Property Market 2020

JimmyVik

fliball123 wrote: »

so thats based on 16 properties now factor in the other 19015 properties that have not changed what is the average now?? 0.0001%

Amazing what you cant get with a tiny sample size

Dwarf.Shortage

pearcider wrote: »

The old system didn’t have negative real rates.

There go the goalposts

Dylan94

fliball123 wrote: »

so thats based on 16 properties now factor in the other 19015 properties that have not changed what is the average now?? 0.0001%

Fair point. I was just looking at price changes. So should have said those with changes in price are down about 10%.

fliball123

JimmyVik wrote: »

Amazing what you cant get with a tiny sample size

yeah sure one went up by 30% if you took a sample size of one with that property property are up 30%

fliball123

Dylan94 wrote: »

Fair point. I was just looking at price changes. So should have said those with changes in price are down about 10%.

Yes but it is not a strong indication that property will fall by this much. There will be some sellers who are distressed sellers taking what they can get but there will be very few of them.

voluntary

Many people sell to buy another place, so it doesn't matter to them that they sell cheaper, assuming they can also buy another place cheaper. It may be even beneficial to upgrade in a downturn as you need to top-up by less to get a better place. Ideally, you upgrade in downturns and downgrade at peaks, if you could time it right.

pearcider

Dwarf.Shortage wrote: »

There go the goalposts

Just a fact really. Is it really so hard to believe that we could go back to the deposit regime that existed here 3 years ago?

Dwarf.Shortage

pearcider wrote: »

Just a fact really. Is it really so hard to believe that we could go back to the deposit regime that existed here 3 years ago?

No, but that wouldn't be a flat 20% on the entire sale price as you claimed.

pearcider

Dwarf.Shortage wrote: »

No, but that wouldn't be a flat 20% on the entire sale price as you claimed.

Time will tell.

Dwarf.Shortage

pearcider wrote: »

Time will tell.

Well no we already know for a fact that what you said is incorrect and the old regime did not expect FTBs to have a 20% deposit.

As to whether that may be the case in future yes we will have to wait and see, not that this is much of a point considering you could say that about anything whatsoever in the future.

Greyian

Dwarf.Shortage wrote: »

It's a disingenuous post to start with, the 20% was only on the excess above €300k so on a €400k house 12.5% deposit, on a €500k house a 14% deposit etc.

Even if the old system is brought back FTBs won't be asked for a 20% deposit.

I believe it was 20% on everything about 220k.

So the 400k house would have required a deposit of 58k (14.5%).

It's likely we'll see banks tightening their lending criteria and one of the easiest ways for them would be to bring FTBs in line with SSBs.
The banks could restrict this themselves, it wouldn't need to be the central bank reinstating old rules.

Dwarf.Shortage

Greyian wrote: »

I believe it was 20% on everything about 220k.

So the 400k house would have required a deposit of 58k (14.5%).

It's likely we'll see banks tightening their lending criteria and one of the easiest ways for them would be to bring FTBs in line with SSBs.
The banks could restrict this themselves, it wouldn't need to be the central bank reinstating old rules.

If they introduce 20% deposits for FTBs the volume traded and price levels are going to go into free fall. I cannot see the state allowing it to happen given health and housing are their key priorities.

pearcider

Dwarf.Shortage wrote: »

Well no we already know for a fact that what you said is incorrect and the old regime did not expect FTBs to have a 20% deposit.

As to whether that may be the case in future yes we will have to wait and see, not that this is much of a point considering you could say that about anything whatsoever in the future.

Well in case you haven’t been paying attention I’m very bearish on Irish property and indeed property in general and have been for a while. I fully expect our banks to tighten their own lending standards as opposed to following central bank diktats in 2016. Banks don’t act in isolation and Irish banks will be paying attention to what JPM have done.

Banks love to lend into a property bubble. As the banks collateral value increase, the banking system is happy to increase its loans to borrowers, which pushes prices yet higher, and so on in a positive feedback loop. Of course eventually this must end. Usually the high prices prompt overdevelopment which lowers rents and then forces borrowers to default.

I think the fact that JPM have tightened lending standards in order to protect their loans is very significant. It signals the credit cycle has now irreversibly turned and significant falls in property lie ahead. Daft rental report is out in a couple of weeks and that will be key data for everybody on this thread.

Hubertj

pearcider wrote: »

Well in case you haven’t been paying attention I’m very bearish on Irish property and indeed property in general and have been for a while. I fully expect our banks to tighten their own lending standards as opposed to following central bank diktats in 2016. Banks don’t act in isolation and Irish banks will be paying attention to what JPM have done.

