. Why would someone pay 41% more for your apartment within a few months? And then it appears you did something similar with the proceeds of the sale. This may have been in 2006 but I have witnessed a bidding war last week where a house went to 18.6% above the September selling price of the last identical house on the same street.

I can understand maybe 10% but once it exceeds that IMO that’s a bubble. We have seen and are still seeing that when the bubble bursts there is no safety net for those who make the primary decision of “yes I am willing to pay €XXX thousands for that property”.

It may not be an owners “fault” but it was the decision that they made. The problem is that when the decision turns out to be a poor one, there is an expectation that someone else will bail them out by once again paying too much for their property.

I know it’s harsh but someone has to take the hit for unjustified 41% in the example above which is repeated over and over again throughout the country thanks to the “boom time mortgage”.

Gumbo

I Am The Law wrote: »

This is where I have struggled to understand how people think when it comes to property prices. Why would someone pay 41% more for your apartment within a few months? And then it appears you did something similar with the proceeds of the sale. This may have been in 2006 but I have witnessed a bidding war last week where a house went to 18.6% above the September selling price of the last identical house on the same street.

I can understand maybe 10% but once it exceeds that IMO that’s a bubble. We have seen and are still seeing that when the bubble bursts there is no safety net for those who make the primary decision of “yes I am willing to pay €XXX thousands for that property”.

It may not be an owners “fault” but it was the decision that they made. The problem is that when the decision turns out to be a poor one, there is an expectation that someone else will bail them out by once again paying too much for their property.

I know it’s harsh but someone has to take the hit for unjustified 41% in the example above which is repeated over and over again throughout the country thanks to the “boom time mortgage”.

I wa responding to a poster that blamed home owners for not selling at a decent price now relative to pre and post boom pricing.

My over the odds comment was aimed at buying in 06 compared to now. We bought brand new so we were not bidding against anyone. We made a choice to buy at the advertised developers price.

I posted that if i bought during the boom then there's no way I'd sell now if that property was in negative value. Why would you?

Bob24

kceire wrote: »

I wa responding to a poster that blamed home owners for not selling at a decent price now relative to pre and post boom pricing.

I posted that if i bought during the boom then there's no way I'd sell now if that property was in negative value. Why would you?

It depends on why you would be selling. If you are upgrading to a larger house (which is also significantly cheaper than it was during the boom) and can finance the deal ... why not doing it? If you wait for your current house regain the same price you paid for it, the larger house will also get more expensive and the gap between the 2 is only going to increase in absolute value - making the upgrade more expensive for you.

If it was a investment and you are looking for profit, or of you are looking at downgrading - then yes of course you wouldn't want to sell.

Cuddlesworth

April 73 wrote: »

We were fortunate to have equity in the house so we could afford to be a bit philosophical about it.
We also sacrificed a 0.5% tracker when we moved. I'm certain some people would think we were completely mad - but we've ended up in the kind of house & area that I always hoped we would and we are happy & settled now.

There are really two things that helped us. I bought young on a single salary - getting on the ladder early (even if people decry the property ladder) & we made a good choice in pushing ourselves with our first jointly-purchased house, which then caught the boomtime rise.

If we were even five years younger or bought five years later we'd be in a different situation now. I don't think it would be possible to do now what we managed. It wasn't entirely luck either though - we've worked hard for 20 odd years & we saved very hard in our 20s & 30s and made sacrifices.

There was a period of about 8 years when mortgages were dished out with little thought or stress-testing. Getting a mortgage of almost any crazy amount was possible. It wasn't like that in 1996 when I first bought or even in 1999 - we really had to fight to get those mortgages & show painful savings records. In 2004 it was very different. "How much do you want? Don't you want more?! Why not go for the bigger house? Borrow over 30 years!"

That 8 year boom period was an aberration - we are back to the days when a mortgage takes hard work to secure & hard work to pay off. Without doubt that is painful for a large group of people who are caught by circumstances in negative equity, or who are trying to get a deposit together, or trying to stretch to current house prices & restricted by the new lending rules.

It's a very uneven market place for different people at the moment.

I think you need to place things in context though.

My company hires college graduates, who are paid roughly 25k per year and have to fork out near 50% of their net income to rent in Kildare, plus pay large sums of money for travel costs because they can't afford to live near work and the public transport solutions are unworkable. Their potential for increased earnings is massively decreased, with most career paths(tech) still being heavily employer favoured without extreme specialization. I know too many unpaid interns wasting months of their time for free, the above are the lucky ones.

Nearby there would be 0 properties for 3.5 times 25k a year. There are 3 within 20k and they are not pretty places. Dual income don't fair much better.

Everytime I hear of people talking about getting on the property ladder, they are nearly always pre-95 buyers where the prices of property were within reason regardless of location. As their earnings increased(coincided with economic boom) and their equity increased they moved up to nicer areas on the backs of those behind them. Earnings are not increasing for the 20's group now and they have nothing to afford equity on.

April 73

Cuddlesworth wrote: »

I think you need to place things in context though.

My company hires college graduates, who are paid roughly 25k per year and have to fork out near 50% of their net income to rent in Kildare, plus pay large sums of money for travel costs because they can't afford to live near work and the public transport solutions are unworkable. Their potential for increased earnings is massively decreased, with most career paths(tech) still being heavily employer favoured without extreme specialization. I know too many unpaid interns wasting months of their time for free, the above are the lucky ones.

Nearby there would be 0 properties for 3.5 times 25k a year. There are 3 within 20k and they are not pretty places. Dual income don't fair much better.

Everytime I hear of people talking about getting on the property ladder, they are nearly always pre-95 buyers where the prices of property were within reason regardless of location. As their earnings increased(coincided with economic boom) and their equity increased they moved up to nicer areas on the backs of those behind them. Earnings are not increasing for the 20's group now and they have nothing to afford equity on.

I don't disagree with you. That's why I said there's a very uneven property market out there. There are the people who bought pre-boom or in the early boom years, those who bought at the high end of the boom market & those people trying to buy for the first time now. Each of those groups have very different opportunities.

I'm certainly not just saying that "oh we had it tough saving a deposit & getting a mortgage, that's just life!" I agree it is tough for people in their 20s. I don't think its a level playing field to where it was I was in my 20s. House prices are too high relative to take home pay.

Mind you, three times my salary in 1996 didn't get me a great house. It was a small terrace in a fairly dodgy area of Belfast. Plenty of people told me I was mad to buy there in fact. And I was unusual in buying a house at that age. None of my friends of the same age bought a house until years later.

Buying a nice house in a nice area in your 20s was & is very difficult. Is it impossible now? Not impossible across the country, no, but probably impossible in Dublin & close proximity to Dublin for sure.

Rew

http://www.rte.ie/news/2015/1204/751262-sinn-fein-housing/

...financed through general taxation to begin with, and the combination of capital spending and local authority borrowing as the plan progresses.

...abolish the local property tax and introduce rent certainty by linking rent increases to inflation.

johnnyskeleton

Cuddlesworth wrote: »

I'm 32 now, in a well paid job and only beginning to get to the point where I can start considering a property.

You're not alone in that category. People who have been working hard on their career and savings for the last 7-8 years are starting to look at the market now with large deposit savings and good incomes. My theory is that this group of people had something of a mass panic between 2012 and 2014 and started paying huge sums for 3/4 bed fixer uppers in middle class suburbs, and that has been the driver of the house price increases.

Substantial rental increases fueled this as well.

As the more level headed members of this group come back to the fore, I would expect prices in this segment to drop. But then again as Keynes said, the market can stay irrational for longer than I can stay solvent (or renting, as the case may be).

leinsterdude

its simple, save €100k, move to Naas, Navan, Drogheda etc etc.

Bob24

leinsterdude wrote: »

its simple, save €100k, move to Naas, Navan, Drogheda etc etc.

Or: move to another country where a similar job will allow you to purchase what you consider to be a significantly better home.

This is where telling well enough paid professionals working long hours to settle for something they consider to be bad value for their money can eventually lead to: shortage of young and qualified workforce in Ireland restricting foreign investment and slowing down the economy.

Whether part of this group of people is right in thinking they are getting screwed is debatable, but if they start leaving (or not coming in large enough quantities to support the economy) this is when something will have to be be done, and not only in Dublin.

gaius c

The "starter home" concept is completely oxymoronic in a market with a turnover rate of around 2%. That means that the average turnover rate of houses is approx 50 years. If you're going to buy, you have to be thinking medium to long-term.

Chardee MacDennis

Speaking to a few people (like myself, not real estate savvy) lately and there seems to be an impression that prices will be a little higher in January. Is that feeling others have? We're looking in D15 and it seems vendors are holding off putting their property on the market till the new year, not sure if this is because they feel the same or that people don't want the hassle of selling around Christmas time.

Will the banks having their exceptions renewed affect property prices?

Bob24

Chardee MacDennis wrote: »

Will the banks having their exceptions renewed affect property prices?

My 2 cents: it will marginally affect them, but only on the lower end of the market, and for a short period.

Also the banks might decide to grand exceptions in a more conservative way than last year if they they don't want to run out in the summer (given that they already have a 3 months backlog from last year to clear using this year's quota, this could easily happen if they don't amend their rules).

Villa05

There was a cartoon in one of the financial papers at the height of the crisis that helped describe the measures used to ease the crisis

It showed a fire in a high rise building with victims (representing the victims of the crisis) trapped inside. The fire service (representing the various institutions tasked with easing the crisis) is on the ground and rather than putting out the fire they find more people and and put them in the burning building so that the victims feel that they are not on their own in their suffering

The narrative was that the crisis which was an asset price bubble bursting could not be cured by creating a new asset price bubble

Sums up many of the property markets in Ireland

Barely Hedged

Villa05 wrote: »

There was a cartoon in one of the financial papers at the height of the crisis that helped describe the measures used to ease the crisis

It showed a fire in a high rise building with victims (representing the victims of the crisis) trapped inside. The fire service (representing the various institutions tasked with easing the crisis) is on the ground and rather than putting out the fire they find more people and and put them in the burning building so that the victims feel that they are not on their own in their suffering

The narrative was that the crisis which was an asset price bubble bursting could not be cured by creating a new asset price bubble

Sums up many of the property markets in Ireland

Asset price bubble or the reality of a post recessionary country with a normal appetite for housing. Wake up and smell the coffee

Villa05

Barely Hedged wrote: »

Asset price bubble or the reality of a post recessionary country with a normal appetite for housing. Wake up and smell the coffee

You cant have a normal appetite when supply of the food source is strangled, Its cut throat not normal

helimachoptor

Was an avid follower and occasional poster of this thread throughout the year.

Offer accepted July
Planning permission pain and holidays etc delayed us, so closed in October
Renovation finished last week

EA dropped in saturday (we were in the process of moving in!!!!) to see if we wanted to sell (diff EA than who we bought from)

Adding in all of our costs, the chap still expected us to make near 100K profit..

"you do realise we have just moved in"

EA "yes and you've done a great job and made this a proper family home, people will pay money etc, we expect this to sell for total costs + 100K"

Mental ted!

OfflerCrocGod

helimachoptor wrote: »

EA "yes and you've done a great job and made this a proper family home, people will pay money etc, we expect this to sell for total costs + 100K"

Mental ted!

Sounds like a market that desperately needs more credit, won't someone remove the CB regulations?

On a more serious note what sort of work did you do, what state was the house in before?

The_Conductor

Thats mental Ted- indeed.......
I suppose its a reflection of supply side issues.

Hope you enjoy your new home- and have many happy years and memories there.

helimachoptor

OfflerCrocGod wrote: »

Sounds like a market that desperately needs more credit, won't someone remove the CB regulations?

On a more serious note what sort of work did you do, what state was the house in before?

Full refurb

- New heating and plumbing through out
- New windows
- Insulation throughout and plastering/ painting
- 2 internal walls knocked
- Garage conversion
- 2 new bathroom suites
- all new flooring/tiling
- new kitchen
- Plastering
- New internal doors ( 2 external doors)

nearly 2 months of work

sapper

Sounds like you made the house into a desirable family property - in my experience of the recent market family homes which tick all the boxes (large clean living spaces, large gardens etc) do still get a lot of interest when it comes to bidding.

Ive also seen a lot of high asking prices - more than likely estate agents touting for business by quoting astronomical valuations