Property Market 2015

Flex

seamus wrote: »

Yep, looks like BOI are stepping up their offers to get people in. They wouldn't necessarily be aiming to fuel a bubble, but it's in their own interests to keep lending strong and to have people buying property.

Planning on drawing down in the next month, so it looks like we'll get this offer, which is a nice little bonus.

Could somebody verify this for me to make sure Im reading it right, please?

Just looking at numbers, if you had a €218,500 mortgage over 25 years,

• On the BOI 5 year fixed (3.95%) you'd pay €68,838 over the first 5 years
• Other 5 year fixed rates (3.8%) you'd pay €67,759
  
• €1079 more over the 5 years, but youre being reimbursed €4370 on the mortgage.

Similarly, taking a 1 year fixed and assuming that rate for 5 years

• BOI at 3.7% costs €67,046
• Whereas the lowest 1 year fixed I can see is KBC at 3.3%, costing €64,234.
• BOI is €2,812 more expensive, but the €4370 means youre still saving with the BOI offer over the course of the 5 years

Just rough sums here, but Id say thered need to be a gap of about 0.6% or more between the BOI rates and competitors to lose out over the first 5 years. I keep referencing 5 years because based on the terms and conditions after 5 years the 'clawback' on the stamp duty reimbursement expires and you could move mortgage provider if you were so inclined

NinjaTruncs

Are there any cost associated with moving mortgage from one provider to another? For some reason I think there are legal fees, although I've never done it so not sure know. But if there are they should be included in the calculation.

I would guess BOI are banking on the fact that most people won't move after the 5 years and as such they will benefit over the long run.

For myself if I'm getting a mortgage in the next 4 months it will be with BOI due to the 2% back and the fact I keep my tracker for 5 years after buying, no other bank can match that.

Mr. teddywinkles

Where's all the people that were on here a few months ago saying that property prices will only increase

audi12

Mr. teddywinkles wrote: »

Where's all the people that were on here a few months ago saying that property prices will only increase

There increasing every month

jay0109

The houses I'm looking at in Sth Dublin are certainly not increasing!

Barely Hedged

Mr. teddywinkles wrote: »

Where's all the people that were on here a few months ago saying that property prices will only increase

What's your proof otherwise?

audi12

jay0109 wrote: »

The houses I'm looking at in Sth Dublin are certainly not increasing!

wish they were not but they seem to be increasing slowly in most places second half of the year may change that who knows

Mr. teddywinkles

Barely Hedged wrote: »

What's your proof otherwise?

No proof just general sentiment.
New rules in effect will definitely impact.
High demand or none at all ya cant buy with no dosh, simples. Yes people out there with money. Just doesn't apply to all.

Barely Hedged

Mr. teddywinkles wrote: »

No proof just general sentiment.
New rules in effect will definitely impact.
High demand or none at all ya cant buy with no dosh, simples. Yes people out there with money. Just doesn't apply to all.

Why do you think the new rules will have an effect?

90% LTV mortgages have not been handed out to people en masse since 2008. Officially banks offered them but once the underwriters came back it was never to this level.

You're ignoring the reality of the situation and interpreting it theoretically. The theory in this case is flawed

Villa05

Barely Hedged wrote:

90% LTV mortgages have not been handed out to people en masse since 2008. Officially banks offered them but once the underwriters came back it was never to this level.

It is the income multiples not the deposit rules that will put downward pressure on prices

The_Conductor

Annecdotally- what I'm seeing is continued increases- in certain property types- in certain areas- but other houses (and apartments) also in exact same areas- are failing to sell, even after several reductions in price.......

Investors- are out of the market by and large- the ROI isn't there for them- and the new deposit rules make it prohibitively expensive upfront for them.

FTBs- have by and large used up the Approval's in Principle- that issued up to the end of last year (there are a few still knocking around- but they are getting fewer and fewer by the day).

Executor sales- as a category in its own right- appears to be in big trouble. Some of these older houses and apartments- are proving quite incredibly difficult to shift- pretty much at any price. People are not interested in 'do-er'uppers anymore- and in any event- don't have the money for them, even if they were.......

The market is sort of like a hot air balloon- its pretty much reached its max cruising altitude- there are little pockets and air drafts that are pushing it up- and commensurate down drafts pulling it back down again.........

Sentiment among a lot of people at viewings- is they are interested- but not at the prices being suggested (in the first instance)- and secondly-they are having great difficulty raising finance.

Estate agents are now habitually asking for proof of funds (in the Dublin and Galway areas anyway- and probably elsewhere), and an increasing number of sales are falling through at the last hurdle (issue can be on the side of either the buyer or seller- many sellers assume banks will refinance negative equity balances- when in practice many lenders wont- many buyers assume that their LTV they're seeking is low enough that they'll have no issue getting finance- when they tripped up on other borrowing constraints.

The rental market is getting worse and worse- as many landlords are desperately trying to exit in what they imagined was as orderly a fashion as possible- but increasingly looks like a route- as many of the properties being offloaded aren't the most desireable for a potential purchaser- the vast preponderance of whom are now owner occupiers.....

The summer will allow a little bit of dust to settle- and people to reassess just where we are and where we are going- but the portents are not good.

Personally- I imagine that there will have to be a relaxation in lending criteria- much as I think it would be an awful idea- as at the moment the indications are that we could be at the top of a cliff- and a fall could be imminent........

There isn't really a solution to all of this- other than a complete rethink from the bottom up (which has to include high density developments in locations that people actually want to live in- read Dublin City Centre, South Co. Dublin, Cork City (and 3 of its more desireable suburbs), Galway City- and a choice few other areas- which might include a few less obvious locations- such as Ennis.........

Builders- are having difficulty accessing finances- however, at the same time- our building costs are higher than in Saudi Arabia........ Brickies still think that they can go back to the good days- where they commanded 4 quid per block laid- and that a Euro a block is penury- which to me seems bizzare. Trades such as carpenters, electricians, plumbers, gas installers etc- are hurrying to hide behind legislation barring entry to their 'professions'. We never looked at any of this when we had the opportunity.

Planning- is nuts- when one person can trump the good of many. While I don't think the Spanish system is something to hold up- the polar opposite that we have here- is as nutty as theirs.

All-in-all- we had the opportunity to change our country from the bottom up.The will wasn't there to do it. Now- with a general election around the corner- nothing is going to happen anytime soon- any chance we had has been squandered.

I'd advise anyone thinking of buying- unless they had a very good reason to plough ahead (such as an artificially low deposit requirement that was about to expire)- to keep their powder dry- that any signs in the market, and the broader environment, at the moment- are dim, and dimming by the day.

Perhaps we may get a more energetic government in due course who may take this bull by the horns- and come up with some sort of policy ideas that actually address the deficits in our economy- from the bottom up. The current crowd are jaded- and being elected on the basis of not being Fianna Fáil- isn't exactly the sort of ringing endorsement that was ever going to achieve anything meaningful.

We need to start at the bottom and work our way up. Planning. Residential Housing densities (read high rise etc). Finance for developers. Costs associated with delivering projects. Costs associated with housing for purchasers. Costs associated with the general economy. Costs associated with Ireland Inc.

We are a high cost economy- trying to pass ourselves off as a yellow pack price workforce- which may work for a while- but we've now hit a brick wall.

Mr. teddywinkles

Barely Hedged wrote: »

Why do you think the new rules will have an effect?

90% LTV mortgages have not been handed out to people en masse since 2008. Officially banks offered them but once the underwriters came back it was never to this level.

You're ignoring the reality of the situation and interpreting it theoretically. The theory in this case is flawed

Either way people have less money to borrow. Has to have an effect. Yes certain houses in certain areas will sell at asking price or more but overall the market will flatten out. They can ask for what they want. Doesn't mean they'll get it.
I think people are more prudent at managing their finances and theres a kind of stigma attached to overburden if debt

decko11

Mr. teddywinkles wrote: »

Either way people have less money to borrow. Has to have an effect. Yes certain houses in certain areas will sell at asking price or more but overall the market will flatten out. They can ask for what they want. Doesn't mean they'll get it.
I think people are more prudent at managing their finances and theres a kind of stigma attached to overburden if debt

I got my apartment valued by Sherry Fitz to sell recently

The lady said this time last year they would have got 370 plus - she recommended asking 345 and hoping to get 350 ish

she said market peaked this time last year and while CGT and AIP kept it somewhat going its down now

