Property Market 2019

IAmTheReign

The_Conductor wrote: »

Anyone in the Lucan/Adamstown/Clondalkin area notice a staggering rise in the amount of secondhand property being put on the market in the last few weeks? Some of it is quite highend stuff- in mature areas?
Its almost like a lot of people are planning on getting out of the area.

If I were retired- and in a position to move- I know I'd be doing the same (and I've lived here since I was a kid).

In addition- I see an increase in the vacancy rate on commercial units- e.g. Main Street Lucan now has 5 vacant units- which has never happened before (and sales of Griffin's Pharmacy at the bridge has fallen through twice- and they've now switched estate agent, Carey's Newsagent has been vacant for over a year despite selling at auction, Ponto Nuovo Italian restaurant- is closed for last 16-18 months and advertised as a going concern (which it most certainly isn't), Toolans betting shop next door to Bank of Ireland closed a few weeks ago, The IT shop next to the Garda Barracks- is still closed/vacant etc etc

The only thing busy about Lucan village- is the amount of traffic insisting on going through it.

I think a lot of that is people who've been holding out for what they think is the top of the market. My parents still live there and the prices they're charging for houses in the area I grew up in are eye watering. It's in or around half a million quid for houses that aren't anything special. Meanwhile all the really high end stuff hasn't moved at all. The 'luxury' houses they built in Rokeby haven't all sold and they've been built ages now.

Bbborris

New houses only built up that way, Mt Pleasant Wood coming in at a cool 1mil nearly... Is there a market for that price with rokeby not selling?Are developers gone nuts again!

Reversal

http://www.davidmcwilliams.ie/ireland-again-faces-a-global-property-cycle-fallout/

this makes our country vulnerable to a property “correction” or “downturn”, even though the underlying demand factors are strong

McWilliams seems to disagree with the insinuation that current demand makes Ireland immune to a property downturn. Also noting Green Reit selling up is an ominous sign. Time to get out, if required, by the looks of things.

Thargor

God Id love a downturn, it would suit me perfectly right now.

awec

Reversal wrote: »

http://www.davidmcwilliams.ie/ireland-again-faces-a-global-property-cycle-fallout/



McWilliams seems to disagree with the insinuation that current demand makes Ireland immune to a property downturn. Also noting Green Reit selling up is an ominous sign. Time to get out, if required, by the looks of things.

Where have you seen this insinuation?

A downturn is inevitable. Could be next month, could be next year, could be 5 years from now, who knows.

It's always amusing to read these articles, the beauty of being a commentator on the economy is nobody can ever prove you right or wrong until after the fact. Writing that Ireland will eventually see a downturn in property prices is like writing that it will rain at least once in the next year, or that the sun will probably come up tomorrow.

Reversal

awec wrote: »

Where have you seen this insinuation?

Multiple times on this thread for one. I will quote some posts tomorrow evening when I have time to find them. But there have been plenty of posts on this forum claiming prices can't fall because there is demand currently. I think that makes sense, but I was merely noting that McWilliams does not believe the current demand and low supply makes us immune from a "correction".

Its a claim I've heard in conversation generally also.

alwald

There are so many variables to be taken into consideration, some of which are linked to Brexit, world trade war, inflation, rise/fall in wages, rise/fall in interest rates, employment levels, government interference, regulations, new CBI rules/limits, supply of new builds, demand for housing and the list is long.

I doubt that we will see a similar scenario than 2007 but I am not an expert and this is just my opinion based on my observations.

I read a lot about that Reits/Cuckoo funds are taking all the risk...well I disagree as these properties (houses or apartments) are in Ireland and used by people living in Ireland so what will happen if these Reits will go bankrupt or whatever?? here is a guess, the government will pay the bill and will buy these properties as they are necessary to save those living in them from homelessness.

hmmm

We're in nothing like a 2007 scenario, that was clearly proceeded by a massive debt bubble. People were borrowing 6 and 7 times their income, and buying second properties in the middle of nowhere.

The world economy looks reasonably healthy, although it's inevitable there will be a downturn at some stage. It's lazy commentating to suggest there will be a downturn, of course there will be - but it could be next year, or next decade. Either way the chances of it being a 50% fall like 2007 are remote.

Demand remains reasonable in Ireland, and employment is growing. Supply is increasing, so naturally the same frantic increase in prices has stopped. Rents continue to go up because the government is still implementing short-sighted policies to placate the left.

JJJackal

Thargor wrote: »

God Id love a downturn, it would suit me perfectly right now.

In what way would it suit you?

Granted house prices may become cheaper - although no new houses would be built; because builders may not be able to make enough of a profit to take the risk of building more houses in a market thats going down

Is your job permanent and pensionable? Most peoples is not. In a downturn alot more people would loose their jobs

Have you a pension? Money invested in shares? Downturn usually means these would go down.

I would be happy if everything stabilized.

Sheeps

Downturn would actually suit me too.

JJJackal

Sheeps wrote: »

Downturn would actually suit me too.

In what way?

Sheeps

JJJackal wrote: »

In what way?

I've got a fairly recession proof job and would welcome lower house prices and/or rental prices.

JJJackal

Sheeps wrote: »

I've got a fairly recession proof job and would welcome lower house prices and/or rental prices.

No job was recession proof in 2007/2009

Public sector - tax pay cuts usc pension and so on

Private- job loss usc tax pay cuts...

Shares and pensions declining

Banks unable to lend

Sheeps

JJJackal wrote: »

No job was recession proof in 2007/2009

Public sector - tax pay cuts usc pension and so on

Private- job loss usc tax pay cuts...

Shares and pensions declining

Banks unable to lend

You're assuming that if a downturn happens it will be like last time, and caused in the same manner. The reason the banks stopped lending before was their position on liquidity and their risk profiles based on the property market going pop. If they are in good order when the economy starts to go in to recession, there's no reason to believe they'll stop lending.

JJJackal

Sheeps wrote: »

You're assuming that if a downturn happens it will be like last time, and caused in the same manner. The reason the banks stopped lending before was their position on liquidity and their risk profiles based on the property market going pop. If they are in good order when the economy starts to go in to recession, there's no reason to believe they'll stop lending.

For a significant downturn to happen money has to be lost my someone and jobs lost

The governments balance sheet will typically not look as good year on year

For a downturn to significantly effect house prices (>10% reduction) some bad stuff has to happen

Sheeps

JJJackal wrote: »

For a significant downturn to happen money has to be lost my someone and jobs lost

The governments balance sheet will typically not look as good year on year

For a downturn to significantly effect house prices (>10% reduction) some bad stuff has to happen

Never said it wasn't selfish, but I'm passed caring at this point. Currently I'm paying the price for the last round of peoples lack of responsibility.

JJJackal

Sheeps wrote: »

Never said it wasn't selfish, but I'm passed caring at this point. Currently I'm paying the price for the last round of peoples lack of responsibility.

I suppose my question for you is why are you so sure a new recession won’t effect?

Sheeps

JJJackal wrote: »

I suppose my question for you is why are you so sure a new recession won’t effect?

I'm not, it's a roll of the dice because the way it is now isn't working for me. I believe the skills I posses are needed and a recession wont change that.

IAmTheReign

alwald wrote: »

There are so many variables to be taken into consideration, some of which are linked to Brexit, world trade war, inflation, rise/fall in wages, rise/fall in interest rates, employment levels, government interference, regulations, new CBI rules/limits, supply of new builds, demand for housing and the list is long.

I doubt that we will see a similar scenario than 2007 but I am not an expert and this is just my opinion based on my observations.

I read a lot about that Reits/Cuckoo funds are taking all the risk...well I disagree as these properties (houses or apartments) are in Ireland and used by people living in Ireland so what will happen if these Reits will go bankrupt or whatever?? here is a guess, the government will pay the bill and will buy these properties as they are necessary to save those living in them from homelessness.

If the REITs are on the verge of bankruptcy the government would be able to pick up the property for a fraction of their value. The last thing that will happen is people being kicked onto the streets because some foreign company went bankrupt.

lawred2

Sheeps wrote: »

Never said it wasn't selfish, but I'm passed caring at this point. Currently I'm paying the price for the last round of peoples lack of responsibility.

Whose lack of responsibility?

Assetbacked

Sheeps wrote: »

I'm not, it's a roll of the dice because the way it is now isn't working for me. I believe the skills I posses are needed and a recession wont change that.

For the last 3 three or so years, it feels worse than during the recession. And it is getting worse. The government have no appetite to make things better and in the absence of a general election, the only hope is for external forces to kick in.

My parents are now taking the steps to sell their home but I've noticed on the street (a mature type of street), there's three other houses up for sale currently. These house prices are in the €1.2 to €1.4m bracket and I am curious whether they will all sell. Is there a herd mentality kicking in where people are starting to feel like something harmful to property prices is going to happen?

CPTM

lawred2 wrote: »

Whose lack of responsibility?

