Property Market 2018

hmmm · 02-09-2018 7:13pm

Q&A wrote: »

At the end of the day there are too few properties for what people want and people will have to pay if they want one of these rare goods.

I wouldn't have much time for David McWilliams, but compared to 2007 I think he's absolutely right that this time around leverage is missing. Back then prices were pushed up by a relatively small group of people who were borrowing massive amounts e.g. 6 times their income. This group of eejits pushed up prices for everyone else.

This time around prices seem to be bouncing off Central Bank caps in lending, and there are only so many people who can afford to pay 500k+ for properties. For once we should be praising regulators for actually getting this one right.

The downside of the caps is that house building costs are so high that it's becoming an issue for developers being able to make any profit at all. A large chunk of costs ends up going to the government in various taxes.

In terms of the overall market, we still have huge demand, supply is still too low, but hopefully we will see a more "normal" market where prices don't move very much from year to year.

Eric Cartman · 02-09-2018 7:20pm

hmmm wrote: »

I wouldn't have much time for David McWilliams, but compared to 2007 I think he's absolutely right that this time around leverage is missing. Back then prices were pushed up by a relatively small group of people who were borrowing massive amounts e.g. 6 times their income. This group of eejits pushed up prices for everyone else.

This time around prices seem to be bouncing off Central Bank caps in lending, and there are only so many people who can afford to pay 500k+ for properties. For once we should be praising regulators for actually getting this one right.

The downside of the caps is that house building costs are so high that it's becoming an issue for developers being able to make any profit at all. A large chunk of costs ends up going to the government in various taxes.

In terms of the overall market, we still have huge demand, supply is still too low, but hopefully we will see a more "normal" market where prices don't move very much from year to year.

I think the only way that market will show up is to cut some of the taxation , a VAT exemption for FTB's and anyone purchasing a PPR would help , along with removing VAT on insulation , fire alarm/smoke detectors , locks/security and boilers/Heat pumps.

theboringfox · 02-09-2018 7:24pm

For a while there used to an affordability index. Think it was done by EBS. Dublin was always most leveraged. People in other parts of country choosing not to go to same income multiples for whatever reason. Dublin much stronger investor market so much more competition for those seeking to buy their own home. I'd see any step back as investors moving away from market. Landlords trapped by rent caps may also be looking to get out.

Cyrus · 02-09-2018 8:06pm

smurgen wrote: »

Brexit coming to a head, end of the investment cycle,possible political turmoil in the U.S. the talking up of prices in here is quiet unbelieveable but mirrors the bitcoin thread in a funny way.the same insults were thrown at those of us trying to be rational in that thread.

There won’t be a major correction in the next 12 months prices will and are already levelling off as affordability kicks in in parts of Dublin cheaper areas will continue to rise as will the rest of the country , that’s what is coming for the next 13 months.

backspin. · 02-09-2018 8:17pm

When people no longer fear rapid price rises they are tempted to hold off and either save more money or wait for a better house. I don't think prices will stabilize I think they will fall.

cardshark · 02-09-2018 8:20pm

Is anyone noticing a lot more 'For Sale' signs up around the place recently or is it just me?! Cork here

Samuel T. Cogley · 02-09-2018 8:21pm

cardshark wrote: »

Is anyone noticing a lot more 'For Sale' signs up around the place recently or is it just me?! Cork here

Yep, springing up near me like dandelions. (Dublin - Cheap Seats)

cardshark · 02-09-2018 8:27pm

Samuel T. Cogley wrote: »

Yep, springing up near me like dandelions. (Dublin - Cheap Seats)

The last time I noticed that was just before the crash, it was actually pointed out to me by my solicitor before I bought!!

I also have a couple of friends needing to move because the Landlords are selling up... So maybe it's the beginning of a turn but who knows.

The Landlords know, that's who!!

sightband · 02-09-2018 8:30pm

cardshark wrote: »

The last time I noticed that was just before the crash, it was actually pointed out to me by my solicitor before I bought!!

I also have a couple of friends needing to move because the Landlords are selling up... So maybe it's the beginning of a turn but who knows.

Wait a second, am I misreading this? Your solicitor discouraged you from purchasing a property?

Samuel T. Cogley · 02-09-2018 8:33pm

cardshark wrote: »

The last time I noticed that was just before the crash, it was actually pointed out to me by my solicitor before I bought!!

I also have a couple of friends needing to move because the Landlords are selling up... So maybe it's the beginning of a turn but who knows.

The Landlords know, that's who!!

TBH I think it's more people getting out of the rental game either due to regulation or moving out of negative equity. There have been to sales on my street and two more for sale, two of them were rentals.

Other than Brexit I don't think we've much chance of a crash this time round there just isn't the level of debt.Sub prime debt is focused on car sales at the moment and I don't think people would be mad enough to default on their mortgage to keep the car payments going, but who knows.

cardshark · 02-09-2018 8:37pm

sightband wrote: »

Wait a second, am I misreading this? Your solicitor discouraged you from purchasing a property?

Correct, solid advice. But who listens to advice?!

Samuel T. Cogley wrote: »

TBH I think it's more people getting out of the rental game either due to regulation or moving out of negative equity. There have been to sales on my street and two more for sale, two of them were rentals.

Other than Brexit I don't think we've much chance of a crash this time round there just isn't the level of debt.Sub prime debt is focused on car sales at the moment and I don't think people would be mad enough to default on their mortgage to keep the car payments going, but who knows.

You are probably right, I can't see a correction anything like we had the last time obviously.

Maybe just some really cheap cars around! Not that we don't have that already, pity about the insurance scam though.

mike_cork · 02-09-2018 8:59pm

I'm in cork as well....Have noticed the exact same thing. Also in the last 3 months there has been a definite increase in the daft email alerts i've been receiving i.e. new properties coming onto the market.
What it all means not sure. As someone pointed out above,landlords getting out?

hmmm · 02-09-2018 10:49pm

mike_cork wrote: »

What it all means not sure. As someone pointed out above,landlords getting out?

Rents still seem to be going up - I suspect a lot of the property for sale is landlords getting out, squeezing rental supply. The warnings re RPZ etc was that it would affect supply, and that seems to be the case. Typical short-sighted behaviour as ever.

I don't get the impression Brexit etc. has any impact on the market at present.

theboringfox · 02-09-2018 11:05pm

The market softening is no bad thing. But there has been no run away debt. Rental still lot dearer than paying mortgage. I think the affordability must be kicking in plus supply going up so softening market. Will be interesting to see though as if any hint of market topping out could make buyers nervous and holding off waiting for further falls. Interesting to hear about Cork too

Henbabani · 02-09-2018 11:50pm

Two months ago - 185 properties for sale in Dublin - at least two bedrooms max 200,000€.
Today - 228.

utmbuilder · 03-09-2018 12:04am

the exception limits are causing hot and cold spells in the market, I reckon a lot of listings will hit the market September, October, November and scare every one again at the start of 2019 but overall there's serious demand in dublin

country wise , I think the likes of a detached 4 bed in navan has peaked at 330k

the next few stages of new builds will be sold and not given away as social housing, which will really impact demand in commuter towns

landlords will panic to get out now I reckon too

utmbuilder · 03-09-2018 12:04am

a FG government over a FF will be interesting to see reaction

Cyrus · 03-09-2018 6:50am

Henbabani wrote: »

Two months ago - 185 properties for sale in Dublin - at least two bedrooms max 200,000€.
Today - 228.

You realise that September is a popular month to sell whereas July and August aren’t even the news papers stop doing properly supplements over the summer

Sleepy · 03-09-2018 11:31am

Anyone looked at the figures? Is my gut feeling that the reported price drops and softening of the market are in the higher-end of the market correct?

Even assuming an average household income of 100k (which would be reasonably high for Dublin ime) lending rules put a limit of 350k on that couple's borrowing so even with a decent deposit, most properties over 400k are simply of reach for the majority of the population. And that's before considering that most buying second-hand want to put tens of thousands into renovations or redecoration (further lowering their available funds).