I was taken aback but appreciated her frankness

OfflerCrocGod

Does any party have a position on higher density housing in Dublin City or house planning regulation? Or do they all ignore the situation?

decko11

OfflerCrocGod wrote: »

Does any party have a position on higher density housing in Dublin City or house planning regulation? Or do they all ignore the situation?

they have to solve it - eg amend it - the minimum size and dual aspect rule is a joke

dubrov

I'd take estate agent advice with a pinch of salt. Their main goal is a sale so that means talking down sellers and talking buyers up.

If she had told you the place is worth €370k, you'd be much more reluctant to accept an offer of €355k.

Villa05

dubrov wrote:

I'd take estate agent advice with a pinch of salt. Their main goal is a sale so that means talking down sellers and talking buyers up.

That has to be balanced with getting the business of overseeing the sale. A professional will be straight and honest.

The_Conductor

Villa05 wrote: »

That has to be balanced with getting the business of overseeing the sale. A professional will be straight and honest.

+1

Its not in an estate agent's interest to have property wildly overpriced on their books,that they know in their heart and soul,they haven't a snowballs chance in hell of shifting at its current price.

Prices are falling- and in a startling fashion in many areas. The wise estate agents- are taking this on board- and being realistic. They don't get a commission if property doesn't sell- QED- give it every possible opportunity to sell........

gosplan

I've been keeping a very close eye in the market in particular areas as I should be in a position to buy in a few months.

What I am absolutely seeing in the last few weeks is the emergence of price drops in Dublin.

Oddly enough these are advertised side by side with very highly priced houses and it really looks like there are two current perceptions of the property market at the moment.

I think there are a number of Vendors that think the price increases through the latter half of last year are still going.

This is not true though. Buyers have gone, especially for anything over 300k. The available stock is rising and houses new to the market are going up for 50k cheaper then the equivalent advertised ones(D9).

gosplan

gosplan wrote: »

I've been keeping a very close eye in the market in particular areas as I should be in a position to buy in a few months.

What I am absolutely seeing in the last few weeks is the emergence of price drops in Dublin.

Oddly enough these are advertised side by side with very highly priced houses and it really looks like there are two current perceptions of the property market at the moment.

I think there are a number of Vendors that think the price increases through the latter half of last year are still going.

This is not true though. Buyers have gone, especially for anything over 300k. The available stock is rising and new houses are going up for 50k cheaper then the equivalent advertised ones.

I have often wondered, because occasionally I see a property clearly overpriced, if it's an attempt by the owners to ride the crest of last year and break even on a house they overpaid for.

For example I've seen houses three doors apart being advertised at 410k and 595k.

Barely Hedged

The_Conductor wrote: »

+1

Its not in an estate agent's interest to have property wildly overpriced on their books,that they know in their heart and soul,they haven't a snowballs chance in hell of shifting at its current price.

Prices are falling- and in a startling fashion in many areas. The wise estate agents- are taking this on board- and being realistic. They don't get a commission if property doesn't sell- QED- give it every possible opportunity to sell........

What areas are you looking at price drops in particular?

How does the level the price has dropped to compare with the sale price of a similar property last year?

Bob24

Probably a different market segment from what most people are looking at here, but for the type of property I have been following (nice enough apartments in GCD/D4/D6/parts of SCD) I don't see any clear price drop. Price increases has stopped all right, but no clear drop and the good ones which are priced right do eventually sell (even though they often go to back the market once or twice before securing an actual sale as deals seem to frequently fall through).

seamus

The_Conductor wrote: »

FTBs- have by and large used up the Approval's in Principle- that issued up to the end of last year (there are a few still knocking around- but they are getting fewer and fewer by the day).

FTBs will keep knocking around for a while. Plenty of younger couples on €60k between them who can raise finance up to €200k and only need a 10% deposit. The issue for FTBs is suitable properties in that price bracket which aren't 1-bed apartments or out in the sticks.

Executor sales- as a category in its own right- appears to be in big trouble. Some of these older houses and apartments- are proving quite incredibly difficult to shift- pretty much at any price. People are not interested in 'do-er'uppers anymore- and in any event- don't have the money for them, even if they were.......

