Property Market 2017

The_Conductor

I thought the revised prediction was an 8-9% increase for Dublin- alongside a national increase in the region of 12% (i.e. the regional increases would vastly exceed the Dublin increases)?

mloc123

jamesthepeach wrote: »

I remember feeling sorry for all those who bought in 2006, 2007.
But as someone pointed out to me recently. They are half finished their mortgages now and most of them are on tracker and paying far less than someone buying a similar house now at a fraction of the price. Even those not on trackers are winning. So my view now is you buy when it suits you and don't ever try to time a market.

True, we bought in 2008... on a tracker, our payments at the time were less than we had been paying on rent for a similar house... our payments now are significantly less than what rent on a similar house would be. People are too caught up no what their house is worth or buying for 'good value', what does it matter if you do not plan to sell?

Samuel T. Cogley

Bob24 wrote: »

Well ... decrease of the increase rate, but still fastest price increase in Europe.

At this stage it is unavoidable as prices can't keep increasing 10% per year forever. But the question is: are we going to see 5%+ increases for another few years, will the market stabilise, or will it crash?

A stabilisation with small increase linked to inflation would be better for everyone in the long term, but this is the Irish property market so not sure I'm counting on it :-)

So a soft landing them :pac:

Bob24

Samuel T. Cogley wrote: »

So a soft landing them :pac:

Yeah, just not sure we have that on the menu in Ireland :-)

ligerdub

mloc123 wrote: »

True, we bought in 2008... on a tracker, our payments at the time were less than we had been paying on rent for a similar house... our payments now are significantly less than what rent on a similar house would be. People are too caught up no what their house is worth or buying for 'good value', what does it matter if you do not plan to sell?

Because it's likely to be the most expensive thing you ever buy, and you have to pay it back. You might not plan on moving but you might plan on holidays, not having a car loan, piece of mind that a sudden loss of immediate income might not be such a disaster.

Would it matter to you to have an extra €100 a week for yourself or not for example?

mloc123

ligerdub wrote: »

Because it's likely to be the most expensive thing you ever buy, and you have to pay it back. You might not plan on moving but you might plan on holidays, not having a car loan, piece of mind that a sudden loss of immediate income might not be such a disaster.

Would it matter to you to have an extra €100 a week for yourself or not for example?

okay.. but all of those are applicable if you are renting a house too? Most people need to pay money each month to have a house to live in, either rent or a mortgage. So if you can buy a house in an area you like with a monthly payment that you are comfortable paying, what does it matter how much the house is worth after you buy it? If you are renting and suddenly lose your source of income, do you think a landlord will be more forgiving than the bank?

ligerdub

mloc123 wrote: »

okay.. but all of those are applicable if you are renting a house too? Most people need to pay money each month to have a house to live in, either rent or a mortgage. So if you can buy a house in an area you like with a monthly payment that you are comfortable paying, what does it matter how much the house is worth after you buy it? If you are renting and suddenly lose your source of income, do you think a landlord will be more forgiving than the bank?

I agree with the bit in bold (perhaps I've misread your original point), but I also think that what you pay for the house does matter. Paying an extra 5,10, 20 grand + could have been put to better use had you not had the misfortune of buying in what was an expensive market.

jamesthepeach

ligerdub wrote: »

I agree with the bit in bold (perhaps I've misread your original point), but I also think that what you pay for the house does matter. Paying an extra 5,10, 20 grand + could have been put to better use had you not had the misfortune of buying in what was an expensive market.

Ask all the people waiting since 2013 how they got on. You would have to be psychic to time the property market. And anyone.telling you that they can better have a private jet to point to as proof that they didn't just say it afterwards that they knew.

rsynnott

ligerdub wrote: »

I agree with the bit in bold (perhaps I've misread your original point), but I also think that what you pay for the house does matter. Paying an extra 5,10, 20 grand + could have been put to better use had you not had the misfortune of buying in what was an expensive market.

On the other hand, many/most people who bought in the expensive market have a ludicrously cheap tracker mortgage; many may actually end up paying less than people buying the house next door for cheaper with an expensive SVR.

mloc123

jamesthepeach wrote: »

Ask all the people waiting since 2013 how they got on. You would have to be psychic to time the property market. And anyone.telling you that they can better have a private jet to point to as proof that they didn't just say it afterwards that they knew.

This. I know people that are now waiting for the 'next recession' to buy a house. Why didn't they buy 4-5 years ago? Because banks were not lending, what will cause prices to drop again? Banks not lending...

jamesthepeach

mloc123 wrote: »

This. I know people that are now waiting for the 'next recession' to buy a house. Why didn't they buy 4-5 years ago? Because banks were not lending, what will cause prices to drop again? Banks not lending...

And job losses to go with it.

Samuel T. Cogley

We tried to buy at the very bottom of the market, absolutely no chance. It was either crap, crap that someone had died in that might have been nice, or stuff that was just on the market 'for the craic'. I've yet to hear of anyone's success of buying the dream home with a mortgage during a crash. I'm sure one or two do, but anecdotally they seem few and far between.

