Property Market 2015

youcancallmeal

When is it expected that new deposit restriction rules will come into force? I thought it was 1st Jan?

johnp001

The_Conductor wrote: »

Don't know.....
Lots of investors cut and ran- before the 31st of December CGT cutoff.
Stock may even go down- there are too many variables to be able to call it.

As I understand the December CGT cut-off the exemption was for purchases before 31/12/14 which are held for 7 years. There was no incentive to sell before the end of last year. There was only an incentive to buy.

irish gent

I think that's in place with the banks ?

dan99989

Watching this really carefully - we're coming back to Dublin from 6 years in London to buy. Whilst most things we've been looking at have been in the "Georgian, ex bedsit, ****e condition" category, neigh on all the EA's offerings we've gone to see (in D1/D7, during Q4 '14) have sold a chunk above their asking prices... Definitely agree that a catch all term for the "Dublin Market" seems wrong - it's very localised with highs here and there and so really hard to read overall.

MarkAnthony

D1/7/8 where pushed up massively by investors. I went to view a shell in Maryland with an asking of 99K went for >160K. I really think the market will continue to rise but to echo some of the above sentiments it will be a ripple effect.

The CB rules will hopefully result in areas seeing caps. Two people on IAW is 70K with 20% deposit saved gives c.275K I personally think this will be the sweet spot. As an area runs out of suitable family housing at 275K we'll see the next area push to this.

Is this going to happen in Darndale? Probably not. I can however see people being less prissy about whether they're living in Glasnevin or Finglas with the associated 'postal area' shenanigans. I actually think Eircode is going to have some very interesting impacts.

Frankly a lot of Dublin is still undervalued IMHO. That said there is an awful lot of crap out there and I'm talking about habitable houses.

TL;DR

Falls in some areas, rises in others. Overall increase of c. 5-9% in Dublin. It'll be up and down like a who... yo-yo with several high profile reductions.

handlemaster

Have the postal codes been set ?

MarkAnthony

handlemaster wrote: »

Have the postal codes been set ?

Spring this year apparently.

mr_seer

The_Conductor wrote: »

Don't know.....
Lots of investors cut and ran- before the 31st of December CGT cutoff.
Stock may even go down- there are too many variables to be able to call it.

I was talking to 2 of the large EAs over the last couple of days. They both had the same message. They are expecting a lot more stock to come on the market for this Spring than they have had on their books in previous years. This is largely based on enquiries from vendors.

It takes quite a while from the moment you decide to sell a property until you actually have it on the market. You need to move out/move tenants out, obtain BER certs, have the EA around to examine and value the property, have photos taken, not to mention getting it ready for viewings.

mr_seer

johnp001 wrote: »

As I understand the December CGT cut-off the exemption was for purchases before 31/12/14 which are held for 7 years. There was no incentive to sell before the end of last year. There was only an incentive to buy.

Having a lot of potential purchasers looking to close a purchase quickly by a set deadline is a great incentive to sell!

johnp001

mr_seer wrote: »

Having a lot of potential purchasers looking to close a purchase quickly by a set deadline is a great incentive to sell!

The_Conductor stated that investors had cut and run before the CGT exemption expired.
My reply to this that you quoted clarified that there is no CGT exemption for selling before the end of 2014. The CGT exemption is for properties bought between Dec 2011 and Dec 2014 and only provides the exemption if they are held for 7 years so the incentive for investors to sell doesn't start until 2018.

MarkAnthony

johnp001 wrote: »

The_Conductor stated that investors had cut and run before the CGT exemption expired.
My reply to this that you quoted clarified that there is no CGT exemption for selling before the end of 2014. The CGT exemption is for properties bought between Dec 2011 and Dec 2014 and only provides the exemption if they are held for 7 years so the incentive for investors to sell doesn't start until 2018.

