Property Market 2019

beauf

https://www.irishtimes.com/business/commercial-property/us-firm-quadrant-targets-1bn-of-irish-property-lending-1.3458527
https://www.independent.ie/business/personal-finance/property-mortgages/a-rental-philosophy-us-property-giants-make-more-in-dublin-than-los-angeles-38086501.html

Even if they were to crash, and there was a fire sale, (very unlikely) there is enough demand to fill any gap and enough free cash outside of the US to fill the gap.

If you have bought a place to live and you like the area, and you are not over committed (mortgage being 25-33% of your household income) then you should be ok.
Likewise if you buy to let and again are not over exposed, or have no mortgage. No issue there really.

Anyone over committed though is vulnerable especially if interest rates rise (unlikely but not impossible).


But for most people it will be their inability to borrow that restricts them.

Bbborris

beauf wrote: »

https://www.irishtimes.com/business/commercial-property/us-firm-quadrant-targets-1bn-of-irish-property-lending-1.3458527
https://www.independent.ie/business/personal-finance/property-mortgages/a-rental-philosophy-us-property-giants-make-more-in-dublin-than-los-angeles-38086501.html

Even if they were to crash, and there was a fire sale, (very unlikely) there is enough demand to fill any gap and enough free cash outside of the US to fill the gap.

If you have bought a place to live and you like the area, and you are not over committed (mortgage being 25-33% of your household income) then you should be ok.
Likewise if you buy to let and again are not over exposed, or have no mortgage. No issue there really.

Anyone over committed though is vulnerable especially if interest rates rise (unlikely but not impossible).


But for most people it will be their inability to borrow that restricts them.

It's as simple as this ^^

Compak

coolshannagh28 wrote: »

There is a correlation there on price caps ok, but this is possibly too simple an explanation , big US money is backstopping Irish property prices and the Fed has been attempting to raise rates thus slowing their liquidity.

The Fed are no longer looking to raise rates. And just today affirmed they will be more likely to cut rates.

The_Conductor

Compak wrote: »

The Fed are no longer looking to raise rates. And just today affirmed they will be more likely to cut rates.

Because the US economy is stuttering unexpectedly (well, if you start trade wars with everyone- you can hardly call it unexpected, however, thats an argument for elsewhere)- and their national debt has reached the stage that they will be paying a cool trillion (a thousand billion) in interest payments per annum- before they know what has happened. Simultaneously- China, Russia and the EU are cutting their holdings of dollars.

Anyone who is counting on a white knight from the US riding to the rescue of the Irish property market- might have to reassess their position with very little warning.

Danzy

The_Conductor wrote: »

Because the US economy is stuttering unexpectedly (well, if you start trade wars with everyone- you can hardly call it unexpected, however, thats an argument for elsewhere)- and their national debt has reached the stage that they will be paying a cool trillion (a thousand billion) in interest payments per annum- before they know what has happened. Simultaneously- China, Russia and the EU are cutting their holdings of dollars.

Anyone who is counting on a white knight from the US riding to the rescue of the Irish property market- might have to reassess their position with very little warning.

US debt is big but it's economy is heading towards 20 trillion GDP fast.

It is 50% bigger than in 2009, the Eurozone economy is smaller now.

It's full of its own problems but it has what the Eurozone hasn't had in 12 years, a long stretch of strong growth, he'll, even weak growth is welcome.

Compak

The_Conductor wrote: »

Because the US economy is stuttering unexpectedly (well, if you start trade wars with everyone- you can hardly call it unexpected, however, thats an argument for elsewhere)- and their national debt has reached the stage that they will be paying a cool trillion (a thousand billion) in interest payments per annum- before they know what has happened. Simultaneously- China, Russia and the EU are cutting their holdings of dollars.

Anyone who is counting on a white knight from the US riding to the rescue of the Irish property market- might have to reassess their position with very little warning.

What rescue? The Irish market has calmed, and even normalised that is all. If anything it can be artificially held up as developers are not building at huge rates.

On a tangent re the US it's very dubious that the economy is stuttering. It's incredibly resilient and firing hard. The SP at 2930 that keeps trucking despite similar warnings from people not to buy equities just like properties shows it's the Fed bowing to Trump as he goes on the election campaign, and in the shorter term (if China talks also go well/ subdue) it is very possible to expect above normal returns on investments.

Compak

Danzy wrote: »

US debt is big but it's economy is heading towards 20 trillion GDP fast.

It is 50% bigger than in 2009, the Eurozone economy is smaller now.

It's full of its own problems but it has what the Eurozone hasn't had in 12 years, a long stretch of strong growth, he'll, even weak growth is welcome.

Exactly, the US won't be the downfall of the Irish property. If anyone is worried it should be their pensions if they are Irish/ European based, more so than property which serves an active purpose besides an 'on paper' return.

beauf

Property used to be an alternative pension for many, hence so many small landlords. They've made this unattractive, and pensions aren't exactly a sure thing.

I wonder how the govt expect to deal with an explosion of an older population in a couple of decades. Housing, pensions and health Care already in crisis.

4ensic15

beauf wrote: »

Property used to be an alternative pension for many, hence so many small landlords. They've made this unattractive, and pensions aren't exactly a sure thing.

I wonder how the govt expect to deal with an explosion of an older population in a couple of decades. Housing, pensions and health Care already in crisis.

It won't be the current government who will be dealing with it.

Eric Cartman

https://www.daft.ie/dublin/houses-for-sale/donabate/eagans-field-donabate-dublin-2151741/

a literal shed in donabate is now 200k.

beauf

4ensic15 wrote: »

It won't be the current government who will be dealing with it.

Very true...

JJJackal

Compak wrote: »

What rescue? The Irish market has calmed, and even normalised that is all. If anything it can be artificially held up as developers are not building at huge rates.

On a tangent re the US it's very dubious that the economy is stuttering. It's incredibly resilient and firing hard. The SP at 2930 that keeps trucking despite similar warnings from people not to buy equities just like properties shows it's the Fed bowing to Trump as he goes on the election campaign, and in the shorter term (if China talks also go well/ subdue) it is very possible to expect above normal returns on investments.

I wonder how much it costs to build a house? What profit is a developer making on a house in Dublin? I am not convinced there is a huge profit to made for developers if prices fall. If there is a concern re a drop is it worth the risk

Wexforllion

Eric Cartman wrote: »

https://www.daft.ie/dublin/houses-for-sale/donabate/eagans-field-donabate-dublin-2151741/

a literal shed in donabate is now 200k.

I saw this apartment pop up in Smithfield yesterday and asking price shocked me. Maybe I am just way out of touch, but will this tiny box sell for 270k.

<SNIP>

Thespoofer

FutureGuy wrote: »

I wonder will the Government's announcement on Climate Action spook the second-hand market?

This.

hmmm

Jaster Rogue wrote: »

I was actually thinking it may have the opposite effect.

Improved access to grants and finance for deep retrofit and other SEAI schemes means older properties in private estates (with no 10% social housing) will become more attractive to potential buyers.

Yep - exactly what I was thinking. Cheap loans or even grants to upgrade older properties may be on the horizon. Kindof unfair in many ways on people who have bought newer properties, but needs must considering the climate.

beauf

JJJackal wrote: »

I wonder how much it costs to build a house? What profit is a developer making on a house in Dublin? I am not convinced there is a huge profit to made for developers if prices fall. If there is a concern re a drop is it worth the risk

I saw somewhere that around 40% of a finished house is the cost to build.

Twenty Grand

beauf wrote: »

I saw somewhere that around 40% of a finished house is the cost to build.

Including the land and wages?

Doubt it.

beauf

https://www.newstalk.com/news/heres-how-much-it-costs-to-build-a-house-597037

I'm sure there's better breakdowns.

KingCong

hmmm wrote: »

Yep - exactly what I was thinking. Cheap loans or even grants to upgrade older properties may be on the horizon. Kindof unfair in many ways on people who have bought newer properties, but needs must considering the climate.

Not sure how this would be unfair considering the the huge deposit contribution the tax payer is giving FTBs of new builds through the Help to Buy Scheme.

SirGerryAdams

ESRI are saying taxes like property and carbon should be increased to prevent overheating the economy.

I wonder how much longer the economy will continue to power on.

The_Conductor

SirGerryAdams wrote: »

ESRI are saying taxes like property and carbon should be increased to prevent overheating the economy.

I wonder how much longer the economy will continue to power on.

Most people on moderate wages (say <50k) have not seen any major increases in their wage packets over the past few years, despite the much heralded end of austerity. We are already being bled dry by the government. Highter LPT has already been highlighted for all property owners- alongside a plethora of additional charges (for landlords etc). There is only so much blood you can extract from a stone.........

mike_cork

The_Conductor wrote: »

Most people on moderate wages (say <50k) have not seen any major increases in their wage packets over the past few years, despite the much heralded end of austerity. We are already being bled dry by the government. Highter LPT has already been highlighted for all property owners- alongside a plethora of additional charges (for landlords etc). There is only so much blood you can extract from a stone.........

