Property Market 2016

Gandalph

Has anyone heard anything further about the VAT reductions on new builds?

Also what is the VAT treatment on these properties if they were develop-to-let?

Bob24

Gandalph wrote: »

Has anyone heard anything further about the VAT reductions on new builds?

Also what is the VAT treatment on these properties if they were develop-to-let?

Not heard much ... but regardless, I would say anything politicians are saying those days is just electoral manoeuvre and should not be taken seriously (about this topic or others). Will start paying attention again if a government is formed or a new election is called.

PhoenixParker

Cuddlesworth wrote: »

Late 90's? I know people were pointing out on this forum for nearly a decade that the actual total number of yearly sales have been way below normal. And before that it was boom city.

The late 90s had a very dysfunctional rental market (huge demand, prices similar to what they are now) too if memory serves.

Seems like we can have one or the other but not both.

Bob24

Slightly off-topic but people on this thread should "like" this:
http://www.irishtimes.com/news/crime-and-law/courts/circuit-court/bank-queues-affecting-man-s-ability-to-pay-84-000-debt-1.2616052

This "Dublin businessman" is being brought to court by AIB for being 84k in arrears on his mortgage and not engaging, and the only explanation he has for the judge is: "They are always very busy and you have to queue for an hour to make a payment".

People are just amazing*!



*shameless

yqtwqxqm

PhoenixParker wrote: »

The late 90s had a very dysfunctional rental market (huge demand, prices similar to what they are now) too if memory serves.

Seems like we can have one or the other but not both.

The government decided to interfere with the market and it led to a huge shortage of properties for rent then too.

quadrifoglio verde

Bob24 wrote: »

Slightly off-topic but people on this thread should "like" this:
http://www.irishtimes.com/news/crime-and-law/courts/circuit-court/bank-queues-affecting-man-s-ability-to-pay-84-000-debt-1.2616052

This "Dublin businessman" is being brought to court by AIB for being 84k in mortgage arrears and not engaging, and the only explanation he has for the judge is: "They are always very busy and you have to queue for an hour to make a payment".

People are just amazing*!



*shameless

Something doesn't add up. The Baily is home to multi million Euro homes. The loans outstanding amount to what 200k with 85K in arrears?
Doesn't make sense

cojomo2

quadrifoglio verde wrote: »

Something doesn't add up. The Baily is home to multi million Euro homes. The loans outstanding amount to what 200k with 85K in arrears?
Doesn't make sense

I think all the info is there ....the man doesn't like to queues, that's all!

Bob24

quadrifoglio verde wrote: »

Something doesn't add up. The Baily is home to multi million Euro homes. The loans outstanding amount to what 200k with 85K in arrears?
Doesn't make sense

I think the mortgages in arrears are not for the house the bank is seeking a possession order for. If I understand correctly, that house was used as a collateral for other mortgages, and since the mortgages are not being repaid the bank is going after the asset used as a collateral.

gaius c

quadrifoglio verde wrote: »

Something doesn't add up. The Baily is home to multi million Euro homes. The loans outstanding amount to what 200k with 85K in arrears?
Doesn't make sense

Probably those daft "equity release" loans on a house they owned outright.

Rew

CSO is out for March 2016:

http://www.cso.ie/en/releasesandpublications/er/rppi/residentialpropertypriceindexmarch2016/

0.3% national and 0.9% in dublin

Theboinkmaster

Rew wrote: »

CSO is out for March 2016:

http://www.cso.ie/en/releasesandpublications/er/rppi/residentialpropertypriceindexmarch2016/

0.3% national and 0.9% in dublin

Well done central bank, I can live with those increases - somewhat "normal".

dubrov

Theboinkmaster wrote: »

Well done central bank, I can live with those increases - somewhat "normal".

I wouldn't call these normal. The percentages quoted are not annualised.

If the same thing happened each month for a year you would be looking at numbers of at 3.6% national and 10.8% Dublin (ignoring compounding).

The Consumer price index is down 0.7% year on year.
I don't think there are any wage inflation numbers published but you can bet it is below 3.6% National and 8.1% Dublin.

Of course the CSO index is quite volatile so I don't think a single monthly number really gives much insight into the true state of the market.

The_Conductor

Theboinkmaster wrote: »

Well done central bank, I can live with those increases - somewhat "normal".

Normal it ain't. Volumes have fallen off a cliff- and continue to worsen.
In addition- the length of time to sell a property- is spiralling- aka we have a shortage of property- and even with the shortage- its proving incredibly difficult to sell property........... It doesn't add up.

Bob24

The_Conductor wrote: »

Normal it ain't. Volumes have fallen off a cliff- and continue to worsen.
In addition- the length of time to sell a property- is spiralling- aka we have a shortage of property- and even with the shortage- its proving incredibly difficult to sell property........... It doesn't add up.

