Property Market 2017

OwlsZat · 14-09-2017 12:13pm

When the property market was terrible we invited foreign investors in to have cheap ownership of our property. Now that we need all our own property back we should just make it unattractive for overseas investors to maintain ownership. Is there any reason it's not that simple?
There was talk on Newstalk yesterday that 49% of the cost of building an apartment goes to Government in various taxes. Since we are being told that it doesn't make any economic sense to build anything that will sell for less than 340k, we should surely expect some changes here. Just like when we made the aforementioned sweeping CGT change.

Graham · 14-09-2017 12:21pm

OwlsZat wrote: »

Now that we need all our own property back we should just make it unattractive for overseas investors to maintain ownership. Is there any reason it's not that simple?

A very good reason.

Changing ownership does not increase the amount of property whether it's changing from an Irish owner or one of these 'foreign investors' you imagine are the cause of the problem..

OwlsZat · 14-09-2017 12:37pm

Vacant houses, vacant sites and general holding despite falling market conditions. Who is the only group that does this? In another business it would be called price fixing. Banks and pension funds. Make it unattractive to hold and give the power back to the people active in the free market.

Graham · 14-09-2017 1:05pm

OwlsZat wrote: »

Vacant houses, vacant sites and general holding despite falling market conditions. Who is the only group that does this? In another business it would be called price fixing. Banks and pension funds. Make it unattractive to hold and give the power back to the people active in the free market.

That sounds like some rather unsubstantiated fluff to be honest.

I suspect there are a reasonable number of empty properties theoretically controlled by the banks. I also suspect a large number of these are going through the glacially slow reposession process in the Courts. I would further go on to suggest most of these will be financed by Irish banks not the foreign bogeyman you keep presenting.

OwlsZat · 14-09-2017 1:11pm

Graham wrote: »

OwlsZat wrote: »

Vacant houses, vacant sites and general holding despite falling market conditions. Who is the only group that does this? In another business it would be called price fixing. Banks and pension funds. Make it unattractive to hold and give the power back to the people active in the free market.

That sounds like some rather unsubstantiated fluff to be honest.

I suspect there are a reasonable number of empty properties theoretically controlled by the banks. I also suspect a large number of these are going through the glacially slow reposession process in the Courts. I would further go on to suggest most of these will be financed by Irish banks not the foreign bogeyman you keep presenting.

Forgive me for speculating, bit daft though that we don't know the actual ownership breakdown/statistics.

Graham · 14-09-2017 1:21pm

OwlsZat wrote: »

Forgive me for speculating, bit daft though that we don't know the actual ownership breakdown/statistics.

No problem with speculation, half the A & P forum is based on speculation.

The other half is probably based on rebutting the speculations and counter-rebuttals in the face of additional information

Colonel Claptrap · 14-09-2017 1:22pm

OwlsZat wrote: »

When the property market was terrible we invited foreign investors in to have cheap ownership of our property.

Did we?
Investors from any country have always been welcome to own property in Ireland.
What makes you think an invitation was sent?

OwlsZat wrote: »

Now that we need all our own property back we should just make it unattractive for overseas investors to maintain ownership.

What about making it unattractive for domestic investors to maintain ownership?

Is your beef with investors or foreigners?

The_Conductor · 14-09-2017 1:36pm

OwlsZat wrote: »

There was talk on Newstalk yesterday that 49% of the cost of building an apartment goes to Government in various taxes. Since we are being told that it doesn't make any economic sense to build anything that will sell for less than 340k, we should surely expect some changes here. Just like when we made the aforementioned sweeping CGT change.

49% ?
That seems improbable (I'm not saying impossible- just improbable).
Any breakdown available of this anywhere?

py · 14-09-2017 3:19pm

py wrote: »

I've seen asking prices rise. We're still viewing prices in the 400-600k range which is a fairly wide scope within the area we're looking at. The houses that have come up recently seem to be quite high and I don't think they'll get the asking. 1 house that never went sale agreed has been relisted for another 25k higher, I personally think they've missed their chance and they'd have been lucky to have the original asking. Stuff that is priced right was definitely moving quicker but definitely seeing things move slower now. It's too early for summer holidays to be affecting the annual cycle so I'm not sure if it's just a little lull or whether there is an actual change in the 2nd market in the price range we're looking at.

Another property which couldn't get it's asking of ~500k 12-18 months ago has gone up for ~575k. if it goes anywhere near the asking price then we're close to 2007/2008 levels for this particular road.

4 months on so wanted to do a follow up on this. The property above for 575k, dropped 50k... still on the market. It's not an overall indicator of the D14/16 market however, just this particular owner being a numpty.

Most of the properties we looked at are now up on PPR so I've been able to validate/bust the games from estate agents as to how closer/far away we were. Now I know some of the price variances may have come after surveys so not all bull**** from the EA. Average selling price (547k) was over the asking price of ~4.5% with 1/2 going every so slightly under and one outlier on the other end going 15% over asking... corner house, could easily fit another house or 2 within the garden. No real correlation between garden orientation and prices selling/below asking from what I can see and even those with small gardens where you couldn't possibly have kids running around for too long went over asking.

As I previously mentioned, DNG/Sherry Fitz are the EA who are getting over asking in the D14/16 (from the selection of properties I was monitoring anyway) more times than not. The smaller agents are getting much closer to asking or slightly below.

Glad to have the stress of a property purchase over and done with, hopefully not something I will have to do ever again or at least not for another 10 years. Best of luck to those who are still searching.

mel123 · 14-09-2017 4:06pm

Graham wrote: »

I also suspect a large number of these are going through the glacially slow reposession process in the Courts.

Just on this, someone i know is nearly at the end of the road on this now, id say another 3-6 months left, and the whole thing started in 2010. Slow is an understatement!

Graham · 14-09-2017 5:30pm

mel123 wrote: »

Just on this, someone i know is nearly at the end of the road on this now, id say another 3-6 months left, and the whole thing started in 2010. Slow is an understatement!

+1

A family member (currently renting) was interested in buying the house next door. Previous occupants had done a bunk posting the keys back to the bank. I'd say the property (fairly new) has been empty for 5+ years at this stage but the Court puts the banks application for possession back every time the original owners fail to turn up in court.

Even when banks are granted possession, it can be months/years before the properties are half-heartedly put on the market.

You would wonder how many of the 'vacant homes' are a result of either scenarios....

Zenify · 14-09-2017 5:50pm

py wrote: »

DNG/Sherry Fitz are the EA who are getting over asking in the D14/16 (from the selection of properties I was monitoring anyway) more times than not. The smaller agents are getting much closer to asking or slightly below

In Kilternan it looks like the DNG Struan Glen properties are selling much lower than asking. Only just looked it up so i could be wrong?

asking 720k

ppr 641k

buyer2017 · 14-09-2017 5:52pm

You are disregarding the 13.5% vat rate which isn't included in the PPR figures

Zenify · 14-09-2017 5:53pm

buyer2017 wrote: »

You are disregarding the 13.5% vat rate which isn't included in the PPR figures

Alright I am mistaken then

unknownlegend · 14-09-2017 5:53pm

Zenify wrote: »

In Kilternan it looks like the DNG Struan Glen properties are selling much lower than asking. Only just looked it up so i could be wrong?

asking 720k

ppr 641k

The 641 is probably pre tax. Add tax and it's approx 720
Edit: tax should be vat and I was beaten to the chase anyway :-)

py · 14-09-2017 9:34pm

Zenify wrote: »

In Kilternan it looks like the DNG Struan Glen properties are selling much lower than asking. Only just looked it up so i could be wrong?

asking 720k

ppr 641k

To add additional information to my post above - we were solely looking at the 2nd hand market and it was DNG Terenure and Sherry Fitz Rathfarnham that had the houses we were looking at.

LiamoSail · 14-09-2017 10:14pm

Some estate agents genuinely seem to have no grasp on what certain properties are achieving.

I understand the concept of setting a low asking price to draw attention, but some are ridiculously low to the extent they're wasting a lot of people's time, including the estate agents.

A case in point; 1 bed apt listed on daft in Temple Bar for €180k. I'd be shocked if that went for under €250k, and it will probably go above that.

Michellenman · 14-09-2017 10:24pm

100% agree liamosail. The first house we offered on had an asking price of 295k and sold 3 days later for 370k. Any other house of same standard in the area sold for 340-380k. The 295k asking price made the whole process an absolute frenzy, we were one of about 40 groups of people viewing the house (2 bed terrace, imagine!!) and about 11 of those went of to bid. The agent was having an awful time of it with calls etc I'm sure but to be honest it was a mess of their own making so I've no real sympathy.

LiamoSail · 15-09-2017 12:23am

Michellenman wrote: »

100% agree liamosail. The first house we offered on had an asking price of 295k and sold 3 days later for 370k. Any other house of same standard in the area sold for 340-380k. The 295k asking price made the whole process an absolute frenzy, we were one of about 40 groups of people viewing the house (2 bed terrace, imagine!!) and about 11 of those went of to bid. The agent was having an awful time of it with calls etc I'm sure but to be honest it was a mess of their own making so I've no real sympathy.

Agree, I've no sympathy for the agent who caused the mess. I've sympathy for all those that wasted their time and aspirations viewing a place significantly beyond their reach.

You would expect an estate agent to have a far better grasp on the current market to avoid such a scenario, or at least to have the common sense to avoid to the hassle he/she will invariably invite upon themselve with the overwhelming interest

zl1whqvjs75cdy · 15-09-2017 8:00am

Aib announce a rate cut today, 0.25 %. They obviously aren't convinced of an ecb hike next year. Probably won't have a massive impact on housing prices but will increase repayment capacity a bit.

myshirt · 15-09-2017 8:21am

donkeyoaty0099 wrote: »

Aib announce a rate cut today, 0.25 %. They obviously aren't convinced of an ecb hike next year. Probably won't have a massive impact on housing prices but will increase repayment capacity a bit.

They have done it, but they have also coupled it with hedging as the deals are in that space due to the euro.

It is in no way a reflection of their views on interest rates. Interest rates will likely go up.

Take a look at the price of futures.

MayoSalmon · 15-09-2017 8:57am

donkeyoaty0099 wrote: »

Aib announce a rate cut today, 0.25 %. They obviously aren't convinced of an ecb hike next year. Probably won't have a massive impact on housing prices but will increase repayment capacity a bit.

Not a hope of it happening with Brexit around the corner

The_Conductor · 15-09-2017 9:47am

MayoSalmon wrote: »

Not a hope of it happening with Brexit around the corner

Whether we like it, or not- Brexit is not the calamitous trainwreck for many other EU countries- that it is for Ireland, Denmark and perhaps the Netherlands. Inflation will be the determinant of when interest rates rise- and there have been ECB comments already about concerns in the rises in factory gate prices in France, Germany and Italy- which haven't fed through to consumers *yet*........

The ECB have already announced a tapering of its asset buying programme- which is why we've leapt in value against the dollar and recovered to around $1.20

There are mechanisms grinding along in the background- that the media aren't necessarily talking about- but which are happening nonetheless.

Colonel Claptrap · 15-09-2017 10:07am

Any sniff of a potential rate rise makes headlines. It's far too premature to assume consistent rate increase over the medium term.

The bump in German inflation was almost entirely explained by the rise in oil prices during the same period. The fundamentals have not changed.

The_Conductor · 15-09-2017 10:29am

Colonel Claptrap wrote: »

Any sniff of a potential rate rise makes headlines. It's far too premature to assume consistent rate increase over the medium term.

The bump in German inflation was almost entirely explained by the rise in oil prices during the same period. The fundamentals have not changed.

Depends on what part of the media you look to- The Economist and the FT Weekender- this week alone- both have articles looking into the likelihood of rate rises in the US, UK and EU (with a footnote given to Australia, Japan and a few other markets).

The US have already had a rate rise- its now thought a second rate rise in December- as pencilled in, will be put off until February.

The pound sterling this week clawed back 4% against both the Euro and the dollar- on an expectation of an increase in rates- given their unexpected inflation report.

The ECB- published factory gate price statistics- alongside sentiment reports- last week- showing strong growth in the main industrial economies (50 represents a stable economy, below 50, a contraction, above 50 an expansion). The German rate (last week) came in at just under 59- the French rate at 57.

The ECB- with its Bundesbank pedigree- are probably the most inflation averse of all the Central Banks globally- as soon as inflation tops 2%- there will be immense pressure for an immediate response. Its not a case of whether there will be an increase- there most certainly will be one- its the case of when this will be.

