Property Market 2015

Property prices rise again in May, says the Indo

Property prices show monthly rise of 0.5%, according to RTE

Irish house price growth slows in May is how Reuters see it

and Property prices rise again in May but fall in Dublin is the Irish Times's take.

So, yes, very annoying! I'm looking to buy in the commuter belt just outside Dublin so my only hope is that some other buyers/bidders will read this closely and ask themselves whether there's value to be had in Dublin if they hang on.

All the headline should really say 'Nothing statistically significant to report on house prices this month' but that wouldn't be very newsworthy

MayBea

Deleted User wrote: »

Property prices rise again in May, says the Indo

Property prices show monthly rise of 0.5%, according to RTE

Irish house price growth slows in May is how Reuters see it

and Property prices rise again in May but fall in Dublin is the Irish Times's take.

So, yes, very annoying! I'm looking to buy in the commuter belt just outside Dublin so my only hope is that some other buyers/bidders will read this closely and ask themselves whether there's value to be had in Dublin if they hang on.

All the headline should really say 'Nothing statistically significant to report on house prices this month' but that wouldn't be very newsworthy

I find it entertaining the way they keep stating "the property prices remain 37.5 per cent lower than their peak in 2007".
In Japan, prices have still not reached their 1989 peak, and they have almost halved since 1992.

gosplan

sapper wrote: »

Im in the market to buy in Dublin right now and these stats are wrecking my head.

Obviously I am biased but to my mind the RPPI in Dublin for May @ 83.2 is undeniably down from where it was in Dec 2014 at the height of the rebound @ 83.8. ie. the market has turned and prices are slowly gently going down

However whats the bet that all the headlines will be about how price rises are still the order of the day - ie. the media will use the soundbite "Dublin residential property prices were 15.2% higher than in May 2014".

Everyone I talk to reads these headlines and thinks that prices are still going up...more importantly sellers read these headlines and think that it is reasonable to ask 15% more than what "the house down the road" sold for last year.

I think the difference now though is affordability.

Every 10k you raise the house price by means people need 2k more deposit and around 3k more income.

Vendors will quickly see that they're not going to get extra but rather price people out of the market for their house.

Rew

Sellers may think that but at least some EAs will be telling them to take offers. I was talking to an EA 5 mins ago about 2 houses being sold by same landlord. He had an offer 10k below asking on one house (that has relatively low asking) and they are advising him to take it. She didn't want to show it again.

Barely Hedged

MayBea wrote: »

I find it entertaining the way they keep stating "the property prices remain 37.5 per cent lower than their peak in 2007".
In Japan, prices have still not reached their 1989 peak, and they have almost halved since 1992.

What I find enntertaining is the comparison to the Japanese.

What about the house price crash in the UK in 1992 and 2008? House prices reverted in 6-7 years max.

Who are we culturally and economically more similar to? The Japanese or the British?

MouseTail

In fairness, I haven't heard the Japanese comparison for a few years, but it never made sense to me. Our demographics, economy, culture and supply/demand are so different.

johnp001

Property market could need decades to recover from bust, says Central Bank

A paper comparing Ireland’s financial collapse to other major collapses in recent decades shows Ireland’s property crash has seen prices fall from their peak values at a steeper and more sustained rate than at any other time in history.
The only comparable case in which property prices fell so dramatically was in Finland, where the collapse of the Soviet Union led to a major economic crash in the early 1990s – and where property prices fell by almost half in four years. In Ireland a similar collapse occurred within five years.
In Finland’s case, however, it took 21 years for prices to match their 1990 peak – with little to indicate that Ireland’s recovery could be any quicker.
The only other case in which prices had fallen by comparable amounts is the ongoing property slump in Japan – where prices peaked in 1991 at the top of an immense property bubble and have continued to fall steadily since.

MouseTail

That article is 3 years old.

MayBea

Barely Hedged wrote: »

What I find enntertaining is the comparison to the Japanese.