What we did manage to do is get the nicest house in a given area at a decent price by overbidding on the upswing. Whether or not that's a winning startegy more than for a sample of 1 I can't say.

Bob24

Samuel T. Cogley wrote: »

We tried to buy at the very bottom of the market, absolutely no chance. It was either crap, crap that someone had died in that might have been nice, or stuff that was just on the market 'for the craic'. I've yet to hear of anyone's success of buying the dream home with a mortgage during a crash. I'm sure one or two do, but anecdotally they seem few and far between.

What we did manage to do is get the nicest house in a given area at a decent price by overbidding on the upswing. Whether or not that's a winning startegy more than for a sample of 1 I can't say.

I know quite a few who bought in 2013/14/15. Not the absolute bottom but still much lower than today.

But yeah waiting for be next crash is not a strategy for most FTBs unless there is a clear sense of madness already (I've come across people who bought new build 1 bed apartments in not so good areas for 400k of more just before the crash getting a long and expensive mortgage for it given their personal circonstances, cleary this was madness territory, but we're not there at the moment).

As a cash investor though it would be a different story.

ligerdub

jamesthepeach wrote:

Ask all the people waiting since 2013 how they got on. You would have to be psychic to time the property market. And anyone.telling you that they can better have a private jet to point to as proof that they didn't just say it afterwards that they knew.

I've been in that place for the last 5 years myself in fairness. I'm not even suggesting about timing the market right. People generally buy when they are at a certain stage in their life and are stuck with the market they are faced with.

My point is that the price you pay is really, really important. If you pay 350 k for a house v 250 k for the same house in 2012 that has a serious knock on effect on your quality of life, both short-term and long-term.

Affordability at a point in time is great and all, but there's comfortable and there's "comfortable". Saying/thinking "I can afford it" is fine and all but it's only thinking about the here and now.

Take my example further. The person who was lucky enough to be buying at 250k can think about an extension to the house, another child, possibly one of a couple could afford to give up work to look after the kids. The person buying at 350k has much fewer options, probably exasperated further by the fact that they are probably older for starters.

jamesthepeach

ligerdub wrote: »

I've been in that place for the last 5 years myself in fairness. I'm not even suggesting about timing the market right. People generally buy when they are at a certain stage in their life and are stuck with the market they are faced with.

My point is that the price you pay is really, really important. If you pay 350 k for a house v 250 k for the same house in 2012 that has a serious knock on effect on your quality of life, both short-term and long-term.

Affordability at a point in time is great and all, but there's comfortable and there's "comfortable". Saying/thinking "I can afford it" is fine and all but it's only thinking about the here and now.

Take my example further. The person who was lucky enough to be buying at 250k can think about an extension to the house, another child, possibly one of a couple could afford to give up work to look after the kids. The person buying at 350k has much fewer options, probably exasperated further by the fact that they are probably older for starters.

You are talking about luck here. Nothing that anybody, unless being clairvoyant is real, can predict.

Graham

jamesthepeach wrote: »

You are talking about luck here. Nothing that anybody, unless being clairvoyant is real, can predict.

+1

and there's every chance those that paid €100k more are on a fraction of the interest rates which could well mean they are paying less than those that bought later at a lower price.

mloc123

jamesthepeach wrote: »

You are talking about luck here. Nothing that anybody, unless being clairvoyant is real, can predict.

And even if somebody could predict what prices will be... some people are in a position that maybe they can't wait another 2/5/10 years for the market to bottom out again.

It probably make sense if you are 20 now and interested in buying a house to hold out and look again in 5 years. But what if your are a couple in your early 30s and want to own a house before having a family etc.. you are much less likely to hold out 5 years in the hope prices crash.

These people will likely weigh up paying an extra 2-300/month now as an acceptable compromise.

ligerdub

jamesthepeach wrote:

You are talking about luck here. Nothing that anybody, unless being clairvoyant is real, can predict.

I never said it wasn't

Villa05

mloc123 wrote:

It probably make sense if you are 20 now and interested in buying a house to hold out and look again in 5 years. But what if your are a couple in your early 30s and want to own a house before having a family etc.. you are much less likely to hold out 5 years in the hope prices crash.

mloc123 wrote:

These people will likely weigh up paying an extra 2-300/month now as an acceptable compromise.

The last boom and bust was partly if not fully blamed on everyone going mad buying property.
In my opinion they were driven mad and your post explains how and that the same mistakes are being repeated

Ref calling the bottom of the market. I had 30 properties on my watch list on daft. They were not moving for 12 months or more, however in February 2013 they started selling quickly. That was my signal to move. I didn't know it at the time but it turned out to be the bottom of the market in my area

Not a scientific approach but simple educated guess having seen what was happening in Dublin/Galway

Graham

Villa05 wrote: »

The last boom and bust was partly if not fully blamed on everyone going mad buying property.
In my opinion they were driven mad and your post explains how and that the same mistakes are being repeated

I think you're seeing the symptom there rather than the cause. I don't disagree people were going mad buying property the cause of which was largely an abundance of easy credit, often well in excess of peoples abilities to repay.

