Property Market 2020

coinflip

Tasfasdf wrote: »

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?

Basically. Was just over 99% of the original AIP amount.

seasidedub

"There are definitely people out there thinking there is still money to be spent on property, especially for those trading down I'd guess, judging by these new homes just launched in Mount Merrion.

I used to live in the area until recently and saw these being built. They knocked what was either a single house or a pair of semis (can't remember) but have fitted 7 units on the site.

https://turkingtonrock...-park-mount-merrion/

The smallest unit is a 3 Bed Duplex / 122 sq m. Prices starting at €775k."

These may not sell. I've been looking at apartments in this end of the market and a lot of developments which were "launched" with "private viewings by invitation only", coffee vans on site on viewing days etc, just have not sold.

Prospect House Blackrock - 1 apartment sold.

Marina Village Greystones - nosed around and an owner occupier told me 6 sold to owner occupiers, the others are for rent as they didn't sell.

These are just 2 examples. 700k for a two bed is steep... buyers are looking, but not buying.

Assetbacked

Unlike with the crash in 2008, this time there is a whole generation caught in the rental market. They have not purchased homes where they may be in a position to upgrade to those €750k houses in a few years. This will drag down prices down for such properties over the next 5 years (unless the lending restrictions are eased - they should not be eased) not insubstantially. With the heap of BTRs in the pipeline, in the next five years the rental market is looking to climb down from its inflated levels currently (covid19 is just moving the speed of the drop up a gear or two). The '08 crash generation will be in a more stable rental market with plenty of tenancy protection and with not much motivation to take on a massive, more expensive mortgage. Outside of talk of price increases and decreases for purchasing houses, I think it will be fascinating to see how the relationship which the older generations have with property contrasts with this generation.

Ozark707

seasidedub wrote: »

700k for a two bed is steep... buyers are looking, but not buying.

Even in Ballsbridge some new places which were looking for that sort of money are now for rent as presumably there were no takers. That market has now dwindled and with high end rents plummeting it is not likely to recover for a long long time.

Hubertj

Assetbacked wrote: »

Unlike with the crash in 2008, this time there is a whole generation caught in the rental market. They have not purchased homes where they may be in a position to upgrade to those €750k houses in a few years. This will drag down prices down for such properties over the next 5 years (unless the lending restrictions are eased - they should not be eased) not insubstantially. With the heap of BTRs in the pipeline, in the next five years the rental market is looking to climb down from its inflated levels currently (covid19 is just moving the speed of the drop up a gear or two). The '08 crash generation will be in a more stable rental market with plenty of tenancy protection and with not much motivation to take on a massive, more expensive mortgage. Outside of talk of price increases and decreases for purchasing houses, I think it will be fascinating to see how the relationship which the older generations have with property contrasts with this generation.

You think price decreases will glide down over 5 years? Why over such a long period vs the massive crash others have been spouting on about - 30% by end of year and all that....
and I thought tenants had plenty of protection now anyway?

Hubertj

seasidedub wrote: »

"There are definitely people out there thinking there is still money to be spent on property, especially for those trading down I'd guess, judging by these new homes just launched in Mount Merrion.

I used to live in the area until recently and saw these being built. They knocked what was either a single house or a pair of semis (can't remember) but have fitted 7 units on the site.

https://turkingtonrock...-park-mount-merrion/

The smallest unit is a 3 Bed Duplex / 122 sq m. Prices starting at €775k."

These may not sell. I've been looking at apartments in this end of the market and a lot of developments which were "launched" with "private viewings by invitation only", coffee vans on site on viewing days etc, just have not sold.

Prospect House Blackrock - 1 apartment sold.

Marina Village Greystones - nosed around and an owner occupier told me 6 sold to owner occupiers, the others are for rent as they didn't sell.

These are just 2 examples. 700k for a two bed is steep... buyers are looking, but not buying.

Mount !Merrion is a lovely area but for 775k(decent size duplex all the same) I would expect a house.

hometruths

Assetbacked wrote: »

Outside of talk of price increases and decreases for purchasing houses, I think it will be fascinating to see how the relationship which the older generations have with property contrasts with this generation.

Don't forget the baby boomers! 1,146,525 of them in the country - https://statbank.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?Maintable=E3002

I read a fascinating article about the effect of baby boomers on the US property market - thesis was that over the next ten years this demographic will start selling up their large, fully paid off houses to downsize

The fear is that thanks to a couple of generations of renters and 95% mortgages, there is not enough homeowners with equity further down the chain ready to step up and purchase maintaining the current price levels.

Given that a large cohort of the baby boomers bought their houses for $30,000 in the late 70s they are not going to sit on the market waiting for a magic number to clear the mortgage, they will accept whatever they can get and move on.

This will obviously have a ripple effect all the way down and the conclusion was an epic crash resetting back prices to historic multiples of salaries leaving those in the middle in permanent negative equity.

I will try and google the article to get a link.

James 007

Houses in Mount Merrion usually command a 1 million price tag and greater. Unfortunately those houses don't fit in with the character of the area & I cant fathom to think how they did get planning permission.

LuckyLloyd

Assetbacked wrote: »

Unlike with the crash in 2008, this time there is a whole generation caught in the rental market. They have not purchased homes where they may be in a position to upgrade to those €750k houses in a few years. This will drag down prices down for such properties over the next 5 years (unless the lending restrictions are eased - they should not be eased) not insubstantially. With the heap of BTRs in the pipeline, in the next five years the rental market is looking to climb down from its inflated levels currently (covid19 is just moving the speed of the drop up a gear or two). The '08 crash generation will be in a more stable rental market with plenty of tenancy protection and with not much motivation to take on a massive, more expensive mortgage. Outside of talk of price increases and decreases for purchasing houses, I think it will be fascinating to see how the relationship which the older generations have with property contrasts with this generation.

Yep, this has the potential to completely change the game.

We're in our mid thirties and were looking up to end of Feb. We might not end up buying now and then you just don't know what happens. At a certain point you start going another direction - and my vote will go to politicians who slide with a changing reality.

Assetbacked

Hubertj wrote: »

You think price decreases will glide down over 5 years? Why over such a long period vs the massive crash others have been spouting on about - 30% by end of year and all that....
and I thought tenants had plenty of protection now anyway?

Tenants have plenty of protection as a result of measures implemented the past few years, so it is not as precarious an existence as it once was, especially if we got to a situation where you're not paying a lot of your salary in rent. Lots of protection + not costing a huge chunk of your salary = appealing to rent.

Ten years of minimal housebuilding resulting in a massive imbalance between supply and demand, salaries not being aligned with house prices and leverage not being available to make up the difference, large institutionals elbowing into the market to compete for the cash of workers by building dwellings to rent to them at the expense of those who seek to sell dwellings to these workers. These things all contribute to a medium to long term view that prices for purchasing houses would fall, as they seem to have started to do last year, before this covid19 pandemic.

Hubertj

Assetbacked wrote: »

Tenants have plenty of protection as a result of measures implemented the past few years, so it is not as precarious an existence as it once was, especially if we got to a situation where you're not paying a lot of your salary in rent. Lots of protection + not costing a huge chunk of your salary = appealing to rent.

Ten years of minimal housebuilding resulting in a massive imbalance between supply and demand, salaries not being aligned with house prices and leverage not being available to make up the difference, large institutionals elbowing into the market to compete for the cash of workers by building dwellings to rent to them at the expense of those who seek to sell dwellings to these workers. These things all contribute to a medium to long term view that prices for purchasing houses would fall, as they seem to have started to do last year, before this covid19 pandemic.

Very insightful thank you. I prepayment it is mainly apartments the institutional have? I wonder how people would feel about apartment living as they get older and have kids etc. Want/need more space....

Hubertj

Ozark707 wrote: »

Even in Ballsbridge some new places which were looking for that sort of money are now for rent as presumably there were no takers. That market has now dwindled and with high end rents plummeting it is not likely to recover for a long long time.

Yes the apartments on the site of the Berkeley court hotel started at €900k i think. I’m sure they are lovely with concierge service and all that but 900k! You can get small 3 bed houses in that part of ballsbridge for less..

Cyrus

Hubertj wrote: »

Yes the apartments on the site of the Berkeley court hotel started at €900k i think. I’m sure they are lovely with concierge service and all that but 900k! You can get small 3 bed houses in that part of ballsbridge for less..

The management charges will be high as well

GreeBo

schmittel wrote: »

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.

tbf it seems like you were trying to imply that the market is massively overpriced and that effectively no one can afford to buy a 3 bed in Dublin...

schmittel wrote: »

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.

Ok, lets say its 10%...so?

schmittel wrote: »

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.

Its percentages that move the market though, not single figures.
Saying "80K people cannot afford their mortgage" is sensationalist if that number represents less than 10% of the population.

schmittel wrote: »

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.

This I can agree with.
Its not a free market if you can buy a multi million euro house and then not pay your mortgage for years.

hometruths

GreeBo wrote: »

tbf it seems like you were trying to imply that the market is massively overpriced and that effectively no one can afford to buy a 3 bed in Dublin...

No, I wasn't implying that no one can afford to buy a 3 bed in Dublin, I was stating that not everybody who owns a 3 bed in Dublin can afford it.

I think the market is artificially overpriced due to this fact, I have no idea if that is massive or not.

GreeBo wrote: »

Ok, lets say its 10%...so?
Its percentages that move the market though, not single figures.
Saying "80K people cannot afford their mortgage" is sensationalist if that number represents less than 10% of the population.

It's hardly sensationalist if it is true.

This backs up my point that the wide acceptance that these arrears figures are no big deal - sure it is only 10% - is (in my humble opinion), one of the big reasons that we have such a dysfunctional market.

€2.4 billion and 89% of arrears balances outstanding are over 720 days - i.e 2 years, some of these people have not paid their mortgage in nearly 10 years.

These are sensational figures. We cannot even try to compare them to other countries because most of the rest of worlds arrears stop at 180 days. i.e if you don't pay your mortgage for 6 months you lose the house.

But yes, Ireland is different. And so is our property market. And oddly enough our interest rates.

JimmyVik

schmittel wrote: »

No, I wasn't implying that no one can afford to buy a 3 bed in Dublin, I was stating that not everybody who owns a 3 bed in Dublin can afford it.

I think the market is artificially overpriced due to this fact, I have no idea if that is massive or not.




It's hardly sensationalist if it is true.

This backs up my point that the wide acceptance that these arrears figures are no big deal - sure it is only 10% - is (in my humble opinion), one of the big reasons that we have such a dysfunctional market.

€2.4 billion and 89% of arrears balances outstanding are over 720 days - i.e 2 years, some of these people have not paid their mortgage in nearly 10 years.

These are sensational figures. We cannot even try to compare them to other countries because most of the rest of worlds arrears stop at 180 days. i.e if you don't pay your mortgage for 6 months you lose the house.

But yes, Ireland is different. And so is our property market. And oddly enough our interest rates.

To me you are in arrears when you are even a month behind.
If you are behind you are behind.

GreeBo

Assetbacked wrote: »

Tenants have plenty of protection as a result of measures implemented the past few years, so it is not as precarious an existence as it once was, especially if we got to a situation where you're not paying a lot of your salary in rent. Lots of protection + not costing a huge chunk of your salary = appealing to rent.

Ten years of minimal housebuilding resulting in a massive imbalance between supply and demand, salaries not being aligned with house prices and leverage not being available to make up the difference, large institutionals elbowing into the market to compete for the cash of workers by building dwellings to rent to them at the expense of those who seek to sell dwellings to these workers. These things all contribute to a medium to long term view that prices for purchasing houses would fall, as they seem to have started to do last year, before this covid19 pandemic.

I still dont see it to be honest.
Sure, lots of less desirable houses and areas will drop, but as I've said before, if you want to live in Donnybrook or Rathmines or Sutton then there are a predefined number of houses to choose from. There aren't too many greenfield 3-4 beds being built in those areas so they will attract a premium IMO.

OwlsZat

GreeBo wrote: »

I still dont see it to be honest.
Sure, lots of less desirable houses and areas will drop, but as I've said before, if you want to live in Donnybrook or Rathmines or Sutton then there are a predefined number of houses to choose from. There aren't too many greenfield 3-4 beds being built in those areas so they will attract a premium IMO.

Where do you live yourself?

LuckyLloyd

GreeBo wrote: »

I still dont see it to be honest.
Sure, lots of less desirable houses and areas will drop, but as I've said before, if you want to live in Donnybrook or Rathmines or Sutton then there are a predefined number of houses to choose from. There aren't too many greenfield 3-4 beds being built in those areas so they will attract a premium IMO.

Sure, but the pool of people who can pay that premium is ever declining. We’re going through a generation with lowest house purchase percentages in the history of the state. That doesn’t affect purchasing price in higher brackets now, but in 10 years it will. Which is the point he’s making, I believe.

There are seeds being down over the past half decade - that Covid 19 will massively exacerbate - which will only start to develop in time. How long and to what extent? A matter of debate and people will be bullish on one side or the other.

But in my view we should not underestimate the societal and political effects of a large portion of educated working people from a generation missing the property boat. That’s a large cohort of people in their 40’s and 50’s in a decade or so time who will not have the relationship to property previous generations their age did.

It doesn’t effect the property market in 2020, but it seems obvious to me to have an impact in time.

LuckyLloyd

LuckyLloyd wrote: »

.........

But in my view we should not underestimate the societal and political effects of a large portion of educated working people from a generation missing the property boat. That’s a large cohort of people in their 40’s and 50’s in a decade or so time who will not have the relationship to property previous generations their age did.

.........

Really interesting and valid point.
I'd think that most educated folk who are coupled up didn't miss the boat though.
€300k properties would be within range of most couples on €40k each if they aimed to buy with a 5 year plan etc.

Obviously for folk who did lots of holidays and nice cars and then decided they wanted to buy at 35 when they've no deposit, well they missed the boat, no doubt, but they could still try to buy at 40.

Reps4jesus

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.

Just in relation to this, I was the poster who got approval with exemption from KBC. I had to give payslips, savings and current account statements and salary certificate from my employer etc. Would this imply it had gone through some form of due diligence anyway? I should not need to go above the 3.5x salary anyway but would be nice to know if i have those funds available (in peoples opinion anyway) should i bid on a place. I have about 85k to use for a deposit and the approval i got was for 290k mortgage, only looking for a two bed place so hoping i wont need all the mortgage.

Fol20

Assetbacked wrote: »

Unlike with the crash in 2008, this time there is a whole generation caught in the rental market. They have not purchased homes where they may be in a position to upgrade to those €750k houses in a few years. This will drag down prices down for such properties over the next 5 years (unless the lending restrictions are eased - they should not be eased) not insubstantially. With the heap of BTRs in the pipeline, in the next five years the rental market is looking to climb down from its inflated levels currently (covid19 is just moving the speed of the drop up a gear or two). The '08 crash generation will be in a more stable rental market with plenty of tenancy protection and with not much motivation to take on a massive, more expensive mortgage. Outside of talk of price increases and decreases for purchasing houses, I think it will be fascinating to see how the relationship which the older generations have with property contrasts with this generation.

If houses are in the pipelines for BTR, do you really think they will still be built if we’re going into a recession?

I suspect. Some will continue to be built but a lot of pension companies etc will tighten their wallets and supply will not increase to the levels you say.

At the same time people may continue to rent as they are unsure if buying a house now is a good time with house prices falling thus there is a chance that demand for renting might actually increase. Hard to know but this could happen.

Fol20

Assetbacked wrote: »

Tenants have plenty of protection as a result of measures implemented the past few years, so it is not as precarious an existence as it once was, especially if we got to a situation where you're not paying a lot of your salary in rent. Lots of protection + not costing a huge chunk of your salary = appealing to rent.

Ten years of minimal housebuilding resulting in a massive imbalance between supply and demand, salaries not being aligned with house prices and leverage not being available to make up the difference, large institutionals elbowing into the market to compete for the cash of workers by building dwellings to rent to them at the expense of those who seek to sell dwellings to these workers. These things all contribute to a medium to long term view that prices for purchasing houses would fall, as they seem to have started to do last year, before this covid19 pandemic.

I do think prices for selling will fall if we are heading into a recession but based on your reasoning. They are falling as more houses being built are BTR rather than buy to own. Normally more supply and equal demand = cheaper housing. Based on your explanation though. Supply is either neutral or decreasing due to BTR so how does this explain the decline of house prices.

Assetbacked

Fol20 wrote: »

I do think prices for selling will fall if we are heading into a recession but based on your reasoning. They are falling as more houses being built are BTR rather than buy to own. Normally more supply and equal demand = cheaper housing. Based on your explanation though. Supply is either neutral or decreasing due to BTR so how does this explain the decline of house prices.

While supply may be restricted for purchasers as a consequence of BTRs, my point was that demand could be reduced. This is due to two things; renting being a more appealing option and the fact many people who have been renting due to the 08 crash will be too old to get a mortgage or will be unable to secure a large mortgage. Both of these things will pull people out of the market of potential buyers. It's important to remember that the property market has so many different components and moving parts with different variables, so it is difficult to generalise and this is very much a general observation on certain aspects of it.

Assetbacked

Fol20 wrote: »

If houses are in the pipelines for BTR, do you really think they will still be built if we’re going into a recession?

I suspect. Some will continue to be built but a lot of pension companies etc will tighten their wallets and supply will not increase to the levels you say.

At the same time people may continue to rent as they are unsure if buying a house now is a good time with house prices falling thus there is a chance that demand for renting might actually increase. Hard to know but this could happen.

For the FF and FG government it's low hanging fruit to feed two problems; housing and the economy. It looks like building sites will be first to be cleared to return to work in a few weeks. The guidance indicates we will return to positive economic growth again next year so the covid19 recession is likely to be just temporary.

Assetbacked

LuckyLloyd wrote: »

Sure, but the pool of people who can pay that premium is ever declining. We’re going through a generation with lowest house purchase percentages in the history of the state. That doesn’t affect purchasing price in higher brackets now, but in 10 years it will. Which is the point he’s making, I believe.

There are seeds being down over the past half decade - that Covid 19 will massively exacerbate - which will only start to develop in time. How long and to what extent? A matter of debate and people will be bullish on one side or the other.

But in my view we should not underestimate the societal and political effects of a large portion of educated working people from a generation missing the property boat. That’s a large cohort of people in their 40’s and 50’s in a decade or so time who will not have the relationship to property previous generations their age did.

It doesn’t effect the property market in 2020, but it seems obvious to me to have an impact in time.

You made the point far better than I did, that's exactly it!

fliball123

Fol20 wrote: »

I do think prices for selling will fall if we are heading into a recession but based on your reasoning. They are falling as more houses being built are BTR rather than buy to own. Normally more supply and equal demand = cheaper housing. Based on your explanation though. Supply is either neutral or decreasing due to BTR so how does this explain the decline of house prices.

Supply is falling day by day if you look at my home over the last month every day there is less available than the day before ..yesterday there was 19036 today 19013 this is going on daily. There is also no one building at the moment further denting supply. As I say a lot of vultures on here waiting to capatalise on lower prices might be in for a shock as supply seems to be going down at the same rate or quicker than people wanting to buy. The vultures might get a cheaper house but will have to accept it in the back a$$ of no where or somewhere in the Wild west areas or Dublin.

hometruths

fliball123 wrote: »

Supply is falling day by day if you look at my home over the last month every day there is less available than the day before ..yesterday there was 19036 today 19013 this is going on daily. There is also no one building at the moment further denting supply. As I say a lot of vultures on here waiting to capatalise on lower prices might be in for a shock as supply seems to be going down at the same rate or quicker than people wanting to buy. The vultures might get a cheaper house but will have to accept it in the back a$$ of no where or somewhere in the Wild west areas or Dublin.

If the assumption is that people who are saying they think prices will fall are motivated by a desire to buy a property at lower prices can you shed some light on the motivations of those saying prices won't fall because supply exceeds demand?

Villa05

GreeBo wrote:

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.

A study revealed that in high demand areas, arrears are less likely, sparking a controversy that some of these arrears were a "won't pay" rather than "can't pay"

I'd be very skeptical that many of theses arrears cases are in Dublin. I may be wrong, as the market is so broken for so long. The fact that you would have so many 10 years behind in repayments is ludicrous

Hubertj wrote:

You think price decreases will glide down over 5 years? Why over such a long period vs the massive crash others have been spouting on about - 30% by end of year and all that.... and I thought tenants had plenty of protection now anyway?

GreeBo wrote:

tbf it seems like you were trying to imply that the market is massively overpriced and that effectively no one can afford to buy a 3 bed in Dublin...

Are we looking at maybe the top 20% of income earners could afford to live in Dublin, reduced further if you have children. I'd say it is significantly overpriced

GreeBo wrote:

Its percentages that move the market though, not single figures. Saying "80K people cannot afford their mortgage" is sensationalist if that number represents less than 10% of the population.

10% is massive where the purchase is highly leveraged.

What kind of margin do you think is on a mortgage product?

What would be the implications on that mortgage market with 10% nonpayment?

Surely it would mean bankruptcy

Hubertj

Assetbacked wrote: »

While supply may be restricted for purchasers as a consequence of BTRs, my point was that demand could be reduced. This is due to two things; renting being a more appealing option and the fact many people who have been renting due to the 08 crash will be too old to get a mortgage or will be unable to secure a large mortgage. Both of these things will pull people out of the market of potential buyers. It's important to remember that the property market has so many different components and moving parts with different variables, so it is difficult to generalise and this is very much a general observation on certain aspects of it.

Are BTRs mostly apartments? In future as more families are formed are there / will there be enough “family” units available whether it is larger apartments or 3 bed+ houses? Some very interesting discussion here. Thank you.