What about the house price crash in the UK in 1992 and 2008? House prices reverted in 6-7 years max.

The emphasis here is on duration of recovery period with Japan being a severe example of.
I find this particular remark "property prices remain 37.5 per cent lower than their peak in 2007" to be irrelevant, they will remain lower than the peak for quite some years.

johnp001

MayBea wrote: »

The emphasis here is on duration of recovery period with Japan being a severe example of.
I find this particular remark "property prices remain 37.5 per cent lower than their peak in 2007" to be irrelevant, they will remain lower than the peak for quite some years.

21 years or 24 years (and counting) according to the study quoted by that article depending on whether you take the example of Finland or Japan.

The main factor that would make the Japan example more applicable would be if the current deflationary period continues for the long term. Finland had fairly healthy inflation averaging around 2% for most of the period that it took for prices to regain the bubble highs. So inflation accounted for a large proportion of the recovery in prices in Finland. Japan, without this inflation, has not recovered.

Barely Hedged

MayBea wrote: »

The emphasis here is on duration of recovery period with Japan being a severe example of.
I find this particular remark "property prices remain 37.5 per cent lower than their peak in 2007" to be irrelevant, they will remain lower than the peak for quite some years.

All else being equal, which is a pretty big assumption.

While I agree the comparison with the peak is a bit tiresome, Japan is a very, very bad comparative example. There's so many contrasts and differences to undermine your point. The only similarity is a sharp fall in house prices - that's it

Barely Hedged

johnp001 wrote: »

21 years or 24 years (and counting) according to the study quoted by that article depending on whether you take the example of Finland or Japan.

The main factor that would make the Japan example more applicable would be if the current deflationary period continues for the long term. Finland had fairly healthy inflation averaging around 2% for most of the period that it took for prices to regain the bubble highs. So inflation accounted for a large proportion of the recovery in prices in Finland. Japan, without this inflation, has not recovered.

What deflationary period?

johnp001

Barely Hedged wrote: »

What deflationary period?

The current one
Current inflation Ireland

Villa05

Can someone please define recovery.
Has Japan recovered ie do they have a normal functioning market with prices at fair value.

Japan has a good pedigree in fixing problems. Ireland; not so much especially when politicians are tasked with developing solutions

MayBea

Barely Hedged wrote: »

All else being equal, which is a pretty big assumption.

While I agree the comparison with the peak is a bit tiresome, Japan is a very, very bad comparative example. There's so many contrasts and differences to undermine your point. The only similarity is a sharp fall in house prices - that's it

I brought Japan as a grotesque example to emphasise the absurdness of constantly referring property prices with their pick in 2007 (..Japanese journalists would've need to refer to 1989's property prices in every property-related article for 26 years), not as a comparative example of two geopolitical and economic cases.

MayBea

johnp001 wrote: »

Finland had fairly healthy inflation averaging around 2% for most of the period that it took for prices to regain the bubble highs. So inflation accounted for a large proportion of the recovery in prices

Thanks, very interesting about Finland.

Barely Hedged

johnp001 wrote: »

The current one
Current inflation Ireland

Is this a joke?

Presenting an article three years out of date and now claiming inflation as deflation?

Ireland returned to inflation at the turn of the year

johnp001

Barely Hedged wrote: »

Is this a joke?

Presenting an article three years out of date and now claiming inflation as deflation?

