Property Market 2016

El_Dangeroso

handlemaster wrote: »

And ? Who cares ... their not going to sell at a loss and their not going to give their business interests away for nothing. Business as usual

I care actually. No one was saying that they would sell at a loss. But it does mean more stock on the market, which has been at record lows. Also these loans were bought for cents on the euro, so a return to them would be a lower price than someone trying to get boom prices.

The_Conductor

cnocbui wrote: »

If you are only prepared to pay $20 for a barrel of oil and it costs the producers $40 to provide - you won't be able to buy barrels of oil for long - that IS how markets work.

Funnily enough- this is not how the market works.
Even if the price of oil (or houses- or any other commodity) is only half its production cost- it doesn't necessarily mean that the producers will be driven from the market.

1. Some producers will continue to build houses (or pump oil) even at a loss- to try and drive other producers from the market.

2. The cost of exiting the market- even loosing $20 a barrel for oil (or 50k for houses) may be greater than the cost of selling the continuous stock of units at a loss.

Its to do with the marginal cost of production- and whether there are other factors in the equation- other than the pure necessity to make a profit- which arguably, as sure as there is in the oil market- there certainly is in the housing market too..........

The Economist have had a few interesting articles on commodities bucking the trend of conventional wisdom lately.

cnocbui

The_Conductor wrote: »

Funnily enough- this is not how the market works.
Even if the price of oil (or houses- or any other commodity) is only half its production cost- it doesn't necessarily mean that the producers will be driven from the market.

1. Some producers will continue to build houses (or pump oil) even at a loss- to try and drive other producers from the market.

2. The cost of exiting the market- even loosing $20 a barrel for oil (or 50k for houses) may be greater than the cost of selling the continuous stock of units at a loss.

Its to do with the marginal cost of production- and whether there are other factors in the equation- other than the pure necessity to make a profit- which arguably, as sure as there is in the oil market- there certainly is in the housing market too..........

The Economist have had a few interesting articles on commodities bucking the trend of conventional wisdom lately.

When you find those houses being built and sold at below cost, do please give us all a heads-up.

slowjoe17

cnocbui wrote: »

When you find those houses being built and sold at below cost, do please give us all a heads-up.

Conductor's point is that pre-built houses can and will be sold for less than the cost to build.

Your point is that no sane builder will build a house if the market price is less than the cost of construction.

You are both correct.

As an aside, this kind of "can't build" crisis is likely if prices drop 15% (since builders aim for a 15% profit. Obviously, it can also occur if costs go up without market prices reflecting this problem.

In the past, the builder would be expected to build a cheaper house, but regulations make that extremely tricky at the moment.

dubrov

slowjoe17 wrote:

As an aside, this kind of "can't build" crisis is likely if prices drop 15% (since builders aim for a 15% profit. Obviously, it can also occur if costs go up without market prices reflecting this problem.

In na normal market land prices would drop to maintain the builders margin.

Of course it will never go below zero but that isn't an issue in the Dublin area where sale prices far exceed builds costs.

Nedbroy

Re: FF & Labour's election promises to top up deposits by 25% for FTBs. Is this a real possibility do you think? Worth holding off buying for? Does the money come from taxpayers? Would it be a loan? Or just a load of pre-election BS?

athtrasna

Nedbroy wrote: »

Re: FF & Labour's election promises to top up deposits by 25% for FTBs. Is this a real possibility do you think? Worth holding off buying for? Does the money come from taxpayers? Would it be a loan? Or just a load of pre-election BS?

Bordering on off topic for the forum but it's not likely to happen. Ftb make up a very small proportion of buyers and to discriminate in this way would be political suicide.

Nedbroy

athtrasna wrote: »

Bordering on off topic for the forum but it's not likely to happen. Ftb make up a very small proportion of buyers and to discriminate in this way would be political suicide.

Sorry perhaps I should start a separate thread. This is what I read and it's not crystal clear whether it will apply solely to FTBs http://analysis.rte.ie/business/2016/02/19/general-election-how-do-the-parties-differ-on-housing/ but surely if some/any of these schemes came to be it wiould have some sort of impact on the market?

OfflerCrocGod

They have something similar in the UK, called Help to Buy, it's an awful idea. Clearly houses are either too expensive or the first time buyers are not earning enough. I wish they'd focus on what parts of the cost base of building a house could be reduced as opposed to providing yet more leverage.

Bob24

Nedbroy wrote: »

Sorry perhaps I should start a separate thread. This is what I read and it's not crystal clear whether it will apply solely to FTBs http://analysis.rte.ie/business/2016/02/19/general-election-how-do-the-parties-differ-on-housing/ but surely if some/any of these schemes came to be it wiould have some sort of impact on the market?

They're not clearly explaining what top-up means (loan or gift?), and I would expect some surprise there.

And in any case, as said just above, giving people leverage to borrow more won't solve the crisis. All it can do is artificially push prices upwards, because many people are desperate for a place and they will borrow as much as they can.

It kind of sounds like a way to circumvent the CBI rules.