I was actually under the impression they could get a fractional relief based on the number of years held - I might be talking out of my rear on that, it's just at the back of my mind.

johnp001

MarkAnthony wrote: »

I was actually under the impression they could get a fractional relief based on the number of years held - I might be talking out of my rear on that, it's just at the back of my mind.

After 7 years you get a fractional relief.
The exemption for CGT is 7 years divided by total time held.
E.G. hold for 10 years get 7/10=70% relief from CGT
but there is no relief unless it is held for at least 7 years.

handlemaster

http://www.irishtimes.com/business/economy/imf-urges-caution-on-mortgage-restrictions-1.2058072


Imf soundings a little surprising bu then again make sense

MarkAnthony

handlemaster wrote: »

http://www.irishtimes.com/business/economy/imf-urges-caution-on-mortgage-restrictions-1.2058072


Imf soundings a little surprising bu then again make sense

What about mortgage interest tax relief on rental properties? What are people's thoughts on this. It's 75% at the moment is there any thoughts that this will decrease over the next few years?

gaius c

handlemaster wrote: »

http://www.irishtimes.com/business/economy/imf-urges-caution-on-mortgage-restrictions-1.2058072


Imf soundings a little surprising bu then again make sense

As always, go directly to the source and away from the distorted lens our media are applying to the source.
http://www.imf.org/external/pubs/cat/longres.aspx?sk=42577.0
http://www.imf.org/external/pubs/ft/scr/2015/cr1501.pdf
Scroll down to page 21.
The report is actually in favour of " macroprudential tools".

kjr77

Mongfinder General wrote: »

3 beds in Citywest, Balbriggan, Darndale, Clondalkin, Ballyfermot all headed north of 300k. I wouldn't put an animal in these places. Please tell me I'm wrong in my analysis?

On what basis have you come to the conclusion that Balbriggan is not fit for animals, have you lived there or is it just something you read. Every area has good and bad but having lived there for over 10years I can say the majority are good.

leelee77

kjr77 wrote: »

On what basis have you come to the conclusion that Balbriggan is not fit for animals, have you lived there or is it just something you read. Every area has good and bad but having lived there for over 10years I can say the majority are good.

Completely agree with you Kjr. What a narrow minded, ignorant thing to say. I also live in Balbriggan and like everywhere else, it has good and bad areas.

gaius c

This month's survey of more than 50 REA member firms shows that the capital's property market has largely stalled in quarter four from September to December

From

And it's blamed on:

"It is clear from our agents that the lack of clarity from the Central Bank is having a large impact on confidence. However, even if it is resolved, the supply issue still remains. For a period for five years, the construction sector ground to a halt and we are still feeling the effects of this through the lack of availability of new homes," said REA chief executive Philip Farrell.

Nothing to do with the sky high prices putting off buyers hmmm? And the market stalled after the spring, well before the rules were first mooted in October.

MarkAnthony

gaius c wrote: »

Nothing to do with the sky high prices putting off buyers hmmm? And the market stalled after the spring, well before the rules were first mooted in October.

Are prices really that high though? Honest question. The property market in Dublin seems (to me) to be very similar to Oxfordshire except that Oxfordshire is now building. The University own most of the land so building in the City is near impossible - hence lack of supply. It's also communterbelt to London meaning high demand. A 3 bed house in a suburb 10 - 12km out is going to cost region £250k minimum. We've got houses within that distance going for less than €200K.

I realise that comparison is pulled out of my... ahem... and someone could come on and compare us to a small town in Outer Mongolia but even when we look at average wages 3 bed houses in less desirable area should be available to FTBs. Should the centre and desirable southern burbs not command a higher price?

It seems to be that one of the major issues in Dublin is lack of 'starter' homes. Trying to get reasonably priced 2 beds seems very difficult and apartments seem to be swallowed up by investors.

Honest questions here, I'd be delighted to see people's logic here.

MrDerp

MarkAnthony wrote: »

Are prices really that high though?

....

