Property Market 2015

Barely Hedged

Greyian wrote: »

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...

Jan/Feb are never good months for the property market for obvious reasons.

johnp001

Barely Hedged wrote: »

...

• 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"

What I have posted is not prophetic at all. I pointed out an established trend (increase in Dublin stock) and what I thought the consequence of that trend continuing would be. The argument was based on empirical statistics.
Your previous post discounted the relevance of one of the statistics I had mentioned which is fair enough, I am interested to hear other points of view and get other insights into what these sorts of figures indicate.
Your previous post merely asserted that the statistic would be different in the future without providing evidence for that.

Barely Hedged wrote: »

You will see a positive increase in mortgage drawdowns between March 2015 and March 2016

This is what I referred to as being prophetic.

Barely Hedged wrote: »

• 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.

The market rate is the rate that the property transacts at by definition.

Barely Hedged

johnp001 wrote: »

What I have posted is not prophetic at all. I pointed out an established trend (increase in Dublin stock) and what I thought the consequence of that trend continuing would be. The argument was based on empirical statistics.
Your previous post discounted the relevance of one of the statistics I had mentioned which is fair enough, I am interested to hear other points of view and get other insights into what these sorts of figures indicate.
Your previous post merely asserted that the statistic would be different in the future without providing evidence for that.



This is what I referred to as being prophetic.



The market rate is the rate that the property transacts at by definition.

But you just present statistics and in my view interpret them in simplistic terms

Mortgage drawdowns in 2014 - 2015 down implies price drops on that criteria alone.

Increase in supply in percentage terms means prices will go down.

I know it's an extreme example but if you had 1 house for sale in Dublin and then there was a 100% increase in supply ie another house came on the market. Would that mean prices fall?

I'm not talking about the dictionary definition of market rate. I'm well aware of what it means. You're missing the point of what I said again

johnp001

Barely Hedged wrote: »

But you just present statistics and in my view interpret them in simplistic terms

Mortgage drawdowns in 2014 - 2015 down implies price drops on that criteria alone.

Increase in supply in percentage terms means prices will go down.

I know it's an extreme example but if you had 1 house for sale in Dublin and then there was a 100% increase in supply ie another house came on the market. Would that mean prices fall?

I'm not talking about the dictionary definition of market rate. I'm well aware of what it means. You're missing the point of what I said again

I did not suggest that mortgage drawdown statistics for 2014 could imply drops on that criteria alone at all. That statistic was mentioned only in reference to an earlier argument that you made based solely on anecdotal evidence. I'm open to a different interpretation of this statistic if a better one is proposed.

Consistently increasing stock on the market does mean prices will go down. I was initially discussing the consequences of this, existing, empirically evidenced trend and how it affected the process of bidding for property.

I'm not missing the point of your comment about the market rate. What can be deduced from your experience recounted in your post is nothing about the market rate but only that the market rate is not available equally to different classes of buyers which is common in a lot of different markets.

Barely Hedged

Barely Hedged wrote: »

Jan/Feb are never good months for the property market for obvious reasons.

Seriously, why is that? The CSO figures for Jan/Feb have been down for at least two, if not three, years in a row.

The figures lag houses going sale agreed by a few months. Is it that people want to sew up a load of deals before year end?

I often read the papers saying January is a bad month because of the weather but that doesn't seem to be explain the CSO figures. You'd think the lack of activity in January would show up in April/May.

The_Conductor

Holidays- pure and simple.
Its the same reason you have a commensurate dip in June/July/August- the figures simply shrivel away.
Jan/Feb (and to a lesser extent March) are dry months, April/May (and to a lesser extent June) are ok/good months. June/July/August- dry months. Sept/Oct/Nov (and to a far lesser extent Dec- good months.........

We may not close down like France does in August- but we come damn close to it. Once the teachers go on holidays in June/July- the country slows down and halts.

The_Conductor

The_Conductor wrote: »

Holidays- pure and simple.
Its the same reason you have a commensurate dip in June/July/August- the figures simply shrivel away.
Jan/Feb (and to a lesser extent March) are dry months, April/May (and to a lesser extent June) are ok/good months. June/July/August- dry months. Sept/Oct/Nov (and to a far lesser extent Dec- good months.........

