Has property gone mad again

Samuel T. Cogley

Yourself isit wrote: »

The term "capital" is meaningless with regards to house prices. In some countries the capital has the highest house prices, in other countries it doesnt.

Why should we get used to high house prices and rent and how do high prices help the economy in general anyway? Why do Google employees benefit from paying more in rent? Why would that attract more FDI?

We can attract people and have cheap houses by building more houses.

Simply because we're in the top ten countries GDP per capita and therefore thing are going to cost more. It's the type of industries and services we want to attract. Tech, Finance etc. This is centred around small areas, mainly in Dublin and while I'm all for building on a large scale it's not going to bring down house prices much inside the M50 as space is finite.

I also think people have a skewed view of how much property costs in major cities in the UK for example. Dublin hasn't gone mad when compared to some major cities in the UK.

Samuel T. Cogley

Yourself isit wrote: »

Shunt the minimum wage workers (but the workers not the unemployed) out of the city?

If you can find a way to deal with the massive social issues in Dublin City Centre which have been there since before Ireland was an independent nation you've my vote for Taoiseach.

Ghettoising people in Ballymun was a huge failure and no area of Dublin is going to want the services that would need to be distributed throughout the suburbs to deal with the people moved on. If you can find someway of moving people to Longford, Leitrim and Kerry that was going not going to cause riots, again please run!

Yourself isit

Samuel T. Cogley wrote: »

Simply because we're in the top ten countries GDP per capita and therefore thing are going to cost more. It's the type of industries and services we want to attract. Tech, Finance etc. This is centred around small areas, mainly in Dublin and while I'm all for building on a large scale it's not going to bring down house prices much inside the M50 as space is finite.

I also think people have a skewed view of how much property costs in major cities in the UK for example. Dublin hasn't gone mad when compared to some major cities in the UK.

Except for London it has. And the UK is just one country. Property in Germany has historically been stable.

And at a time when house prices are historically out of kilter relative to wages in some countries and cities (and causing several problems in all of them) we shouldn't really be copying them, AGAIN.

We've alreasy seen the human misery caused by high house prices already, it's pretty annoying when the same arguments that were common on 2006 are being produced now.

Yourself isit

Samuel T. Cogley wrote: »

If you can find a way to deal with the massive social issues in Dublin City Centre which have been there since before Ireland was an independent nation you've my vote for Taoiseach.

Ghettoising people in Ballymun was a huge failure and no area of Dublin is going to want the services that would need to be distributed throughout the suburbs to deal with the people moved on. If you can find someway of moving people to Longford, Leitrim and Kerry that was going not going to cause riots, again please run!

I'm suggesting we build housing in the centre of Dublin, there's plenty of brown fields and dereliction. No idea why you think I'm on favour of moving people to Longford - you're the one suggesting ballbriggan .

Samuel T. Cogley

Yourself isit wrote: »

Except for London it has. And the UK is just one country. Property in Germany has historically been stable.

And at a time when house prices are historically out of kilter relative to wages in some countries and cities (and causing several problems in all of them) we shouldn't really be copying them, AGAIN.

We've alreasy seen the human misery caused by high house prices already, it's pretty annoying when the same arguments that were common on 2006 are being produced now.

The boom around 2006 was caused by ridiculous credit availability. If we're seeing prices return to those levels (we're not there yet around c30% to go IIRC) then it's down to the market finding a rate for property in the centre and close to centre suburbs. Frankly 350K is not unreasonable for a 3 bed house, given relative incomes.

Yes it would be fantastic if we could have high incomes and low living costs. It doesn't happen like that in the majority of cases. Germany is 18th in GDP per capita and is almost $20K behind Ireland. Now my understanding of Berlin districts is limited to good pints and certain other establishments but prices seem to range between 4K per sq.m and above*. That would be roughly equivalent to Dublin pricing.

* The median asking price in Fried richs hainKreuzberg, €3,926 per square metre

Turning to the UK the taking Manchester 3 bed semi-D £193,278 or roughly €220K. That's obviously cheaper than Dublin, but that's a Northern UK city that typically would be a different Economy to Dublin. It's very difficult to price the SE of England as London commuting can be upwards of 75 miles but taking Oxfordshire £366,811 is the average for a semi detached according to google. Dublin falling somewhere in between the two would seem to indicate 'madness' has not been reached.