Doesn't add-up indeed.

And while it is a welcome side-effect, lets not forget the CBI's intend or mandate is not to control property prices. From their perspective what they are doing is regulating mortgage practises to prevent banks and individuals from taking too much risk and avoid a debt crisis.

Many other factors are at play beside credit availability when it comes to property prices and availability which the CBI has no control over and there should be an overall coherent policy from the government (even though of course credit is a big one and the CBI should be applauded for being the only public institution doing the right thing).

RandomAccess

The_Conductor wrote: »

Normal it ain't. Volumes have fallen off a cliff- and continue to worsen.
In addition- the length of time to sell a property- is spiralling- aka we have a shortage of property- and even with the shortage- its proving incredibly difficult to sell property........... It doesn't add up.

I wonder would that be people waiting for a better offer, Or people stuck in a buyer's chain.

farrerg

With so much of peoples savings now going into deposits, any house with a bit of work required is likely to be a non runner for a good portion of buyers

RandomAccess

farrerg wrote: »

With so much of peoples savings now going into deposits, any house with a bit of work required is likely to be a non runner for a good portion of buyers

Yes, and people are still bidding the asking and not considering how much cash/work is needed for a houses first makeover since the 60's. Groan..

PhoenixParker

The_Conductor wrote: »

Normal it ain't. Volumes have fallen off a cliff- and continue to worsen.
In addition- the length of time to sell a property- is spiralling- aka we have a shortage of property- and even with the shortage- its proving incredibly difficult to sell property........... It doesn't add up.

Have they?

February is very comparable to last year, there's a bit of a cliff nationwide in March but it's much smaller in Dublin. I'd expect March 2016 to be a bit lower then last year because of the 3 day week followed by two four day weeks. Also, and I'm open to correction on this the PPR seems to record the date of sale so as properties are reported to them via the revenue they are added retrospectively, i.e. it's likely that the full tally of property sales for March isn't yet visible because they're not through the system yet.

My own feeling is that it's picked up considerably since Easter with lots of people reporting sales agreed in the mortgage thread.

I think April will tell us what's really going on.


Dublin Sales

Feb 2015 - 1155
Feb 2016 - 1284

Mar 2015 - 1054
Mar 2016 - 996

National Sales

Feb 2015 - 3634
Feb 2016 - 3602

Mar 2015 - 3641
Mar 2016 - 3090

Bob24

Another bit of common sense from the CBI (http://www.irishtimes.com/business/economy/central-bank-says-it-will-not-lower-mortgage-rates-1.2626934):

He was asked whether housing supply constraints could be attributed in part to the mortgage caps.

Prof Lane said multiple, often conflicting forces, were at work in respect of supply and demand. “Anything that boosts housing demand – where the supply response is not forthcoming – is going to not be helpful.”

Hopefully the message will start being heard and people will demand other solutions than higher mortgage caps to the current deadlock.

koheim

If interest rates stays as high as they are now - Highest in Europe, actually 50% higher than European average!! Who is cashing in??

As a mortgage holder I find this attitude from CBI completely disgusting. But in Ireland the Banks get away with absolute murder. It is like an extra tax to make up for previous years mess...

Also, if mortgage interest stays this high compared to Europe, nothing will be built here the next 10 years, because nobody can afford to. Or the other option is to accept a lower wages and a lower standard of living.

Get those interest rates down now!! ;-)

Michael D Not Higgins

koheim wrote: »

If interest rates stays as high as they are now - Highest in Europe, actually 50% higher than European average!! Who is cashing in??

As a mortgage holder I find this attitude from CBI completely disgusting. But in Ireland the Banks get away with absolute murder. It is like an extra tax to make up for previous years mess...

Also, if mortgage interest stays this high compared to Europe, nothing will be built here the next 10 years, because nobody can afford to. Or the other option is to accept a lower wages and a lower standard of living.

Get those interest rates down now!! ;-)

What attitude? How do they have any effect on the mortgage interest charged by a private bank?

koheim

From the article : "[font=Georgia, 'Times New Roman', Times, serif]Asked about high home-loan rates, Prof Lane said any legislation to curtail interest rates could deter potential market entrants and change the nature of the market as banks would focus on super-safe customers ."[/font]

[font=Georgia, Times New Roman, Times, serif]I agree that it is up to each bank to set the rates, but obviously they are not pushed very hard to do this[/font]

Villa05

Irish mortgage rates are ridiculously low considering the cost and hassle of repossessions in Ireland.

I'm surprised anyone bothers to enter the market

Michael D Not Higgins

koheim wrote: »

From the article : "Asked about high home-loan rates, Prof Lane said any legislation to curtail interest rates could deter potential market entrants and change the nature of the market as banks would focus on super-safe customers ."

I agree that it is up to each bank to set the rates, but obviously they are not pushed very hard to do this

The remit of the Central Bank of Ireland is regulation of the financial markets, not micromanaging the banks.

The reason the rates are higher than other countries in Europe is the difficulty with mortgages in arrears. It is not profitable for a new company to come in and undercut the market rate because of the risk involved. This doesn't sit at the CBI's door to fix.

Bob24

koheim wrote: »

If interest rates stays as high as they are now - Highest in Europe, actually 50% higher than European average!! Who is cashing in??

As a mortgage holder I find this attitude from CBI completely disgusting. But in Ireland the Banks get away with absolute murder. It is like an extra tax to make up for previous years mess...

Also, if mortgage interest stays this high compared to Europe, nothing will be built here the next 10 years, because nobody can afford to. Or the other option is to accept a lower wages and a lower standard of living.

Get those interest rates down now!! ;-)

If you compare to the rest of Europe, mortgage defaulters and tracker mortgage holders are cashing in (and through them the developers who sold them overpriced property).

Basically there are 3 reasons rates are higher:
- Lack of competition
- Legacy tracker mortgages on which the banks are making no or very little profit (it is their own fault for having offered them, but still it is a liability for them compared to other European banks)
- The fact that as opposed to many other EU countries repossessions are not happening and therefore banks effectively have to subside mortgage defaulters, increasing their cost

If the central bank was to impose lower rates than what ofer and demand is currently settling for, it would:
- Deter new entrants from joining the Irish market, making sure the competition issue is not addressed.
- Not solve any of my last 2 points while reducing the banks' revenue stream on mortgages, which basically means they would simply look at increasing profits from their other activities. So people would pay less interest but all banking fees would increase to make up for the loss.

No sure it would help very much.

koheim

Responsible lending and fair interest rates needs to go hand in hand. It is very convenient to embrace the status quo and just accept that this is the way it is, that way nothing will change. I obviously want lower interest rates, as I have better things to spend my money on. Also in order to get house building started, interest rates will have to go down.

The_Conductor

With respect of interest rates- one of the biggest problems- which is little spoken of- is the cost of working capital for builders. The average cost of finance for developers in Ireland is now 15%. This factor alone- wholly aside from any other factor- is making it damn hard for any developer to justify building here. Given the average length it takes (from start to finish)- the cost of finance is north of 20% of the finished cost of pretty much any unit you can build in Ireland.........

We need a multi pronged approach- to increase the supply of dwellings on the market- without lessening the quality of lending for our banking sector.......

Its all well and good moaning about deposit rules being too stringent etc- however, if you loosen them- but do nothing to assist in upping the supply- all you do is start another property bubble- which as sure as anything- will blow up in our faces yet again.

Supply- or rather the lack thereof- is the biggest issue of all- if we got supply up to levels sufficient to satisfy the market- everything else would fall into place.

whiskeyman

RandomAccess wrote: »

Yes, and people are still bidding the asking and not considering how much cash/work is needed for a houses first makeover since the 60's. Groan..

Flip side - I've seen sellers setting asking price with very little factoring of how poorly their property has been maintained and the amount needed to do it up to a good standard to hit the asking price realistically for houses sold in area recently.

One in particular has received just only our bid, but their refuse to accept saying it far too low and we don't think it's worth any more given current condition.

dubrov

Bob24 wrote:

Basically there are 3 reasons rates are higher: - Lack of competition - Legacy tracker mortgages on which the banks are making no or very little profit (it is their own fault for having offered them, but still it is a liability for them compared to other European banks) - The fact that as opposed to many other EU countries repossessions are not happening and therefore banks effectively have to subside mortgage defaulters, increasing their cost

Legacy trackers wouldn't be a problem is there was competition/new entrants.

Margins are fat so the only reason i can see that new entrants have not entered the market is the difficulty to repossess assets linked to non-performing loans.

Sleepy

whiskeyman wrote: »

Flip side - I've seen sellers setting asking price with very little factoring of how poorly their property has been maintained and the amount needed to do it up to a good standard to hit the asking price realistically for houses sold in area recently.

One in particular has received just only our bid, but their refuse to accept saying it far too low and we don't think it's worth any more given current condition.

So many people that have watched too many home improvement shows are convinced they can "add value" to fixer uppers that the margin between what buyers will pay for a "hang up your coat" versus a "project" is minuscule in Ireland. There's often less than 10k between the sales price of a house in good condition versus one that needs 20/30k spent on it.

(says the guy buying a project house that needs 20k or more spent on it!) :pac: