Property Market 2015

The_Conductor

cherryghost wrote: »

Can someone give me a lowdown on why house prices in Balbriggan are low? Scanning over the net the area itself seems fine and has a few transport links to the cc...

Some of the guys had a Pros and Cons to Living in Balbriggan thread a few months ago. Its a good starting point........ Link here

seamus

cherryghost wrote: »

Can someone give me a lowdown on why house prices in Balbriggan are low? Scanning over the net the area itself seems fine and has a few transport links to the cc...

Primarily because it's so far out. It might be Dublin, but if you look at it on a map, you can see that Dublin City itself is very in the South of the county, whereas Balbriggan is right up North.
There are big towns in Kildare that are closer to the city than Balbriggan.

It was also very much a destination town in the Celtic Tiger, lots of undeveloped land so lots and lots of cheap properties went up, "Co. Dublin, only 40 minutes from the City!", etc.
So I imagine there's still quite an oversupply of properties up there and a lot of very young communities, still settling, and still lacking the facilities that a more established town will have.

cherryghost

Cheers for the feedback, Balbriggan is on my radar along with Celbridge/Leixlip, the latter two while slightly higher in price are more attractive to me.

bohsfan

Just went sale agreed on a property today. Early days still, anything can happen, but thought I would share my experience.

Our catchment area was the commuter towns in Kildare. Primarily Celbridge, Maynooth, Leixlip in the north and Sallins, Naas in the south. We wanted a 3 bed semi-d with a budget of 200k to 240k.

Our experience was of a severe shortage of supply. There was only a handful of properties on the market, with many people viewing at the same time as us. We ended up in a couple of bidding wars. With houses we were interested in, in all cases the bidding exceeded the asking price. One bungalow had moved to 18k over asking when we stopped following its progress.

In the end we have settled in a place for 4k over what was asked. I do feel that prices are a little high at this time and may be in line for a slight haircut- but it was the right time for us to buy and this will be a house with the next 10 years in mind, so we are happy to commit.

It is interesting to read discussion about dropping prices in Dublin, but within our market we certainly saw no signs of that. Who knows what will happen in the next year though!

Congrats bohsfan! Hope it works out for you.

My guess about what might happen in that price bracket is that things won't fall all that much. The new mortgage lending rules might even push some people who were in the 250k-300k bracket into the 200-250k bracket.

And if prices dip, say, 5% in a year (that's not a prediction!) on a 240k house, that's 12k. You'd probably spend something like that in rent.

If the house suits you I'd have no qualms. Best of luck with closing!
(I'm looking in N. Kildare by the way so I know your pain)

rathmoresham

Just looking at all the talk of sale agreed deals falling through. I'm wondering would renegotiations make up a small minority of fall throughs? I'm going to try renegotiate a sale agreed price with a difficult to deal with estate agent as my surveyor told me there is about €7,500 reparations needed to the house. Anybody have any advice? I know that the vendors are keen to move and that there hasn't been any other bidding on the house. Sorry if this constitutes hijacking.

Paulo1977

Hi,

Has anyone been able to get their bank to shift on the 30% deposit rule for non primary dwelling? The legislation allows the bank 10% of loans to fall outside the 70% LTV parameters.

Thanks

Barely Hedged

johnp001 wrote: »

The reason I anticipate the kind of turnaround in the market I described above is because not only is the stock of properties in Dublin increasing but the rate at which supply is increasing is also increasing and this is a positive feedback loop.
e.g. Daft report figures
Dec 1st 2014: supply up 33% on Dec 1st 2013
Mar 1st 2015: supply up 56% on Mar 1st 2015
if that trend was to continue (and stock has continued rising since Mar 1st) then we could have Jun 1st stock up 75% YoY and a full on bear market/rush to the exits situation.

What percentage drop quantifies a "full on bear market/rush to the exits situation"?

Anecdotally on this forum, a lot of people are still seeing busy open viewings. With an increasing supply, doesnt the existence of this situation not suggest that the increase in supply will be fully supported by this large demand and that a "full on bear market/rush to the exits situation" wont happen?

johnp001

Barely Hedged wrote: »

What percentage drop quantifies a "full on bear market/rush to the exits situation"?

Anecdotally on this forum, a lot of people are still seeing busy open viewings. With an increasing supply, doesnt the existence of this situation not suggest that the increase in supply will be fully supported by this large demand and that a "full on bear market/rush to the exits situation" wont happen?

That hypothesis seems less likely for a number of reasons.
E.G. today's IT article on latest CB lending figures states:

"Loans for house purchase, which account for 82 per cent of total household loans, declined at an annual rate of 2.7 per cent."

In the case that the increased supply was being fully consumed by pent-up demand you would expect this figure to be an order of magnitude larger and positive.
https://www.irishtimes.com/business/economy/spurt-in-non-mortgage-lending-linked-to-car-sales-1.2195219

Barely Hedged

johnp001 wrote: »

That hypothesis seems less likely for a number of reasons.
E.G. today's IT article on latest CB lending figures states:

In the case that the increased supply was being fully consumed by pent-up demand you would expect this figure to be an order of magnitude larger and positive.
https://www.irishtimes.com/business/economy/spurt-in-non-mortgage-lending-linked-to-car-sales-1.2195219

What's your answer to my previous question:

What percentage drop quantifies a "full on bear market/rush to the exits situation"?

To be honest, I can't deuce any significant insight from the article you have posted. I don't see how a lack of mortgage draw downs from March 2014 to March 2015 would tell us anything about how it will impact supply that has only really increased in the last 2/3 months when on average it takes 4 months to complete on a house purchase with a mortgage

johnp001

Barely Hedged wrote: »

What's your answer to my previous question:

What percentage drop quantifies a "full on bear market/rush to the exits situation"?

To be honest, I can't deuce any significant insight from the article you have posted. I don't see how a lack of mortgage draw downs from March 2014 to March 2015 would tell us anything about how it will impact supply that has only really increased in the last 2/3 months when on average it takes 4 months to complete on a house purchase with a mortgage

My post which you quoted gives figures stating significant and accelerating increase of supply since Dec 1st 2013. I do not understand on what basis you say supply has only increased in last 2/3 months.

If the extra supply coming on the market was was being fully consumed by demand then you would expect to see an increase in loans for house purchase over the period that the supply was coming onto the market commensurate with the extra amount of supply rather than a reduction in these loans.

Barely Hedged

johnp001 wrote: »

My post which you quoted gives figures stating significant and accelerating increase of supply since Dec 1st 2013. I do not understand on what basis you say supply has only increased in last 2/3 months.

If the extra supply coming on the market was was being fully consumed by demand then you would expect to see an increase in loans for house purchase over the period that the supply was coming onto the market commensurate with the extra amount of supply rather than a reduction in these loans.

Third time lucky

What percentage drop quantifies a "full on bear market/rush to the exits situation"?

I cant remember where i was looking at the numbers, cant find the link, but supply has increased again considerably from the turn of the year.

Were talking about a drop in mortgages in the year 2014. This is the same year the CGT exemption expired and cash buyers represented the majority of the market? Seems reasonable to see a drop off in mortgages with an increase in cash buyers

johnp001

Barely Hedged wrote: »

Third time lucky

What percentage drop quantifies a "full on bear market/rush to the exits situation"?

I cant remember where i was looking at the numbers, cant find the link, but supply has increased again considerably from the turn of the year.

Were talking about a drop in mortgages in the year 2014. This is the same year the CGT exemption expired and cash buyers represented the majority of the market? Seems reasonable to see a drop off in mortgages with an increase in cash buyers

I fully agree supply has increased again considerably this year. The increase in the supply in the Dublin market is what I contend will cause the potential for price falls.
Your argument was that this supply increase would be taken up by demand based on some viewings being busy. I replied with a current statistic that suggests that this is not what happening. You are free to argue the relevance of that statistic.

However your argument (paraphrased below) now seems entirely contradictory.
There was a major increase in supply in 2014 but this was fully absorbed by demand because there was a prevalence of cash buyers in 2014, motivated by imminent CGT exemption expiry.
While at the same time:
Supply is increasing by even more in 2015 when there is no tax incentive for investors but it will still be fully absorbed by demand based on anecdotal evidence of busy viewings.

Unless I am missing something in your argument I am not convinced.

Barely Hedged

For the fourth time - it would be common decency to reply to it at this stage:

What percentage drop quantifies a "full on bear market/rush to the exits situation"?

johnp001 wrote: »

I fully agree supply has increased again considerably this year. The increase in the supply in the Dublin market is what I contend will cause the potential for price falls.
Your argument was that this supply increase would be taken up by demand based on some viewings being busy. I replied with a current statistic that suggests that this is not what happening. You are free to argue the relevance of that statistic.

You stated:

"Loans for house purchase, which account for 82 per cent of total household loans, declined at an annual rate of 2.7 per cent."

