Property Market 2020

Hubertj

SozBbz wrote: »

The above is not a given. You've provided no basis for your assertions save a link to Gavin Reillys twitter.

Of course its bad but its not a true economic recession. We don't know how things are going to pan out. It's not a foregone conclusion that it will be as bad as you've described.

I think the numbers are as per the Dept of Finance today. However, this poster is just 1 long streak of misery if you look at what he posts. Must be still sore from the last recession and feeling sorry for himself.

I would look at the positives in that we will be making progress again through 2021 and into 2022.

Miserable people will focus on the negatives and not accomplish anything.

landofthetree

SozBbz wrote: »

The above is not a given. You've provided no basis for your assertions save a link to Gavin Reillys twitter.

Of course its bad but its not a true economic recession. We don't know how things are going to pan out. It's not a foregone conclusion that it will be as bad as you've described.

https://www.rte.ie/news/business/2020/0421/1132910-stability-programme-update-2020/


Facts dont have feelings.

"Not a true economic recession" isnt much consolation to the buinesses that will go under or the people who will lose their job.

eagle eye

SozBbz wrote:

Of course its bad but its not a true economic recession. We don't know how things are going to pan out. It's not a foregone conclusion that it will be as bad as you've described.

Well that is a bad forecast which will definitely have a huge affect on prices but it's a pretty conservative one I think. Things could be much worse.
The world has changed and for the vast majority of the world everything revolves around today, this week, this month, quarter and at the very longest the year. What's going on now is destroying a lot of companies who will not survive this. I think it could be way worse than most are projecting.

guyfawkes5

SozBbz wrote: »

The above is not a given. You've provided no basis for your assertions save a link to Gavin Reillys twitter.

Of course its bad but its not a true economic recession. We don't know how things are going to pan out. It's not a foregone conclusion that it will be as bad as you've described.

To be fair, the tweet is referring to Department of Finance analysis.

I don't think their assertions are too unexpected as broadly the predictions have been a recovery starting in late 2020 at the earliest and the second half of 2021 at the latest. The only new bit of information I took from it is that we will reach 'par' for early 2020 in 2022, so the recovery will be quite steep too.

Hubertj

SozBbz wrote: »

The above is not a given. You've provided no basis for your assertions save a link to Gavin Reillys twitter.

Of course its bad but its not a true economic recession. We don't know how things are going to pan out. It's not a foregone conclusion that it will be as bad as you've described.

I think the numbers are as per the Dept of Finance today. However, this poster is just 1 long streak of misery if you look at what he posts. Must be still sore from the last recession and feeling sorry for himself.

I would look at the positives in that we will be making progress again through 2021 and into 2022.

Miserable people will focus on the negatives and not accomplish anything.

Graham

landofthetree wrote: »

Facts dont have feelings.

Facts are not usually accompanied with

"set to"
"likely"
"projected"
"expected"
"assumed"

While I' wouldn't necessarily disagree with the predictions/forecasts/estimates/guesses, they are still predictions/forecasts/estimates/guesses.

They are also based on current ECB supports. Who knows what the final versions of those supports will look like.

landofthetree

eagle eye wrote: »

Well that is a bad forecast which will definitely have a huge affect on prices but it's a pretty conservative one I think. Things could be much worse.
The world has changed and for the vast majority of the world everything revolves around today, this week, this month, quarter and at the very longest the year. What's going on now is destroying a lot of companies who will not survive this. I think it could be way worse than most are projecting.

We are very dependent on the US economy.

Your average American has been very badly hit by this crisis. No European style welfare system to help them get through it. Plus when its over a lot of Americans will be very reluctant to spent.

GreeBo

Augeo wrote: »

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.

Yeah, I know there are lots of people who are stuck renting etc, but there are also lots of people with good jobs with household incomes of 150K+.

These people might be renting for a few years while saving a deposit, but home ownership in a desirable location is still a top priority for them.

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.

Cant disagree with this, but I think it skips over the incredibly low supply for these houses. There doesnt need to be a huge cohort of people clambering to buy in these areas.
I recently sold in Ranelagh and the estage agents had a book of people who were looking to buy, even before we went to market we had people looking at the house. These are people who just want to live in X. If there are only 2 of these people then thats still demand that outstrips supply. As I said, there isnt a lot of supply in these areas and there is nowhere to create more, other than knocking detached houses and building apartment complexes in their place. This is not what these people are looking for though, so that just decreasesa supply.