There is an informal meeting of all the ECB finance Ministers planned for today- to discuss just this (some of the comments from accompanying staff are up on Reuters already).

Honestly- if you think we're not going to have rate rises in the medium term- you are very much out of sync with the rest of the financial media.............

Colonel Claptrap · 15-09-2017 11:11am

The_Conductor wrote: »

Honestly- if you think we're not going to have rate rises in the medium term- you are very much out of sync with the rest of the financial media.............

I completely agree that my opinion should not be listened to. I don't have the facts. Very few individuals have the facts and those experts who do, are sworn to secrecy within the various central banks.

Interest rate policy by it's nature has to be shrouded in mystery. A misplaced word in a media statement from the ECB could wipe millions off international markets.

Media outlets are starved of information in a normal environment. But this is not normal. There has not been an ECB rate rise since 2011.

The point I'm trying to make is that any sort of hint of an upward trend is blown out of proportion by media scrambling to herald to a return to 'normal' growth. People need to take a deep breath and look at the fundamentals - as you have done. Consistent 2% growth is not around the corner and it's certainly not a given.

As for the 2 media outlets you cited. The economist speaks as one voice rather than various opinion pieces. That voice is libertarian free market economics.

The FT's columnists and readers thrive on market volatility.

Both papers want a rate rise.

pilly · 15-09-2017 11:44am

Graham wrote: »

+1

A family member (currently renting) was interested in buying the house next door. Previous occupants had done a bunk posting the keys back to the bank. I'd say the property (fairly new) has been empty for 5+ years at this stage but the Court puts the banks application for possession back every time the original owners fail to turn up in court.

Even when banks are granted possession, it can be months/years before the properties are half-heartedly put on the market.

You would wonder how many of the 'vacant homes' are a result of either scenarios....

This is a much bigger problem than we think. I personally know of 3 houses that have been repossessed and the banks are just doing nothing with them.

If anyone should be penalised for not selling houses it's definitely the banks, they have no business holding on to them for profit.

Graham · 15-09-2017 12:35pm

pilly wrote: »

This is a much bigger problem than we think. I personally know of 3 houses that have been repossessed and the banks are just doing nothing with them.

If anyone should be penalised for not selling houses it's definitely the banks, they have no business holding on to them for profit.

It's a tough call.

On one hand the banks have a duty to the defaulting borrowers to recover the most amount of value. It could be argued this is best achieved by waiting, particularly in a rapidly rising market.

On the other side, it's everyone else that pays for this in terms of increased interest and out-of-circulation housing.

I won't pretend to know the accounting rules but I don't think it's unreasonable to insist:

Banks write-down notional losses on mortgages in default after a fixed period.
Repossession proceeding must be started after a fixed period in default.
Central Bank sets targets that XX% of repossessions must be completed within a fixed period.
Central Bank sets a target that XX% of repossessed property must be disposed of within a fixed period.

The_Conductor · 15-09-2017 1:28pm

Colonel Claptrap wrote: »

I completely agree that my opinion should not be listened to. I don't have the facts. Very few individuals have the facts and those experts who do, are sworn to secrecy within the various central banks. .

Colonel- your opinion is as valid an opinion as mine- or anyone elses. As for whether some people have facts- and others not- its not as simple as that- I get reports by e-mail several times during the day- and have a few digests in the morning with my coffee- before I ever leave the house. I enjoy reading these reports. It doesn't mean they are more right or wrong than anything else. Few of them pretend to predict the future- most of them are dedicated to dissecting the past- and trying to apply reason to why past events (which could be as recent as overnight) happened.

No-one has a magic crystal ball- and despite what some economists would have you believe- even people who predicted the last financial crash- were predicting the crash for years, before it actually came to be. An interesting cross-section of them are predicting another crash- both here and in the UK- based on affordability- scarcity bedamned.

As to people being sworn to secrecy- nope- that's borderline conspiracy theory stuff. Alastair Darling has an interesting memoir on his time in the Treasury in the UK- in it he tells of receiving a phone call from the governor of the bank of England- informing him of the difficulty RBS was finding itself in- and how it had a liquidity issue. He asked- how long can they keep going- and was dumbfounded to be told perhaps 2-3 hours..........

