Property Market 2019

Danzy

For a country which goes on about being a great place to do business, continuously rising house prices at the rates of the last 5 years is toxic.

The_Conductor

Danzy wrote: »

For a country which goes on about being a great place to do business, continuously rising house prices at the rates of the last 5 years is toxic.

Unless there are continuously rising salaries to offset the continuously rising prices....... Which- other than in a few select sectors, there isn't.

The_Conductor

Wildly Boaring wrote: »

Stagnate like Galway in same report etc??

Large parts of Galway city are significantly more expensive than even D6 and on parr with D4. Those sort of prices are silly- and its crazy that they grew to these extents. Galway seems to be in a world of its own concerning property prices- its completely and utterly divorced from the rest of the country.

beauf

ECO_Mental wrote: »

Article in this mornings independent...TBH I think they have been reading this thread :P

they put it down to

1. Banking lending limits
2. Banks not using thier allocation of exemptions

Dublin obviously is a different ball game and €466k average for a 3 bed semi is WAY above anywhere in the country.

https://www.independent.ie/business/personal-finance/property-mortgages/house-prices-fall-1000-a-month-as-new-homes-built-38246221.html

It would be monumentally stupid to change the lending rules.

JJJackal

The_Conductor wrote: »

Large parts of Galway city are significantly more expensive than even D6 and on parr with D4. Those sort of prices are silly- and its crazy that they grew to these extents. Galway seems to be in a world of its own concerning property prices- its completely and utterly divorced from the rest of the country.

There are a few old Georgian houses (only a few which drives up price) and some massive detached houses (with better BER than most Dub equivalent) with substantial Gardens that are valued at 1 million plus. There are currently 7 houses on sale in GC for over 1 million - one of these comes with 23 acres of land.

The expensive areas in Galway tend to overlooking Galway Bay

JJJackal

Wildly Boaring wrote: »

So 450k plus houses are down between 2 and 3 percent in a year.

Is this not a good thing?
Houses have found their level?
Fall couple percent. Stagnate like Galway in same report etc??

Straight away Michael O Flynn on Newstalk crying. "Get rid of those pesky banking rules ASAP!!"

He did mention land prices as part of build costs. Surely a fall here is first thing needs to happen.

Stagnating and down 2-3 per cent is good

A yearly decrease of 10-20 per cent would be bad

SirGerryAdams

I don't see how the bank lending rules have prevented the middle range houses from being overpriced.

Let's say a couple were looking at a house for 350k, that was the most they could offer. Someone with 400k outbids them each time.

This couple then drop down to the 300k range and outbid by 10k all the people with a max borrowing ability of 300k.

Sure, the level of debt taken by the banks is not as big with the CB rules but if there is a recession and people lose jobs they won't be able to keep paying the mortgage, foreign workers will flee meaning rent demands fall, meaning rents fall, meaning yields fall, meaning house prices fall.

CB rules have limited the risk of the banks - but it hasn't limited the risk of prices falling by a substantial amount.

JJJackal

SirGerryAdams wrote: »

I don't see how the bank lending rules have prevented the middle range houses from being overpriced.

Let's say a couple were looking at a house for 350k, that was the most they could offer. Someone with 400k outbids them each time.

This couple then drop down to the 300k range and outbid by 10k all the people with a max borrowing ability of 300k.

Sure, the level of debt taken by the banks is not as big with the CB rules but if there is a recession and people lose jobs they won't be able to keep paying the mortgage, foreign workers will flee meaning rent demands fall, meaning rents fall, meaning yields fall, meaning house prices fall.

CB rules have limited the risk of the banks - but it hasn't limited the risk of prices falling by a substantial amount.

In a recession people will only sell if they have or want to. CB rules prevent your mortgage including "renting out all 3 rooms" in your 3 bed house and sleeping on the floor to get a bigger mortgage. In 2006 alot of people relied on renting rooms to cover the mortgage. Current mortgages are based on peoples salary - so less likely they wont be able to afford repayments. Or if there are job losses there wont be mass mortgage default just an increase.

In the great recession, you couldnt sell new houses, ghost estates... Think builders are more cautious re this this time around too

The new CB Governor can expect to be heavily lobbied to raise the lending caps when/if he arrives


https://www.irishtimes.com/business/commercial-property/easing-mortgage-caps-is-lenders-top-priority-for-new-central-bank-governor-1.3933697

tigger123

cisk wrote: »

The new CB Governor can expect to be heavily lobbied to raise the lending caps when/if he arrives


https://www.irishtimes.com/business/commercial-property/easing-mortgage-caps-is-lenders-top-priority-for-new-central-bank-governor-1.3933697

I'd imagine when they appointed him they already had a fairly strong idea of what his position on the CB rules is. I doubt there'll be any surprises.

myshirt

tigger123 wrote: »

I'd imagine when they appointed him they already had a fairly strong idea of what his position on the CB rules is. I doubt there'll be any surprises.

Not necessarily so.

The appointment cannot be contingent on him holding certain views and positions. It's on competence.

The next review of the macroprudential rules are later this year. Who knows if they'll change the limits. I doubt it. The market needs to move to a target cost model or some Kaizen costing. Seen some projects managed in a piss poor way and the cost just passed on to the homebuyers. Too easy for them. They need to have some cost discipline.

The_Conductor

tigger123 wrote: »

I'd imagine when they appointed him they already had a fairly strong idea of what his position on the CB rules is. I doubt there'll be any surprises.

Apparently his appointment was delayed because of leaks from the CB in Newzealand relevant to the forthcoming budget- which has mightily annoyed the NewZealanders, and led to an investigation. His appointment as head of the Irish CB was put back to September to allow the investigation in New Zealand time to wind its way to a conclusion.

tobsey

The_Conductor wrote: »

Apparently his appointment was delayed because of leaks from the CB in Newzealand relevant to the forthcoming budget- which has mightily annoyed the NewZealanders, and led to an investigation. His appointment as head of the Irish CB was put back to September to allow the investigation in New Zealand time to wind its way to a conclusion.

His start date of September was agreed before any of that happened.

JJJackal

myshirt wrote: »

Not necessarily so.

The appointment cannot be contingent on him holding certain views and positions. It's on competence.

The next review of the macroprudential rules are later this year. Who knows if they'll change the limits. I doubt it. The market needs to move to a target cost model or some Kaizen costing. Seen some projects managed in a piss poor way and the cost just passed on to the homebuyers. Too easy for them. They need to have some cost discipline.

Builders can pass on cost to home owners if they want and make as much profit as they can extract; they are not a charity

airportgirl83

tobsey wrote: »

The_Conductor wrote: »

Apparently his appointment was delayed because of leaks from the CB in Newzealand relevant to the forthcoming budget- which has mightily annoyed the NewZealanders, and led to an investigation. His appointment as head of the Irish CB was put back to September to allow the investigation in New Zealand time to wind its way to a conclusion.

His start date of September was agreed before any of that happened.

New Zealand has big problems with property market as well. I don't think foreigners are even allowed to buy property over there atm. I would not expect him to relax lending rules tbh.

Zenify

Noticing a lot of apartments going on sale in south Dublin over the last few weeks. Particularly the last two weeks.

The_Conductor

Zenify wrote: »

Noticing a lot of apartments going on sale in south Dublin over the last few weeks. Particularly the last two weeks.

Someone, or several people/groups/developers - cashing out asap before a market peak is acknowledged in the mainstream media?

June is a funny time to put volume on the market........

hmmm

I've noticed South Dublin apartment prices dipped a bit in the second half of 2018, and have been largely stable since - asking prices have begun to creep up in certain areas, and some of the more expensive (400+) have come back. The panic has gone out of the market IMO. Nothing wrong with stable prices, or slightly rising and falling.

Madness to give out more money to people to borrow, but I would like us to find a way to make it easier to get a deposit together.

Eric Cartman

The_Conductor wrote: »

Someone, or several people/groups/developers - cashing out asap before a market peak is acknowledged in the mainstream media?

June is a funny time to put volume on the market........

was always going to be the way, were just finishing up H1 / Q2 of 2019 and the results are pretty stable. This is the peak and its either going to stay stable or dip but we've hit the CB rules cap hard now, everyone and their dog selling up, also loads of the airbnb money is drying up now with the new rules coming in so many are just selling rather than rent long term ever again.

Mickiemcfist

airportgirl83 wrote: »

New Zealand has big problems with property market as well. I don't think foreigners are even allowed to buy property over there atm. I would not expect him to relax lending rules tbh.

Yea that's correct, it's a good policy imo.

ZX7R

The_Conductor wrote: »

Someone, or several people/groups/developers - cashing out asap before a market peak is acknowledged in the mainstream media?

June is a funny time to put volume on the market........

More the fact developers getting projects finished before builders holidays,that's an old wives tale of june being a bad time to put property on the market.
If you go back over the years there is always a little flood of propertys completed and sold before builders holidays.

Eric Cartman

ZX7R wrote: »

More the fact developers getting projects finished before builders holidays,that's an old wives tale of june being a bad time to put property on the market.
If you go back over the years there is always a little flood of propertys completed and sold before builders holidays.

investors 'paying balance on completion' and builders wanting to all get paid before being off on holidays has a hell of a lot to do with this. I know electricians that have lived monastic existences for 4-5 months pre dating july and boom 25k shows up 5 days before a 2 week stint on a spanish island.

adriaaaan

The CB rules won't be touched in the near or long term. Mostly for political reasons but also why would you change the one economic policy that has worked exactly as intended? I wouldn't waste time debating it.

SirGerryAdams

adriaaaan wrote: »

The CB rules won't be touched in the near or long term. Mostly for political reasons but also why would you change the one economic policy that has worked exactly as intended? I wouldn't waste time debating it.

Central bank rules did what it was supposed to, but it didn't really do what people thought it would do.

It has limited the risk of the banks. That is all.

The prices of middle prices houses are far overpriced now compared to the upper ends of the market.

If you had 100 couples looking for a mortgage in 2006 on a combined salary of 100k, 70 might have bought for 350k and maybe 30 for 450k.

Today, of those same couples on same salary, 100 of them would be looking at 350k houses. So instead of 70 couples fighting for the same houses you have 100 couples now, increasing the price even further!

The market is demand and supply. You can't alter that effect by any policy.

If someone can't buy, they're renting. If more people are renting with the same short supply rents will be higher. If rents are higher yields are higher. Rental income will determine house price.

kippy

SirGerryAdams wrote: »

Central bank rules did what it was supposed to, but it didn't really do what people thought it would do.

It has limited the risk of the banks. That is all.

The prices of middle prices houses are far overpriced now compared to the upper ends of the market.

If you had 100 couples looking for a mortgage in 2006 on a combined salary of 100k, 70 might have bought for 350k and maybe 30 for 450k.

Today, of those same couples on same salary, 100 of them would be looking at 350k houses. So instead of 70 couples fighting for the same houses you have 100 couples now, increasing the price even further!

The market is demand and supply. You can't alter that effect by any policy.

If someone can't buy, they're renting. If more people are renting with the same short supply rents will be higher. If rents are higher yields are higher. Rental income will determine house price.

You can alter supply by any number of policies if you want, same as with demand.......the biggest issues are there are far too many stakeholders with varying degrees of clout involved and the impact of any policies can take years to actually affect the market.

Again, we still have a massive amount of unoccupied housing stock, just not in the right areas!

adriaaaan

SirGerryAdams wrote: »

Central bank rules did what it was supposed to, but it didn't really do what people thought it would do.

It has limited the risk of the banks. That is all.

The prices of middle prices houses are far overpriced now compared to the upper ends of the market.

If you had 100 couples looking for a mortgage in 2006 on a combined salary of 100k, 70 might have bought for 350k and maybe 30 for 450k.

Today, of those same couples on same salary, 100 of them would be looking at 350k houses. So instead of 70 couples fighting for the same houses you have 100 couples now, increasing the price even further!

The market is demand and supply. You can't alter that effect by any policy.

If someone can't buy, they're renting. If more people are renting with the same short supply rents will be higher. If rents are higher yields are higher. Rental income will determine house price.

This would be a good point if the facts backed it up but unfortunately they don't. The price of second houses is falling now especially in the more expensive areas of South Dublin according to REA survey released yesterday. So your point about increased competition driving up prices is incorrect This has been attributed to increased supply of new homes but that is a moot point. CB rules are stabilizing prices and limited the temptation of hungry bankers to drive another bubble.

Link https://www.irishexaminer.com/breakingnews/ireland/average-price-of-three-bed-home-in-dublin-falls-to-433000-932641.html

cruizer101

SirGerryAdams wrote: »

If you had 100 couples looking for a mortgage in 2006 on a combined salary of 100k, 70 might have bought for 350k and maybe 30 for 450k.

Today, of those same couples on same salary, 100 of them would be looking at 350k houses. So instead of 70 couples fighting for the same houses you have 100 couples now, increasing the price even further!

But people don't earn nice round numbers like that, people earn 97k, 97.2k, 97.5k, etc...

So people will all have different budgets even with the hard set 3.5 multiple.

SirGerryAdams

kippy wrote: »

You can alter supply by any number of policies if you want, same as with demand.......the biggest issues are there are far too many stakeholders with varying degrees of clout involved and the impact of any policies can take years to actually affect the market.

Again, we still have a massive amount of unoccupied housing stock, just not in the right areas!

Sorry, policy which impacts the supply obviously affects it.

I mean policies like limiting borrowing amounts, LTV amounts etc. can't stop it.

I mean look at the comments of people who have bought here.

I bought because my mortgage went up to 1900 a month and my mortgage was cheaper. If I wait a year that's 24k I've spent on rent.

You can almost see the similarities between the two generations. Celtic tiger was "gotta get on the property ladder as prices are going up."

Now it's "Gotta buy a house even if it's way overpriced because I'll be paying more rent."

Islander13

It hardly limits the risk of the banks. Its near impossible to enforce in this country

Evd-Burner

SirGerryAdams wrote: »

Sorry, policy which impacts the supply obviously affects it.

I mean policies like limiting borrowing amounts, LTV amounts etc. can't stop it.

I mean look at the comments of people who have bought here.



You can almost see the similarities between the two generations. Celtic tiger was "gotta get on the property ladder as prices are going up."

Now it's "Gotta buy a house even if it's way overpriced because I'll be paying more rent."

I am in the process of buying a house as I have to move out of my parents by 30. I don't have enough money to pay rent at over 2k per month, whereas the mortgage will be 1100, even with tax and insurances, upkeep etc it is still well below 2k. I like everyone else I know are buying because I can no longer wait. If things crash I may not be able to get credit to buy in the future.