Property slowdown in Dublin?

PMBC

Surely 5% is a good yield with interest rates for those amounts being neglibly small and inflation at less than 2%?
What sort of yield do people expect on property p/a - 10%?
I'm just curious.

Lumen

Bob24 wrote: »

There's one piece of logic I don't get though at he end: "If the first-time buyers grant encourages more to build properties, the price of housing will come down"

There's a broader piece of logic malfunction in commentary about Irish property, and that's the idea that demand is inelastic, that if you create enough supply (of new stock) the housing will become reasonably priced.

It doesn't hold for roads (people just use their cars more) so I don't see why it should hold for urban housing. Think of all the people that would choose to live in Dublin if it were cheaper (both in Ireland and abroad). Think of all the twenty- and thirty- somethings living with their parents who would move out.

That's not to say the current low level of construction is desirable.

browne_rob5

jamesthepeach wrote: »

I just accepted an offer on a 1 bed apparent in North Dublin. 50% more than I could have got for it only a year ago. Apartment are moving again now. Nobody wanted them last year.
No way could I refuse the offer I got, as renting it out is just a mugs game now.
Also very few on the market now too. All getting snapped up.

Did you still to an investor or an owner occupier?

jamesthepeach

browne_rob5 wrote: »

Did you still to an investor or an owner occupier?

The Early says he was a guy living with his parents in Carlow, sick of the commute to Dublin who was ready to do the deal straight away.
But I suppose if they had a mind to they could become an investor at any time.
I don't care as long as I get the money

There were others interested too, but his bid was high and he was ready to go right away.

SunSeeker101

jamesthepeach wrote: »

There were others interested too, but his bid was high and he was ready to go right away.

Selling to the greater fools, must surely be at end game now.

Samuel T. Cogley

SCD was the first to hit a bubble and did so very quickly. I think it's peaked out there for secondhand property. Agree with some of the sentiments above that new properties, as they appear will still sell well. I I also think we've probably finished exemption season have we? And it's rocking around to holiday time for both purchasers/buyers and lawyers.

We'll continue to see house prices on an upward trend until supply is sorted just moving North.

LirW

I also think we've probably finished exemption season have we?

I think Exemption season was over in March with every last cent granted by then.

Also have to disagree strongly with this article, especially rural Ireland. It's just numbers thrown around, it says nothing about one of the most important factors: location. Okay there were 60something 3bed Semi-Ds in Dublin, a few remain unsold. But where? I've viewed houses in very undesirable parts of town and the houses are sitting on the market forever. That says seriously F all about the situation in Dublin.

Same in rural parts of the neighboring counties of Dublin. Houses remain on the market for years, because they are unrealistically priced, even with drops of around 50k in the asking.

When selling even a year can be pretty short. From first viewing to Sale agreed can take a few weeks, what if it falls through, what if it doesn't get the attention the EA expected, price correction, holiday season etc. and a year is already gone. Our neighbor had his house on the market for over a year, dropped the asking almost 60k and got a bit under his original asking in the end. Went sale agreed in January and is handing the keys over next week. Purchasing is usually a slow process, people seem to forget this.

jamesthepeach

jamesthepeach wrote: »

I'm retiring to Spain tbh.
I was going to use my rentals here as income but that's not really viable now. I will source other more stable, interference and hassle free sources of income to invest in

Browney7 wrote: »

If you find them let us know! All asset classes look to have pretty lofty valuations

Asset classes generally look loftily priced unless in a crash. Given the strength of the € against the £ I'd consider the following decent options to invest in Easyjet, Vodafone, Kingfisher, Landsec & Next. If my money was in € currently I wouldn't purchase any US shares.

Dividend paying shares aren't bad when you are retired if you aren't being taxed at the higher rate or at all IMO

PMBC wrote: »

Surely 5% is a good yield with interest rates for those amounts being neglibly small and inflation at less than 2%?
What sort of yield do people expect on property p/a - 10%?
I'm just curious.

Gross rental income x 15 = purchase price; that was the rule of thumb years back........... approx 6.7%

I wish I had adhered to it when I purchased my first property, I reckon it rings true more often than not.

Possibly but if you currently have € even accepting that might as a definite the UK stuff is a good buy IMO compared to the US stuff.

I'd also strongly expect the £ to rally sometime over the next decade or so

Feckofff

Property is only attractive because you can borrow money against it.

Mickiemcfist

Feckofff wrote: »

Property is only attractive because you can borrow money against it.

Technically true, although CFD's & Spread betting are leveraged stock purchases so loans in effect

6541

Somewhat related I think, an old developer guy I know stopped his daughter buying her first house in Dublin. He states that we are in bubble territory and housing is overvalued with a correction coming. I can't see it, this guy is an old hand in the game and he is adamant.

TimeToShine

6541 wrote: »

Somewhat related I think, an old developer guy I know stopped his daughter buying her first house in Dublin. He states that we are in bubble territory and housing is overvalued with a correction coming. I can't see it, this guy is an old hand in the game and he is adamant.

I don't think anyone denies that we're in a bubble. But if you are buying a home to live in for life then it really doesn't make that much of a difference, the sooner the better. If you're having notions about investments then definitely don't bother.

Bob24

6541 wrote: »

Somewhat related I think, an old developer guy I know stopped his daughter buying her first house in Dublin. He states that we are in bubble territory and housing is overvalued with a correction coming. I can't see it, this guy is an old hand in the game and he is adamant.

Dublin City or the suburbs? Does he see it as imminent?

And did he give any explanation for his reasoning?

I think a correction will come eventually, but I have to say in the short term I can't see it either.

Earl _of _Sandwich

6541 wrote: »

Somewhat related I think, an old developer guy I know stopped his daughter buying her first house in Dublin. He states that we are in bubble territory and housing is overvalued with a correction coming. I can't see it, this guy is an old hand in the game and he is adamant.

I would not be taking property market advice from an old developer.
Few survived for a reason.

Bob24

TimeToShine wrote: »

But if you are buying a home to live in for life then it really doesn't make that much of a difference

A lot of people say that, but it only half makes sense to me.

I get that if you're going to live there for decades as long as you can afford the mortgage and think the place is good enough you'll be grand even if there is a crash.

BUT I wouldn't agree it doesn't make much of a difference for you: if you can buy the same property at a significantly lower price a few years down the road, it means much lower mortgage repayments for those few decades which will increase your disposable income and positively improve your quality of life for a long enough period (or let you use that extra money for investments).

TimeToShine

Bob24 wrote: »

A lot of people say that, but it only half makes sense to me.

I get that if you're going to live there for decades as long as you can afford the mortgage and think the place is good enough you'll be grand even if there is a crash.

BUT I wouldn't agree it doesn't make much of a difference for you: if you can buy the same property at a significantly lower price a few years down the road, it means much lower mortgage repayments for those few decades which will increase your disposable income and positively improve your quality of life for a long enough period (or let you use that extra money for investments).

It would have to be significantly cheaper to offset the few years worth of money sunk into a rental property (upwards of 50k) plus the uncertainty that comes with renting.

Not saying it isn't viable but the risk/reward value isn't there for families who value stability above all else. I would like to note though that this doesn't apply to as many families as you would think. Any couples with aspirations to move abroad or further their careers elsewhere - or who even think they might end up in another country - should consider renting. This "buying makes sense regardless" logic would apply mainly to homebirds who love Ireland, love Dublin (or whatever city/town they live in), and have no intention whatsoever of leaving aside from the odd holiday.

6541

Bob24 wrote: »

Dublin City or the suburbs? Does he see it as imminent?

And did he give any explanation for his reasoning?

I think a correction will come eventually, but I have to say in the short term I can't see it either.

To be honest he is a smug so and so. He made his money and got out. He has loads of rental properties in Dublin and has no problem putting rent up etc. Not the nicest of chaps. Either way I know him and know him well. His take is that Dublin is inflated, building is coming on stream, keep well away from property.

Browney7

6541 wrote: »

Somewhat related I think, an old developer guy I know stopped his daughter buying her first house in Dublin. He states that we are in bubble territory and housing is overvalued with a correction coming. I can't see it, this guy is an old hand in the game and he is adamant.

If she was living at home and saving at least what a rent payment would be there could be some merit in this. If she's currently renting and plans on living in Ireland for the long term and is in a position to buy now and the right property is available then why not?

6541

Browney7 wrote: »

If she was living at home and saving at least what a rent payment would be there could be some merit in this. If she's currently renting and plans on living in Ireland for the long term and is in a position to buy now and the right property is available then why not?

I think she was looking to buy an investment property to get in on the whole screw everyone for rent thing. I read into it that his thinking is that ship has sailed and the rental yield will not be as great in the future.

I am listening intently as I would love to purchase myself but I also feel that I have missed the boat and now is the time to hold out. At the moment I can hold out as I have the free use of a house for now.

I would love someone to come on here and actually tell it like it is. Say in five years its gonna be this or that, I guess that is wishing for too much.

Bob24

TimeToShine wrote: »

It would have to be significantly cheaper to offset the few years worth of money sunk into a rental property (upwards of 50k) plus the uncertainty that comes with renting.

Not saying it isn't viable but the risk/reward value isn't there for families who value stability above all else. I would like to note though that this doesn't apply to as many families as you would think. Any couples with aspirations to move abroad or further their careers elsewhere - or who even think they might end up in another country - should consider renting. This "buying makes sense regardless" logic would apply mainly to homebirds who love Ireland, love Dublin (or whatever city/town they live in), and have no intention whatsoever of leaving aside from the odd holiday.