Yourself isit wrote: »

I'm suggesting we build housing in the centre of Dublin, there's plenty of brown fields and dereliction. No idea why you think I'm on favour of moving people to Longford - you're the one suggesting ballbriggan .

By all means build in Dublin, supply is a massive issue. However don't expect it to result in massive price reductions. At best it will stabilise Dublin prices that's after areas in D5 and D12 and a likes see sharp gains in the next 2 - 3 years as people are forced out of other areas and realise there's value to be had by looking at other areas.

It's not unreasonable for people in minimum wage jobs to be a 30-40 minute easy commute from the centre of a major metropolitan area.

ThisRegard

Yourself isit wrote: »

Trading up from what? On general we are taking about first time buyers here are even some second time buyers are on negative equity.

400k isnt average. (And remember people used to be able to buy on below average salaries).

Not everyone is in negative equity. If you bought in the early, or mid at the latest, 2000's, at worse your house is worth what you paid but you'll be around half way into the mortgage giving you​ a reasonable amount of equity.

Samuel T. Cogley

ThisRegard wrote: »

Not everyone is in negative equity. If you bought in the early, or mid at the latest, 2000's, at worse your house is worth what you paid but you'll be around half way into the mortgage giving you​ a reasonable amount of equity.

Huge pent up demand for trading up - we'd waiting 3 or 4 years longer than we expected too. In the end we didn't trade up, we just bought a house and kept the apartment on but as you've pointed out above other's would have been in a position to trade up.

cnocbui

ThisRegard wrote: »

Not everyone is in negative equity. If you bought in the early, or mid at the latest, 2000's, at worse your house is worth what you paid but you'll be around half way into the mortgage giving you​ a reasonable amount of equity.

That's great, only lost 37.2% of the capital to CPI increase then.

Hollister11

My folks bought a house for 650K, and it's not worth 500K. In 2012 it was worth 375K, so yea there's that,

ThisRegard

cnocbui wrote: »

That's great, only lost 37.2% of the capital to CPI increase then.

I don't know what your point is.

VonLuck

If you look at the average industrial wage, which I believe to be around €35000 (not sure of the exact figure) and taking the mortgage lending limit of 3.5 times your salary, the maximum mortgage a single person could afford is €122,500. Add 10% on for your deposit and you get €136,000.

Now, can anyone tell me how a single person earning average, or even above average, living in Dublin could purchase a property at this price? A 2 bed property is going to set you back at least €225,000 in any area of Dublin City. That would mean you would have to have saved a whopping €102,500 by yourself!

That's a lot of scrimping for many years to be able to afford that.

Samuel T. Cogley

VonLuck wrote: »

If you look at the average industrial wage, which I believe to be around €35000 (not sure of the exact figure) and taking the mortgage lending limit of 3.5 times your salary, the maximum mortgage a single person could afford is €122,500. Add 10% on for your deposit and you get €132,500.

Now, can anyone tell me how a single person earning average, or even above average, living in Dublin could purchase a property at this price? A 2 bed property is going to set you back at least €225,000 in any area of Dublin City. That would mean you would have to have saved a whopping €102,500 by yourself!

That's a lot of scrimping for many years to be able to afford that.

It's more like 45K, especially in Dublin, which lands you at €157,500, 173,250 with the deposit. That puts a nice two bed in Santry at your finger tips. Alternatively a number of CC 1 beds with the required 25% deposit.

VonLuck

Samuel T. Cogley wrote: »

It's more like 45K, especially in Dublin, which lands you at €157,500, 173,250 with the deposit. That puts a nice two bed in Santry at your finger tips. Alternatively a number of CC 1 beds with the required 25% deposit.

€45,000? Are you sure? That would surprise me. Not to mention I was quoting an average and not the median which I would expect to be lower again.

Samuel T. Cogley

VonLuck wrote: »

€45,000? Are you sure? That would surprise me. Not to mention I was quoting an average and not the median which I would expect to be lower again.

TBH I get my figures off links on boards so make of it what you will. I know that a supervisor in a call centre can make about 40K so I assume once there is any sort of skilled job one would assume they'd be on more. As a retail manager my salary peaked at about 50K albeit during the last boom. I didn't get a degree until after I'd decided to retrain.

koheim

VonLuck wrote: »

€45,000? Are you sure? That would surprise me. Not to mention I was quoting an average and not the median which I would expect to be lower again.

In order to get a mortgage you need a full time permanent job. Average annual earnings for full-time employees in 2015 were €45,075
http://www.cso.ie/en/releasesandpublications/er/elca/earningsandlabourcostsannualdata2015/

cnocbui

ThisRegard wrote: »

I don't know what your point is.

My point is that "at worse your house is worth what you paid" is untrue. Anyone who bought a house around 2000 with it currently worth only the same amount now, effectively has a house that is worth 37.2 % less than it originally was.

ThisRegard

cnocbui wrote: »

My point is that "at worse your house is worth what you paid" is untrue. Anyone who bought a house around 2000 with it currently worth only the same amount now, effectively has a house that is worth 37.2 % less than it originally was.

It's all relative if every other property is the same, so your point is irrelevant.

VonLuck

koheim wrote: »

In order to get a mortgage you need a full time permanent job. Average annual earnings for full-time employees in 2015 were €45,075
http://www.cso.ie/en/releasesandpublications/er/elca/earningsandlabourcostsannualdata2015/

That makes more sense. The part-time salaries were skewing the figures I was working off.

Geuze

VonLuck wrote: »

If you look at the average industrial wage, which

2015 data

http://www.cso.ie/en/releasesandpublications/er/elca/earningsandlabourcostsannualdata2015/

Average earnings = 36,519, or 21.90 per hour

Average for FT workers = 45,075

Average in industry, FT and PT = 44,168

alastair

cnocbui wrote: »

My point is that "at worse your house is worth what you paid" is untrue. Anyone who bought a house around 2000 with it currently worth only the same amount now, effectively has a house that is worth 37.2 % less than it originally was.

You'd be remarkably unlucky if your 2000 purchase house was only worth what you paid for it. Coming up to the end of a 20 year mortgage this summer, and the value of the place, while still below what it would have notionally fetched in the peak bubble days, is multiples of the original purchase price, and never went remotely near negative equity - before or after allowing for inflation. Can see it for a mid-2000's place alright, but then the inflation to apply is a good deal lower too.

Samuel T. Cogley

VonLuck wrote: »

That makes more sense. The part-time salaries were skewing the figures I was working off.

Actually though in fairness to your point 45K for someone in a call centre or retail would be made up of bonus and Overtime, so would not qualify for a mortgage.

That only just occurred to me this morning.

johnnyskeleton

BBMcQ wrote: »

Gone mad depends on your perception of value. But everything is currently converging on the 400-450 house price range. This is where the average couple working in Dublin would be able to get a mortgage if they have a decent deposit saved up over the last 2-5 years. There isn't much demand for property way above this mark and anything below will go shooting up to converge at approx 400.

The central bank rules ensure a lid is kept on the pot, but the lid is quite high up there for a lot of ppl.

Assuming that they are first time buyers or exceptions to the CB rules, that's a deposit of c. 60k and a mortgage of c. 360k, meaning a joint income of close to 100k.

So yeah, the lid is quite high indeed.

willbeuptuesday

Only saw this thread now, I posted something similar about the market going mad in Dublin in the property market thread. Long story short, a house across from mine in Lucan went on sale for €325k (about 25k above norm due to it having a garage built on the side). There was at least 200 people queuing to see this house on a Saturday. In the finish it was sold at €374k following a 4 way bidding war, all were first time buyers. The experts say 5-7% rise in Dublin but from what I have witnessed this will easily be double digit figures, they are under estimating the demand big time.

Samuel T. Cogley

willbeuptuesday wrote: »

Only saw this thread now, I posted something similar about the market going mad in Dublin in the property market thread. Long story short, a house across from mine in Lucan went on sale for €325k (about 25k above norm due to it having a garage built on the side). There was at least 200 people queuing to see this house on a Saturday. In the finish it was sold at €374k following a 4 way bidding war, all were first time buyers. The experts say 5-7% rise in Dublin but from what I have witnessed this will easily be double digit figures, they are under estimating the demand big time.

It's the lower end of the market going a bit bonkers now as the upper end has now hit a ceiling. People are looking at cheaper areas. They can support a higher 'overbid' in terms of money but not push the overall figure up as much as a 500K house selling at 600K.

Yourself isit

Geuze wrote: »

2015 data

http://www.cso.ie/en/releasesandpublications/er/elca/earningsandlabourcostsannualdata2015/

Average earnings = 36,519, or 21.90 per hour

Average for FT workers = 45,075

Average in industry, FT and PT = 44,168

I don't know why the cso uses the average and not the median unless it's a ploy to overestimate earnings.

According to this report by in the journal.


33% of households have a gross income of less than €30,000
56% of households have a gross income of less than €50,000
62% of households have a gross income below the average (mean) household income of €56,500
The top 30% of households have a gross income of more than €70,000 per annum
The top 20% of households have a gross income of more than €80,000 per annum
14% of household have a gross income above €100,000 per annum
2% of households have gross incomes above €200,000 per annum

The bit in bold highlights the problem with the use of the mean.

athtrasna

Mod note

Can we get back to the A&P relevant discussion please, there are other places to discuss the average wage calculations.

ThisRegard

Average wage is relevant to how the property market may go given there's a direct correlation between the two.

athtrasna

ThisRegard wrote: »

Average wage is relevant to how the property market may go given there's a direct correlation between the two.

How it's calculated isn't. No more please.

Mod

Geuze

Yes, I think property in cities has "gone mad again".

Terraced houses in Claddagh in Galway city are asking 400k.

Cunning Stunt

I think the housing market is going a bit mad again, yeah. There are houses in my sisters estate in Athy which were built during the boom, for 170k off plans and had fallen to as low as 90k in recent years  -- but now two have come on the market in the last month and sold for around 140k mark each - one was on the market for about a week, bidding war - went 40% over asking price -- the other was for sale for just a few days - those buyers met the asking price straight away. 

Like most other areas there was an issue with over-supply, but different story now - it's slim pickings and houses are being snapped up as soon as they become available!

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cnocbui

Any time people think prices have gone mad, they should work out how much it would cost to buy the land and build an equivalent structure on it. Outside of Dublin, many houses prices are madly low.

Chimera88

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Absolutely, same story here- I was involved bidding on a 2 bed apartment in Dublin listed at 195, sold before Christmas for 218 and fell through.

It's now on 244k and counting in the bidding process- that seller must be thrilled the first sale fell through!

Not a good outlook for those of us trying to get on the ladder

HiGlo

Chimera88 wrote: »

Absolutely, same story here- I was involved bidding on a 2 bed apartment in Dublin listed at 195, sold before Christmas for 218 and fell through.

It's now on 244k and counting in the bidding process- that seller must be thrilled the first sale fell through!

Not a good outlook for those of us trying to get on the ladder

I think I know the apartment you're talking about!! haha.. I was just about to post about the exact same one.... I think I was probably bidding against you at one point! haha... I've since dropped out but the estate agent told me they've accepted the 244k bid and are expecting deposit tomorrow.

Almost €50k above ask!!! It's madness :eek:

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pilly

In my opinion I think FTB's have expectations that are far too high. They want their perfect house in the perfect location and if they can't have it because it's over 400k they're whinging about it.

What ever happened to living within your means? If you can't afford to live in a certain place there are hundreds of houses and apartments for sale in Dublin for much much less, I just had a look on Daft this morning with a limit of 350k and literally found hundreds.

HiGlo

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Hahaha, are we all talking about the same apartment?? haha :pac:

D24?

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allibastor

limnam wrote: »

That's an odd average.

In order to come in under LTI both would need to be earning 60k+ a year to buy at 400-450k.

Average earnings for people in full-time employment is aprox 32k a year.

12% of households have income over 100k

I've no idea who's buying these 400k+ houses but it would seem 88% of the workforce can't afford to.

Granted the figures are for 2014 so probably slightly higher now...but still it amazes me how we get to an avg of 400-450k

Average industrial wage that is.
You wont get an account/tech/senior sales etc for anything less than 50K in Dublin each.

prices are high there, but its a sefl contained market in essence as the wages needed to live there and buy there are only available there.

impr0v

pilly wrote: »

In my opinion I think FTB's have expectations that are far too high. They want their perfect house in the perfect location and if they can't have it because it's over 400k they're whinging about it.

What ever happened to living within your means? If you can't afford to live in a certain place there are hundreds of houses and apartments for sale in Dublin for much much less, I just had a look on Daft this morning with a limit of 350k and literally found hundreds.

This is a good point. Is social practicality or snobbery that pushes people to pay tens, maybe even hundreds of thousands, more for one house over another a mile or so away, and possibly equidistant from their place of work?

pilly

impr0v wrote:

This is a good point. Is social practicality or snobbery that pushes people to pay tens, maybe even hundreds of thousands, more for one house over another a mile or so away, and possibly equidistant from their place of work?