KevinCavan · 03-09-2018 6:00pm

Good to see that the Shinners are putting pressure on minister Eoghan Murphy.

theboringfox · 03-09-2018 6:04pm

KevinCavan wrote: »

Good to see that the Shinners are putting pressure on minister Eoghan Murphy.

No better sign you are doing the right thing then having Sinn Fein say it's wrong. He is a very good minister. Huge task.

The_Conductor · 03-09-2018 7:14pm

theboringfox wrote: »

No better sign you are doing the right thing then having Sinn Fein say it's wrong. He is a very good minister. Huge task.

I'll reserve judgement- as it stands- the myriad amendments he has made to the core legislation has served to drive landlords and prospective landlords- from the sector in their droves- and the 'minimum 100,000' derelict dwellings he stated would be brought into habitable condition- has been revised to 2-3,000 tops....... He honestly hasn't a clue whats happening around him............

Browney7 · 03-09-2018 9:05pm

theboringfox wrote: »

No better sign you are doing the right thing then having Sinn Fein say it's wrong. He is a very good minister. Huge task.

Hi Eoghan!

theboringfox · 03-09-2018 9:38pm

The_Conductor wrote: »

I'll reserve judgement- as it stands- the myriad amendments he has made to the core legislation has served to drive landlords and prospective landlords- from the sector in their droves- and the 'minimum 100,000' derelict dwellings he stated would be brought into habitable condition- has been revised to 2-3,000 tops....... He honestly hasn't a clue whats happening around him............

The angle Sinn From are coming from is not going to support getting landlords back in though. It is a huge task. I won't criticise his effort. Anyone in that job will make errors. And there is no quick fix solution.

myshirt · 03-09-2018 9:40pm

theboringfox wrote: »

No better sign you are doing the right thing then having Sinn Fein say it's wrong. He is a very good minister. Huge task.

I agree with you, he is an able young man, but his feet need to be held to the fire. Keep him working. Keep him sweating. This is such a critical portfolio. He's a competent and able person, I'd just like him to pedal a bit harder.

Jjjjjjjbarry · 03-09-2018 10:05pm

https://www.irishtimes.com/business/economy/irish-house-prices-are-heading-for-soft-landing-s-p-1.3616705

House prices heading for a soft landing? Could they fall outside of Dublin?

hmmm · 03-09-2018 10:31pm

A Minister can't suddenly generate houses or building activity.

On the other hand, the pressure to implement short term fixes can be counterproductive. Landlords are being driven out of the market because pressure to "do something" led to a lot of bad decisions which were politically popular. I heard some homeless campaigner recently suggesting that there should be a ban on evictions - what does he think this will do to the rental market?

We need a Minister to present a 5 to 10 year plan and then let them get on with it. Unfortunately I'm not sure our system will ever allow this to happen.

Bob24 · 03-09-2018 11:09pm

Jjjjjjjbarry wrote: »

https://www.irishtimes.com/business/economy/irish-house-prices-are-heading-for-soft-landing-s-p-1.3616705

House prices heading for a soft landing? Could they fall outside of Dublin?

I don’t give much credit to this type of forecast simply because it is based on too many assumptions, and most of these assumptions consist of extending current trend lines (new supply, demand, rate of economic growth, etc). Thing is trends can and will change.

Bob24 · 04-09-2018 9:58am

David McWilliams argues that “Dublin’s housing market not yet ripe for a crash” (he actually starts off with commenting the Economist figures we were talking about here).

http://www.davidmcwilliams.ie/dublins-housing-market-not-yet-ripe-for-a-crash/

jay0109 · 04-09-2018 10:04am

I see FF are putting a budget proposal in that Landlords who give 5 year leases will get a reduced tax rate on their rental income. And a bigger reduction for those that give 10 years. Details still being thrashed out.
Should win votes from renters and landlords alike.

They haven't gone away you know!

Property Market 2018

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