And unrealistic executors; people who seem to have already spent the sale of the property in their heads. They seem to be even more intractable than owners for refusing to negotiate down.
The main issue with doer-uppers I feel is that there is no way you will get home improvement finance after a new mortgage. Someone who can afford to spend €x00,000 on a property and €y0,000 doing it up, will instead just spend €xy0,000 on a bigger/better/nicer property that needs no work.

In the past a bank would give someone a bigger mortgage based on the post-renovation value of the property, but that's just not possible for your average pleb anymore.

gaius c

The_Conductor wrote: »

+1

Its not in an estate agent's interest to have property wildly overpriced on their books,that they know in their heart and soul,they haven't a snowballs chance in hell of shifting at its current price.

Prices are falling- and in a startling fashion in many areas. The wise estate agents- are taking this on board- and being realistic. They don't get a commission if property doesn't sell- QED- give it every possible opportunity to sell........

They also won't get a commission if it's on another EA's books. They'll tell the vendor what they want to hear in order to get them as a client and if that means over-valuing it with an intention to later revise the price down to a more realistic value, that's what they'll do.

gosplan

gaius c wrote: »

They also won't get a commission if it's on another EA's books. They'll tell the vendor what they want to hear in order to get them as a client and if that means over-valuing it with an intention to later revise the price down to a more realistic value, that's what they'll do.

I think what you've described above is exactly what the most successful agents would do.

Promise people the moon to get them on board and then somehow being their expectations back to reality without pissing them off.

Piriz

gaius c wrote: »

They also won't get a commission if it's on another EA's books. They'll tell the vendor what they want to hear in order to get them as a client and if that means over-valuing it with an intention to later revise the price down to a more realistic value, that's what they'll do.

an estate agent described this to me a few weeks ago, he described it as "they are all scrambling for market share".. he also advised me not to purchase until this time next year.. for the record this was not a business discussion of any kind and he told me what I believe to be his true opinion on the market.

Random anecdote: got chatting to a man in the pub on Saturday night - I'd say he was in his late 60s. Inevitably(!) got around to talking property and he said he had bought 30+ properties in the last three years but was now out of the market :eek:

Hi portfolio was nearly all apartments, staring in 2012 when nobody wanted them and people said they'd never regain value. Now he has them all rented and every one of them has gained substantially in value. But his best bet/guess/opinion is that there are no more real capital gains to be had - at least none big enough to justify another purchase. Also, to be fair, he has enough to be getting on with!

[Nice man. He won a tenner by backing Barca (not a big risk taker!) and bought us pints with his winnings.]

Rew

Another random anecdote. Sold my house (Sale Agreed in April just closed). Identical one around the corner of higher spec same asking isn't getting any viewings/offers.

freelancerTax

Rew wrote: »

Another random anecdote. Sold my house (Sale Agreed in April just closed). Identical one around the corner of higher spec same asking isn't getting any viewings/offers.

what is the general location if you don't mind me asking?

ionapaul

Barely Hedged wrote: »

What areas are you looking at price drops in particular?

How does the level the price has dropped to compare with the sale price of a similar property last year?

My wife and I are sale agreed on a small-ish 3-bed house in D18 - we've been looking in this area for about a year at this stage, I've been following asking prices, sale prices (via PPR) and offers (via speaking to the EAs we've a relationship with). There is no doubt in my mind that for 3-bed and 4-bed houses in the areas of D18 we're interested in (Sandyford Hall, Glencairn, Leapordstown Heights) prices currently being achieved are down 5%-10% (closer to the latter on average I'd say) on this time last year. I've posted a few good examples/anecdotes on the Pin about it, been very interesting seeing the prices drift down a bit, this house went sale agreed for approx. €465k last summer (we were one of the underbidders at over €450k), the sale didn't complete, came back to the market recently and the currently top offer is at €417k.

What seemed like a good deal to us when we went sale agreed earlier in the year is now no longer such a bargain, but we'll almost certainly complete the sale regardless. If I wasn't sale agreed I'd hold off for a few months though, I think prices will continue to come down slowly over the course of the rest of the year - won't return to 2011/2012 prices though IMHO.