Banks love to lend into a property bubble. As the banks collateral value increase, the banking system is happy to increase its loans to borrowers, which pushes prices yet higher, and so on in a positive feedback loop. Of course eventually this must end. Usually the high prices prompt overdevelopment which lowers rents and then forces borrowers to default.

I think the fact that JPM have tightened lending standards in order to protect their loans is very significant. It signals the credit cycle has now irreversibly turned and significant falls in property lie ahead. Daft rental report is out in a couple of weeks and that will be key data for everybody on this thread.

With so little activity in the Irish market at present, what will the daft report tell us next month? I would have thought it would be 6 - 12 months before we know the impact? Or are you smarter than everyone? Or are you full of sh*t?

notcarlos

Hi everyone. Just received the contract. One quick question. What is the difference between Deed of transfer vs deed of charge. Just figuring out how much they paid for the house.

pearcider

Hubertj wrote: »

With so little activity in the Irish market at present, what will the daft report tell us next month? I would have thought it would be 6 - 12 months before we know the impact? Or are you smarter than everyone? Or are you full of sh*t?

Rental market stalled in mid 2019...right about the time the international credit markets did. So while it won’t reflect the covid collapse it will at least be hard data instead of just $hit as you so eloquently put it.

Hubertj

pearcider wrote: »

Rental market stalled in mid 2019...right about the time the international credit markets did. So while it won’t reflect the covid collapse it will at least be hard data instead of just $hit as you so eloquently put it.

How do you mean it stalled? All I’ve heard the last few years are socialists whining about rising rents rising year on year?

Maitguel

How reliable are the prices on PPR, Daft, My Home PR? Do the EA enter these figures or are they based on stamp duty returns?

I haven’t meet anyone who wants to pull out of a purchase so far although if you don’t have contracts signed you should look for a cut, purely because you can. I think if someone wants to pull out now it’s because they think they were already paying too much for the house, Covid just pushed them over.

The lockdown is really screwing everything as there are zero transactions and no point in advertising new properties now so impossible to know what is happening with prices.

Maitguel

notcarlos wrote: »

Hi everyone. Just received the contract. One quick question. What is the difference between Deed of transfer vs deed of charge. Just figuring out how much they paid for the house.

Transfer transfers ownership this states the price. Charge is the mortgage this has the loan amount.

awec

Maitguel wrote: »

How reliable are the prices on PPR, Daft, My Home PR? Do the EA enter these figures or are they based on stamp duty returns?

I haven’t meet anyone who wants to pull out of a purchase so far although if you don’t have contracts signed you should look for a cut, purely because you can. I think if someone wants to pull out now it’s because they think they were already paying too much for the house, Covid just pushed them over.

The lockdown is really screwing everything as there are zero transactions and no point in advertising new properties now so impossible to know what is happening with prices.

PPR is the most accurate as it's the actual sale price and has nothing to do with EAs.

Daft and MyHome are just asking prices, which is of limited use.

coinflip

nerrad01 wrote: »

I just got confirmation from my broker that the banks she deals with have all pulled exemptions across the board. I know a previous poster said they had just got one with kbc, but i imagine once you get beyond approval in principle it would be hard to get the exemption over the line.

Got AIP last Friday for 4.5x with AIB - valid for 12 months (so they say). Not planning on stretching that high anyway but tough to know what they would honour at loan offer.

awec

coinflip wrote: »

Got AIP last Friday for 4.5x with AIB - valid for 12 months (so they say). Not planning on stretching that high anyway but tough to know what they would honour at loan offer.

AIP is a very fluffy thing, especially these days. Many banks have moved to a fast-track system where AIP is given very quickly with almost no due-diligence and no underwriters involved.

For a bank, granting AIP is super low risk, since it's pretty much nothing more than giving someone an estimate of an amount they might be eligible for.

Unless you had to submit payslips, bank statements and all that jazz, and your application went through the underwriters, don't put too much faith in your AIP figure.

eagle eye

Maitguel wrote:

I haven’t meet anyone who wants to pull out of a purchase so far although if you don’t have contracts signed you should look for a cut, purely because you can. I think if someone wants to pull out now it’s because they think they were already paying too much for the house, Covid just pushed them over.

I was talking to my solicitor today and she told me that everybody is pulling out. Her advice to us, as predominantly cash buyers, is to wait and see.
The owners of the house we agreed a sale on want to have their cake and eat it. They were looking for contracts to be signed but the purchase not to take place for eight weeks.

GreeBo

schmittel wrote: »

Not quite all of them.

No doubt some of 60,596 mortgages that are in arrears in the country are 3 bed houses in Dublin.

https://www.centralbank.ie/statistics/data-and-analysis/credit-and-banking-statistics/mortgage-arrears

What percentage of 3 beds in Dublin do you reckon they make up?