We may not close down like France does in August- but we come damn close to it. Once the teachers go on holidays in June/July- the country slows down and halts.

But but but...even the August CSO figures must be houses that went sale agreed a few months before that.

OfflerCrocGod

A bear market is normally defined as a decline of 20%. It's highly unlikely that we will see -20% this year, as unlikely as +20%.

Far more likely is -/+5%, hopefully those are the sort of price moves we get used to seeing in the Irish property market from now on. I'd say that's what the CB is aiming for.

gaius c

OfflerCrocGod wrote: »

A bear market is normally defined as a decline of 20%. It's highly unlikely that we will see -20% this year, as unlikely as +20%.

Far more likely is -/+5%, hopefully those are the sort of price moves we get used to seeing in the Irish property market from now on. I'd say that's what the CB is aiming for.

For liquid stocks yes. Not particularly relevant to illiquid assets like property.

gaius c

Repos are coming (complete with emotive language).
http://www.independent.ie/business/home-repossession-orders-soar-new-figures-31195330.html

Caliden

gaius c wrote: »

Repos are coming (complete with emotive language).
http://www.independent.ie/business/home-repossession-orders-soar-new-figures-31195330.html

This will only come as a surprise to the 'ostriches'

MarkAnthony

gaius c wrote: »

Repos are coming (complete with emotive language).
http://www.independent.ie/business/home-repossession-orders-soar-new-figures-31195330.html

Drop in the ocean though in terms of demand.

gaius c

MarkAnthony wrote: »

Drop in the ocean though in terms of demand.

It'll increase the transaction rate, increase mobility and remove the foreclosure stuffing from the market. All things needed to normalise the market.

MarkAnthony

gaius c wrote: »

It'll increase the transaction rate, increase mobility and remove the foreclosure stuffing from the market. All things needed to normalise the market.

I'm not sure how? We might see 2000 a year. You know much more about the Dublin Market than I do, how does that compare to a total number of transactions?

Also as that piece alludes, there are plenty of schemes in the offing to keep people in their homes. In all honesty the ostriches seem to have come out on top, yet again.

gaius c

MarkAnthony wrote: »

I'm not sure how? We might see 2000 a year. You know much more about the Dublin Market than I do, how does that compare to a total number of transactions?

5% of stock is a normal transaction rate. We had about 2% last year and the market won't get "unblocked" until houses become less difficult to transact due to the debt overhang.

To get an idea of how illiquidity distorts prices, check out AIB shares and their nominal value, which would mean the bank is valued at a somewhat improbable €55 billion. The distorting factor is that only 0.2% of the shares are available to publicly trade.

The shares are a pretty extreme example of what happens when a market becomes illiquid but apply the same logic to the property market. The stock of available housing is extremely low relatively to the total size of the market. Of course new entrants are going to have to pay through the nose.

Also as that piece alludes, there are plenty of schemes in the offing to keep people in their homes. In all honesty the ostriches seem to have come out on top, yet again.

That's just Indo kite flying. I wouldn't pay much attention to it.
Only 88 people have used the scheme in the 3 years it's been in existence so far.

The_Conductor

OfflerCrocGod wrote: »

A bear market is normally defined as a decline of 20%. It's highly unlikely that we will see -20% this year, as unlikely as +20%.

Far more likely is -/+5%, hopefully those are the sort of price moves we get used to seeing in the Irish property market from now on. I'd say that's what the CB is aiming for.

When you're dealing with an illiquid asset- a bear market is known colloquially as 'a secular bear market'. It differs considerably in the time scales- with property- typically it is over a 10 year period- however, frequently it is expressed over an even longer period of time (for example the Japanese bear market- which the WSJ suggests is over 25 years in 'bear' territory.

Its really not particularly helpful, in the context of real estate- to attempt to ascribe a 'bear' or 'bull' label to it- because of the illiquid nature of the asset. With shares- a bear or bull market might be declared after as little as 2 months (though in the region of 18 months is more normal).

OfflerCrocGod

Turnover is 2% of stock while in normal market conditions it would be 4-5%, that's half of normal turnover. Not illiquid, just depressed, if we thought the market was illiquid then we'd ignore the CSO/RPPR figures.