There aren't people in the backroom somewhere with the information, sworn to secrecy- and yanking our chains- despite what many people would have you believe.

Colonel Claptrap wrote: »

Interest rate policy by it's nature has to be shrouded in mystery. A misplaced word in a media statement from the ECB could wipe millions off international markets..

Interest rate policy isn't shrouded in mystery though- there are set policies in the various central banks for dealing with a variety of scenarios. So- we have mutual assistance programmes- whereby the various Central Banks help one another- to smooth over short term knee-jerk capital movements- which can relate to events happening in another country or region- it could be a terrorist attack, a geopolitical event, an unexpected announcement- whatever.

The ECB has a stated inflation rate of 2%- and a mandate to manipulate interest rates to try and maintain the standardised rate of inflation at 2%. This is stated policy. There are other policies- such as the asset buying programme- which can have a massive effect on the rate of inflation- or may not do- and are monitored over time.

You can't just look at one element of the picture- and imagine its a good descriptor for the whole picture- it can't be, and isn't.

Colonel Claptrap wrote: »

Media outlets are starved of information in a normal environment. But this is not normal. There has not been an ECB rate rise since 2011..

Media outlets are not starved of information- there is so much information out there- that there is an element of fatigue in relation to stories on the economy. To cut an analogy- if Henny Penny keeps crying about the sky falling down- people get bored listening to her- and move on to whoever has a more interesting story. They'll only come back to listen to her again- if the sky does actually start to fall in. Of course- it'll be too late- however, Henny Penny- like David Williams- will be crowned as some sort of sage for having the prescience to predict the sky falling in.........

Colonel Claptrap wrote: »

The point I'm trying to make is that any sort of hint of an upward trend is blown out of proportion by media scrambling to herald to a return to 'normal' growth. People need to take a deep breath and look at the fundamentals - as you have done. Consistent 2% growth is not around the corner and it's certainly not a given..

The key word in your paragraph here is 'consistent'.
Its entirely possible that the entire concept of 'consistency' is dead and gone- never to return. The ECB has a target inflation rate of 2%. It looks at other factors to determine how likely, or not, they are to reach or overshoot this target. Factory gate price indexes are one key predicator of this- as if goods leaving the factory are increasing in price- there is a limit to how much the intermediate parts of the chain can absorb such increases. Its only one factor of course though. We already are well above the 2% growth rate here in Ireland- according to the CSO we hit 1.4% in the last quarter alone- however, the performance of the Irish economy is an outlier- and obviously, Germany, the largest economy, has an oversized influence on the rest of the block.

Colonel Claptrap wrote: »

As for the 2 media outlets you cited. The economist speaks as one voice rather than various opinion pieces. That voice is libertarian free market economics.

The FT's columnists and readers thrive on market volatility.

Both papers want a rate rise.

Have a look at the Economist website- the discussion forums on it are excellent- and feature many remarkable commentaries and viewpoints that you might not consider looking at any given scenario. Of course there is a load of political crap in there too- so it involves a degree of sifting through the chaff to find the corn.

I beg to differ with you regarding the FT- I don't think anyone, anywhere, thrives on volatility. Measured analysis- along with opinion pieces- and good news coverage- mark it as a different kettle of fish from most of the regular media. There are some parts of the paper that do drive me nuts- such as the monthly 'How to spend it' magazine- which just annoys the living hell out of me. They have a few regular columnists- such as the recently departed David Tang- alongside a standard of journalism that marks them out from most of their competitors.

How-and-ever, I'm beginning to sound like I'm trying to sell you on buying a subscription to the FT...........

OwlsZat · 15-09-2017 2:05pm

Colonel Claptrap wrote: »

OwlsZat wrote: »

When the property market was terrible we invited foreign investors in to have cheap ownership of our property.

Did we?
Investors from any country have always been welcome to own property in Ireland.
What makes you think an invitation was sent?

OwlsZat wrote: »

Now that we need all our own property back we should just make it unattractive for overseas investors to maintain ownership.

What about making it unattractive for domestic investors to maintain ownership?

Is your beef with investors or foreigners?

Ya we did make it attractive. We gave them a tax holiday. Free money. We were exceptionally generous to them.
I assume we only did it because Ireland is so reliant on tax generated from housing.

Property Market 2017

Comments