The financial regulator and financial ministers who didn't realise that lending 110% mortgages to everyone could have a detrimental effect long-term.

It's weird Sheeps is getting grilled here about a fairly understandable comment. Has nobody heard about the winners from the last recession? There were recession proof jobs in 2006/2007. There were loads of people who had saved cash and bought houses which have now more than doubled in price. There are people who bought in 2013 and sold in 2018 and are waiting for the next dip. Is it something for a society to look forward to? No, but I could definitely understand how someone who is maybe up against a horrible rental market but with some cash saved would want another recession like 2007 to get on the gravy train that so many individuals did back then.

SirGerryAdams

Can't see prices coming down considerably lower (10+ %) than they are which is bad for me because I'm renting but at the same time I'm not paying the type of money they are looking for, it's not good value.

I just can't see history repeating itself 10 years later.

The only thing that gives me hope is that seasoned economists, hedge fund managers etc. still say the economy moves in a boom/bust cycle and that we're nearing the end of the credit cycle. Plus we're seeing Australia fall.

But....at the same time, my fear is that with the boom of technology, information is instant and moves are made by computers to prevent errors.

Also the fact we've been at consistently low interest rates and inflation has stayed normal. Normally interest rates could be at 4+ % but maybe low/very low rates are the new norm and prevent recessions.

kippy

Assetbacked wrote: »

For the last 3 three or so years, it feels worse than during the recession. And it is getting worse. The government have no appetite to make things better and in the absence of a general election, the only hope is for external forces to kick in.

My parents are now taking the steps to sell their home but I've noticed on the street (a mature type of street), there's three other houses up for sale currently. These house prices are in the €1.2 to €1.4m bracket and I am curious whether they will all sell. Is there a herd mentality kicking in where people are starting to feel like something harmful to property prices is going to happen?

It's mad
-when there aren't enough houses for sale in the country - it's a disaster.
-when there are "too many" houses for sale in the country - it's a disaster.

There's rarely a middle ground.

The time it takes to implement policies that have an effect on the ground as well as the set of unintended consequences caused by the policies lead to these big swings I believe.

1.2-1.4 million are prices outside the realms of many many people in this country and 3 houses for sale in that price bracket at ANY time in the same street will ALWAYS slow down the sale of any/all of those houses.

kippy

Sheeps wrote: »

Never said it wasn't selfish, but I'm passed caring at this point. Currently I'm paying the price for the last round of peoples lack of responsibility.

Weren't they just being selfish as well?

JJJackal

The conclusion to all this is:

House prices are predictable - they go up and they go down

What is unpredictable is no one knows by how much and when

What is predictable is over the long term house prices increase in value

The_Conductor

SirGerryAdams wrote: »

Can't see prices coming down considerably lower (10+ %) than they are which is bad for me because I'm renting but at the same time I'm not paying the type of money they are looking for, it's not good value.

I just can't see history repeating itself 10 years later..

Prices are already falling in some areas. There will always be areas of high demand which hold their headline prices- however, even now in the midst of a scarscity crisis- we do have price falls- in both new and secondhand prices (esp. in areas which were over-developed in the last decade).

Also- history does repeat itself. We've had several booms and busts- since 1980. Hanging around expecting one- is like waiting for the bus that never comes- but when you stop looking out for it- thats when it normally happens.

SirGerryAdams wrote: »

The only thing that gives me hope is that seasoned economists, hedge fund managers etc. still say the economy moves in a boom/bust cycle and that we're nearing the end of the credit cycle. Plus we're seeing Australia fall..

Australia is falling- for other reasons. Its economy is built on the provision of raw materials to the Chinese (esp. coal and metals). It was always the case that eventually the Chinese would move upstream- clean up their act- and behave in a more responsible manner. They might not be there yet- but they're heading there. Meanwhile- those supplier countries on whose economies trade in raw materials was designed- are feeling the chill. Other countries in the area (such as New Zealand for example)- are not in the same boat as Australia on this one. Also- unemployment rates in Australia, New Zealand, the US- and even Brexit bound UK- are at almost historical lows. There isn't a lot of slack out there- regardless of what is happening with the larger commoditised elements of the respective economies.

Times are changing- its up to economists to evolve to understand the psychology of the modern world- and how it differs from the models they grew up on.

SirGerryAdams wrote: »

But....at the same time, my fear is that with the boom of technology, information is instant and moves are made by computers to prevent errors..

