Property Market 2020

GreeBo

schmittel wrote: »

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

But what does a generic term like "house prices" actually mean?
Average house price? - useless
Median house price? - equally useless imo

House price means different things to different people. Largely people have X amount of cash and will get the most that they can for that X. In times of low demand they get more for their case, in times of high demand they get less. But its still an intangible as to whats good or bad value as you cant price the value of a house other than what the market supports. But there isnt one housing market there are thousands of categories, hence why I think talking in generic terms like "house prices" doesnt really mean much.

GreeBo

Deleted User wrote: »

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.

Numerous houses for sale in Butterfield for under 1M and its a stonesthrow from the village.
https://www.myhome.ie/residential/brochure/15-butterfield-avenue-rathfarnham-dublin-14-d14-ey89/4255888

OwlsZat

fliball123 wrote: »

yeah but you cant ignore the fact that people on the left have been screaming blue murder at a certain cohort of people not being able to get on the ladder so what do you do ?

Reduce the cost of building houses so we finally move away from boom bust property cycles.

SozBbz

Donald Trump wrote: »

EU has a target inflation of something like 2% that isn't supposed to be broken.

Thats under normal circumstances, which I'd assume are out the window for now.

IMO inflation is a given.

Hubertj

pearcider wrote: »

Wow the bulls are recommending 50 year mortgages now. Never mind the interest rate risk you are assuming. If interest rates rise, then you’re dead in the water. I would say again you won’t need a 50 year mortgage where we’re going.

where do you think we are going again?

fliball123

OwlsZat wrote: »

Reduce the cost of building houses so we finally move away from boom bust property cycles.

Any reduction in the cost of building will be swallowed up by developers

GreeBo

Pivot Eoin wrote: »

Neighbour of ours, fairly central in Rathmines (Leinster Road) was given the option to drop asking price or take it off the market for the time being yesterday by their EA.

They were selling a relatively modern 3-Bed Mews for 790k asking (Overpriced anyway IMO) but now going off the market.

Link: https://www.dng.ie/residential/brochure/7-louis-lane-leinster-road-rathmines-dublin-6-d06x923/4407994

IMO they have done pretty well with the place, but I wouldnt be paying that much for a house of that size and garden.

However, there are plenty of "professional" couples who would as they want location over garden/space but dont want an apartment.

SozBbz

OwlsZat wrote: »

Reduce the cost of building houses so we finally move away from boom bust property cycles.

Talk is cheap.

How do you plan to do that? Reduce standards? Reduce energy efficiency? Cap developers profits (best of luck with that).

The cost of building is not the main cause of boom and bust property cycles anyway.

GreeBo

eagle eye wrote: »

People in a healthy financial situation with no urgency to sell can take the chance that things will improve in the long term and take their properties off the market. I don't think there's a whole pile of them though.

If you follow that through what it means is that you think most people who are selling are downsizing for financial reasons...I'm not sure I would agree.

GreeBo

grindle wrote: »

To add to this, a prudent person doesn't only presume the negative of a situation - they're careful and they capitalise on opportunities.

If prices fall 30-50% it wouldn't shock me, and prudent purchasers will have money on the sidelines for it.

Household deposit totals are pretty much as high as they have ever been in Ireland, there are plenty of people with money sitting in banks. Some of them will enter the BTL market if prices plunge, even just to top up their pension pots.
https://www.centralbank.ie/docs/default-source/statistics/_ie_financial_statistics_summary_chart_pack.pdf

GreeBo

ittakestwo wrote: »

Tell that to a person who bought in Tokyo in 1990.

And this is what is facing Europa now too, years/decades of being trapped in a deflationary cycle.

YOu mean this Tokyo?
https://asia.nikkei.com/Business/Markets/Property/Tokyo-property-prices-near-bubble-era-levels

SozBbz

ittakestwo wrote: »

Tell that to a person who bought in Tokyo in 1990.

And this is what is facing Europa now too, years/decades of being trapped in a deflationary cycle.

People who make casual comparisons to Japan don't understand that Japanese culture is fundamentally different to the West. Property doesnt appreciate there the way it does here, because they value newness above all else. New builds are always valued higher than existing properties, theres no such thing like here where period properties can attract a premium. To them, if a property is 2nd hand, its worth less.

I was in Japan last year and you'd be hard pressed to think of it as anything other than extremely prosperous.

eagle eye

GreeBo wrote:

If you follow that through what it means is that you think most people who are selling are downsizing for financial reasons...I'm not sure I would agree.

