Property Market 2015

handlemaster

http://www.myhome.ie/pricechanges?page=2&RegionID=1265&LocalityIDs=

latest price drops in Dublin. quiet a few

gmisk

gmisk wrote: »

I was at a viewing last night, I was there for a good 20 minutes. I would say 7 sets of people there including myself (House on at 180 offer of 177, this was 4th viewing).

Of those set of people
I would say 3 were investors (older couples), of the rest 2 said they had to get the house sale agreed asap as their AIP was running out (i.e. need to be sale agreed to get the amount they need).
So maybe May June time will give a better indication of exactly where we are?

For first-time buyers, a 10% deposit is needed up to 220k. Maybe some of the people at the viewing were second-time buyers or investors who will be hit by the 20% rule.

In general, I'd guess the biggest impact will be felt the further you get from 220k i.e. FTBs looking at 300k houses currently need around 25-30k but would need 38 under new rules.

That said, we were outbid by two people recently: one a retiree buying for offspring living overseas and another was trading up but mortgage-free on existing house. Not everyone scrimping and saving (unfortunately!)

gmisk

Deleted User wrote: »

For first-time buyers, a 10% deposit is needed up to 220k. Maybe some of the people at the viewing were second-time buyers or investors who will be hit by the 20% rule.

In general, I'd guess the biggest impact will be felt the further you get from 220k i.e. FTBs looking at 300k houses currently need around 25-30k but would need 38 under new rules.

That said, we were outbid by two people recently: one a retiree buying for offspring living overseas and another was trading up but mortgage-free on existing house. Not everyone scrimping and saving (unfortunately!)

You could be right. I would say the 3.5 thing would also have an affect?
I was bidding on a house recently as well, I had an offer of 180, but they went with 175 as they were a cash buyer, gutted to say the least. But hey will keep looking!

gmisk

gmisk wrote: »

You could be right. I would say the 3.5 thing would also have an affect?
I was bidding on a house recently as well, I had an offer of 180, but they went with 175 as they were a cash buyer, gutted to say the least. But hey will keep looking!

True enough, the 3.5 rule is probably underestimated.

That's interesting about sellers opting for cash. I suppose they avoid the risk of AIPs falling through. Bad news for you and me though!

gaius c

johnp001 wrote: »

So if this is a buyer trying to use an expiring AIP who would not be eligible under the new LTV or LTI limits there is a strong chance that they might have to pull out of the purchase due to difficulties drawing down their finance.

I know from friends and colleagues that virtually nobody is getting drawdown of the full amount of what they got in AIP. If buyers are using "AIP + cash" as their budget figure, there's a good chance that any potential sale agreed from that will fall through as the bank revise their figures.

handlemaster wrote: »

http://www.myhome.ie/pricechanges?page=2&RegionID=1265&LocalityIDs=

latest price drops in Dublin. quiet a few

Something to bear in mind that EA's almost never raise the asking price of a house, even if there is a sustained bidding war.

However, there is no doubt that the pace and size of the drops is increasing. Bull market is over.

gmisk

Unfortunately it is.
The good thing is I haven't been affected by the new rules at all, so will keep looking. Best of luck!

Bob24

johnp001 wrote: »

I don't understand how the CBI have written the opposite of what they intend to happen, could you clarify?

I mean why would they have announced "If you have approval in principle, supported by a full credit assessment, prior to the effective date of the Regulations, you will not be impacted by these regulations for the duration of your mortgage approval."; if in practice they expected the banks to massively push back on customers trying to use these AIPs. I don't see why the CBI would mislead everyone and waste buyers, sellers, and AEs time as this would inevitably lead to high number of properties going sale agreed only for the deal to fall through due to the bank's refusal.

johnp001 wrote: »

The CBI wanted to reduce the exposure of the banks that they regulate in a volatile property market. Their initial proposal and eventual rules were both unambiguously geared to this purpose.

It was an unfortunate knock-on effect (caused by commercial realities of a competitive banking sector) that this led to the vast swathes of AIPs that have been issued and further uncertainty/volatility for both buyers and sellers.
AIPs are always non-binding for the banks so it makes sense that the more they issue the more picky they can be about who is allowed the privilege of becoming a customer.

I have certainly seen several situations locally (from December on) where an agreed sale has fallen through due to failure to draw down finance but I don't know how this phenomenon is going to be captured by statistics.
Signs that it is happening may be EA starting to advise owners against accepting offers from buyers with pre-rule AIPs, Sale Agreed being re-advertised, asking price drops etc...

Yes agreed with all of that.

Bob24

Deleted User wrote: »

That's interesting about sellers opting for cash. I suppose they avoid the risk of AIPs falling through. Bad news for you and me though!

Indeed ... hopefully the situation around this can be clarified soon.

johnp001

johnp001 wrote:

I don't understand how the CBI have written the opposite of what they intend to happen, could you clarify?

Bob24 wrote: »

I mean why would they have announced "If you have approval in principle, supported by a full credit assessment, prior to the effective date of the Regulations, you will not be impacted by these regulations for the duration of your mortgage approval."; if in practice they expected the banks to massively push back on customers trying to use these AIPs. I don't see why the CBI would mislead everyone and waste buyers, sellers, and AEs time as this would inevitably lead to high number of properties going sale agreed only for the deal to fall through due to the bank's refusal.

I think the intention of the CBI was to ease the transition, meaning that someone in the middle of buying a house according to the old rules would not have the sale fall through at a late stage as this could be considered unfair on the buyer, the seller and the bank.
The banks, as is typical for any commercial entity, used the letter of the law rather than the spirit of it to try and gain commercial advantage leading to the quickly fading attempt at a mini bull market based on the (unlikely in my view) possibility of the banks following through on all these AIPs that contravene the directive but not the actual rule.

Gaius's post above and the unfortunate experience by gmisk in relation to losing out to a lower offer from a cash buyer both corroborate this viewpoint.

gmisk

johnp001 wrote: »

I think the intention of the CBI was to ease the transition, meaning that someone in the middle of buying a house according to the old rules would not have the sale fall through at a late stage as this could be considered unfair on the buyer, the seller and the bank.
The banks, as is typical for any commercial entity, used the letter of the law rather than the spirit of it to try and gain commercial advantage leading to the quickly fading attempt at a mini bull market based on the (unlikely in my view) possibility of the banks following through on all these AIPs that contravene the directive but not the actual rule.

Gaius's post above and the unfortunate experience by gmisk in relation to losing out to a lower offer from a cash buyer both corroborate this viewpoint.

You have hit the nail on the head I think.

Basically the banks are finding a way around the new rules in the short term at least.
The house I looked at yesterday was a probate sale so wasn't going to go quickly as the EA pointed out, the prospective purchaser said the bank said it would be fine as long as it was sale agreed in the next 3 weeks (he readily admitted under the new rules he wont be get mortgage approval for the same amount).

I will keep looking around and putting in offers that I think are fair for houses I can see myself living in for at next the least 10 years, otherwise I will bide my time and move out of Dublin in the next few years.

Cuddlesworth

Bob24 wrote: »

I really don't understand why someone would disclose that information :eek:

When it comes to what would be the largest purchase of most people's lives, it shouldn't really be surprising to you that Irish people seem to place very little emphasis on shrewd business practises. Otherwise we wouldn't be in this position.

PixieOD

handlemaster wrote: »

latest price drops in Dublin. quiet a few

Actually, I've noticed a considerable drop in Houses added/Price reductions this week compared to the last 2 weeks.

johnp001

gmisk wrote: »

You have hit the nail on the head I think.

Basically the banks are finding a way around the new rules in the short term at least.
The house I looked at yesterday was a probate sale so wasn't going to go quickly as the EA pointed out, the prospective purchaser said the bank said it would be fine as long as it was sale agreed in the next 3 weeks (he readily admitted under the new rules he wont be get mortgage approval for the same amount).

I will keep looking around and putting in offers that I think are fair for houses I can see myself living in for at next the least 10 years, otherwise I will bide my time and move out of Dublin in the next few years.

No, I don't think the banks are finding a way around the new rules.
In order to increase their pool of potential customers the banks appeared to offer a potential way to circumvent the rules (with pre-existing AIPs before the date the rules came into effect) but as detailed above it seems unlikely that they will honour these.

DublinDilbert

The race is definitely on by the developers to get people to put down deposits before supply increases and/or money runs out.

Last weekend I saw two builders putting up the facades of 3 houses in the corner of a derelict car park in Dublin 7/11/15 (not sure which post code as its exactly where all these areas meet). They looked like the front of 2 bed houses and were only about 2 feet deep.

helimachoptor

went to view a couple of houses off Clonkeen road (SCD) at the weekend.

Owner knocked his house and built 3 circa 200 sqm houses (terraced)

2 are up for sale.

nice bright spacious houses, 2 reception rooms downstairs, massive shower/bathroom, massive utility room, enormous kitchen/dining room.
Big rooms upstairs and potential to floor the attic.

Could turn these into 6 bedroom + attic bedroom if you were so inclined.

Tiny garden.. ridiculous price for the 2 of them (mid and end of terrace). First viewing was last weekend, interested to see what way they go

These ones?
http://myhome.ie/residential/brochure/56b-meadow-vale-deansgrange-co-dublin/3110334

http://myhome.ie/residential/brochure/56c-meadowvale-deansgrange-co-dublin/3110397

Wowsa. 575k for end of terrace; 550k for mid-terrace. They are very nicely designed with a good bright living area - and, unlike some new-builds, have decent gardens. But those prices....

I know there's a whole thread on the pros and woes of commuting but the bang for buck in this part of the world is shocking. I don't know the area that well but it doesn't look particularly swanky/close to town/close to the sea. No doubt it's nice, safe, settled etc.

Obviously if you work there or have family nearby then this is where you go house shopping but if you can get away with living further out (i.e. it doesn't require a two hour daily commute) you'd be rich!

Under the Central Bank mortgage rules, to buy a 575k house, a buyer would need 115k deposit (80% of purchase price) and an income of 131k (to quality for a mortgage 3.5 income). And you'd end up with a terrace/mid-terrace in a built-up estate.

Sorry Helimachoptor, I know this is hardly news to you and I'm sure it grieves you every freaking day! Hopefully serious price drops come in for this kind of house.

The owner is looking to get 1.125 million on the sale of two nice houses. But how much did it cost him to build them? I reckon he could afford to discount them substantially (presuming there are no buyers at this level) and still sleep on a bed of money.

mel123

Sorry for the stupid question, but when ye are referring to 'cash' buyers, what exactly do you mean? Cash buyer as in ready to rock with a mortgage and deposit, or are these people buying a house for the full amount of asking price in 'cash'?

seamus

Deleted User wrote: »

Wowsa. 575k for end of terrace; 550k for mid-terrace. They are very nicely designed with a good bright living area - and, unlike some new-builds, have decent gardens. But those prices....

Price per sq.m. is pretty good, and for many that location would be a lot more desirable than, e.g. Hersil Wood in Knocklyon. You're a stone's throw from the "elite" of Foxrock.
Interesting that they were built in 2008 and he's selling now though. Maybe he was waiting for market recovery.

Under the Central Bank mortgage rules, to buy a 575k house, a buyer would need 115k deposit (80% of purchase price) and an income of 131k (to quality for a mortgage 3.5 income). And you'd end up with a terrace/mid-terrace in a built-up estate.

A couple who bought in 2000 at the age of 25, could easily have €115k or more in equity at this stage between being halfway through their mortgage and the recovery in property prices.