Ireland returned to inflation at the turn of the year

The study referenced by that article was a study on historical context of Irelands property bubble which is perfectly valid 3 years later.
The figures I have linked above show Ireland in a 6 month period of deflation. I do not accept your assertion that Ireland is in inflation as any sort of valid refutation of those figures. Please provide reasons why they are incorrect if you refute them

Barely Hedged

johnp001 wrote: »

The figures I have linked above show Ireland in a 6 month period of deflation. I do not accept your assertion that Ireland is in inflation as any sort of valid refutation of those figures. Please provide reasons why they are incorrect if you refute them[/QUOTE]

The figures are in the link youve provided!!! I dont need to refute any assertion. Its a fact

The_Conductor

Barely Hedged wrote: »

johnp001 wrote: »

The figures I have linked above show Ireland in a 6 month period of deflation. I do not accept your assertion that Ireland is in inflation as any sort of valid refutation of those figures. Please provide reasons why they are incorrect if you refute them[/QUOTE]

The figures are in the link youve provided!!! I dont need to refute any assertion. Its a fact

Extrapolating the inflation rate from the last 3-4 months would give you an anualised rate of between 5 and 6%. The uptick in the economy has been more and more apparent over the past few months- the increase in inflation though can almost totally be accounted for by increases in fuel costs.

gaius c

sapper wrote: »

a bit off topic but anyone know why the PPR hasnt been updated since June 12? Been some recent sales in my street and am gumming to find out the sold price

Updated yesterday.

MayBea wrote: »

Spider has gone unusually quiet over the last few months..

He's prohibited from posting in this thread IIRC.

MayBea wrote: »

I find it entertaining the way they keep stating "the property prices remain 37.5 per cent lower than their peak in 2007".
In Japan, prices have still not reached their 1989 peak, and they have almost halved since 1992.

Sure you have to have a target to aim for! :pac:

The market stalled in the second half of last year. We are now in a phoney war phase (like 2008-2009) as vendors struggle to get to grips with the fact that their houses aren't worth what they thought they were. How long will it go on? Hard to tell but vendors are dropping their prices at present. The question is if they are dropping them enough. A big feature of the 2009-2012 period was vendors doing lots of small little drops, forever chasing the market downwards but never quite catching it. Good quality, well-priced houses are still selling but wrecks are proving hard to shift unless they are priced very attractively.

Re the discussion on CSO v PPR data earlier, I agree that monthly data is much too bumpy to use for PPR but quarterly data shows a much clearer picture and it shows consistent drops in both Ireland and Dublin since Q3 2014*. I'm due to post an update and will do as soon as I can. I want to start using median rather than average figures and it's all a learning experience on Excel.

*Data for the urban areas outside Dublin is incredibly jumpy, even on a quarterly basis.

sapper

gaius c wrote: »

Updated yesterday.

Yes saw that - the house on my street is up there now sold 10k under asking. Amazing how hard it is to get an EA to disclose a sale price when its under asking...no problem at all for them to give you the price when sold over asking...great that the PPR is as fast as it is now

NinjaTruncs

sapper wrote: »

Yes saw that - the house on my street is up there now sold 10k under asking. Amazing how hard it is to get an EA to disclose a sale price when its under asking...no problem at all for them to give you the price when sold over asking...great that the PPR is as fast as it is now

That's so true. I asked about a house and was told it sold for a little over asking price when it was about 10k under according to ppr.

jmayo

MayBea wrote: »

Spider has gone unusually quiet over the last few months..

The market is definitely flattening..but not dramatically falling. My guess is we'll soon to see the government's Help to Buy/cash grant scheme etc. back on the agenda.

Cynical much

Barely Hedged wrote: »

What I find enntertaining is the comparison to the Japanese.

What about the house price crash in the UK in 1992 and 2008? House prices reverted in 6-7 years max.

Who are we culturally and economically more similar to? The Japanese or the British?

Comparing us to anyone is a bit unfair.
After all these countries never created such a bubble that accounted for such a high precentage of tax revenue and overall employment.
These countries didn't have their entire indigenous banking system wiped out with the can being dumped on to the taxpayers.
Yes I know there were bailouts in these other countries but nothing like the level seen in Ireland.

Now you of course will say that makes us all the more remarkable since we have "recovered" so quickly.