Cash transactions were significant last year due to the expiry of the CGT exemption. This pushed the number of mortgage completions down. Its obvious this was the reason for the drop off. It does not point to a decreasing demand which when coupled with increasing supply will lead to a "full on bear market/rush to the exits situation". It was purely cash pushing mortgage buyers out of the market. Those mortgage buyers havnt gone anywhere.

johnp001 wrote: »

However your argument (paraphrased below) now seems entirely contradictory.
There was a major increase in supply in 2014 but this was fully absorbed by demand because there was a prevalence of cash buyers in 2014, motivated by imminent CGT exemption expiry.
While at the same time:
Supply is increasing by even more in 2015 when there is no tax incentive for investors but it will still be fully absorbed by demand based on anecdotal evidence of busy viewings.

Unless I am missing something in your argument I am not convinced.

Youre basing your interpretation of this on the fact that mortgage drawdowns decreased => shrinking pool of buyers. This is simply not true. There is a large pool of buyers, as evidenced by busy open viewings, just that they were pushed out of the market last year - evidence of this => continuing boom in the rental market. So supply might be increasing, although it is still 88% below peak levels as of start of February, but its not even near enough to keep up with demand. You will see a positive increase in mortgage drawdowns between March 2015 and March 2016

Greyian

Barely Hedged wrote: »

You stated:

"Loans for house purchase, which account for 82 per cent of total household loans, declined at an annual rate of 2.7 per cent."

Cash transactions were significant last year due to the expiry of the CGT exemption. This pushed the number of mortgage completions down. Its obvious this was the reason for the drop off. It does not point to a decreasing demand which when coupled with increasing supply will lead to a "full on bear market/rush to the exits situation". It was purely cash pushing mortgage buyers out of the market. Those mortgage buyers havnt gone anywhere.

Just on that, while there may have been (and I'd fully expect that there was) an increase in cash buyers, total residential property sales in 2014 stood at €9.303 billion, compared with €6.040 billion in 2013.

That's a jump of 54% in sales (in value, not in # of units) between 2013 and 2014. Can you really say with any certainty that cash transactions pushed the number of mortgage completions down? Did cash sales really jump by more than €3.3 billion on the previous year, causing a drop in mortgage sales, or did mortgage drawdowns drop because people were feeling that there was less value (and, as a result, less inclined to buy)?

Barely Hedged

Greyian wrote: »

Just on that, while there may have been (and I'd fully expect that there was) an increase in cash buyers, total residential property sales in 2014 stood at €9.303 billion, compared with €6.040 billion in 2013.

That's a jump of 54% in sales (in value, not in # of units) between 2013 and 2014. Can you really say with any certainty that cash transactions pushed the number of mortgage completions down? Did cash sales really jump by more than €3.3 billion on the previous year, causing a drop in mortgage sales, or did mortgage drawdowns drop because people were feeling that there was less value (and, as a result, less inclined to buy)?

Might be worth considering the appreciation in prices between those years. Let say 15% - 20%. Accounts for over 1bn of the 3.3bn.

Can i say that the rest is attributable to cash buyers - definitely not. Were they a significant contributor - yes. Why? Expiration of CGT and search for yield as evidence started to mount that EUR rates were going nowhere soon in 2014.

johnp001

Barely Hedged wrote: »

For the fourth time - it would be common decency to reply to it at this stage:

What percentage drop quantifies a "full on bear market/rush to the exits situation"?

This sort of question only serves to divert the discussion and does not elucidate. You used the phrase yourself in your last post indicating that it is commonly understood what is meant.

Barely Hedged wrote: »

You stated:

"Loans for house purchase, which account for 82 per cent of total household loans, declined at an annual rate of 2.7 per cent."

Cash transactions were significant last year due to the expiry of the CGT exemption. This pushed the number of mortgage completions down. Its obvious this was the reason for the drop off. It does not point to a decreasing demand which when coupled with increasing supply will lead to a "full on bear market/rush to the exits situation". It was purely cash pushing mortgage buyers out of the market. Those mortgage buyers havnt gone anywhere.



Youre basing your interpretation of this on the fact that mortgage drawdowns decreased => shrinking pool of buyers. This is simply not true. There is a large pool of buyers, as evidenced by busy open viewings, just that they were pushed out of the market last year - evidence of this => continuing boom in the rental market. So supply might be increasing, although it is still 88% below peak levels as of start of February, but its not even near enough to keep up with demand. You will see a positive increase in mortgage drawdowns between March 2015 and March 2016

I disagree with your conclusions.
You rejected my earlier hypothesis about the effects of major continuing increases in the Dublin housing stock, based on your interpretation of some observations that you admit yourself are anecdotal.
I then replied to that with a counter argument based on current statistics. Your reply to that above is based on prophetic knowledge of next year's mortgage drawdown statistics so I remain unconvinced.

I maintain that continued accelerating increase of supply into the Dublin market will have a downward effect on prices and gave an example based on the sudden sharp drops in sale prices that can take place when the number of bidders for properties decreases.
As you point out above, the absence of tax incentives for non-PPR purchasers since December 2014 will be a factor in price movements in 2015.
I see this as exerting a downward pressure on prices and do not follow your argument that it will somehow make prices increase in 2015 - precognition of future statistics notwithstanding.

The_Conductor

Mod note:

Guys- its not difficult to remain civil towards one another.
If you are unhappy with what another posts- refute the post, without attacking the poster.

Getting snippy with one another- achieves nothing.

MayBea

Some of the astonishing asking prices bemuses me personally:
this modest bungalow asks for nearly 800k http://www.myhome.ie/residential/brochure/carna-ardtona-avenue-churchtown-dublin-14/3142520
Am I the only one who thinks some vendors have out of reality pricing expectations :rolleyes:

cherryghost

People will pay for the area you live in, so they will push their luck. Not worth 800k but someone somewhere might foolishly agree with it.

gaius c

MayBea wrote: »

Some of the astonishing asking prices bemuses me personally:
this modest bungalow asks for nearly 800k http://www.myhome.ie/residential/brochure/carna-ardtona-avenue-churchtown-dublin-14/3142520
Am I the only one who thinks some vendors have out of reality pricing expectations :rolleyes:

At nearly €600 per sq ft, it clearly is somewhat "optimistic" in terms of pricing.

Anyone know what these were asking/selling for during the bubble?

MayBea

gaius c wrote: »

At nearly €600 per sq ft, it clearly is somewhat "optimistic" in terms of pricing.

Anyone know what these were asking/selling for during the bubble?

The only one I found is 18 Flemingstown Park, Churchtown - was asking for over 1m, but sold for 595k in June last year (this was a 4-bed though).

gaius c

Re stock levels in Dublin:

33% YoY increase in Dublin stock on December 1st 2014 (source Daft report)
56% YoY increase in Dublin stock on March 1st 2015 (source Daft report)
61% YoY increase in Dublin stock at end of April

If it keeps increasing at this rate, there will be significant price drops.

I reckon it'll be -5 to -10% for the year in December.

Barely Hedged

johnp001 wrote: »

This sort of question only serves to divert the discussion and does not elucidate. You used the phrase yourself in your last post indicating that it is commonly understood what is meant.

It is the most fundamental appraisal of the the title of the thread.

By not answering it in your posts, it diminishes your argument significantly. Theres no substance to the phrase you have used and its a lazy analysis of the situation. i.e. prices falling implies a collapse in the housing market. Prices can fall but the market doesnt have to collapse.

Can you quantify the phrase in percentage terms please: "full on bear market/rush to the exits situation"

johnp001 wrote: »

I disagree with your conclusions.
You rejected my earlier hypothesis about the effects of major continuing increases in the Dublin housing stock, based on your interpretation of some observations that you admit yourself are anecdotal.
I then replied to that with a counter argument based on current statistics. Your reply to that above is based on prophetic knowledge of next year's mortgage drawdown statistics so I remain unconvinced.

I maintain that continued accelerating increase of supply into the Dublin market will have a downward effect on prices and gave an example based on the sudden sharp drops in sale prices that can take place when the number of bidders for properties decreases.
As you point out above, the absence of tax incentives for non-PPR purchasers since December 2014 will be a factor in price movements in 2015.
I see this as exerting a downward pressure on prices and do not follow your argument that it will somehow make prices increase in 2015 - precognition of future statistics notwithstanding.

But you have failed to analyse what your statistics mean or the reason for them. Youre taking them blind, at face value:

• Major increases in supply - ill agree theres been an increase but as of the start of February its still 88% below supply at the peak. Supply still has a long way to go before it can match demand. Youre hypothesis is that currently demand is being met and that any further supply will lead to price falls. If demand is currently being met, why the boom in the rental market and busy open viewings? Its clearly not the case that as it stands that demand is being met by supply. You also also assume that supply will increase in factors of the current stock. Thats also "prophetic"

• Mortgage drawdowns down < 3% yoy - in a year that was dominated by cash sellers am i shocked mortgage drawdowns are down - absolutely not. Cash buyers exiting wont lead to price drops because demand is not being met by supply. Ssupply will need to be much, much higher than it is now or the best case situation you predict to lower prices. Ive bid on properties that cash buyers have got for 10% less than i bid because they could close in a week. So, you could also deduce that in some cases prices were transacting at less than their market rate because of the cash buyers.

Barely Hedged

gaius c wrote: »

Re stock levels in Dublin:

If it keeps increasing at this rate, there will be significant price drops.

I reckon it'll be -5 to -10% for the year in December.

An interesting analysis would be what the increases were in absolute terms. The demand p.a. figure is bandied about a good bit so it would be good to equate the two to get a proper understanding.

Percentages presented like this can be misleading

Eugene Norman

Barely Hedged wrote: »

It is the most fundamental appraisal of the the title of the thread.

By not answering it in your posts, it diminishes your argument significantly. Theres no substance to the phrase you have used and its a lazy analysis of the situation. i.e. prices falling implies a collapse in the housing market. Prices can fall but the market doesnt have to collapse.

Can you quantify the phrase in percentage terms please: "full on bear market/rush to the exits situation"



But you have failed to analyse what your statistics mean or the reason for them. Youre taking them blind, at face value:

• Major increases in supply - ill agree theres been an increase but as of the start of February its still 88% below supply at the peak. Supply still has a long way to go before it can match demand. Youre hypothesis is that currently demand is being met and that any further supply will lead to price falls. If demand is currently being met, why the boom in the rental market and busy open viewings? Its clearly not the case that as it stands that demand is being met by supply. You also also assume that supply will increase in factors of the current stock. Thats also "prophetic"

• Mortgage drawdowns down < 3% yoy - in a year that was dominated by cash sellers am i shocked mortgage drawdowns are down - absolutely not. Cash buyers exiting wont lead to price drops because demand is not being met by supply. Ssupply will need to be much, much higher than it is now or the best case situation you predict to lower prices. Ive bid on properties that cash buyers have got for 10% less than i bid because they could close in a week. So, you could also deduce that in some cases prices were transacting at less than their market rate because of the cash buyers.

Its supply over demand you need to look at of course. If supply in the boom was 100,000 and 100,000 were sold then supply = demand. Any fairly rapid increase in the number of houses on the DAFT list, or MyHome or other sources is an indication of increasing supply over demand however -- although flow is something you need to take into account as well -- and thats up this year, and up more than 100% since end 2013. This tends to be a leading indicator, as fell from the boom until late 2013 but prices didn't rise until that floor.

Cash does of course dominate, the argument is whether it continues to or not. Will cash buyers rush into a declining market. Generally it wouldn't be expected to.

In any case medium term any increase in interest rates would probably see a cash exit fairly quick ( although there is that 7 year term on CGT,) as the greybeards are not looking to be landlords at their time of lives but to live off capital in some form. If they can get 4% in some bond, or savings account then thats where they go, and where they won't get calls to fix the washing machine at 11pm.

Barely Hedged

Eugene Norman wrote: »

Its supply over demand you need to look at of course. If supply in the boom was 100,000 and 100,000 were sold then supply = demand. Any fairly rapid increase in the number of houses on the DAFT list, or MyHome or other sources is an indication of increasing supply over demand however -- although flow is something you need to take into account as well -- and thats up this year, and up more than 100% since end 2013. This tends to be a leading indicator, as fell from the boom until late 2013 but prices didn't rise until that floor.

The economy is improving and all the major economic statistics are positive for Ireland. Im not surprised, as you say, that were seeing an increase in flow. Its only natural. What i take issue with is that supply is still low even though its increasing in good percentage terms (percentage terms mask the low base it came from).

Eugene Norman wrote: »

Cash does of course dominate, the argument is whether it continues to or not. Will cash buyers rush into a declining market. Generally it wouldn't be expected to.

Who said its declining? Its just below flat this year.

gaius c

Barely Hedged wrote: »

An interesting analysis would be what the increases were in absolute terms. The demand p.a. figure is bandied about a good bit so it would be good to equate the two to get a proper understanding.

Percentages presented like this can be misleading

Not really. Available stock at any one time is a snapshot. If demand is high, you would expect to see it decrease YOY but it has increased suggesting that either demand is not as high as we thought it was or much of the market is priced beyond what the buyers can pay for it.

Either scenario => price drops

Greyian

Barely Hedged wrote: »

Who said its declining? Its just below flat this year.

Well, just below flat would mean declining (or rather, more accurately, declined, seeing as it's past tense)...but it is pretty much what it means...

Barely Hedged

gaius c wrote: »

Not really. Available stock at any one time is a snapshot. If demand is high, you would expect to see it decrease YOY but it has increased suggesting that either demand is not as high as we thought it was or much of the market is priced beyond what the buyers can pay for it.

Either scenario => price drops

So youre saying that supply is increasing because the demand is not there to meet it.

Not because:

• Supply was low because people felt they didnt want to sell for what were depressed prices
• some people can now trade up/sell because banks have made NE mortgages available and price increases have brought them out of NE
• improving economic conditions