Property Market 2020

Claw Hammer

fliball123 wrote: »

Not when there is an issue of the persons well being I am telling you now look at the link I put up for what people can get away with
https://www.boards.ie/vbulletin//showthread.php?t=2057082551&page=3

What does that prove? a few hard-necked individuals provoke a bit of a social media outpouring.
Deal with what happens in the real world.

fliball123

Claw Hammer wrote: »

What does that prove? a few hard-necked individuals provoke a bit of a social media outpouring.
Deal with what happens in the real world.

It proves that people can get away with blue murder when it comes to paying their debts

Claw Hammer

Donald Trump wrote: »

It is not inconceivable that courses would continue as online for the first semester next year at least.

That would be a lot of students staying at home with their parents rather than renting in Dublin or wherever

at this stage we don't even know if the Leaving cert will take place and be corrected in time for CAO offers to be made. with hundreds of thousands out of work there will be many who can't afford to go and many who can't get part time jobs to sustain themselves either. It would hammer the rental market.

milhous

fliball123 wrote: »

It proves that people can get away with blue murder when it comes to paying their debts

The school one? An 8 month stay doesn't show much tbf. It takes a long time to get through the courts, granted. The more of a hard neck you have the longer it may take but it gets there. If people are in genuine financial difficulty due to job loss or health but are trying their best and providing their sfs etc. It can take years.. If someone's taking the piss, less so. I'd say on average it takes 4/5 years to get an order.

fliball123

milhous wrote: »

The school one? An 8 month stay doesn't show much tbf. It takes a long time to get through the courts, granted. The more of a hard neck you have the longer it may take but it gets there. If people are in genuine financial difficulty due to job loss or health but are trying their best and providing their sfs etc. It can take years.. If someone's taking the piss, less so. I'd say on average it takes 4/5 years to get an order.

Well Like I say I know about half a dozen people who went through the mill of the courts and only one gave up the other 5 still have their house. lets be clear I dont agree with it but like I say anyone thinking there will be a load of houses coming on stream to buy due to repossession will be left waiting as it wont happen

Claw Hammer

fliball123 wrote: »

Well Like I say I know about half a dozen people who went through the mill of the courts and only one gave up the other 5 still have their house. lets be clear I dont agree with it but like I say anyone thinking there will be a load of houses coming on stream to buy due to repossession will be left waiting as it wont happen

The banks will appoint receivers to the BTL's in jig time. They will all be sold to start with. The hard chaws before the courts who have been stringing things along for years are running out of road. Add to that, many restructurings will have fallen apart and the banks will proceed with those repossessions which are all dependent on the borrower sticking to the new schedule.

fliball123

Claw Hammer wrote: »

The banks will appoint receivers to the BTL's in jig time. They will all be sold to start with. The hard chaws before the courts who have been stringing things along for years are running out of road. Add to that, many restructurings will have fallen apart and the banks will proceed with those repossessions which are all dependent on the borrower sticking to the new schedule.

Ah yeah the BTLs are up for grabs but I think the mom and pop landlords have been getting out of the game over the last 4/5 years due to the law siding with the tenant no matter what and of course the punitive tax burden on any profit. Not much left for a landlord with one or two properties after all expenses are paid. It all depends on if the REITS and vulture funds start throwing their property portfolios onto the market

milhous

fliball123 wrote: »

Well Like I say I know about half a dozen people who went through the mill of the courts and only one gave up the other 5 still have their house. lets be clear I dont agree with it but like I say anyone thinking there will be a load of houses coming on stream to buy due to repossession will be left waiting as it wont happen

They can make it difficult alright but its a long process. We're still dealing with repos from the 2008-2014 so you're right there, we won't be seeing lots come on board from new repos and all the other ones are on hold for the time been.
However, that is not to say the market is not going to take a nose dive. I'd say the next 3 months will see a 20% drop in house prices and then when confidence is lost and investors start selling up/mortgages are harder to get further decreases.
A house went up for sale beside me last week, I'm gonna keep an eye on that over the next few months and see where the price goes (if it doesn't sell of course, its a desirable estate in the village for people down sizing).

PommieBast

Claw Hammer wrote: »

3. It is going to be emigration? By Irish nationals moving abroad or by foreign nationals here returning home or moving abroad elsewhere?

I can foresee returning home in both directions, but not so sure about foreigners going to third countries. That would require somewhere else to be doing quite well, rather than everywhere crash'n'burning at once..

BillyBiggs

Neamhshuntasach wrote: »

Exact same for me. In the past year I've viewed in excess of 30 houses i reckon. And bid on 5 only for each to go way over asking with a lot of work to be done so we bowed out. I haven't had one call yet from an agent yet. So presumably the buyers are still proceeding.

And on the house i am selling. I had the buyer pull out right before we signed contracts due to both himself and wife losing their job. Understandable in their case that they didn't want to even renegotiate which i would have been prepared to do. Anyways I had 4 under-bidders and each one is still interested and bidding back up towards what we were sale agreed on.

I can see house prices falling but no where near the 20-30% being floated about by some people. I'm in no rush to sell. I'd take 5% off previous sale agreed price. But if 20% was what people were expecting across the board. I simply won't sell unless i seen house prices in excess of 400K also fall and i can at least even things out on the other end. If not, i'd be one example of adding to less houses going on the market.

I think you said it all when you said the initial buyers of your house were a couple who both lost their jobs.

Reversal

There will be no bounce back. Very interesting reading.

https://www.independent.ie/business/dont-expect-a-quick-economic-recovery-from-the-ravages-of-covid-19-39095871.html

Villa05

cnocbui wrote:

in a depressed market, the sellers of better properties who don't have a mortgage will pull them off the market leaving mostly the chaff from distressed sales, so the selection of properties will be far more limited.

There will always be sales even in distressed markets

voluntary wrote:

But this is all based on a very WRONG assumption that the market moves evenly. The average CSO increase of drop cannot be simply applied to the wide market. Expensive properties in the vast majority drop by a higher percent in general than the cheaper ones. The very low end of the market may not even move that much so you may be talking about getting small hit on your sale price and saving a lot of money on your next property.

lawred2 wrote:

If you can find a lender

The bottoming out process is accellarated by the lack of lending. If it is very difficult to get a loan, prices will continue to fall. Prospective buyers should be encouraged by this and using that time to improve there ability to get a loan

Maitguel wrote:

IMO properties in good locations will not crash as at the end of the day people will pay a premium to live in the areas they to be in long term.

Premium properties like any other good or service are the first and fastest to fall in a recession.

Graham wrote:

I vaguely recall it was the other way round after the GFC. Smaller/lower-end properties lost significantly more than larger/mid-high.

Dublin prices fell faster and by more in the Gfc. Now surely Dublin would be the premium location

Summer2020 wrote:

This is Ireland. People won’t lose their homes. It didn’t happen during the 2008 recession. It’s extremely hard for a bank to repossess a family home in Ireland. The debt will be added onto the mortgage.

Can that situation continue indefinitely. The most recent figures on arrears shows that 30, 000 properties are 5 years or more behind in repayments. This situation is not tolerated anywhere else in the world

Will this be allowed to continue? Would any future bailout require cleansing of bad loans on your balance sheet

Assetbacked

Assetbacked wrote: »

https://www.irishtimes.com/business/media-and-marketing/ad-giant-wpp-pulls-dividend-buyback-and-outlook-1.4216684?mode=amp

To put this in context for the Irish rental market, there are thousands of employees employed in Dublin carrying out online sales for multinationals who are in an extremely vulnerable position right now. Online marketing revenue will be obliterated in the near term at least, with many of the employees not having any work to do consequently. The vast majority of the younger people employed by the multinationals are renters who, should they lose their job, will have to return home as they could be renting at 800+ their room in an apartment in Dublin and social welfare won't cover that. It is likely that no movement will happen on the jobs front until these stringent stay-at-home measures are eased as everything is essentially on hold right now, but once people start returning to work, there are likely to be job losses in the tech multinationals. This will be a hit to the demand for rentals which is going to put even more pressure on the rental return bubble to deflate.

However, it is important to say again that the rental market is different to the home purchasing market, where there is chronic undersupply due to the lack of new builds the past decade, meaning there is pent up demand from FTBs in particular who are (for the most part at least) not the non-national employees of the big multinationals. Looking at the share price of Cairn and Glenveagh, the homebuilding entities, they are maybe 40% lower than what they were three months ago. This probably means that the return on shares is expected to be 40% less (although, it is possible that this drop is more significant due to the initial panic and uncertainty that followed Covid19 measures being brought in), which translates to a drop in profit on new builds of up to 40% from a few months ago. Importantly, that does not mean house prices dropping by 40%; for example, cost to build of 400k and selling for 450k 3 months ago would be a drop in house price amounting to 4.4%. This is the market view in respect of homebuilders such as Glenveagh and Cairn.

I know I'm replying to myself but the largest tenant in the State has had a significant blow to it from its main backer, Soft Bank has pulled its offer to purchase 3bn of equity from some investors including Neumann:

https://on.mktw.net/2JujMRz

Soft Bank claim they are still committed to WeWork but, to be honest, they are probably starting to accept that the billions in cash burned through by WeWork may not be sustainable, particularly with the new world of working from home and likelihood of licencee companies to whom it provides office space going tits up.

Those that suffer in Ireland in this context? US institutional money which has built the office space that WeWork has taken leases on. Perhaps a clear positive of FG's policy since 2011 to outsource the main risk with respect to Irish property to foreign capital.

As a separate point, the death of co-living before it even gets going would be most welcome.

AlmightyCushion

Assetbacked wrote: »

I know I'm replying to myself but the largest tenant in the State has had a significant blow to it from its main backer, Soft Bank has pulled its offer to purchase 3bn of equity from some investors including Neumann:

https://on.mktw.net/2JujMRz

Soft Bank claim they are still committed to WeWork but, to be honest, they are probably starting to accept that the billions in cash burned through by WeWork may not be sustainable, particularly with the new world of working from home and likelihood of licencee companies to whom it provides office space going tits up.

Those that suffer in Ireland in this context? US institutional money which has built the office space that WeWork has taken leases on. Perhaps a clear positive of FG's policy since 2011 to outsource the main risk with respect to Irish property to foreign capital.

As a separate point, the death of co-living before it even gets going would be most welcome.

I actually don't think co-living is that bad. Some of the ones that were announced would be grand with a little bit of tweaking. My main problem with them was the price. They were ridiculously expensive.

The_Conductor

Softbank are committed to 'WeWork'.........
I'm sorry for finding that funny- but Softbank have significant shareholdings in WeWorks two largest competitors. I wouldn't put any faith whatsoever in Softbank's commitment to Wework.......

Assetbacked

AlmightyCushion wrote: »

I actually don't think co-living is that bad. Some of the ones that were announced would be grand with a little bit of tweaking. My main problem with them was the price. They were ridiculously expensive.

1300+ was the price point for one of them. Then I recall the representative for the provider saying this would be perfect for a nurse or Garda starting out despite the fact this would be about 50% of their after tax salary. Ludicrous, I thought they would only work in lieu of the 300/400 per bed in a shared room set up but not at a price above 3/400.

Assetbacked

<SNIP>

Reversal

Assetbacked wrote: »

Some links to publications in The Journal and the IT today on the Irish property market;

https://www-thejournal-ie.cdn.ampproject.org/c/s/www.thejournal.ie/housing-market-coronavirus-5063782-Apr2020/?amp=1

https://www-irishtimes-com.cdn.ampproject.org/c/s/www.irishtimes.com/business/economy/coronavirus-applies-handbrake-to-irish-property-market-1.4217952?mode=amp

So even the EAs admitting that the coming unemployment is guaranteed to have a negative impact on the market. Why do so many on here still struggle with that concept.

All of the the predictions by the think tanks predict unemployment to settle around just over 10% after the dust settles and we get back to normal. That is a major shift in long term circumstances. The country, economy and property market if the last few years is gone, and won't be coming back.

ittakestwo

There is a few myths being spouted on this thread.

Myth 1. "People need a place to live so rents and prices have to stay high".

If people lose income then prices will fall regardless of population/demand. In the last recession the population never fell, not in one year did the population fall yet rents fell 25% from 07 to 10

Myth 2. "ECB printing money will lead to hyper inflation.... better get your money into property before your savings are wiped away by inflation".

Under the Maastricht Treaty the ECB is obliged to keep inflation under 2%. If the ECB start to break this, it will inevitably lead to Germany leaving the Euro and the Euro falling apart. The recent printing of money by the ECB is to compensate to the fact they cant lower interest rates as they are already at zero. In the last recession in 2008 the ECB was able to cut the base rate from 4.25% to 0 to increase the money supply but that's not an option going into this recession as the base rate was already near zero. A lot of economists actually believe Europe will be caught in a deflationary cycle or a "liquidity trap" like Japan has been for decades characterised by no inflation and zero interest rates. Anytime the CB prints money the public just save more and the price level doesn't rise.

LuasSimon

The drop in house prices will mean some couples whod given up on owning their own home will now be able to purchase a house , has to be a good thing

Marius34

Reversal wrote: »

So even the EAs admitting that the coming unemployment is guaranteed to have a negative impact on the market. Why do so many on here still struggle with that concept.

I believe you got it wrong, as I haven't seen people disagreeing with it. But what I see quite many, including me, disagree with statements of property price crash, and that significant amount of completed new builds are unsold.

voluntary

Construction costs will drop a big time.
A quick look at the Londons commodity market (LME), price change year over year:

Crude Oil -58.33%
Natural gas -42,44%
Cotton -33,80%
Copper -24,38% (used in late stage house construction)
Steel -14,47%
Coal -18,66%
Aluminum -20,91%

The whole commodities index is down over 25% in the last 12 months.


High unemployment will push the labor costs down as well. Construction should be getting cheaper moving forward.

SozBbz

Assetbacked wrote: »

I know I'm replying to myself but the largest tenant in the State has had a significant blow to it from its main backer, Soft Bank has pulled its offer to purchase 3bn of equity from some investors including Neumann:

https://on.mktw.net/2JujMRz

Soft Bank claim they are still committed to WeWork but, to be honest, they are probably starting to accept that the billions in cash burned through by WeWork may not be sustainable, particularly with the new world of working from home and likelihood of licencee companies to whom it provides office space going tits up.

Those that suffer in Ireland in this context? US institutional money which has built the office space that WeWork has taken leases on. Perhaps a clear positive of FG's policy since 2011 to outsource the main risk with respect to Irish property to foreign capital.

As a separate point, the death of co-living before it even gets going would be most welcome.

I don't understand why WeWork keep getting mentioned on this thread.

Phrases like "largest tenant in the state" imply that they're somehow massively significant in this country.

They have 5 sites in Dublin and thats it. The companies they house will need office space regardless of whether WeWork exist or not. They're not really the tennant, they're the middleman.

Personally I'm glad if Softbank manage not to give Adam Neumann more money for mismanaging the company and walking away a Billionaire. But do I think its somehow structurally significant in Ireland - not a bit.

Mic 1972

LuasSimon wrote: »

The drop in house prices will mean some couples whod given up on owning their own home will now be able to purchase a house , has to be a good thing

Depends on how much cash they have, lending will be an issue during recession

cnocbui

voluntary wrote: »

Construction costs will drop a big time.
A quick look at the Londons commodity market (LME), price change year over year:

Crude Oil -58.33%
Natural gas -42,44%
Cotton -33,80%
Copper -24,38% (used in late stage house construction)
Steel -14,47%
Coal -18,66%
Aluminum -20,91%

The whole commodities index is down over 25% in the last 12 months.


High unemployment will push the labor costs down as well. Construction should be getting cheaper moving forward.

Almost none of those commodities have much bearing on construction material costs.

There is very little steel used in the construction of most domestic houses. There is some in the form of rebar used in the concrete foundations. The rest is stuff like nails, timber straps and switch boxes and the boiler. Lets say the weight of copper in house wiring is 2 Kg at current prices that's €8.75 worth. In a house with a 350K build cost, I don't care if copper falls 99% in price as it's going to make no difference I would notice. Same for steel.

Now if the cost of sand, cement, timber and windows fell 25%, that might make a noticeable dent.

Claw Hammer

There are a couple of things that will be different this time round. There are be far fewer ghost estates. There are fewer BTL landlords exposed this time. Borrowing in that sector has been very restrained. The ones who will be forced to sell this time, will be those whose other business has failed.

handlemaster

For anybody in doubt about a drop in prices read this.


https://m.independent.ie/business/coronavirus-crisis-has-caused-more-economic-damage-than-financial-crash-varadkar-says-39097759.html

cnocbui

handlemaster wrote: »

For anybody in doubt about a drop in prices read this.


https://m.independent.ie/business/coronavirus-crisis-has-caused-more-economic-damage-than-financial-crash-varadkar-says-39097759.html

I'm in no doubt there will be a drop. I'm hopeful it wont last a decade like last time. We barely got back to a functioning market before this bolt from the blue happened.

The Belly

handlemaster wrote: »

For anybody in doubt about a drop in prices read this.


https://m.independent.ie/business/coronavirus-crisis-has-caused-more-economic-damage-than-financial-crash-varadkar-says-39097759.html

It took 3 years in the last financial crisis to reach the height of unemployment we are already past that in 3 weeks. Its hard to see a v curve recovery.

JamesMason

cnocbui wrote: »

I'm in no doubt there will be a drop. I'm hopeful it wont last a decade like last time. We barely got back to a functioning market before this bolt from the blue happened.

If this crisis is going to be economically worse than the crash, expect property prices to crash.