Property Market 2015

slowjoe17

OfflerCrocGod wrote: »

They won't build up their REITs by buying 3 bed semi-D's randomly around Dublin. It's just not worth the hassle for them. Bridge finance to developers to develop more REIT stock doesn't sound like the sort of thing that will trigger a boom either. Quite the opposite, more choice for people.

Controlling the rental market by building lots of new stock, how does that work? It's in my interest to rent the properties out so I can pay my dividends. We aren't talking about NAMA here, the REITs want stable cash flow not a boom bust cycle.

I can't think of a single boom in history that was fuelled only by cash. Credit is the poison.

More to the point, REITs aren't dumb enough to bid the market up. They've bought 100s or 1000s of properties before. They really don't give a toss about the start of the school year or the expiry of their mortgage offer. They can wait 3 years to complete any given transaction.

REITs will wait for the market to drop. Only "dumb money" (who get their info from the Indo and the Irish Times) actually think prices are sustainable.

Remember, central bank rules only fully apply next week (2015-08-11). After that, anyone placing an opening bid on Dublin property > 80% of asking is a fool.

alastair

slowjoe17 wrote: »

Only "dumb money" (who get their info from the Indo and the Irish Times) actually think prices are sustainable.

Remember, central bank rules only fully apply next week (2015-08-11). After that, anyone placing an opening bid on Dublin property > 80% of asking is a fool.

Current prices are entirely sustainable, even if they're not palatable to you.

Bidding strategies are all well and good, but this notion that prices are going to fall 10/20% is real foolishness. It's just not going to happen.

The_Conductor

alastair wrote: »

Current prices are entirely sustainable, even if they're not palatable to you.

Bidding strategies are all well and good, but this notion that prices are going to fall 10/20% is real foolishness. It's just not going to happen.

It is not foolishness to imagine prices will fall 10 or 20%.
Its also not foolish to imagine they may rise by a commensurate amount.
It is foolish not to listen to people and their thoughts- professionals and otherwise- and once you have equipped yourself with the best information you can find- to make an informed decision.
Ignoring those who disagree with your point of view- solely because they have a different point of view- is foolish.

MarkAnthony

alastair wrote: »

Current prices are entirely sustainable, even if they're not palatable to you.

Bidding strategies are all well and good, but this notion that prices are going to fall 10/20% is real foolishness. It's just not going to happen.

To be fair there are a good few local bubbles. There are some very still prices going on in isolated pockets of Dublin and there is some excellent value out there. I suspect that we'll see things stabilising and settling down.

slowjoe17

alastair wrote: »

Current prices are entirely sustainable, even if they're not palatable to you.

Bidding strategies are all well and good, but this notion that prices are going to fall 10/20% is real foolishness. It's just not going to happen.

Thanks for the ad-hominem about foolishness in the context of an economy where every bank had to be bailed out.

Do you give lessons on statistics as well?

Please explain what you expect the effect of the central bank rules (coming in NEXT WEEK) will be?

alastair

slowjoe17 wrote: »

Thanks for the ad-hominem about foolishness in the context of an economy where every bank had to be bailed out.

Do you give lessons on statistics as well?

Please explain what you expect the effect of the central bank rules (coming in NEXT WEEK) will be?

You seem a bit blinkered on the whole ad-hominem issue. Just saying. The CB rules have been in effect since the start of the year, and we've had months of people buying on the post CB mortgage regime.

FortySeven

Think you're being a bit optimistic there slowjoe. There are plenty folks who have more than a 20% deposit. I just put down more than that on my house, first time buyer with 3 kids and not by any stretch of the imagination wealthy. There are plenty folks I know sitting on the sidelines waiting to see what happens.

Competing with cash buyers looking to cash in on the astronomical rents and in the middle of a supply shortage you are expecting a 10 - 20% drop? In Dublin? There is also a faux recovery and we are showing growth the highest in Europe.

Personally I have no skin in the game and couldn't care less if they go up or down, we were effectively forced to buy due to rising rents, we would have preferred to pay much more deposit but the saving v rent equation was no longer in our favour. There are a lot like us.

If there is any drop then it will be bought up in no time as all those crippled with rising rent are forced to hold their noses and jump in.

There will be another crisis soon enough when the rental bubble bursts. That would be the time to be sitting on cash but who knows when that will happen?

Roger McAllen

The amount of speculation going on here is ridiculous, people trying the same crap that we saw in the 2002-2007 bubble: get on the ladder before it's too late - otherwise you will never own a house, rent is dead money, quick quick buy anything! once you are buying! doesn't matter if it's an hour drive from Dublin and €400k for a 2-bed poorly built apartment, just buy - quick! There's a wave of rich Irish migrants returning from Australia with €300k cash ready to push you out of the market! We are the fastest growing economy in Europe, therefore house prices will keep rising, the sky's the limit my friend!

Christ above, this country's obsession with property speculation makes me nauseous sometimes. Thankfully house prices will ultimately be decided by factors out of our control (interest rates, government housing strategy, unemployment levels, to name a few) and not internet forum posts.

MarkAnthony

Roger McAllen wrote: »

The amount of speculation going on here is ridiculous, people trying the same crap that we saw in the 2002-2007 bubble: get on the ladder before it's too late - otherwise you will never own a house, rent is dead money, quick quick buy anything! once you are buying! doesn't matter if it's an hour drive from Dublin and €400k for a 2-bed poorly built apartment, just buy - quick! There's a wave of rich Irish migrants returning from Australia with €300k cash ready to push you out of the market! We are the fastest growing economy in Europe, therefore house prices will keep rising, the sky's the limit my friend!

Christ above, this country's obsession with property speculation makes me nauseous sometimes. Thankfully house prices will ultimately be decided by factors out of our control (interest rates, government housing strategy, unemployment levels, to name a few) and not internet forum posts.

Kinda begs the question, why are you here?

Firstly the points you've made are pretty inaccurate ref what people are suggesting about buying/prices. Secondly Everyone (almost) knows this is a chit chat. I bet you're great craic at parties.

wenbo

As a FTB, I read every post in this thread and was begging for price drop every day. Now I got my house and don't care anymore:)

TheDriver

wenbo wrote: »

As a FTB, I read every post in this thread and was begging for price drop every day. Now I got my house and don't care anymore:)

Same, begged for price drops and realized it doesn't seem to be happening, in fact houses just rose in price

slowjoe17

FortySeven wrote: »

Think you're being a bit optimistic there slowjoe. There are plenty folks who have more than a 20% deposit. I just put down more than that on my house, first time buyer with 3 kids and not by any stretch of the imagination wealthy. There are plenty folks I know sitting on the sidelines waiting to see what happens.

It's not just the 20%. If you have combined earning of 80k and 100k deposit, you can still only bid up to 380k. So the CB deposit requirement is 14%, but in fact, you are required to present a 26% deposit by the LTV rules.

Competing with cash buyers looking to cash in on the astronomical rents and in the middle of a supply shortage you are expecting a 10 - 20% drop? In Dublin? There is also a faux recovery and we are showing growth the highest in Europe.

The borrowing ability of the average buyer has just dropped by 4.5/3.5 = 27%. Even if cash buyers were 50% of the market, that has to play out. I have well-paid friends in the Facebooks and Googles, and they can't get a mortgage for a 3bed semi atm.

So, for the South Dublin market, just forget it. The market has to fall.

Personally I have no skin in the game and couldn't care less if they go up or down, we were effectively forced to buy due to rising rents, we would have preferred to pay much more deposit but the saving v rent equation was no longer in our favour. There are a lot like us.

Respectfully, being long a multi-hundred thousand euro asset doesn't meet my definition of "no skin in the game". OTOH, no-one on this forum meets that definition IMO. I'm looking, so I have skin-in-the-game on the downside.

But I really wish that prolific posters who might be estate agents or BTL investors would identify themselves!

If there is any drop then it will be bought up in no time as all those crippled with rising rent are forced to hold their noses and jump in.

"Any drop" is clearly, provably wrong. Again, that assumes "they" have a deposit and income to meet current market prices at current market rules, the month that borrowing abiity has dropped by 28% (assuming the LTV rule changed from 4.5 to 3.5 times income.)

If "any drop" is 25%, yeah, totally, there will be a buying frenzy for the ages.

From an investment POV, anyone looking to buy has to factor in landlord-hostile rules currently in effect, and discount any future legislative stupidity "to solve the rental crisis" in the runup to the election.

gaius c

wenbo wrote: »

As a FTB, I read every post in this thread and was begging for price drop every day. Now I got my house and don't care anymore:)

Until you want to trade up and realise that despite your house appreciating (or depreciating) in value, the house you'd like to trade up to has done the same.

Mr.McLovin

gaius c wrote: »

Until you want to trade up and realise that despite your house appreciating (or depreciating) in value, the house you'd like to trade up to has done the same.

or when your children and grandchildren can only afford live a 3 drive from you or even a ten hour flight!

handlemaster

gaius c wrote: »

Until you want to trade up and realise that despite your house appreciating (or depreciating) in value, the house you'd like to trade up to has done the same.

its really all the same then, the same boat and all that.

alastair

Mr.McLovin wrote: »

or when your children and grandchildren can only afford live a 3 drive from you or even a ten hour flight!

In fairness - I'm not seeing how price drops in property will help emigrants or those who can't find affordable housing less than 3 hours from you (!). There's far more affordable housing less than an hour from the most expensive locations in Dublin. No need to move three hours away (or abroad) to find a gaff.

MarkAnthony

alastair wrote: »

In fairness - I'm not seeing how price drops in property will help emigrants or those who can't find affordable housing less than 3 hours from you (!). There's far more affordable housing less than an hour from the most expensive locations in Dublin. No need to move three hours away (or abroad) to find a gaff.

+1!

Where's the most expensive area in Dublin? D4 - 6 million for a mansion. D5 is less than 20 minutes (the way I drive) and you'll get a 3 bed there for under €200K. Go to Finglas/Coolock you're still less than an hour and likely to find something under €100K.

Dublin is no overpriced. Certain areas of Dublin are.

jam_mac_jam

MarkAnthony wrote: »

+1!

Where's the most expensive area in Dublin? D4 - 6 million for a mansion. D5 is less than 20 minutes (the way I drive) and you'll get a 3 bed there for under €200K. Go to Finglas/Coolock you're still less than an hour and likely to find something under €100K.

Dublin is no overpriced. Certain areas of Dublin are.

You really will not get a three bed for less then 200K that is not a complete wreck. Like wise a house in Finglas is not less then 100K.

jay0109

MarkAnthony wrote: »

+1!

Where's the most expensive area in Dublin? D4 - 6 million for a mansion. D5 is less than 20 minutes (the way I drive) and you'll get a 3 bed there for under €200K. Go to Finglas/Coolock you're still less than an hour and likely to find something under €100K.

Dublin is no overpriced. Certain areas of Dublin are.

And you'd have no issues living in an area of Coolock/Finglas where a house cost less than 100k?
Or you'd just expect other people to do this?

handlemaster

http://m.independent.ie/business/personal-finance/property-mortgages/increase-in-number-of-homes-being-built-wont-solve-crisis-31428468.html


I think rental prices in Dublin will shoot up again if building doesnt start soon. Even in a stagnant economy there needs to be building and whether the the dark cloud pervayers believe it or not Ireland needs to build in population grow th areas.The economy is growing strongly but demand for housing is not been met, only one result higher rents.

castle2012

handlemaster wrote: »

http://m.independent.ie/business/personal-finance/property-mortgages/increase-in-number-of-homes-being-built-wont-solve-crisis-31428468.html


I think rental prices in Dublin will shoot up again if building doesnt start soon. Even in a stagnant economy there needs to be building and whether the the dark cloud pervayers believe it or not Ireland needs to build in population grow th areas.The economy is growing strongly but demand for housing is not been met, only one result higher rents.

I think both rental and sales prices are going to move upwards . Simple supply and demand economic s

Floodzie

castle2012 wrote: »

I think both rental and sales prices are going to move upwards . Simple supply and demand economic s

Hasn't this argument already been covered in this thread? i.e. a restriction on credit will have a downward effect on sales prices. You could be right about rents though.

alastair

Floodzie wrote: »

Hasn't this argument already been covered in this thread? i.e. a restriction on credit will have a downward effect on sales prices. You could be right about rents though.

A restriction on credit will have a once-off slowing effect on turnover, and certainly slow price increases, but in the context of continued supply constraints, an improving economy, increased employment, increasing rents, relatively low interest rates, and the fact that the credit constraints make for more affordable purchases in the long run, it's hard to see any downward effect of the new lending rules outweighing upward pressures.

Archaeoliz

alastair wrote: »

A restriction on credit will have a once-off slowing effect on turnover, and certainly slow price increases, but in the context of continued supply constraints, an improving economy, increased employment, increasing rents, relatively low interest rates, and the fact that the credit constraints make for more affordable purchases in the long run, it's hard to see any downward effect of the new lending rules outweighing upward pressures.

I think it's more complicated than that. As I think has been mentioned before the CB rules are designed to reduce risk to the banking sector. Any impact on the housing market is secondary.

Things that I do know are that 20% YOY growth is unsustainable. That level would need to be supported by similar inflation and salary rises. Therefore I think the housing market needs to be considered as a separate entity, affected but different to the wider economy. The whole economy is doing better but not 20% per annum! Given levels of inflation, interest rates and the level of growth sustainable would IMHO need to be closer to 1 or 2% increases YOY. That means there will need to be an adjustment from the large increase last year but that seems to be happening/have happened looking at the CSO data.

I believe that Seller/Landlord expectation is one of the biggest factors here. Why would you consider moving/selling if you think you can gain 10% + on your property in a year's time without doing a thing? For me a flat market, following inflation is the best possible outcome for everyone.

If you only expect 1% then it's not worth your while waiting. I also think it very interesting as independent.ie articles seem to be a litmus test for general opinion on the housing market (no matter what you think of their journalistic prowess *ahem*).

gaius c

Is there no end to the sneakiness of EA's?

A well-known trick to hide price drops for currently selling houses is to delete the ad and re-list as a new ad but I'm coming across a new one to hide sales that went for below asking and it's simply not to update the house from "sale agreed" to "sold" on myhome because myhome will then add the sale price as it appears on the PPR. Leave it as sale agreed indefinitely and the myhome algorithims don't update while the agent still gets to crow about the sale.

Here is a good example.
http://www.myhome.ie/residential/brochure/44-cromwellsfort-road-walkinstown-dublin-12/2888521
Originally looking for just shy of €400k and PPR has it sold for €340k on 24th April. Only got alerted to this yesterday as I heard of a similar house where the vendor was told not to contact myhome themselves to correct the error because "it would cause tax problems for them" when the real reason is that the EA wants to hide a sale 18% below asking. Buyer will probably be onto myhome pretty snappy once they realise their home is still up on the site but I imagine that the ad will be deleted rather than having the price added.

gosplan

There's a couple of pieces in the Indo today by EAs looking to roll back the CB rules.

They're killing the hopes and dreams of all the trader-uppers apparently.

All points to them being very worried about the middle slice of the market (350k - 600k) or there abouts.

As said before, future economic growth, returning Irish with bags of cash and giveaway budgets will see the market OK in the long term but right now the no of people that can afford the 450k house has been slashed hugely and there are is no immediate economic counterbalance.

These houses will drop. It can't go any other way.

People going on about long term economic fundamentals are either ignoring the fact that they've already started dropping or refusing to see the different sub-markets in the irish property market.

seamus

gaius c wrote: »

Is there no end to the sneakiness of EA's?

Here is a good example.
http://www.myhome.ie/residential/brochure/44-cromwellsfort-road-walkinstown-dublin-12/2888521

"Never ascribe to malice that which is adequately explained by incompetence."
I think that's especially true in the case of Castles. How that agency survived the collapse I'll never know. They were a clueless bunch before the crash and still a clueless bunch now.

gaius c

seamus wrote: »

"Never ascribe to malice that which is adequately explained by incompetence."
I think that's especially true in the case of Castles. How that agency survived the collapse I'll never know. They were a clueless bunch before the crash and still a clueless bunch now.

I'm not going to reveal the second house I mentioned (as it's a family member's house) but that was Castle too. And the exact same agent...

ionapaul

My wife and I recently closed on a small house we got for €40K/approx 10% below asking - the EA deleted the ad a few days after we went sale agreed (way back at the start of the year, getting it over the line took a LONG time!), I wonder was 'hiding' the dropping of prices one of the reasons? Hadn't thought about it until now.

OfflerCrocGod

gosplan wrote: »

There's a couple of pieces in the Indo today by EAs looking to roll back the CB rules.

They're killing the hopes and dreams of all the trader-uppers apparently.

It's great how they don't mention the possibility of price drops to make houses more affordable for trader-uppers? Such ideas aren't to be contemplated.