It's complete snobbery. Plenty of places in Tallaght for example, right on the Luas line, every amenities you could want on your doorstep. Cinemas, theatres, restaurants etc. Some people just don't like the address. There's no way I would pay 400-500k for a good address. You'd have no life paying that mortgage.

Samuel T. Cogley

Dublin property snobbery is a great driver of the market. I love giving Kilbarrack as an example so I will again. In under 900m (as the crow flies) prices go from 200K for a terrace to 1.25million (Albeit a 281sqm. Mansion on the Howth road). In less than 500m a house with a similar enough square footage will go from 275k to 480K (100 v 116 sqm.). I hear the phrase 'location location location' and it always give me a chuckle. That would put me in Foxfield rather than Kilbarrack and cost me 200K. Same schools, same people, further from the DART station.

There was a great thread here about developers/EA's renaming areas. The OP seemed earnest enough, not a single post backing up his position. Literally everyone on the thread acknowledged it as par for the course.

Milly33

Well said it it never property going mad it is people.. They want and want and want and are getting to lazy

Cuddlesworth

pilly wrote: »

It's complete snobbery. Plenty of places in Tallaght for example, right on the Luas line, every amenities you could want on your doorstep. Cinemas, theatres, restaurants etc. Some people just don't like the address. There's no way I would pay 400-500k for a good address. You'd have no life paying that mortgage.

For me and my partner for the age we are at, its schools. And the areas with the good schools usually go for more money.

Samuel T. Cogley

Cuddlesworth wrote: »

For me and my partner for the age we are at, its schools. And the areas with the good schools usually go for more money.

I'd be interested to know - genuine question I really don't know - what the cost of an education at a top school in Dublin is. It has to be getting to the point you're better off buying in Kilbarrack and sending them to a top private school on the DART than living in Sandymount and sending them to the local comprehensive (or the Irish equivalent).

Hollister11

Samuel T. Cogley wrote: »

I'd be interested to know - genuine question I really don't know - what the cost of an education at a top school in Dublin is. It has to be getting to the point you're better off buying in Kilbarrack and sending them to a top private school on the DART than living in Sandymount and sending them to the local comprehensive (or the Irish equivalent).

There isn't much of a choice currently in Kilbarrack. There's 3 for sale on Daft.

Cuddlesworth

Samuel T. Cogley wrote: »

I'd be interested to know - genuine question I really don't know - what the cost of an education at a top school in Dublin is. It has to be getting to the point you're better off buying in Kilbarrack and sending them to a top private school on the DART than living in Sandymount and sending them to the local comprehensive (or the Irish equivalent).

Semi-Private is preferable. Top end schools are out of our price range I think. Well currently at least. There is a huge difference in primary schools and secondary schools in our current area. Very much a case of haves and have nots.

Samuel T. Cogley

Hollister11 wrote: »

There isn't much of a choice currently in Kilbarrack. There's 3 for sale on Daft.

I was using it as an example, Baldoyle is a good secondary place to try :pac:

The point being it's about 40K to put a kid through a good private education, lets say 125K to include two of the little sods, books, bribes etc. to get them in. To me it makes more sense to buy a house for 350K and give them that, rather than buying a house for 600K and sending them to the local.

I'm sure I'm missing something.

I sincerely hope the wife doesn't go through the computer and wonder why I'm looking at posh boys schools...

Link to IT article

Hollister11

Samuel T. Cogley wrote: »

I was using it as an example, Baldoyle is a good secondary place to try :pac:

The point being it's about 40K to put a kid through a good private education, lets say 125K to include two of the little sods, books, bribes etc. to get them in. To me it makes more sense to buy a house for 350K and give them that, rather than buying a house for 600K and sending them to the local.

I'm sure I'm missing something.

I sincerely hope the wife doesn't go through the computer and wonder why I'm looking at posh boys schools...

Link to IT article

I'm even getting sick of Baldoyle. It's a very lifeless town really.

The dream is Howth.

Samuel T. Cogley

Hollister11 wrote: »

I'm even getting sick of Baldoyle. It's a very lifeless town really.

The dream is Howth.

Just get on the bloody DART man, it's like 5 minutes from you. :pac: