Property Market 2015

mlb10theshow

It's hard to predict for the moment.

I think property prices will go up because of these reasons:

ECB's recent QE decision : more cash will be injected to the economy

Strong demand but limited supply: there's lots of folks living in their private rental accommodation far long and lots of potential first time buyers.

Economic recovery seen in the figures.

But if the price will go down, here's possible reasons :

Change in lending regulations and disposal of CGT.

Too many low-paid jobs and too much income tax and other taxes.

People are cautious and reminding boom time.

Glenbhoy

SeanSouth wrote: »

From a SELLERS perspective, I can tell you that most of the tactics mentioned in this thread don't matter a jot to me. I require a certain price for my house. If I get it, that's great. If I don't get it, I wont be moving (selling)............

Sean, many sellers aren't in your position and have no choice but to accept the highest offer, one would expect this to become more prevalent in the future because firstly, vendors cannot keep on postponing these life decisions indefinitely (and one presumed these may have been on hold for 7 yes odd now) and secondly, as banks start to sort out their arrears problems, the choice may be removed from many vendors.

mr_seer

mlb10theshow wrote: »

It's hard to predict for the moment.

I think property prices will go up because of these reasons:

ECB's recent QE decision : more cash will be injected to the economy

Strong demand but limited supply: there's lots of folks living in their private rental accommodation far long and lots of potential first time buyers.

Economic recovery seen in the figures.

But if the price will go down, here's possible reasons :

Change in lending regulations and disposal of CGT.

Too many low-paid jobs and too much income tax and other taxes.

People are cautious and reminding boom time.

I don't agree. Mortgage lending fell in 2014 relative to 2013. This fact does not seem to be well known and it is certainly not mentioned to any great degree in the media. The media prefer to spin the meaningless increase in loan approval numbers - these are irrelevant unless the approved mortgages actually draw down.

The point I am making is that the reason lending is falling is because house prices in many areas (Dublin especially) have risen to a point that people are unable to meet with mortgage finance. Mortgage lending is almost certain to fall again on the back of the CB rules. There are not infinite cash buyers out there and with the CGT exemption now over, once current AIPs have expired, the number of transactions will fall drastically. It will take a few months but by the end of 2015 we are going to see large falls in house prices on the back of this. Maybe in a couple of years time investors will start to see value and re-enter the market as some have suggested. This will take a couple of years and price falls to happen though

Cuddlesworth

mlb10theshow wrote: »

People are cautious and reminding boom time.

I don't think this exists outside of a small minority. Its been 7 years since the crash, there is a generation that had little to no exposure to the house price climb or crash since it would have meant little to them.

Older generations refuse to drop the belief that their houses should make them all millionaires by retirement and not cost them a drop of money in their lifetime.

The_Conductor

P. Breathnach wrote: »

In any event, for a FTB, the difference is small: only the excess over €220k will require a 20% deposit.

AIB and BOI are quoting a 20% deposit for the entirety of a loan- over 220k- not just for the portion over the threshold. Of course its their prerogative- and indeed, safer for them as a lending institution to do so- however- it is shoe horning a significant portion of the market into the sub 220k bracket.

Bob24

The_Conductor wrote: »

AIB and BOI are quoting a 20% deposit for the entirety of a loan- over 220k- not just for the portion over the threshold. Of course its their prerogative- and indeed, safer for them as a lending institution to do so- however- it is shoe horning a significant portion of the market into the sub 220k bracket.

Not sure I am getting you here ... are you saying the deposit for a FTB borrowing 219k would be 10% of the full amount (22k) but the deposit to borrow 221k would be 20% of the full amount (44k). If yes it is seems pretty strange ... it can't make sense for them to ask 22k more deposit to borrow an extra 2k, can it?

impr0v

The_Conductor wrote: »

AIB and BOI are quoting a 20% deposit for the entirety of a loan- over 220k- not just for the portion over the threshold. Of course its their prerogative- and indeed, safer for them as a lending institution to do so- however- it is shoe horning a significant portion of the market into the sub 220k bracket.

Where are they quoting this?

I haven't checked AIB's site but it certainly seems to conflict with what BOI is saying on its "mortgage myths"page. (See the bottom of the page.)

highgiant1985

The_Conductor wrote: »

AIB and BOI are quoting a 20% deposit for the entirety of a loan- over 220k- not just for the portion over the threshold. Of course its their prerogative- and indeed, safer for them as a lending institution to do so- however- it is shoe horning a significant portion of the market into the sub 220k bracket.

if you're using an online calculators and its telling you that then its likely its a bug/gap in the design or are you sure you've set an option to say first time buyer.

Sala

I have just done a few online calculations and they are still returning quotes of 4.2-4.7 times gross salary with 10%. They obviously haven't updated them

Michael D Not Higgins

Sala wrote: »

I have just done a few online calculations and they are still returning quotes of 4.2-4.7 times gross salary with 10%. They obviously haven't updated them

Same here. Wonder how long they'll leave that going for?

Villa05

Wonder will banks relax other conditions now that the deposit and income multiples are set.

Take for example a person who lost there job and are now employed under contract.

seamus

Villa05 wrote: »

Wonder will banks relax other conditions now that the deposit and income multiples are set.

Take for example a person who lost there job and are now employed under contract.

The regulations still require the banks to employ the same level of due diligence that they have before rather than just offer 3.5 times and do no other checks.

I would say on the whole that banks will be far more likely to offer the whole 3.5x value to borrowers (because most people should be able to afford the repayments on it), but that doesn't mean that people who've been two months in a new contract position will be able to take out a big mortgage. The affordability checks will still be there.

seamus

I might just be way too close to this, but I reckon the next Daft report for Q1 is going to show a bizarre drop in inflow and outflow. It's all purely anecdotal, but from the report I have set up I used to get a number of properties reported every day. But when the new rules came in last Wednesday, everything seemed to go quiet. I got practically zero alerts about new properties or price changes between Thursday and now.

Probably too soon to tell and yes I'm probably way too close to this. But I've been subscribed to alerts since late last year and the only time it seems to have been this quiet was the last 2 weeks in December.

by the seaside

mlb10theshow wrote: »

It's hard to predict for the moment.

I think property prices will go up because of these reasons:

ECB's recent QE decision : more cash will be injected to the economy

Strong demand but limited supply: there's lots of folks living in their private rental accommodation far long and lots of potential first time buyers.

Economic recovery seen in the figures.

But if the price will go down, here's possible reasons :

Change in lending regulations and disposal of CGT.

Too many low-paid jobs and too much income tax and other taxes.

People are cautious and reminding boom time.

Fair summary. I would add that:

1. QE has also led to a weakened Euro so prices are cheaper for non-Euro buyers, which creates upward pressure on prices.

2. Related to the low paid jobs is the high house price to salary ratio (5 in Dublin? Does anyone know what the historic average is?) which indicates prices are too high.

3. The possibility of contagion from Greece to the broader Eurozone.

johnp001

seamus wrote: »

I might just be way too close to this, but I reckon the next Daft report for Q1 is going to show a bizarre drop in inflow and outflow. It's all purely anecdotal, but from the report I have set up I used to get a number of properties reported every day. But when the new rules came in last Wednesday, everything seemed to go quiet. I got practically zero alerts about new properties or price changes between Thursday and now.

Probably too soon to tell and yes I'm probably way too close to this. But I've been subscribed to alerts since late last year and the only time it seems to have been this quiet was the last 2 weeks in December.

Seems to be the opposite in some other areas. Large volumes of property in Co. Roscommon for example have gone on sale this year and seems to be accelerating if anything even in the last week.
The other change I have noticed is an increasingly large proportion going up as "Price On Application" this year as opposed to last year.

Also, checking daftdrop data for Dublin.
Feb 11th-Feb 14th 2014 shows 98 new property listings in the time period
Feb 11th-Feb 14th 2015 shows 177 new property listings in the time period

What part of the country is your alert in Seamus?

dearg lady

seamus wrote: »

I might just be way too close to this, but I reckon the next Daft report for Q1 is going to show a bizarre drop in inflow and outflow. It's all purely anecdotal, but from the report I have set up I used to get a number of properties reported every day. But when the new rules came in last Wednesday, everything seemed to go quiet. I got practically zero alerts about new properties or price changes between Thursday and now.

Probably too soon to tell and yes I'm probably way too close to this. But I've been subscribed to alerts since late last year and the only time it seems to have been this quiet was the last 2 weeks in December.

Yep, things seem to have gone completely dead! At the moment I'm still just looking online, haven't applied yet, but my notifications have completely dried up since last week.

tharmor

AIB calculator shows msg that they are changing it !! so its definitely 20% going forward !! Doom for the property markets !!

seamus

johnp001 wrote: »

What part of the country is your alert in Seamus?

Dublin 14/16/24

flintash

by the seaside wrote:

1. QE has also led to a weakened Euro so prices are cheaper for non-Euro buyers, which creates upward pressure on prices.

the profits are lower due to the same reason . yield that hasn't changed so no big diference here.

mr_seer

seamus wrote: »

Dublin 14/16/24

D14 and D16 are in my search areas as well and I have noticed quite a lot of new stock - a good few houses came up today in these areas for example. Are you looking in a certain price bracket?

seamus

mr_seer wrote: »

D14 and D16 are in my search areas as well and I have noticed quite a lot of new stock - a good few houses came up today in these areas for example. Are you looking in a certain price bracket?

3+ beds under 500k. Funnily enough you mention the brackets, a quick look on myhome shows quite a bit of stuff outside of those criteria (i.e. 2 beds or 500k+)

mariaalice

11 Dun Emer View, Lusk, Dublin


€215,000
- 3 Bed Terraced House 97 m² / 1044 ft² For Sale.

I think the new rules are having an effect, 215 is just under the threshold. I think you will see a lot of pricing like that.

The_Conductor

Any update on AIB and BOI and the whole of mortgages over 220k needing a 20% deposit? Both are advising- wait for an official announcement........

Michael D Not Higgins

mariaalice wrote: »

11 Dun Emer View, Lusk, Dublin


€215,000
- 3 Bed Terraced House 97 m² / 1044 ft² For Sale.

I think the new rules are having an effect, 215 is just under the threshold. I think you will see a lot of pricing like that.

Don't think so, the property price register has a number of Dun Emer, Lusk places around that mark for the last few years.

19 Dun Emer Walk is an end of terrace house which went for 222k back in November. Also 21 Dun Emer Way is another end of terrace 3 bed for 220k back in July. The one you've shown is a middle of terrace house.

mariaalice

Michael D Not Higgins wrote: »

Don't think so, the property price register has a number of Dun Emer, Lusk places around that mark for the last few years.

19 Dun Emer Walk is an end of terrace house which went for 222k back in November. Also 21 Dun Emer Way is another end of terrace 3 bed for 220k back in July. The one you've shown is a middle of terrace house.

I am not saying anything about that house per say, its more about pricing under the psychological price point of 220k/ 10% deposit.

If a similar terrace went for 222k back in November and is now at an asking price of 215k not a drop in price? or maybe its just a tactic to attract interest.

Bob24

mariaalice wrote: »

If a similar terrace went for 222k back in November and is now at an asking price of 215k not a drop in price? or maybe its just a tactic to attract interest.

Could be either. But in the segment I am looking at, some agents are definitely pricing 5 to 20% lower than what the seller actually wants to generate more interest and try to create bidding wars.

Michael D Not Higgins

mariaalice wrote: »

I am not saying anything about that house per say, its more about pricing under the psychological price point of 220k/ 10% deposit.

If a similar terrace went for 222k back in November and is now at an asking price of 215k not a drop in price? or maybe its just a tactic to attract interest.

It's not similar, the ones I listed are end of terrance and would therefore be more desirable.

Glenbhoy

The_Conductor wrote: »

Any update on AIB and BOI and the whole of mortgages over 220k needing a 20% deposit? Both are advising- wait for an official announcement........

Talked to AIB today, as in an actual Pre-Sanction in principal meeting. It's all about 20%, the new application format was thrown together in the last few days, my proposed LTV was 80.19% (figures roughly calculated as we sat there), my advisor showed me the red mark on the screen!! She didn't make mention of the exceptions and I didn't bother enquiring, she just amended the figures to make it 20%.
On the income side, they haven't tweaked the old criteria (which I thought they would have in an effort to increase the amounts that can be given out, maybe this is something in the pipeline though). It's still net monthly income less 2,050 for a couple and 250 per kid and all other outgoings (in my case childcare). This amount must be above the repayments on your mortgage amount, stress tested at variable rate +2%. Max term is until 65. Presumably the LTI requirement is also in place, but it wasn't a factor in my case.

flintash

Glenbhoy wrote: »

t's still net monthly income less 2,050 for a couple and 250 per kid and all other outgoings (in my case childcare). This amount must be above the repayments on your mortgage amount, stress tested at variable rate +2%.

this thing i really dont understand! so ,for example couple on minimum wages and one kid cannot get a single penny yet they fully capable to pay same size rent on private accomodation?! i know life is tough and unfair but seriuosly please explain me this as it is in my head for a few years now and i still dont get it. it gotta be an irish thing.

Villa05

Paying the high rents is an irish thing. Prudent lending is a change from the period 1995 to 2008 and is to be welcomed