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.

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

I think its easy to overestimate the impact this cohort will have on the overall market. I think there will be a big impact on first time houses, your average 3-bed semi in Knocklyon that you used to buy for 400K thats now 600K. These will and indeed should drop back somewhat, however they wont collapse as the very reason these prices increased is people who wanted to buy in Rathfarnham but got pushed out due to high prices. These Rathfarnham prices are high because of people who wanted to live in Rathmines getting pushed out to Rathfarnham. And so on and so on.

Obviously the further out you get, the wider the circle so the more houses there are and hence prices fall.

GreeBo

OwlsZat wrote: »

Where do you live yourself?

Relevance?

SozBbz

Hubertj wrote: »

I think the numbers are as per the Dept of Finance today. However, this poster is just 1 long streak of misery if you look at what he posts. Must be still sore from the last recession and feeling sorry for himself.

I would look at the positives in that we will be making progress again through 2021 and into 2022.

Miserable people will focus on the negatives and not accomplish anything.

This is completely true - ones perspective can have a huge impact is how they actually weather adversity.

I can already see businesses adapting and improvising in order to keep cash flowing, its really encouraging.

Once Covid 19 has either been contained or runs its course I'd be quite optimistic about out ability to get back to business again.

GreeBo

Villa05 wrote: »

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

Agreed, I dont see that Dublin would have a huge percentage of them. Probably just more high profile ones.

Villa05 wrote: »

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

The top 20% is still a lot of people though...and they are the ones most likely to be moving around and upsizing IMO.

Villa05 wrote: »

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

It's significant to the banks involved, I dont think its significant to the cost of housing.
How many of these houses are actually coming on the market due to repossessions? Effectively none.

These people in arrears, by definition, already have a mortgage so arent looking for another one, again, no impact to house prices.

The only people who impact house prices are the people looking to buy and what sort of mortgage they can get, X percentage of people being in arrears has no real impact on them, it really just means that a percentage of those X people took out unsuitable mortgages for their circumstances. You cant blame the house for that, irrespective of its price tag.

landofthetree

Hubertj wrote: »

I think the numbers are as per the Dept of Finance today. However, this poster is just 1 long streak of misery if you look at what he posts. Must be still sore from the last recession and feeling sorry for himself.

I would look at the positives in that we will be making progress again through 2021 and into 2022.

Miserable people will focus on the negatives and not accomplish anything.

We could all be miserable when we look at our wages. Income tax,USC,PRSI may all have to increase.

Which make you wonder what planet FG and Varadkar are on. He said FG wont increase personal taxes. I can just imagine next budget all the whinging left wing parties bringing it up as FG are forced to increase taxes.

SozBbz

landofthetree wrote: »

We could all be miserable when we look at our wages. Income tax,USC,PRSI may all have to increase.

Which make you wonder what planet FG and Varadkar are on. He said FG wont increase personal taxes. I can just imagine next budget all the whinging left wing parties bringing it up.

A planet where they have access to the actual numbers and also have insight into whats coming from the ECB?

I absolutely think the ECB will have to prioritise helping countries worst effected while helping them steady the ship economically. This is not like 2008. There are no systemic failures to be flushed out. There is no moral hazard. This is act of God type stuff and heaping austerity on top is not helpful in any way.

Clearly theres not going to be any "fiscal space" for a while but thats not to say this debt can't be pushed down the road cheaply by printing money at a EU level.

Hubertj

landofthetree wrote: »

We could all be miserable when we look at our wages. Income tax,USC,PRSI may all have to increase.

Which make you wonder what planet FG and Varadkar are on. He said FG wont increase personal taxes. I can just imagine next budget all the whinging left wing parties bringing it up as FG are forced to increase taxes.

I look at my payslip and I see I pay a lot of taxes. A lot of my tax is wasted on inefficient public services but a lot of it goes towards supporting the social welfare system which is so important at the moment. I think the tax base needs to be widened property tax should be higher (however they calculate it). That will impact me as I live in a nice house in Dublin 4 but if the taxes go to pay for public services then I’m ok with it.