Ok yeah I agree, if it is to save 5% on the purchase price it doesn't make sense. When I say it makes a difference I'm talking if there is a proper crash with at least a 20% drop in prices and possibly much more.

Maybe we also need to all agree on what we call a bubble then. To me if I say bubble I am kind of implying that it will result in such drops in the short to medium term (and I would be cautious about saying this is were we are today).

TimeToShine

Bob24 wrote: »

Ok yeah I agree, if it is to save 5% on the purchase price it doesn't make sense. When I say it makes a difference I'm talking if there is a proper crash with at least a 20% drop in prices and possibly much more.

Maybe we also need to all agree on what we call a bubble then. To me if I say bubble I am kind of implying that it will result in such drops in the short to medium term (and I would be cautious about saying this is were we are today).

Don't forget that if there is a crash like that then you will effectively not be able to get a mortgage. There are plenty of people out there with short memories who honestly believe they are retrospectively shrewd operators who knew that 2008 was coming and would have held out until 2010 to buy. The bank would have told you to feck right off unless you were putting up a 50%+ cash deposit and even then if you ever are in a position where you have six figures sitting liquid in your bank account you have already lost out by not investing it in the build up.

My definition of a bubble: When a 3 bed in Goatstown a 30 min commute from the city centre costs significantly more than a 3 bed in Brooklyn a 30 min commute from Manhattan where salaries are easily up to 10x higher.

6541

"My definition of a bubble: When a 3 bed in Goatstown a 30 min commute from the city centre costs significantly more than a 3 bed in Brooklyn a 30 min commute from Manhattan where salaries are easily up to 10x higher."


And is that the case ?

Cyrus

TimeToShine wrote: »

Don't forget that if there is a crash like that then you will effectively not be able to get a mortgage. There are plenty of people out there with short memories who honestly believe they are retrospectively shrewd operators who knew that 2008 was coming and would have held out until 2010 to buy. The bank would have told you to feck right off unless you were putting up a 50%+ cash deposit and even then if you ever are in a position where you have six figures sitting liquid in your bank account you have already lost out by not investing it in the build up.

My definition of a bubble: When a 3 bed in Goatstown a 30 min commute from the city centre costs significantly more than a 3 bed in Brooklyn a 30 min commute from Manhattan where salaries are easily up to 10x higher.

So if average salaries in Dublin are 40k the average in Manhattan is 400?!?!

Cyrus

6541 wrote: »

I think she was looking to buy an investment property to get in on the whole screw everyone for rent thing. I read into it that his thinking is that ship has sailed and the rental yield will not be as great in the future.

I am listening intently as I would love to purchase myself but I also feel that I have missed the boat and now is the time to hold out. At the moment I can hold out as I have the free use of a house for now.

I would love someone to come on here and actually tell it like it is. Say in five years its gonna be this or that, I guess that is wishing for too much.

Do you think anyone knows ?

I believe you won't see a crash for at least 7-10 years of there is to be one in Dublin

Bob24

TimeToShine wrote: »

Don't forget that if there is a crash like that then you will effectively not be able to get a mortgage. There are plenty of people out there with short memories who honestly believe they are retrospectively shrewd operators who knew that 2008 was coming and would have held out until 2010 to buy. The bank would have told you to feck right off unless you were putting up a 50%+ cash deposit and even then if you ever are in a position where you have six figures sitting liquid in your bank account you have already lost out by not investing it in the build up.

Lending conditions were tighter alright, but not that tight. I was not ready to buy for personal reasons at the time but while I had a long term job and and decent salary for my age I had more like 25% deposit for the stuff I was looking at and banks didn't seem to have an issue.

Lumen

TimeToShine wrote: »

I don't think anyone denies that we're in a bubble

I deny that we are in a bubble.

Zenify

Lumen wrote: »

I deny that we are in a bubble.

http://jrnl.ie/3431600

wrote:

In a series of statements today, think tanks have warned that Ireland could be heading towards another unsustainable property bubble.

The Irish Fiscal Advisory Council has warned that the construction sector could cause Ireland’s economy to overheat if it grows much more quickly than is currently anticipated.

Nobody knows the future but I think we can all admit there are warning signs of a bubble.

Lumen

Zenify wrote: »

http://jrnl.ie/3431600

Nobody knows the future but I think we can all admit there are warning signs of a bubble.

Sure, but "heading towards" is not "in".

There were warning signs going all the way back to 2013 in terms of price rises, or further if looking at lack of new construction.

Zenify

Lumen wrote: »

Sure, but "heading towards" is not "in".

There were warning signs going all the way back to 2013 in terms of price rises, or further if looking at lack of new construction.

please explain the difference. I'm being serious about this and not trying to be smart.