Property Market 2019

utmbuilder

Minimal effect you say lol

Take a look at the mortgage drawdown numbers, and correlate that with new build's in 2018 and total sales.

Housing association's are buying 45% of the stock maybe more, funded by a few hundred million from the Government

When returns to the exchequer falls, where do you think the Government are going to start cutting to meet repayments on the 200 billion loan we have to service from the 2008 crash.

Most of these housing associations could'nt rent a car at hertz their credit is so bad.

Mad_maxx

pearcider wrote: »

Mad_maxx wrote: »

Minimal effect, irish banks not exposed for the most part

If 2008 showed us anything it’s that every bank is exposed in a credit crunch since the entire system is connected. Once Bear Sterns went down, Lehman wasn’t far behind, then AIG was next. This prompted the 780 billion dollar bailout in October 2008 as by Hank Paulsons own admission this would have caused the systematic collapse of all banks worldwide within days. Alistair Darling made similar comments in his book on the bailout of RBS in October 2008 where he stated that most ATMs in the UK would have been emptied in 2 hours.

So you think a bunch of irish motorists who took out thirty grand loans to buy a Skoda will be the spark that ignites the next lehmans event?

Padre_Pio

Mad_maxx wrote: »

So you think a bunch of irish motorists who took out thirty grand loans to buy a Skoda will be the spark that ignites the next lehmans event?

PCP is pretty much the only way to buy in the US.
They don't even advertise the sticker price.

There's many signs the boom is on the way out, just no one knows when or how it'll happen.

Cyrus

Samuel T. Cogley wrote: »

Three little letters: PCP

I don't get the pcp scare mongering personally

L1011

Cyrus wrote: »

I don't get the pcp scare mongering personally

If there's a price shock to second hand vehicles, the side guaranteeing the minimum future value is at a large risk

If people generally get poorer and can't afford to roll over agreements / hand back cars the income stream drops off for the provider

Thats the first two risks I can think of

Mad_maxx

Padre_Pio wrote: »

Mad_maxx wrote: »

So you think a bunch of irish motorists who took out thirty grand loans to buy a Skoda will be the spark that ignites the next lehmans event?

PCP is pretty much the only way to buy in the US.
They don't even advertise the sticker price.

There's many signs the boom is on the way out, just no one knows when or how it'll happen.

Ah OK, didn't realise we were talking about pcp in a global context

99problems1

Nah PCP isn't a risk.

The only ones who could lose out are the garages and there's not that many relatively employed in this industry.

SozBbz

I don't think PCPs are a massive risk to the global financial system - I'm not sure I think they're a great idea either, but thats another arguement.

Most PCPs are not financed by conventional banks, they're often financed by some finance entity of the manufacturer themselves, ie, Volkswagen Bank GMBH.

Its just a way for these rich companies to use money that they'd otherwise have as bonds or on deposit (yeild is negative now, so can't do that) to work and simultaneously help stimulate demand for their own products.

Its not a typical loan scenario. When you borrow from BOI or whoever on the high street, they don't care what car you buy, they're all about the interest rate. The manufacturers own "banks" don't care about the rate thats why its very low or in some cases 0%, they just care about getting new cars sold, and getting people into 3 year buying cycles.

Interested Observer

UsBus wrote: »

I hate to break it to you, but I don't see Trump losing next year. Unfortunately his base are delighted with his stance on migration, illegal immigrants etc, the US economy is much improved over there in the last couple of years in terms of jobs, sentiment. Trump voters don't care whether there's a property crash or global crisis as long as their back yard are doing better. I'd love to see him kicked out to settle things down but I can't see anyone overtaking him

ELM327 wrote: »

Trump will win in 2020 due in part to his main "opponents" being laughable.

ANyone waiting for Trump to be "turfed out" will be sadly disappointed.
I wouldn't be surprised (if they manage to replaced RBG on the supreme court with another conservative) if Trump manages to get a third term either. This would take some supreme court to get it through (as it's not currently allowed in the constitution)

That is one thing I'm relatively certain of (Trump winning in 2020).
Another thing that is more likely than not to happen is a recession. Probably 12-18 months out.

The_Conductor wrote: »

I hate to have to suggest you might be right.
The Democrats are making an appalling haemes of things.
They need a single candidate and they need to coalesce behind them sooner rather than later. This sniping at one another- is delivering a second term to Trump. The whole process of finding a candidate- the hustings- are a gift to Trump- why bother fighting with the Democrats, when they're doing the job for him...........

Lot to disagree with here. No point in getting into the weeds, we'll see next November.

Cyrus

L1011 wrote: »

If there's a price shock to second hand vehicles, the side guaranteeing the minimum future value is at a large risk

If people generally get poorer and can't afford to roll over agreements / hand back cars the income stream drops off for the provider

Thats the first two risks I can think of

Depends on the finance provider

Often it’s the manufacturer.

If people hand cars back and the income streams drop off for a regular bank it’s hardly a shock to the global financial system ?

beauf

Man you guys fixate. The suggestion was we (Irish population in general) aren't living on credit like we were at the time of last crash.
But we are. Less than we were certainly but still very significant compared to other countries.

Cyrus

beauf wrote: »

Man you guys fixate. The suggestion was we (Irish population in general) aren't living on credit like we were at the time of last crash.
But we are. Less than we were certainly but still very significant compared to other countries.

i dont think arguing the toss on PCP is fixating, i find the fixation with it as some kind of financial tsunami odd to be honest.

but yes in general our household debt is relatively high but getting lower and falling to be fair.

shenanagans

Mortgage lending has been well regulated here in recent years. People can't borrowed 10 times their salary with no deposit as was the scenario in the boom. As for global debt, its risen enormously since 2008 but 40% of the new debt since 2008 has been taken on by the Chinese alone. They are followed by Brazil, Turkey, South Africa and India. So China is vulnerable.

Anyone thinking or hoping property here will fall of a cliff again, thats wishful thinking. The demand is still crazy with poor supply. Housing crisis, rental crisis, homelessness crisis..... I see whole estates being bought up for social housing.

Things may slow but I can't see huge drop in prices. Particularly new houses as so many are being bought up by councils.

Cuddlesworth

shenanagans wrote: »

Mortgage lending has been well regulated here in recent years.

You know we didn't really deal with that whole mortgage arrears thing? They cleaned up the easy stuff and got very quiet about the rest.

duffman13

Cuddlesworth wrote: »

You know we didn't really deal with that whole mortgage arrears thing? They cleaned up the easy stuff and got very quiet about the rest.

They are all off the books of banks by in large now. You can see a lot more property going for auction although it seems to be BTLs more than anything although Banks have now shifted those primary residental home loans on for cents on the euro aswell. The banks have been really well regulated in regards to mortgages in the last 10 years.

beauf

duffman13 wrote: »

...The banks have been really well regulated in regards to mortgages in the last 10 years.

How? The regulations only came out in 2015/2017.

shenanagans

beauf wrote: »

How? The regulations only came out in 2015/2017.

When people came back into the market. When house sales recovered. I'd say many sales prior were cash sales. People who were unemployed couldn't get mortgages. Banks weren't handing out money after the crash unless I'm remembering things differently to you?

shenanagans

Cuddlesworth wrote: »

You know we didn't really deal with that whole mortgage arrears thing? They cleaned up the easy stuff and got very quiet about the rest.

I was referring to mortgage lending since crash not before. People in arrears bought before crash when they got easy credit.

beauf

Before the Celtic tiger, and there were strict rules on mortgages, these were the banks own rules.
These rules were lifted during the Celtic Tiger as the market slowed (as it is now, and there is pressure to do the same again).
They were warned it was a bad idea, no one listened, the Central banks and regulator sat on their hands.
Only long after the crash and the damage done and the horse well and truly bolted. Did the central bank finally do its job and bring in regulation.

The fact that banks weren't lending, post crash, does not mean they were regulated.

Its an assumption that all the people in arrears now bought before the crash. Even in good times, people and business fail. People make poor decisions all the time.

beauf

Ireland has a long reputation for a lack of regulation.

https://www.publicinquiry.eu/2006/06/07/ireland-the-wild-west-of-european-finance/

Its not just banking, across building, crime, driving, and other sectors our history of poor regulation, and enforcement is well known.

We like to think of other "lesser" countries as corrupt. We need to look in the mirror.