Bob24

gaius c wrote: »

Repos are coming (complete with emotive language).
http://www.independent.ie/business/home-repossession-orders-soar-new-figures-31195330.html

Will believe it when I see it. I definitely think it should happen (and probably will at some point), but repos have been announced many times and forces holding them back are pretty strong.

El_Dangeroso

Bob24 wrote: »

Will believe it when I see it. I definitely think it should happen (and probably will at some point), but repos have been announced many times and forces holding them back are pretty strong.

Agreed, will not happen this close to an election.

handlemaster

Has anybody looked at the levels of stock that has come to the market over the Last month ?Has there been a slow down? Not buying or selling myself but having a look at daft there doesnt seem to be à lot on offer in Dublin

seamus

In sales? Yeah, it does seem to have picked up.

Around April it seemed to be a lot of €400k+ properties coming up, but in the last couple of weeks a lot of stuff between 350 and 400 has started popping up, and a lot more revision of prices downward than I saw before.

MarkAnthony

handlemaster wrote: »

Has anybody looked at the levels of stock that has come to the market over the Last month ?Has there been a slow down? Not buying or selling myself but having a look at daft there doesnt seem to be à lot on offer in Dublin

I'd focus on myhome for sales tbh. There is quite a bit of stock hitting the market. I think the 500K+ range has missed the boat to a certain extent, I'm seeing stock I'd expect to be sub 300K hitting the 300K mark, I suspect trying to milk the 'new' CB rules.

handlemaster

MarkAnthony wrote: »

I'd focus on myhome for sales tbh. There is quite a bit of stock hitting the market. I think the 500K+ range has missed the boat to a certain extent, I'm seeing stock I'd expect to be sub 300K hitting the 300K mark, I suspect trying to milk the 'new' CB rules.

the sub 200k previously is now up also .

gaius c

handlemaster wrote: »

Has anybody looked at the levels of stock that has come to the market over the Last month ?Has there been a slow down? Not buying or selling myself but having a look at daft there doesnt seem to be à lot on offer in Dublin

Myhome had 3211 this time last year for Dublin. It's 5210 now. That's over a 60% increase in stock.

Barely Hedged

gaius c wrote: »

Myhome had 3211 this time last year for Dublin. It's 5210 now. That's over a 60% increase in stock.

Didn't the chartered surveyors of Ireland say we needed a minimum of 11k units to be built a year in Dublin in the summer last year? Were still a long way off that

johnp001

Barely Hedged wrote: »

Didn't the chartered surveyors of Ireland say we needed a minimum of 11k units to be built a year in Dublin in the summer last year? Were still a long way off that

Just in reference to the 11k units:
"A lot of people have come out with different reports on how many homes we need going forward. I put most credence in the report produced by Future Analytics, which was commissioned for the Housing Agency. It says there is a requirement for 7,500 units per year in Dublin"
Quote from DNG chairman interviewed for Indo article last month. "The estate agents' view: why we don't want a boom - Independent.ie"

gaius c

Why not do something about existing supply first?
There's 500 apartments sitting empty in Tallaght Cross because NAMA won't fill them or sell them to anybody at a price they are prepared to pay.

Fkall

gaius c wrote: »

Myhome had 3211 this time last year for Dublin. It's 5210 now. That's over a 60% increase in stock.

Transaction volumes in Dublin are also up 53% in Q1 compared to 2014.

gaius c

Fkall wrote: »

Transaction volumes in Dublin are also up 53% in Q1 compared to 2014.

Yep. 49% as per PPR yesterday.
More transactions but at a lower price point.
The market is recovering but not in the way that various VI's think it is.

johnp001

gaius c wrote: »

Yep. 49% as per PPR yesterday.
More transactions but at a lower price point.
The market is recovering but not in the way that various VI's think it is.

Some of the statistics that the DAFT report measures are also not pointing to a recovery:

Expectations about house prices continue to cool
Having steadily increased from December 2011 to September 2014, the moderation in house price expectations that started in late 2014 continued into early 2015. In Dublin, the expected 1-year change in house prices has fallen from 12% in mid-2014 to 4% now.

"Perceived value" statistic going down nationwide - less than 20% now perceive good value in Dublin

The fraction of Dublin listings selling within four months has eased back
From 71% a year ago to 65% today