Dont forget the the recently announced "green" taxes which are coming our way.

KindOfIrish

SirGerryAdams wrote: »

ESRI are saying taxes like property and carbon should be increased to prevent overheating the economy.

I wonder how much longer the economy will continue to power on.

In my opinion there are two options beyond 2020:
1. significant economic recession
2. Hyperinflation
Western governments will not allow hyperinflation, so recession it is.
House prices will fall as soon soon as unemployment rate goes up.

Marius34

KindOfIrish wrote: »

In my opinion there are two options beyond 2020:
1. significant economic recession
2. Hyperinflation
Western governments will not allow hyperinflation, so recession it is.
House prices will fall as soon soon as unemployment rate goes up.

This is of course possible, but current economic projections data says in opposite for 2020:
GDP growth over 3%
Unemployment down
Wage up by 3% -> higher purchasing power
Population up -> higher demands for property
Non-Performing loans to fall below 5% -> possibly lower interest rates & less restriction on new loans.

If population will grow close to 100K per year, which is possible based on the projections, even 35K of new constructed residential property per year would be to low. Thus based on current projections, property price hardly has a chance to fall in the next few years.

ZX7R

KindOfIrish wrote: »

In my opinion there are two options beyond 2020:
1. significant economic recession
2. Hyperinflation
Western governments will not allow hyperinflation, so recession it is.
House prices will fall as soon soon as unemployment rate goes up.

Even if you right and there was a significant economic recession I don't believe that you would see unemployment rates as high as the last crash,as the construction industry is not the main employer there one of the few industries that are way understaffed,banks seem to be more restrained and better able to withstand a down turn.
Personally I reckon another 5 years of growth and then two to 3 years of stagnation of our grouth,I would not be surprised if there is a noticeable jump in our economy after Brit exit , farming will be hit hard seemly tourasim is all ready seen a up take in visitors and business tourists.

sacamano

9 year old photos now appearing on ads. Nobody gives a sh*t anymore.

beauf

Perhaps they don't have access to the apartment at the moment. Or they have to refurbish it but are getting the ad up as fast as possible. ....

... because someone I know did something similar.

..or they might be too cheap or lazy to take new ones.

The_Conductor

sacamano wrote: »

9 year old photos now appearing on ads. Nobody gives a sh*t anymore.

They could be a technophobe who doesn't know how to set the date on their camera. The fact that they're using a formal camera- and not a cameraphone- gives you an idea of the age of the person involved?

Assetbacked

ZX7R wrote: »

Even if you right and there was a significant economic recession I don't believe that you would see unemployment rates as high as the last crash,as the construction industry is not the main employer there one of the few industries that are way understaffed,banks seem to be more restrained and better able to withstand a down turn.
Personally I reckon another 5 years of growth and then two to 3 years of stagnation of our grouth,I would not be surprised if there is a noticeable jump in our economy after Brit exit , farming will be hit hard seemly tourasim is all ready seen a up take in visitors and business tourists.

So much of the demand for rental properties in Dublin is from young workers in finance and tech companies. Tech companies valuations are astronomical and surely unrealistic to the point that the whole thing is just a big bubble which will pop. Their growth has been huge but surely it cannot continue - Twitter only recently started making a profit and, while not in Ireland, Uber may never make a profit yet has a hyper valuation indicative of a herd mentality pumping money into huge tech company stocks.

If something happens with the economy, we'll probably lose a lot of the tech and finance workers who will go back to their own/migrate to the next country, empty high spec offices and institutional owners of large apartment blogs flogging them off individually. Housing crisis will no longer be a crisis without the government actually doing anything.

Bob24

The_Conductor wrote: »

They could be a technophobe who doesn't know how to set the date on their camera. The fact that they're using a formal camera- and not a cameraphone- gives you an idea of the age of the person involved?

It is probably a futile discussion which is not overly relevant to the thread, but just to add my 2 cents: no camera will burn the date onto actual pictures by default, this has to be enabled - and someone who goes into menus to enable this obviously cares about the date and will likely make sure the camera time is correct.

So the date could be wrong but in this case I’d just follow this rule of thumb and say it has a higher probability of being correct: https://simple.wikipedia.org/wiki/Occam%27s_razor