FernandoTorres

shenanagans wrote: »

Mortgage lending has been well regulated here in recent years. People can't borrowed 10 times their salary with no deposit as was the scenario in the boom. As for global debt, its risen enormously since 2008 but 40% of the new debt since 2008 has been taken on by the Chinese alone. They are followed by Brazil, Turkey, South Africa and India. So China is vulnerable.

Anyone thinking or hoping property here will fall of a cliff again, thats wishful thinking. The demand is still crazy with poor supply. Housing crisis, rental crisis, homelessness crisis..... I see whole estates being bought up for social housing.

Things may slow but I can't see huge drop in prices. Particularly new houses as so many are being bought up by councils.

It's easy to say it's wishful thinking by looking at the current situation and extrapolating into the future. Things can change very quickly. I don't remember many people predicting in 2012 that prices would be up nearly 100% in 2019. There aren't many assets in the world that have those sort of gains and continue the run.

One worry I'd have about Irish property is the demographics. 24% of the population is over 55 and they hold 60% of the wealth, the majority of which is held in their home property. Given their homes are not producing an income and private pension coverage is very low, a lot of these people are reliant on the state pension. As the cost of living in Dublin goes through the roof how sustainable is this?

I've a feeling a lot of older couples living alone in 4 or 5 bed houses know they'll have to downsize but are in denial while prices steadily rise. Once the recession talk picks up again when Germany and Britain fall into it, it might cause a bit of panic and see a lot more supply some on board, just at the same time as younger people hold off to see what happens. That scenario would see prices crash again and isn't beyond the realms of possibility albeit I admit that I may be slightly pessimistic.

duffman13

beauf wrote: »

How? The regulations only came out in 2015/2017.

Maybe not regulated but working in the sector and seeing the difficulty for people from 2011 onwards to get a mortgage, I'd be interested to see the number of people in arrears on mortgages taken out since say 2010. Again just going on personal experience, I'd say it's low.

Cyrus

FernandoTorres wrote: »

It's easy to say it's wishful thinking by looking at the current situation and extrapolating into the future. Things can change very quickly. I don't remember many people predicting in 2012 that prices would be up nearly 100% in 2019. There aren't many assets in the world that have those sort of gains and continue the run.

One worry I'd have about Irish property is the demographics. 24% of the population is over 55 and they hold 60% of the wealth, the majority of which is held in their home property. Given their homes are not producing an income and private pension coverage is very low, a lot of these people are reliant on the state pension. As the cost of living in Dublin goes through the roof how sustainable is this?

I've a feeling a lot of older couples living alone in 4 or 5 bed houses know they'll have to downsize but are in denial while prices steadily rise. Once the recession talk picks up again when Germany and Britain fall into it, it might cause a bit of panic and see a lot more supply some on board, just at the same time as younger people hold off to see what happens. That scenario would see prices crash again and isn't beyond the realms of possibility albeit I admit that I may be slightly pessimistic.

houses were artificially underpriced in 2012, i dont think anyone is expecting a continuation of growth like we have seen from 12-18 rather prices should from now on track inflation. the reason prices have stalled is because of the affordability impact of the lending restrictions which is a good thing, as wages increase so will peoples ability to finance a property, if wages dont increase then prices wont.

duffman13

beauf wrote: »

Ireland has a long reputation for a lack of regulation.

https://www.publicinquiry.eu/2006/06/07/ireland-the-wild-west-of-european-finance/

Its not just banking, across building, crime, driving, and other sectors our history of poor regulation, and enforcement is well known.

We like to think of other "lesser" countries as corrupt. We need to look in the mirror.

Don't think anyone can argue with that, central bank with mortgages have regulated well but there "inspections" are almost laughable.

With exception maybe to revenue I'd say there is not a well run effecient body in our public sector.

Cuddlesworth

FernandoTorres wrote: »

I've a feeling a lot of older couples living alone in 4 or 5 bed houses know they'll have to downsize but are in denial while prices steadily rise. Once the recession talk picks up again when Germany and Britain fall into it, it might cause a bit of panic and see a lot more supply some on board, just at the same time as younger people hold off to see what happens. That scenario would see prices crash again and isn't beyond the realms of possibility albeit I admit that I may be slightly pessimistic.

Right now, I can't see many people downsizing regardless. There are no suitable properties for them to move to and the ones that are, are being bid on aggressively by young people as its the only thing in their price range.

shenanagans

beauf wrote: »

Ireland has a long reputation for a lack of regulation.

https://www.publicinquiry.eu/2006/06/07/ireland-the-wild-west-of-european-finance/

Its not just banking, across building, crime, driving, and other sectors our history of poor regulation, and enforcement is well known.

We like to think of other "lesser" countries as corrupt. We need to look in the mirror.

Yes I take your point on regulation in this country, we have a poor reputation which nobody could argue with. I'm was just making the point in regards to the whole debt concerns raised by many people on this forum...I don't think much of the mortgage lending post crash could result in arrears at present. Anyone who managed to get money from a bank 09-15 did well as they simply didn't want to lend. As you said there's been regulation since 2015. Anyone who bought property from 2008-15 is in a great position given the rise in price. Anyone post 2015 wasn't given irresponsible levels of debt.

The country has big debt but the new debt that's mortgage related post crash....I can't see that there's a huge problem with it coming over the horizon.

kippy

shenanagans wrote: »

Yes I take your point on regulation in this country, we have a poor reputation which nobody could argue with. I'm was just making the point in regards to the whole debt concerns raised by many people on this forum...I don't think much of the mortgage lending post crash could result in arrears at present. Anyone who managed to get money from a bank 09-15 did well as they simply didn't want to lend. As you said there's been regulation since 2015. Anyone who bought property from 2008-15 is in a great position given the rise in price. Anyone post 2015 wasn't given irresponsible levels of debt.

The country has big debt but the new debt that's mortgage related post crash....I can't see that there's a huge problem with it coming over the horizon.

The biggest problems with debt aren't necessarily the debt itself but the ability to repay it.
Any loan is given out on the likelihood/abilty of the person to repay the loan.
Giving these out at a time when there is almost or close to full employment to people in good jobs is great, but issues start to happen if whatever crash, has an impact on the jobs market. Then you get people losing their second most important asset behind health, income. Debts don't get repaid - boom - issues again.

beauf

shenanagans wrote: »

...
The country has big debt but the new debt that's mortgage related post crash....I can't see that there's a huge problem with it coming over the horizon.

Post 2015, People can still easily borrow up to their max on a mortgage, build lots of personal debt, then they are vulnerable to...

Lose job,
Reduction in Income,
Sickness,
Having to work less to care for someone else. Parents, sick partner or child
Etc.
Thats before you get into external economic factors.

They can easily have done all that in the last 4yrs. Especially if its at peak for property prices and rent, low interest rates, and a booming economy, low employment.
You can set yourself up nicely for a fall.
The idea the its only an issue for people caught in the last crash is a bit optimistic. Maybe thats not what you're implying.

L1011

beauf wrote: »

Post 2015, People can still easily borrow up to their max on a mortgage, build lots of personal debt, then they are vulnerable to...

Lose job,
Reduction in Income,
Sickness,
Having to work less to care for someone else. Parents, sick partner or child
Etc.
Thats before you get into external economic factors.

They can easily have done all that in the last 4yrs. Especially if its at peak for property prices and rent, low interest rates, and a booming economy, low employment.
You can set yourself up nicely for a fall.
The idea the its only an issue for people caught in the last crash is a bit optimistic. Maybe thats not what you're implying.

The risk of loss of income or spending power has applied to anyone buying a house with a mortgage for ever though

shenanagans

beauf wrote: »

Post 2015, People can still easily borrow up to their max on a mortgage, build lots of personal debt, then they are vulnerable to...

Lose job,
Reduction in Income,
Sickness,
Having to work less to care for someone else. Parents, sick partner or child
Etc.
Thats before you get into external economic factors.

They can easily have done all that in the last 4yrs. Especially if its at peak for property prices and rent, low interest rates, and a booming economy, low employment.
You can set yourself up nicely for a fall.
The idea the its only an issue for people caught in the last crash is a bit optimistic. Maybe thats not what you're implying.

That's life. Those are the risks anyone taking out a loan faces. If you can't accept those risks you'd never take out a loan.

As for the last 4 years....If you bought a house in say 2010 and lost you'r job in the last 4 years ...chances are your house has gained in value....sell it.

There's always a risk the property market can take a turn for the worst but I don't see it in the short term. IMO.