Computers are fallible- arguably, more fallible than their human overlords. Look at the number of flash crashes on global stock markets over the past 18 months- it only takes a broken algorithm for all hell to break loose. Other predicators- such as mention of 'Brexit' in the FT and other media- have had to be taken offline altogether. Computers- and their use- are constantly evolving- however- a computer is only as intelligent as the person who programmed it at a particular point in time- and the presumptions that held true at that point in time. In a constantly changing world- those presumptions are often obsolete before they are ever released in the wild. Computers are a great tool to help us manipulate data- however as future predicators of events- they are as fallible as a weather forecaster is with long range weather predictions.

SirGerryAdams wrote: »

Also the fact we've been at consistently low interest rates and inflation has stayed normal. Normally interest rates could be at 4+ % but maybe low/very low rates are the new norm and prevent recessions.

We have been at historically low interest rates. To suggest that this is a 'new normal' though- is making a few too many assumptions. For example- the ECB under Mario Draghi- has consistently advised that normalisation of interest rates will occur- they just don't know when- and this 'normalisation' could be considered a return to overnight rates of between 4-5%. In the US we've already had 2 interest rate increases in the last 12 months- and despite the protestations from Trump- it looks likely that there will be a further increase in this calendar year. Bond prices are rising- pricing in expected increases in interest rates- normally this heralds a fall in share prices- this fall has not yet materialised- however, earnings reports from major companies- such as Apple for example- show consumers less and less willing to make large purchases- and a crunch coming in companies expected earnings.

Its actually a very interesting time to look at the larger economic background of what is happening out there- and how the various cogs in the clockwork interact with one another.

The world is a hell of a lot simpler- and yet more complicated- at the same time- the best that anyone can really say is that it has never been as interconnected in the manner in which it currently is- at any previous point in history- and the old analogies about a sneeze in Beijing causing a cold in London- have never been more accurate.

The list of unknowns- and how they will interact with one another- is growing by the day- anyone who is taking a short-term view of house prices, the Irish economy, global employment prospects, interest rates or geopolitical factors- is going to consistently get burnt. The players who are going to win- are those who play the longer game.

Ray Palmer

CPTM wrote: »

lawred2 wrote: »

Whose lack of responsibility?

The financial regulator and financial ministers who didn't realise that lending 110% mortgages to everyone could have a detrimental effect long-term.

It's weird Sheeps is getting grilled here about a fairly understandable comment. Has nobody heard about the winners from the last recession? There were recession proof jobs in 2006/2007. There were loads of people who had saved cash and bought houses which have now more than doubled in price. There are people who bought in 2013 and sold in 2018 and are waiting for the next dip. Is it something for a society to look forward to? No, but I could definitely understand how someone who is maybe up against a horrible rental market but with some cash saved would want another recession like 2007 to get on the gravy train that so many individuals did back then.

Were there really a load of people who bought at the bottom of the market? Very few houses sold at that point so that would disagree with what you are saying. Then you have economics of mortgage deals along with the renting while waiting for prices to drop.
Give you an example a guy I knew decided that he wouldn't buy as he felt prices were too high. Meanwhile another friend bought. Friend A waited 15 years to buy and rented during this time. So when he got his mortgage there was no trackers about but the usual high rates.
5 years later Friend B has 5 years left on his mortgage friend B has 20 at a higher rate of interest. Friend A had paid 100k in rent over the 15 years and his now partner had also rented but only for 8 years or 57k. The house he bought was about 80k off the peak value so he didn't save anything really but could have bought similar 15 years earlier and his mortgage is more expensive along with the 20 years he has left. So who are the people who made massive savings? Right now rent is much more expensive and you need to save more in order to get a mortgage. Lots of people ignore the rent they paid while waiting for price drops. It is simply an expense on your purchase to be considered.

Sheeps

I'm doing my daily search on daft and I have to say there are a lot of second hand homes on the market right now. I've a feeling we're on the cusp of a significant price correction across the entire second hand homes market.

Ray Palmer

Sheeps wrote: »

I'm doing my daily search on daft and I have to say there are a lot of second hand homes on the market right now. I've a feeling we're on the cusp of a significant price correction across the entire second hand homes market.

It is still way way less than the amount of properties that were for sale in years past. Little or no new estates built close by so even with an increase in 2nd hand houses the supply is way way down. Demand is still high but lending restrictions stop prices going up.
People are aging out of their properties and selling up is to do with time passing not a price correction.
Maybe you are right but some big assumptions and ignoring other factors. Of the houses on my road for sale in the last 2 years only one was a rental others were from deaths. During the recession people re tend the houses out rather than sell but sold when prices went up.