Only thing I will say is our government (and the banks they were/are in charge of) intervened to halt the market finding it's natural bottom.
I wouldn't say we have anywhere near a proper functioning property market when we have a sizable precentage of mortgages in default for years.
Care to name any other country today or in history where people were allowed basically live rent free in properties on which they owed almost entire mortgage ?
We must ahve the biggest percentage of squatters in the world at this stage.

We have the highest percentage of mortgages in default in the world.
Of course that is ignored by some when they speak of recoveries.

Cuddlesworth

jmayo wrote: »

We must ahve the biggest percentage of squatters in the world at this stage.

5%(37898) of total mortgage holders are 2+ years out arrears and its been holding at that figure for at least 4 years now.

11%(15,361) of BTL properties are 2+ years in arrears.

There are over 50 thousand properties in here that would have been repossed in any other county in the world.

fret_wimp2

besides a looming election, is there any legitimate reason to keep people in houses they cant afford?

starbaby2003

fret_wimp2 wrote: »

besides a looming election, is there any legitimate reason to keep people in houses they cant afford?

If people bought a house as a home and not an investment then what do you have to gain by turfing them out ? The state will still and rightly so have to house them. Why not give them time to get in to better circumstances. Put a stop on the accruing interest whilst keeping the principle or get the government to take over the debt ( pay the overdue amount and repackage at a more manageable level that is upped when circumstances allow or the term increased) The house can never be sold or used as collateral without the full amount being paid off but reprieve is given to allow people to get their heads above water if it's an option. Unfortunately there will still be some repossessions but people who are making a genuine effort to pay will be looked after.

El_Dangeroso

starbaby2003 wrote: »

If people bought a house as a home and not an investment then what do you have to gain by turfing them out ? The state will still and rightly so have to house them.

Why would the state have to house them? I doubt all those in mortgage arrears are out of work, they would just have to join the renting classes like many others have to do. And the 11% buy to let figure is an actual scandal in my opinion, why on earth have they not been repossessed? I can't think of one good reason.

Cuddlesworth

starbaby2003 wrote: »

If people bought a house as a home and not an investment then what do you have to gain by turfing them out ? The state will still and rightly so have to house them. Why not give them time to get in to better circumstances. Put a stop on the accruing interest whilst keeping the principle or get the government to take over the debt ( pay the overdue amount and repackage at a more manageable level that is upped when circumstances allow or the term increased) The house can never be sold or used as collateral without the full amount being paid off but reprieve is given to allow people to get their heads above water if it's an option. Unfortunately there will still be some repossessions but people who are making a genuine effort to pay will be looked after.

Compound interest. A 200k mortgage at 4% interest would be 216k at the end of 2 years. Its one of the main reasons why in normal economies default is considered over 90 days. Those people who are 2+ years in arrears are very unlikely to ever get their head above water. In the meantime, the bank has to charge other people higher interest rates to cover the lost revenue coupled with the ridiculous costs of equity retrieval from all the court time required per case. Why do you think we have such high interest rates in comparison to other countries and why no other bank will touch us?

Then there is the worry that even with all the court cases, the number of people in arrears over 2 years is staying roughly static. Its not going away. What do you think will happen if we see another property crash while we have the highest arrears in the world without any real repercussion?

One of the things I find hilarious about the irish attitude to this is how they react to people who rent who are evicted versus those who rent from a bank. Like there is any real difference besides some equity in the property.

starbaby2003

El_Dangeroso wrote: »

Why would the state have to house them? I doubt all those in mortgage arrears are out of work, they would just have to join the renting classes like many others have to do. And the 11% buy to let figure is an actual scandal in my opinion, why on earth have they not been repossessed? I can't think of one good reason.

I would presume people who are unable to come to an agreement with the bank to make payments on a property would also be unable to privately rent ?
I think the buy to let properties should be reprocessed. These are an investment gone bad and all investors know the risks ..... It's not like the government would guarantee unsecured debtors ... Oh wait