Last figures I can find have 600,000 private houses in Dublin.

coinflip

awec wrote: »

AIP is a very fluffy thing, especially these days. Many banks have moved to a fast-track system where AIP is given very quickly with almost no due-diligence and no underwriters involved.

For a bank, granting AIP is super low risk, since it's pretty much nothing more than giving someone an estimate of an amount they might be eligible for.

Unless you had to submit payslips, bank statements and all that jazz, and your application went through the underwriters, don't put too much faith in your AIP figure.

Process took 5 or 6 weeks with a lot of follow-up requests for payslips and P60s going back to 2017 (not self-employed). But yeah, still not putting a ton of faith in it.

JamesMason

pearcider wrote: »

Well in case you haven’t been paying attention I’m very bearish on Irish property and indeed property in general and have been for a while. I fully expect our banks to tighten their own lending standards as opposed to following central bank diktats in 2016. Banks don’t act in isolation and Irish banks will be paying attention to what JPM have done.

Banks love to lend into a property bubble. As the banks collateral value increase, the banking system is happy to increase its loans to borrowers, which pushes prices yet higher, and so on in a positive feedback loop. Of course eventually this must end. Usually the high prices prompt overdevelopment which lowers rents and then forces borrowers to default.

I think the fact that JPM have tightened lending standards in order to protect their loans is very significant. It signals the credit cycle has now irreversibly turned and significant falls in property lie ahead. Daft rental report is out in a couple of weeks and that will be key data for everybody on this thread.

A bank will lend you an umbrella during the summer, and then ask for it back when it starts raining...

Tasfasdf

coinflip wrote: »

Process took 5 or 6 weeks with a lot of follow-up requests for payslips and P60s going back to 2017 (not self-employed). But yeah, still not putting a ton of faith in it.

Did AIB give you the full amount on the initial AIP, just going through the last few steps and hearing you got it was wondering did they reduce and if so by much?

hometruths

GreeBo wrote: »

What percentage of 3 beds in Dublin do you reckon they make up?

Last figures I can find have 600,000 private houses in Dublin.

No idea, but a fair slug I'd guess, I'd go as far as to guess most of them.

My logic being I would suspect the majority of the arrears cases are in Dublin, (it being the most populated county), and the majority of those are 3 bed houses (that being the most common PDH).

GreeBo

schmittel wrote: »

No idea, but a fair slug I'd guess, I'd go as far as to guess most of them.

My logic being I would suspect the majority of the arrears cases are in Dublin, (it being the most populated county), and the majority of those are 3 bed houses (that being the most common PDH).

The same logic would lead me to believe that the majority of those 600,000 private dwellings are 3 bed houses, so I'd suggest that the percentage in arrears is quite low.

Let's say 75% of the arrears are Dublin and 75% of them are 3 beds.
They are pretty generous numbers I reckon.
So let's say half of all private dwellings in Dublin are 3 beds.

That's still only 12% of Dublin 3 beds in arrears, and I'd wager they make up more then half of private dwellings, probably more like 75%+, which gets you around 8%.
So 92% of Dublin 3 bed owners are not in arrears.

I.r. The vast, vast majority

hometruths

GreeBo wrote: »

The same logic would lead me to believe that the majority of those 600,000 private dwellings are 3 bed houses, so I'd suggest that the percentage in arrears is quite low.

Let's say 75% of the arrears are Dublin and 75% of them are 3 beds.
They are pretty generous numbers I reckon.
So let's say half of all private dwellings in Dublin are 3 beds.

That's still only 12% of Dublin 3 beds in arrears, and I'd wager they make up more then half of private dwellings, probably more like 75%+, which gets you around 8%.
So 92% of Dublin 3 bed owners are not in arrears.

I.r. The vast, vast majority

My initial comment was a merely flippant one to suggest that clearly not all Dublin 3 bed owners cannot afford the house they live in. Having said that happy to dive into the figures a bit more.

Some of the 3 beds in your 600,000 will be buy to lets which are separate to the 60k arrears figures I quoted so I'd guess more than 8% of Dublin 3 bed PDHs are in arrears.

Applying your 75% assumptions to the PDH arrears figures suggest that there are around 33,000 people who own Dublin 3 beds who cannot afford them.

On top of the current PDH arrears figures there are 85,000 mortgages that have been restructured (arrears capitilisation, split mortage, move to interest only etc). Fair to say these people cannot afford their houses either.

Applying your assumptions to these suggests there are a further 48,000 Dublin 3 bed owners who cannot afford them.

Personally I think that 81,000 figure is huge no matter what percentage it represents of the total 3 bed stock.

One of the reasons the property market in Ireland is so dysfunctional is not only the sheer number of people who are not servicing their mortgages, but the sheer number of people who seem to think it is no big deal.