I think the big difference in the current market is credit supply is much tighter largely asa direct result of the central bank rules.

LirW

Don't forget that a lot of people had almost a decade to save their money because there was no credit available from banks.
A thread here recently had a poll and if that's true a surprisingly high amount of voters had a deposit well over 100k.

Curious of how deposit rules will be changed later this year.

The_Conductor

Graham wrote: »

I think the big difference in the current market is credit supply is much tighter largely asa direct result of the central bank rules.

The biggest issue driving house prices though- is lack of supply.
Yes- income multiples, deposits etc- are being governed a lot more strictly- and rightly so- however, and despite the banks using prudent lending tactics- prices are soaring based solely on scarscity.

This year we are optimistically expected to build 18k units- some say it may well be less. We need 25k to stand still- and probably a one off hit of about 40k units to take the heat out of the market- or indeed, an external factor- however, a collapse doesn't play well either- its a bit of a delicate situation.

All told- supply side issues have to be addressed. Even the Minister's 20k wad on new housing units- hasn't been sufficient to drive supply to an equilibrium level- though the industry sector pay agreement (giving them 10% straight off)- is going to help to entice some Irish back home to our building sites, once again.

The entire sector- is self inflating- through lack of supply- and it isn't in anyone's interests to allow this to continue- we need to hit equilibrium- and halt industry growth at this level. Our problem is- people can't see the wood for the trees- and if prices continue to inflate- a sense of euphoria pervades, once again. Its quite depressing actually- some of the people you might imagine to be rational and sane- stand up on pedestals and peddle the most ridiculous baloney- and are believed.

I keep hoping that a lesson will be learnt- however, I suspect people's memories are shorter than their inherent gambling instincts.

A rise in interest rates- will hurt a lot of people- but may be in the better interests of the country in the longer run.

draiochtanois

This post has been deleted.

theboringfox

I keep seeing people talk about waiting for a crash. I just don't see it. The central bank rules are controlling the level of debt plus people are much more wary themselves.

I think there will inevitably be a low down in price growth and I also think this may even hit negative territory depending on how supply ramps and potential for external shocks.

But I don't see it crashing and by time any dip comes along it'll be at least 3 years away when prices may have gone up another 15 or 20%. So even if there was a dip it would be dearer than today.

Arcade_Tryer

The Central Bank rules will prevent a crash in the short to medium term. But people will eventually grow frustrated with stability, regulation will become lax once again, and we will see something similar to the recent housing crash within a decade or so. Hopefully anyway.

Bob24

theboringfox wrote: »

I keep seeing people talk about waiting for a crash. I just don't see it. The central bank rules are controlling the level of debt plus people are much more wary themselves.

I think there will inevitably be a low down in price growth and I also think this may even hit negative territory depending on how supply ramps and potential for external shocks.

But I don't see it crashing and by time any dip comes along it'll be at least 3 years away when prices may have gone up another 15 or 20%. So even if there was a dip it would be dearer than today.

Even though lending practices are more reasonable compared to the "good" old times, a crash could still be caused by poor economic performances for the country causing increased unemployment, stagnating/lowering wages, and net emigration. Increasing interest rates could also apply downwards pressure.

But I agree with you, it is unlikely to happen in the very short term, and by that time prices will likely have risen a good bit before crashing.

The_Conductor

Arcade_Tryer wrote: »

The Central Bank rules will prevent a crash in the short to medium term. But people will eventually grow frustrated with stability, regulation will become lax once again, and we will see something similar to the recent housing crash within a decade or so. Hopefully anyway.

I honestly don't think this is going to happen.
The Irish Central Bank is more divorced from state- than it has ever been- and we have just tendered to host the EBA- the days of the wild wild west- have come and gone.

mloc123

Bob24 wrote: »

Even though lending practices are more reasonable compared to the "good" old times, a crash could still be caused by poor economic performances for the country causing increased unemployment and stagnating/lowering wages. Increasing interest rates could also apply downwards pressure.

But I agree with you, it is unlikely to happen in the very short term, and by that time prices will likely have risen a good bit before crashing.

I see this mentioned a lot... sure the ECB rates are rock bottom but bank rates here are not that low. Rates during the last 'boom' were around 2%? Current rates are around 4% and applications are being stress tested to 6%. Currently I think rates here are out of line with ECB and already some banks have announced dropping rates (Ulster have some new 2.6%?)

Arcade_Tryer

The_Conductor wrote: »

I honestly don't think this is going to happen.
The Irish Central Bank is more divorced from state- than it has ever been- and we have just tendered to host the EBA- the days of the wild wild west- have come and gone.

All very true. But the future is uncertain, and one things remains constant, plus ça change, plus c'est la même chose.

Bob24

mloc123 wrote: »

I see this mentioned a lot... sure the ECB rates are rock bottom but bank rates here are not that low. Rates during the last 'boom' were around 2%? Current rates are around 4% and applications are being stress tested to 6%. Currently I think rates here are out of line with ECB and already some banks have announced dropping rates (Ulster have some new 2.6%?)

Agreed in the short term (next year or 2). But after that it's very difficult to predict what's gonna happen.