Property Market 2015

Barely Hedged

johnp001 wrote: »

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

This makes no sense...prices have risen steadily (recovered) since 2011 and now that its expected to be a 4% yoy increase, theres not a recovery? Id say its been an observed recovery, followed by moderation. The recovery is done, dusted.

johnp001 wrote: »

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

Perceived value? What is this statistic and who measures it?

The_Conductor

'Perceived'.......
Its an arbitrary term that means precisely nothing.
Just because I perceive something as expensive (or indeed good value)- has precisely zero bearing on whether the next person walking down the street will make a similar judgement call.

Barely Hedged

The_Conductor wrote: »

'Perceived'.......
Its an arbitrary term that means precisely nothing.
Just because I perceive something as expensive (or indeed good value)- has precisely zero bearing on whether the next person walking down the street will make a similar judgement call.

Exactly. Value is in the eye of the beholder.

seamus

To be fair, in a market where prices are not set by a manufacturer or a regulator, such as with stocks or property, buyer perception is important when it comes to making predictions about the future of that market.

If few buyers perceive good value in a particular market, then you can reasonably predict that sales within that market will be slow or flat, and as such that prices in that market are likely to stagnate or fall.

What confounds property is that unlike stocks, property is an essential commodity. Even if buyers do not perceive good value to exist in a market, they may still have to buy in that market out of necessity. Between 2001 and 2006 practically everyone agreed that there was no value in the Irish property market, prices were utterly insane and you were getting very little property for a lot of money. And yet everyone still participated out of need.

So perceived value is a useful indicator, but not a very strong one.

Barely Hedged

seamus wrote: »

So perceived value is a useful indicator, but not a very strong one.

Thats the crux of my argument. So much of these crappy statistics are put out there as if theyre some significant indicator. All they are is noise.

When has a bank official refused someone a mortgage based on the perceived value scale?

johnp001

Barely Hedged wrote: »

Perceived value? What is this statistic and who measures it?

It's one of the statistics that is recorded in the Daft report. I think there is a link to their methodology on the last page of the report.

Barely Hedged

johnp001 wrote: »

It's one of the statistics that is recorded in the Daft report. I think there is a link to their methodology on the last page of the report.

Have you got a link to it please?

MayBea

Barely Hedged wrote: »

Have you got a link to it please?

It might be this: http://www.ipav.ie/sites/default/files/daft-sale-report-q4-2014.pdf , page n.7.

MarkAnthony

Surely perceived value = market sentiment.

Not being a stocks and shares/forex guru (oh how I've tried!) I thought market sentiment was a fairly good and useful indicator when used correctly.

Bob24

MarkAnthony wrote: »

Surely perceived value = market sentiment.

Not being a stocks and shares/forex guru (oh how I've tried!) I thought market sentiment was a fairly good and useful indicator when used correctly.

Agreed, as long as one keeps in mind market observers can be wrong is a usefully indicator to have in mind. If someone is smart enough to tell the difference between the perceived value and the likely actual value, this is when they are starting to understand what is happening on the market.

gaius c

MarkAnthony wrote: »

Surely perceived value = market sentiment.

Not being a stocks and shares/forex guru (oh how I've tried!) I thought market sentiment was a fairly good and useful indicator when used correctly.

It's useful until it points to the outcome that you are predicting won't happen.

Then it becomes rubbish & useless.

Barely Hedged

johnp001 wrote: »

It's one of the statistics that is recorded in the Daft report. I think there is a link to their methodology on the last page of the report.

Its a crappy measure as perceived value is based on what the asset was priced at previously compared to now.

Asset x increases by 50% => perceived to be decreased/less value

Asset y decreases by 50% => perceived to be increased/more value

Completely meaningless. Cant believe they put it in an official, published report

MarkAnthony

Barely Hedged wrote: »

Its a crappy measure as perceived value is based on what the asset was priced at previously compared to now.

Asset x increases by 50% => perceived to be decreased/less value

Asset y decreases by 50% => perceived to be increased/more value

Completely meaningless. Cant believe they put it in an official, published report

Yes because all the other statistics have lead to such foolproof predictions :pac:

El_Dangeroso

Barely Hedged wrote: »

Its a crappy measure as perceived value is based on what the asset was priced at previously compared to now.

Asset x increases by 50% => perceived to be decreased/less value

Asset y decreases by 50% => perceived to be increased/more value

Completely meaningless. Cant believe they put it in an official, published report

It's as meaningful as most of the things they put in those reports, in fact most of those predictions are based on market sentiment as much as anything.

riclad

quote ,
l have to buy in that market out of NECESSITY Between 2001 and 2006 practically everyone agreed that there was no value in the Irish property market, prices were utterly insane and you were getting very little property for a lot of money. And yet everyone still participated out of need.

i know 2 people who bought btl as investments in 2003,
plus they both had separate mortages on apartments they live in.
1 house 80k,one apartment 130k.
Both were on ordinary wages ,say 18k. single women.
in the last 10 years ,they have made zero euro profit .
Person with the apartment has spent 1000,s over the rent,rent is half the mortgage.
apartment is worth 70k now.
she can.t afford to sell it.
and she actually got a tax bill for 50 cent of all the massive profits she makes .

there must be 1000 s of so called landlords out there like this.
there was absolutely no logical reason to buy either of these btl units .
Funny thing is house was valued in 2006 at 120k,
she could have sold it then and made a profit on it.

i don,t think there was any necessity for anyone on an average wage to buy a btl buy to let from 2000-2007 ,

But the banks were throwing money at anyone ,
look we need the no,s ,
i made x amount of loans ,wheres my bonus .
i need to buy a new car every 2 years.

freelancerTax

riclad wrote: »

quote ,
l have to buy in that market out of NECESSITY Between 2001 and 2006 practically everyone agreed that there was no value in the Irish property market, prices were utterly insane and you were getting very little property for a lot of money. And yet everyone still participated out of need.

i know 2 people who bought btl as investments in 2003,
plus they both had separate mortages on apartments they live in.
1 house 80k,one apartment 130k.
Both were on ordinary wages ,say 18k. single women.
in the last 10 years ,they have made zero euro profit .
Person with the apartment has spent 1000,s over the rent,rent is half the mortgage.
apartment is worth 70k now.
she can.t afford to sell it.
and she actually got a tax bill for 50 cent of all the massive profits she makes .

there must be 1000 s of so called landlords out there like this.
there was absolutely no logical reason to buy either of these btl units .
Funny thing is house was valued in 2006 at 120k,
she could have sold it then and made a profit on it.

i don,t think there was any necessity for anyone on an average wage to buy a btl buy to let from 2000-2007 ,

But the banks were throwing money at anyone ,
look we need the no,s ,
i made x amount of loans ,wheres my bonus .
i need to buy a new car every 2 years.

no neccesity just greedy idiots

Bob24

freelancerTax wrote: »

no neccesity just greedy idiots

In the case of BTL yes. Owner occupiers are a slightly different story. They made mistakes and should be penalised compared to people who waited and kept renting, but I would not call them greedy idiots.

cherryghost

Hows the area around the Luas line in Tallaght?

freelancerTax

Bob24 wrote: »

In the case of BTL yes. Owner occupiers are a slightly different story. They made mistakes and should be penalised compared to people who waited and kept renting, but I would not call them greedy idiots.

considering I quoted a post about btl I would have thought that it was obvious as to what group of people my comment referred to

Michael D Not Higgins

cherryghost wrote: »

Hows the area around the Luas line in Tallaght?

I'd avoid going further west than Belgard. Some of it is okay but you'd want to avoid Fettercairn, Jobstown, Fortunestown, etc.

Belgard, Kingswood, Ballymount are all grand. I think some of Springfield near the Square is okay too.

handlemaster

i wonder with an election coming up and the governments attempts to buy the election with investments, USC changes and over all an improving economy how this will play into the property market. Im assuming confidence will increase and prices also

Amidoman

All I can see is still many people coming to open viewings no matter they are new or crappy old houses. It wasn't long ago I saw houses in Newtownmountkennedy being sold off plans without people even looking at them (ok, deposits paid). The next day when prelaunch was on there was nearly nothing left when we came. A few days later at official opening there were a few houses that were gone in minutes.
Only yesterday - nearly all houses were booked in Hansfield in Ongar. I saw many cars and people coming to see an older house in Tallaght... There is still demand and the supply means nothing if the prices are unrealistic. Those unrealistic must go down as people won't buy. Those realistic will sell. When prices start decreasing those who don't have to sell will wait for another opportunity. I would. Builders can't afford buiding below a certain price they can get on a house. So once again there will be less supply if prices decrease. I don't see any significant increase in prices coming. I don't see any significant price drops neither. Wake up - this is not the boom or post boom time.

riclad

IN the boom people were buying btl units,
one example apartment bought for 150k,
the investment loan on that is way more than the monthly rent plus misc expenses,services charges etc
People were buying property on the formula ,
i,ll buy this in 25 years it will be worth 300k.
ie house price will aways go up.
The costs on this unit will be 350 k plus counting property tax over the next 25 years ,
and this apartment is only worth 80k now.
And thats presuming interest rates do not rise in the next 20 years .
Which is unlikely .
IF you bought a btl unit outside dublin,cork,galway,
between 2000 and 2007 you were taking on a massive debt for a small
return maybe in 2030/40 ,
so the banks could get a nice bonus , commission ,
or joe bloggs banker gets a promotion .