Rothmans

Has anyone noticed that there are certain houses which seem to be up on Daft for an eternity? For example, this house has been up for over a year, and the price has been fluctuating. Anyone have any suggestions as to why this may be? This is one of those three bed semis which is apparently in such high demand. Looks to be in good condition etc, reasonably priced, yet it doesn't seem to be shifting. Anyone have any suggestions?

http://www.daft.ie/dublin/houses-for-sale/phibsborough/16-ulster-street-phibsborough-dublin-1018495/

Michael D Not Higgins

Rothmans wrote: »

Has anyone noticed that there are certain houses which seem to be up on Daft for an eternity? For example, this house has been up for over a year, and the price has been fluctuating. Anyone have any suggestions as to why this may be? This is one of those three bed semis which is apparently in such high demand. Looks to be in good condition etc, reasonably priced, yet it doesn't seem to be shifting. Anyone have any suggestions?

http://www.daft.ie/dublin/houses-for-sale/phibsborough/16-ulster-street-phibsborough-dublin-1018495/

There must be something wrong with it. Number 10 sold less than a year ago for 370k according to the Property Price Register.

It does say it's currently rented so who knows, maybe they can't shift the tenants and no viewings have occurred.

Rothmans

Michael D Not Higgins wrote: »

There must be something wrong with it. Number 10 sold less than a year ago for 370k according to the Property Price Register.

It does say it's currently rented so who knows, maybe they can't shift the tenants and no viewings have occurred.

Number 10 was a four bed though. But it's definitely a bit anomalous though.

EDIT: That was number 9, not 10. Apologies.

Michael D Not Higgins

Also, considering it's a rental property, it could be a mortgage in arrears and the sale is being forced by the bank. The landlord could be playing silly buggers with the bank and it would also explain the very low price in relation to similar property in the area.

Villa05

When we purchased in 2014, there was another house (bank sale) on the same street which we enquired about. Estate agent put us of it saying the bank was dithering and testing the market rather than serious sellers. The house is still there empty in a city with a housing shortage, families in hotels etc.

gaius c

There's a lot of that going on. Was a thread on here before with a wannabe buyer complaining about the decent spec houses on the market but not actually for sale. They were only advertised to get the banks off their backs.
Must find the link.

El_Dangeroso

They are discussing property market at the moment on Today FM.

The guests are highlighting the shocking amount of vacant houses.

gaius c

El_Dangeroso wrote: »

They are discussing property market at the moment on Today FM.

The guests are highlighting the shocking amount of vacant houses.

Any figures mentioned? Read an article before suggesting 8% vacant housing rate in Dublin but more evidence would be great.

El_Dangeroso

gaius c wrote: »

Any figures mentioned? Read an article before suggesting 8% vacant housing rate in Dublin but more evidence would be great.

They didn't have figures but suggested in some areas it's up to 20%.

Michael D Not Higgins

El_Dangeroso wrote: »

They didn't have figures but suggested in some areas it's up to 20%.

What were they attributing the vacancy rate to, people holding on for higher prices?

PhoenixParker

The best figures available at the moment are probably from the 2011 census which are too out of date to be relevant really.
That's probably where the 8% Vacancy rate comes from as that was the average across Dublin at that time.

Map of 2011 Vacancy rates in Dublin:



The census in April should give us a better idea before year end.

gaius c

El_Dangeroso wrote: »

They didn't have figures but suggested in some areas it's up to 20%.

What areas?

I'd well believe the figure for older, more mature areas. Old folks go to nursing homes and their house sits there for years until they've departed this mortal coil and the messy probate is dealt with.

There's also developments that have deliberately been left empty but these are slowly been worked through. The 500 odd apartments at Tallaght Cross are a good example.

El_Dangeroso

Michael D Not Higgins wrote: »

What were they attributing the vacancy rate to, people holding on for higher prices?

Mostly to stalled receivership processes.

gaius c wrote: »

What areas?

They didn't say.

gaius c

And who were the guests?

(We're full of questions today)

El_Dangeroso

gaius c wrote: »

And who were the guests?

(We're full of questions today)

Ah here, listen to it yourself!

http://www.todayfm.com/player/podcasts/The_Last_Word_with_Matt_Cooper/The_Last_Word_with_Matt_Cooper/49892/1/election_2016__the_big_issue_housing

gaius c

And what colour is the sky???

Okay thanks. Will have a listen later.

whiskeyman

Market still seems very sluggish with little coming out.
Are potential sellers waiting for relaxation of CB rules / other things from new Gov so prices are go back up?

SarahMollie

whiskeyman wrote: »

Market still seems very sluggish with little coming out.
Are potential sellers waiting for relaxation of CB rules / other things from new Gov so prices are go back up?

I'd say some potential sellers are maybe waiting for the outcome of the election. If some populist crowd get in (or partially in) they might be looking for schemes to help FTBs, which have historically helped increase prices.

Anytime there is uncertainty, sellers hold out IMO.

Very low volumes out there at the moment.

The Mulk

SarahMollie wrote: »

I'd say some potential sellers are maybe waiting for the outcome of the election. If some populist crowd get in (or partially in) they might be looking for schemes to help FTBs, which have historically helped increase prices.

Anytime there is uncertainty, sellers hold out IMO.

Very low volumes out there at the moment.

On the opposite side of the fence, I've my house up for sale, we had Sale Agreed before Christmas but the chain fell through.
Approx 20 couples have viewed it since then, 90% first time buyers, not a single bid, same with 2 other similar houses that have gone up around the same time in the area. Seems to be FTB's are waiting until after the election too.(Well that's what the EA is telling us)

Cuddlesworth

The Mulk wrote: »

On the opposite side of the fence, I've my house up for sale, we had Sale Agreed before Christmas but the chain fell through.
Approx 20 couples have viewed it since then, 90% first time buyers, not a single bid, same with 2 other similar houses that have gone up around the same time in the area. Seems to be FTB's are waiting until after the election too.(Well that's what the EA is telling us)

Or that they simply don't think its worth the money.