The left will always whine. They have no other purpose.

Your attitude is bad. You need to take the positives out of the situation - it could be a lot lot worse.

landofthetree

Hubertj wrote: »

I look at my payslip and I see I pay a lot of taxes. A lot of my tax is wasted on inefficient public services but a lot of it goes towards supporting the social welfare system which is so important at the moment. I think the tax base needs to be widened property tax should be higher (however they calculate it). That will impact me as I live in a nice house in Dublin 4 but if the taxes go to pay for public services then I’m ok with it.

The left will always whine. They have no other purpose.

Your attitude is bad. You need to take the positives out of the situation - it could be a lot lot worse.

I agree we should widen the base.

I think we should havd a council tax to cover property,water and waste.

Id have less councils. But keep them small enough so the locals can hold them to account on how they spend the tax. Elections would be held more frequently.

Villa05

fliball123 wrote:

Really so all rentals that go through EAs they have to restructure the deals to allow people no longer working not having to pay, just because the government tell the people you no longer have to pay rent, it doesn't just magically happen. The EAs would of been busy over the last 3/4 weeks, maybe not so much now.

So EA are busy with work that will reduce income that they have to do.

Will they then put up ads knowing that it will be a fruitless exercise as they can not get to the next stage of the sales process for the foreseeable future.

There is no point in putting ads up at this time

fliball123 wrote:

No my assertion is that any one putting a decent property back up for sale will only do so when they are assured of getting the price they want. There will be some distressed selling that is a given and some of this will be of decent properties but like I say there are a lot of mechanisms that give a seller in this country the opportunity to hold onto a property a lot longer than in other countries.

Ads will go back up when measures are reduced an house viewings allowed. Everybody did not buy there house in December 2019, many people selling will do so at a profit

Swings and roundabouts. House prices rise and fall

GreeBo

GreeBo wrote: »

people who wanted to live in Rathmines getting pushed out to Rathfarnham. And so on and so on.

Rathfarnham (the real parts near the actual village) over Rathmines all day long, please !

Hubertj

[Deleted User] wrote: »

Rathfarnham (the real parts near the actual village) over Rathmines all day long, please !

Rathfarnham hasn’t been the same since club Sarah closed.

hometruths

Villa05 wrote: »

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

The average value of the 27,000 720+ days outstanding mortages (not including arrears owed) is just over €200k - certainly suggests a fair chunk of them would be on Dublin going by value.

Villa05 wrote: »

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

There are currently 60,596 mortgages with a value of €10.2 billion (not including arrears) that are currently in arrears to some extent.

That represents 8% of the number of mortgage account holders or 10% of the value of all mortgages.

If you include the mortgages arrears that have been restructured/recapitalised/written off etc it is 145,000 with a value of €21 billion - 19.5% of account holders and 20% of the value of mortgages.

The figures don't lie, but they are not widely publicised/discussed/understood.

So what are the implications? Doesn't appear to be bankruptcy.

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

awec

schmittel wrote: »

The average value of the 27,000 720+ days outstanding mortages (not including arrears owed) is just over €200k - certainly suggests a fair chunk of them would be on Dublin going by value.




There are currently 60,596 mortgages with a value of €10.2 billion (not including arrears) that are currently in arrears to some extent.

That represents 8% of the number of mortgage account holders or 10% of the value of all mortgages.

If you include the mortgages arrears that have been restructured/recapitalised/written off etc it is 145,000 with a value of €21 billion - 19.5% of account holders and 20% of the value of mortgages.

The figures don't lie, but they are not widely publicised/discussed/understood.

So what are the implications? Doesn't appear to be bankruptcy.

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

The figures themselves aren't discussed but the fact that people will go into arrears rather than sell off the family home has been discussed to the death on here previously.

It was a common complaint a number of years ago when things started to recover, people started to become ready to buy, but found very little houses available to buy. There was a realisation that people in financial difficulty were not selling (obviously excluding those who couldn't sell).

It's was also commonly brought up in the discussion of interest rates, and why new buyers were getting rates that were less than stellar.

Looking forward the policy toward mortgage arrears here is very unlikely to change, especially if you consider the sentiment in recent election results.

hometruths

GreeBo wrote: »

It's significant to the banks involved, I dont think its significant to the cost of housing.
How many of these houses are actually coming on the market due to repossessions? Effectively none.

These people in arrears, by definition, already have a mortgage so arent looking for another one, again, no impact to house prices.

The only people who impact house prices are the people looking to buy and what sort of mortgage they can get, X percentage of people being in arrears has no real impact on them, it really just means that a percentage of those X people took out unsuitable mortgages for their circumstances. You cant blame the house for that, irrespective of its price tag.

I agree that effectively none of the properties in arrears will be coming to the market either due to repossession or that the owners wish to sell.

So all those houses and buyers have been taken out of the market. 145,000 of them with a paper value of 21 billion - see above post.

A functioning property market depends on supply, demand, turnover of transactions etc builders, FTBs, trader uppers, downsizers, relocators etc all working together to buy houses off each other.

It follows that if there is less people trading up there will be less supply driving prices up for FTBs and downsizers.

Last year there was 58,000 property transactions nationally - https://statbank.cso.ie/px/pxeirestat/Statire/SelectVarVal/Define.asp?maintable=HPA02

Do you really think that removing 2.5 years worth of buyers and properties out of the market has zero impact on house prices?

And beyond that simple fact there are effects from the inefficient use of existing stock, bad debt in the market, increased interest rates etc etc.

hometruths

awec wrote: »

The figures themselves aren't discussed but the fact that people will go into arrears rather than sell off the family home has been discussed to the death on here previously.

It was a common complaint a number of years ago when things started to recover, people started to become ready to buy, but found very little houses available to buy. There was a realisation that people in financial difficulty were not selling (obviously excluding those who couldn't sell).

It's was also commonly brought up in the discussion of interest rates, and why new buyers were getting rates that were less than stellar.

Looking forward the policy toward mortgage arrears here is very unlikely to change, especially if you consider the sentiment in recent election results.

Fair enough it may have been to discussed on here, what I mean is I don't think the scale of the problem and it's knock on effects are widely discussed in media etc and understood by the public at large.

We hear plenty of commentary that we bailed out the banks, we cannot let them unleash a tsunami of repossessions, poor John and Mary etc, but we hear very little discussion of the macro effects of the problem.

I completely agree it is unlikely to change, largely because as a society we are very accepting of it either because:

a) we don't actually understand the scale and impact of it
or
b) we are just nicer people than other countries, and we'd rather suck up the increased costs together than see John and Mary suffer unduly.

Personally I suspect it is (a) - see above!

Hubertj

Hubertj wrote: »

Rathfarnham hasn’t been the same since club Sarah closed.

I don't know what that is but I'm glad I don't. 🙈You'd be hard pressed to get a house for less than a million on the parts I'm talking about.

awec

schmittel wrote: »

Fair enough it may have been to discussed on here, what I mean is I don't think the scale of the problem and it's knock on effects are widely discussed in media etc and understood by the public at large.

We hear plenty of commentary that we bailed out the banks, we cannot let them unleash a tsunami of repossessions, poor John and Mary etc, but we hear very little discussion of the macro effects of the problem.

I completely agree it is unlikely to change, largely because as a society we are very accepting of it either because:

a) we don't actually understand the scale and impact of it
or
b) we are just nicer people than other countries, and we'd rather suck up the increased costs together than see John and Mary suffer unduly.

Personally I suspect it is (a) - see above!

It's a little bit of A and a little bit of B and some other things.

A big problem is that once you start repossessing, then housing these people becomes an issue for the taxpayer, and we already had an insanely long backlog when it comes to social housing (I think it's something like 10 years long at the moment).

There's an element of us having to suck up the increased costs either way. Either we have higher interest rates, or we have to pay more taxes to build more social houses.

Governments run a mile from this stuff. No party will advocate for change here. There is no appetite for repossessions in Ireland. At best you'd get support to go after the chancers who refuse to pay anything, the 10-year-no-cents-paid crowd.

hometruths

awec wrote: »

It's a little bit of A and a little bit of B and some other things.