It seems to be that one of the major issues in Dublin is lack of 'starter' homes. Trying to get reasonably priced 2 beds seems very difficult and apartments seem to be swallowed up by investors.

Honest questions here, I'd be delighted to see people's logic here.

For me there's a combination of factors at play here:
1) There's been a massive growth in what we now consider to be middle-income earners in this country. Back in the day a teacher, public sector worker, person in the bank had a job with some prestige and buying power. Now people with those jobs (particularly early in their careers when they'd be FTBs) are way down the income table, competing with ICT/Pharma grads that can be north of 50K four years after graduating. The mean income in this country, or industrial average or whatever, is relatively meaningless in terms of Dublin salaries.

2) There's not just a lack of supply of what we call 'family homes', there's a realisation that we're not building any more in Dublin to any great degree. Short of extending Tallaght, Blanch and Swords even further into the green belt, there just won't be large swathes of new estates for the new middle class to buy. Further to that, most people don't make a first choice outside the m50. That's why the most desirable parts of Dublin recovered first, followed by the other/outer suburbs and satellite towns, and now I know people buying new builds in Co. Meath.

We need to build smarter higher density in Dublin. That means well-serviced apartments which you can raise a family in: with on-site playgrounds, facilities, garage blocks/basement storage cages and ample parking. I agree we need more 'starter' homes, but starter shouldn't mean shoebox apartments and 2 bed 'townhouses'. It should be a sacrifice of a garden, not space and storage. Making livable high-density would provide an option for those who don't want to live 30-50km from the city centre. It has to have good facilities and infrastructure though.

All of the above is why we moved back to Cork last year, where we bought all the house we could ever need, close to the city centre and amentities, and had no significant reduction in income moving down. We were shopping around the market in Dublin over 2011/2012/2013, saw the bottom, saw what we could afford at the bottom, and that was that. Once prices ticked up, we didn't want to play anymore

P. Breathnach

MarkAnthony wrote: »

...
It seems to be that one of the major issues in Dublin is lack of 'starter' homes. Trying to get reasonably priced 2 beds seems very difficult and apartments seem to be swallowed up by investors....

Just impressions, not based on research:
- There is some difficulty with finding starter homes that might be considered "good", in terms both of being in desirable areas and being in walk-in condition. It's a bit easier for people who are not scared of some neighbourhoods or for those willing to take on a project.
- I think the typical Dublin apartment is not the best choice for a family home. There is a large market for rental property for young single workers, many of them well-paid. That creates a natural market for investors. I see nothing wrong with that: the apartments do get used.

P. Breathnach

MrDerp wrote: »

...
We need to build smarter higher density in Dublin....

But judiciously. In some areas the infrastructure might not support a large number of extra housing units.

MarkAnthony

P. Breathnach wrote: »

Just impressions, not based on research:
- There is some difficulty with finding starter homes that might be considered "good", in terms both of being in desirable areas and being in walk-in condition. It's a bit easier for people who are not scared of some neighbourhoods or for those willing to take on a project.
- I think the typical Dublin apartment is not the best choice for a family home. There is a large market for rental property for young single workers, many of them well-paid. That creates a natural market for investors. I see nothing wrong with that: the apartments do get used.

Although I don't have an objection to apartments as family homes per se I agree that they are not ideal especially in Dublin for two reasons; (i) the building standards, (ii) there is no need for that level of density in a country that is mostly empty.

If we had a functioning property market though I'd see the following scenario as the ideal:

Graduate who been living in digs/shared accom saves c.€24K over 4 years being paid say 36K (4 year post qual). Is able to buy an apartment for c.150K lives there for five years or so decides to settle down and then looks at houses in the €275k range assuming a combined income with a partner of €70K. The first mortgage is 35 years but the next is 30 years. At no point are the buyers paying down anyone elses mortgage.