I know what you're saying about crazy prices, but these don't actually seem all that crazy in respect of their location.

seamus

mel123 wrote: »

Sorry for the stupid question, but when ye are referring to 'cash' buyers, what exactly do you mean? Cash buyer as in ready to rock with a mortgage and deposit, or are these people buying a house for the full amount of asking price in 'cash'?

Full amount, in cash (i.e. sitting in a bank account waiting to be used).

Someone with mortgage approval is not a cash buyer because they couldn't sign contracts and close today, where a cash buyer can. A non-cash buyer is more risky too as if the bank pulls the approval, they can't buy your house.

helimachoptor

Yep thats them, there's also the first house "A" which i assume the owners live in or has been sold already.

Yep mature enough area (though across the park is Macintosh which wouldn't have the greatest rep but has gentrified a fair but) the rest of the houses in the estate are on average 130 sq m but for the most part require a lot of cosmetic work anyway and they're anywhere from 500-550K.

I grew up down the road, so it would suit in that regards and would suit for work, home life etc.

Yeah, i think if it was a semi D we'd consider if the price came down, for a terrace it would need to drop considerably tbh.

The hunt continues, couple more viewings this weekend, as time goes on we are just saving more and more which will ultimately reduce the cost of the mortgage but yes still a little grating to see such a ridiculous price, hopefully around mid year as 10%-ers fall out of the market things may reduce but who knows tbh.

An interesting fact is a few houses we were interested in have been sale agreed for quite a while but no sign of them actually selling

by the seaside

mel123 wrote: »

Sorry for the stupid question, but when ye are referring to 'cash' buyers, what exactly do you mean? Cash buyer as in ready to rock with a mortgage and deposit, or are these people buying a house for the full amount of asking price in 'cash'?

CAsh buyer means no mortgage needed. They have the money.

seamus

seamus wrote: »

Full amount, in cash.
Someone with mortgage approval is not a cash buyer because they couldn't sign contracts and close today, where a cash buyer can.

I always think of 'cash buyer' as being 100% cash and I think that's what gmisk's post was referring to where the seller favoured a cash offer even though it was 5k lower than a bid from someone who needed a mortgage.

But I do see/hear some people talking about 'cash buyers' as people who have a supersized deposit. Wouldn't be much of an advantage in terms of getting a sale closed quickly, although maybe the risk of a bank offering less than they had hoped would be greater for an 80% mortgage versus a 40% mortgage.

Short answer: I think of cash as 'all cash, no mortgage'.

helimachoptor

by the seaside wrote: »

CAsh buyer means no mortgage needed. They have the money.

there was a retired couple at the viewing actually, they mentioned they were buying in cash to the EA.

Seems like a monster house for 2 old people tbh

seamus

helimachoptor wrote: »

Seems like a monster house for 2 old people tbh

Grandchildren.

The ability to have the whole family over, kids in tow on a sunny Sunday afternoon.

Plus, a settled older location (no fighting with neighbours, no teenagers hanging around causing hassle), and in close proximity to a large private hospital.

My in-laws, at the same time that all of their children moved out, bought a house, pulled it down and put a huge house in its place. So they could have everyone over for meals, parties, etc.

helimachoptor

helimachoptor wrote: »

Yep thats them, there's also the first house "A" which i assume the owners live in or has been sold already.

Yep mature enough area (though across the park is Macintosh which wouldn't have the greatest rep but has gentrified a fair but) the rest of the houses in the estate are on average 130 sq m but for the most part require a lot of cosmetic work anyway and they're anywhere from 500-550K.

I grew up down the road, so it would suit in that regards and would suit for work, home life etc.

Yeah, i think if it was a semi D we'd consider if the price came down, for a terrace it would need to drop considerably tbh.

The hunt continues, couple more viewings this weekend, as time goes on we are just saving more and more which will ultimately reduce the cost of the mortgage but yes still a little grating to see such a ridiculous price, hopefully around mid year as 10%-ers fall out of the market things may reduce but who knows tbh.

An interesting fact is a few houses we were interested in have been sale agreed for quite a while but no sign of them actually selling

Yeah I see from MyHome that those new houses are actually relatively good value. Other houses are smaller, in worse condition, inferior layouts and lower BER rating.