I might consider maybe buying a house and renting it out and work out the likely costs vs profit
over ten years assuming tax rates and interest rates stay as they are now.

The profit per year after tax would have to be at least twenty per cent
assuming interest rate is 6 per cent on the loan and house is in an area
where i could easily sell it if i want to .

Sentiment may be oh look we are in a new boom,
prices are going up,
but sentiment is irrelevant if the profit you might make on a btl unit is maybe 3per cent .
And you are putting your investment at risk if interest rates go up or for some reason you are getting no return on the investment .

handlemaster

riclad wrote: »

IN the boom people were buying btl units,
one example apartment bought for 150k,
the investment loan on that is way more than the monthly rent plus misc expenses,services charges etc
People were buying property on the formula ,
i,ll buy this in 25 years it will be worth 300k.
ie house price will aways go up.
The costs on this unit will be 350 k plus counting property tax over the next 25 years ,
and this apartment is only worth 80k now.
And thats presuming interest rates do not rise in the next 20 years .
Which is unlikely .
IF you bought a btl unit outside dublin,cork,galway,
between 2000 and 2007 you were taking on a massive debt for a small
return maybe in 2030/40 ,
so the banks could get a nice bonus , commission ,
or joe bloggs banker gets a promotion .

I might consider maybe buying a house and renting it out and work out the likely costs vs profit
over ten years assuming tax rates and interest rates stay as they are now.

The profit per year after tax would have to be at least twenty per cent
assuming interest rate is 6 per cent on the loan and house is in an area
where i could easily sell it if i want to .

Sentiment may be oh look we are in a new boom,
prices are going up,
but sentiment is irrelevant if the profit you might make on a btl unit is maybe 3per cent .
And you are putting your investment at risk if interest rates go up or for some reason you are getting no return on the investment .

20% good look with that

Mongfinder General

Bob24 wrote: »

In the case of BTL yes. Owner occupiers are a slightly different story. They made mistakes and should be penalised compared to people who waited and kept renting, but I would not call them greedy idiots.

Why should owner occupiers be penalised?

Balmed Out

Mongfinder General wrote: »

Why should owner occupiers be penalised?

They need not be but if they cant pay their debts then why not?

Bob24

Mongfinder General wrote: »

Why should owner occupiers be penalised?

I was talking about owner occupiers who are not paying their mortgage and/or bought overpriced property, and saying they should be held responsible for all the financial consequences (otherwise it would be unfair to those people who were more realistic and refrained from buying as they could see things were out of hands, but have therefore been paying rent and don't own a property).

Of course not saying there should be penalties for being an owner occupier.

The_Conductor

riclad wrote: »

The profit per year after tax would have to be at least twenty per cent assuming interest rate is 6 per cent on the loan and house is in an area where i could easily sell it if i want to .

Typical ROIs demanded by investors are 6-8% after all costs (including tax) are deducted. It would be unheard of for an investor to make 20%- those sort of returns simply don't, and never have, existed (other than as bizarre paper gains on asset prices- in which case there have been 3 years between 1994 and 2006 when they hit 20%- however for anyone to have any expectation of this- is quite ridiculous).

Typical returns are 6-6.5% with 8% considered to be a very good investment.

Mongfinder General

Bob24 wrote: »

I was talking about owner occupiers who are not paying their mortgage and/or bought overpriced property, and saying there should be held responsible for all the financial consequences (otherwise it would be unfair to those people who were more realistic and refrained from buying as they could see things were out of hands, but have therefore been paying rent and don't own a property).

Of course not saying there should be a penalties for being an owner occupier.

Agree with you. Those who can't pay need help. Those who won't pay should be hounded for everything that they are liable for.

The_Conductor

Cognisance also needs to be made of people's lifestyles.
Many people have gone through hell on earth to pay their mortgages at any cost- while their similarly income affected neighbours have given up on paying their mortgages- but continue to have holidays, nice clothes and keep a car on the road.

There has to be some sort of equity. Many people who *are* managing to pay their debts- are in actual fact far worse off than a significant cohort who aren't paying their debts (and who would themselves consider that they need help given their dire financial states).

The little people who are going through hell- but are paying their debts- I would argue- are every bit as entitled to help-as are those who aren't paying their debts because of a change in their circumstances.