In the first place he/she is paying c.600 a month. Arguably that's very affordable and would suggest that 3.5 is probably a little constrictive to someone at a low point in their earning potential. Even so it seems far preferable to renting a one bed in Finglas (no offence to Finglas but it's what I'd consider a reasonable distance to the CC etc.) for €800 - €900 p/m without reducing down debt.

It seems though that many go straight in at a 3 bed house having been paying mental money in rents for over a decade. I'm just not seeing the logic. Of course that assumes a functioning property market which I'm not suggesting we have.

gaius c

MarkAnthony wrote: »

Are prices really that high though? Honest question. The property market in Dublin seems (to me) to be very similar to Oxfordshire except that Oxfordshire is now building. The University own most of the land so building in the City is near impossible - hence lack of supply. It's also communterbelt to London meaning high demand. A 3 bed house in a suburb 10 - 12km out is going to cost region £250k minimum. We've got houses within that distance going for less than €200K.

I realise that comparison is pulled out of my... ahem... and someone could come on and compare us to a small town in Outer Mongolia but even when we look at average wages 3 bed houses in less desirable area should be available to FTBs. Should the centre and desirable southern burbs not command a higher price?

It seems to be that one of the major issues in Dublin is lack of 'starter' homes. Trying to get reasonably priced 2 beds seems very difficult and apartments seem to be swallowed up by investors.

Honest questions here, I'd be delighted to see people's logic here.

Yes, yes they are. Lack of mortgage affordability now rivals the bubble era.

Oxford is on the outskirts of the largest urban conurbation in Europe. Not a good comparison point I think.

Also the example of a recent grad earning €36k gross being able to save €6k per annum needs to be filed under the column labelled "aspirational".

MarkAnthony

gaius c wrote: »

Yes, yes they are. Lack of mortgage affordability now rivals the bubble era.

Oxford is on the outskirts of the largest urban conurbation in Europe. Not a good comparison point I think.

Also the example of a recent grad earning €36k gross being able to save €6k per annum needs to be filed under the column labelled "aspirational".

Thanks for the link and fair enough on the comparison. I'm not sure it's aspirational to put aside €500 on €2225 a month in shared accommodation. I'm not suggesting it's easy either but living on €1000 per month after accom costs should be doable surely?

EDIT: Updated article - interesting reading. http://noworsoon.com/121

ElizKenny

gaius c wrote: »

Also the example of a recent grad earning €36k gross being able to save €6k per annum needs to be filed under the column labelled "aspirational".

that would be between 2 Recents grads these days.
The days of expecting to be able to afford to buy a house in a desirable area on your own are long gone i fear.

gaius c

ElizKenny wrote: »

that would be between 2 Recents grads these days.
The days of expecting to be able to afford to buy a house in a desirable area on your own are long gone i fear.

Talk to mark Anthony. It was his example. Same target between two is a lot more reasonable yes.

Mongfinder General

kjr77 wrote: »

On what basis have you come to the conclusion that Balbriggan is not fit for animals, have you lived there or is it just something you read. Every area has good and bad but having lived there for over 10years I can say the majority are good.

I couldn't post it. I'd be accused of all sorts of things. If you're happy there, good for you. That means one less person to compete with in the market.

on_my_oe

ElizKenny wrote: »

that would be between 2 Recents grads these days.
The days of expecting to be able to afford to buy a house in a desirable area on your own are long gone i fear.

I don't think it's aspirational - on a combined salary of €50k we saved €12k a year towards our deposit

ElizKenny

on_my_oe wrote: »

I don't think it's aspirational - on a combined salary of €50k we saved €12k a year towards our deposit

Id imagine that would be very easy too, but people lead very different lives and have different priorities and needs.

eg you might have one couple earning 50k renting a double room in a share in the suburbs for €5000 a year, or another couple living with parents with €0 rent. Or another renting a prime apartment in the city center €15000 a year. And those examples are living together. they might live separate too.
All have different priorities/needs and outgoings on rent. So all would be able to save different amounts.