Still, those one just look even madder. Surely this is not sustainable once the new rules are fully in effect. Alas, this time last year I had great reasons why prices couldn't go much higher - only for things to go loco in spring/summer!

As you say, provided the prices are not rocketing and you can save a bit, you don't get that sense of going backwards (which drove me mad last summer: save 1k, house prices go up 10k:o)

helimachoptor

helimachoptor wrote: »

there was a retired couple at the viewing actually, they mentioned they were buying in cash to the EA.

Seems like a monster house for 2 old people tbh

We got outbid on a four-bed house recently by an old couple. Maybe they were buying for overseas offspring but the agent reckoned it was for themselves.

I suppose the having-grandchildren-over idea is possible. You definitely need a spare bed or two if you can afford it. The sellers were in their early 60s and 'downsizing'. Weird that they will be replaced by people older than themselves.

helimachoptor

seamus wrote: »

Grandchildren.

The ability to have the whole family over, kids in tow on a sunny Sunday afternoon.

Plus, a settled older location (no fighting with neighbours, no teenagers hanging around causing hassle), and in close proximity to a large private hospital.

My in-laws, at the same time that all of their children moved out, bought a house, pulled it down and put a huge house in its place. So they could have everyone over for meals, parties, etc.

Do a couple of meal sittings :pac:

I see the appeal for sure, the open plan living room/kitchen is very handy but there's a lot of unused space a lot of the time

Deleted User wrote: »

Yeah I see from MyHome that those new houses are actually relatively good value. Other houses are smaller, in worse condition, inferior layouts and lower BER rating.

Still, those one just look even madder. Surely this is not sustainable once the new rules are fully in effect. Alas, this time last year I had great reasons why prices couldn't go much higher - only for things to go loco in spring/summer!

As you say, provided the prices are not rocketing and you can save a bit, you don't get that sense of going backwards (which drove me mad last summer: save 1k, house prices go up 10k:o)

They are better value than the other houses for sure, bigger and better use of space, better BER, i'd expect other sellers to knock 50-70K off their own asking but imagine they wont.

My preference would be clonkeen road, however most are in bits and require a lot of work and the ones that are in decent shape seem to be selling for 575-600K, i think the enormous gardens are helping.

Keep on saving and keep on looking at this point..

MarkAnthony

Cash buyers are people not needing a mortgage, they also need to have that cash as a liquid asset to be the most desirable type of buyer, not tied up in the sale of their current house. Another type of desirable buyer is someone who is not in a chain. Ideally not a First Time Buyer by typically they are FTBs.

A desirable buyer may be able to leverage a lower price on the basis the sale is less likely to fall through. They may even be able to undercut a bid by someone in a chain.

Montroseee

Is anybody else a little a bit dazed by the market at the moment? I hear people talking about price reductions, all I'm sseeing are increases. 3 or 4 bed semi d's in Dalkey, Clontarf, Clonskeagh, Sandycove etc. going for 700k and more in some cases. These are not far off boom time prices and the thing is, the houses are actually selling and fairly quickly at that.

MarkAnthony

MarkAnthony wrote: »

Cash buyers are people not needing a mortgage, they also need to have that cash as a liquid asset to be the most desirable type of buyer, not tied up in the sale of their current house. Another type of desirable buyer is someone who is not in a chain. Ideally not a First Time Buyer by typically they are FTBs.

A desirable buyer may be able to leverage a lower price on the basis the sale is less likely to fall through. They may even be able to undercut a bid by someone in a chain.

I asked an agent once if I could bid the same amount as the leading bid because I was an FTB and not in a chain whereas the other bidder was trying to sell a house so they could trade up. The answer was 'yes' - making me wish I'd actually offered less than the highest bid

In the end, we both got outbid by an investor. This was last Sept when investors with cash were very actively trying to take advantage of the Capital Gains Tax exemption before it was too late.