A big problem is that once you start repossessing, then housing these people becomes an issue for the taxpayer, and we already had an insanely long backlog when it comes to social housing (I think it's something like 10 years long at the moment).

There's an element of us having to suck up the increased costs either way. Either we have higher interest rates, or we have to pay more taxes to build more social houses.

This idea of we'd have to pay for them anyway is one of the reasons I'd like to see more wide scale in depth discussion and analysis.

For a start nobody is suggesting repossessing and burning the house down. The property will become vacant and added to the housing supply. Somebody will buy it, be it an FTB, trader upper, downsizer or investor. If it is a trader upper, their property will become vacant and available for somebody else.

And so on and so forth. This is how it works in other countries.

Some of these houses will be 4 beds with three people etc. It is a hugely inefficient using of the existing stock which only exacerbates the existing social housing problem.

What do we do with the person who has been evicted? Treat them like everybody else, if they qualify for housing assistance it will be provided. But we need to know how many people out of those 145,000 are in genuine need of housing assistance.

Many of them will be in secure employment and perfectly capable of meeting their own housing needs. Ireland is the only country in the world where mortgages arrears increased even as unemployment figures decreased.

awec wrote: »

Governments run a mile from this stuff. No party will advocate for change here. There is no appetite for repossessions in Ireland. At best you'd get support to go after the chancers who refuse to pay anything, the 10-year-no-cents-paid crowd.

I agree governments will run a mile from this but the reason is the sheer volume of numbers - in other markets it is perfectly acceptable to repossess houses because it is only a tiny minority in arrears. It is the governments fault for allowing this situation to develop.

And part of the reason there is no appetite amongst the general public for repossession is there is no mature discussion and analysis of it.

It always descends into "sure that would just make more people homeless and we are already in the midst of a housing crisis."

I think the only way to solve the housing crisis is to tackle the arrears head on and for a new government to have a policy to instruct banks to start aggressively repossessing and make it very public.

Tell everybody the banks will start at the bottom - ie. the longest run of non payers - and reassure everybody that housing support will be provided if you require it but if you are financially capable of meeting your own housing needs you are out on your ear.

Give them fair warning - say if you haven't paid for 10 years, expect a letter tomorrow but it will take us a while to work through the list, and if you can start making a dent in the arrears you'll be moving further away from our sights, but we will get to everybody eventually.

I guarantee in short order you will see the arrears figures drop dramatically, weeding out the can pay, won't pay brigade.

You will also see a much more efficient use of our existing housing stock, increased new housing stock, lower interest rates, falling rents, increased supply - all sorely needed to solve the housing stock.

And instead of cuckoo funds financing mass apartment blocks to rent they will finance them properties for people to buy.

There are a lot of potential positives to come from such a policy if only we had the stomach to discuss it.

Qwerty2018

I know it’s very hard to speculate, just wondering what my chances are.

Was planning on trying to buy a house next year valued at around 240,000.

I will need a mortgage of 210,000. I am a single applicant first time buyer. I am a teacher on a full time contract with a gross salary of 42,000.
Also have parents willing to act as guarantor on my mortgage.

Would I have trouble getting a mortgage as I would need 5 times my salary?

Thanks

Geuze

The normal limit is 3.5x.

Padre_Pio

Qwerty2018 wrote: »

Would I have trouble getting a mortgage as I would need 5 times my salary?

Thanks

Yes.

beanyb

Qwerty2018 wrote: »

I know it’s very hard to speculate, just wondering what my chances are.

Was planning on trying to buy a house next year valued at around 240,000.

I will need a mortgage of 210,000. I am a single applicant first time buyer. I am a teacher on a full time contract with a gross salary of 42,000.
Also have parents willing to act as guarantor on my mortgage.

Would I have trouble getting a mortgage as I would need 5 times my salary?

Thanks

Look into the Rebuilding Ireland Home Loan which will be with your local council (there's a long detailed thread on it on here). You won't get a bank mortgage for that but you may qualify for the RIHL.

Qwerty2018

beanyb wrote: »

Look into the Rebuilding Ireland Home Loan which will be with your local council (there's a long detailed thread on it on here). You won't get a bank mortgage for that but you may qualify for the RIHL.

Thanks a mill,

I will look into it!