No, there are a multitude of reasons why people in good financial situations might want to sell. Everything from retirees relocating to people upsizing/downsizing etc.
The biggest hit on the market will come from the lack of younger people being able to get a mortgage. There will be less buyers and from every expert I've talked to they say that the cash buyer will be in a really strong position.

JimmyVik

GreeBo wrote: »

Household deposit totals are pretty much as high as they have ever been in Ireland, there are plenty of people with money sitting in banks. Some of them will enter the BTL market if prices plunge, even just to top up their pension pots.
https://www.centralbank.ie/docs/default-source/statistics/_ie_financial_statistics_summary_chart_pack.pdf

Buy to let is a toxic swamp to get into IMO.
I dont think you will see too many people jumping in there these days.
Loads are dying to get out or have got out.

JimmyVik

ittakestwo wrote: »

Tell that to a person who bought in Tokyo in 1990.

And this is what is facing Europa now too, years/decades of being trapped in a deflationary cycle.

I actually know some of them.
I worked in Tokyo for a year in 2017.
Spoke about this often with workmates. The said they had it hard for a few years, but things are fine there now.
Also I think Ireland Ireland had worse in the last one than they ever had it.

Hotels there are definitely better value than Ireland. And rent is reasonable enough too.

Give me another example though. How many developed economies in the world can we say have had a crash and not recovered prices for 20 years.

fliball123

eagle eye wrote: »

No, there are a multitude of reasons why people in good financial situations might want to sell. Everything from retirees relocating to people upsizing/downsizing etc.
The biggest hit on the market will come from the lack of younger people being able to get a mortgage. There will be less buyers and from every expert I've talked to they say that the cash buyer will be in a really strong position.

Supply is being drained away by almost the same rate as buyers you would be crazy trying to move currently there are less options open to you day on day as this pandemic is happening. Already a high number of properties taken off my home and daft and this is with new properties coming onto the sites every day and with the 2 sites offering free ad space. Why would you limit your choice on where you are moving to and not wait until the market opens up again.

As far as I am aware a lot of younger people were frozen out of the market anyway. Did Sinn Fein not get the majority vote on the premise of building affordable housing...this is hardly aimed at those in the 40+ category who most have already got a foot on the ladder?

FVP3

fliball123 wrote: »

Maybe but at the very least you have a place that is yours and do not have to pay rent. when the person retires one thing for sure is there will be a lot less owed on the property than when they started. I am talking about a structure where people have certainty of housing but not wanting to pay the sky high rents or mortgages. If it was drawn out over 50 years instead of 30/20 it would be a lot more affordable it would also leave your kids with an asset or place to call home for their future.

If the supply of houses is the same with 50 year mortgages, then the price of housing will rise and the cost of the mortgage will be the same per month.

I am also confused by what happens when people get to pensionable age. They have to keep paying until they die? Or do they hand over the payments to their children who might be living somewhere else?

Crazy talk.

fliball123

JimmyVik wrote: »

Buy to let is a toxic swamp to get into IMO.
I dont think you will see too many people jumping in there these days.
Loads are dying to get out or have got out.

Maybe but its a viable option for some who don't want to take a hair cut on the price they might get and with an option of renting 5 months at a time and then giving the tenant a free day and then going another 5 months it puts an end to all this bullsh1t of 90 days notice if you want them out. It is only 28 days which is a bit more reasonable. So when the market bounces back maybe in 2, 3, 4, 5 years your ready to sell at a nice profit and with knowledge that mr tenant has paid a significant amount or even all your mortgage for you in that period

JimmyVik

eagle eye wrote: »

No, there are a multitude of reasons why people in good financial situations might want to sell. Everything from retirees relocating to people upsizing/downsizing etc.
The biggest hit on the market will come from the lack of younger people being able to get a mortgage. There will be less buyers and from every expert I've talked to they say that the cash buyer will be in a really strong position.

Im gonna go out on a limb here and say the upsizer market just died.
The FTB market is about to be decimated. There are so many right now who have mortgage approval that will not have mortgage approval when it comes to drawdown, if the sale even makes it that far.
Downsizers, I dont think that is a big pool anyway. IT certainly wont be growing.
Cash buyers will hold their powder for a while yet.

OwlsZat

fliball123 wrote: »

Any reduction in the cost of building will be swallowed up by developers

Says who?

Property materials are 3X prices of UK. We've long had a problem with land hoaring and crazy pricing. It wouldn't take much legislation to fix both these issues.

FVP3

fliball123 wrote: »

Landlords are already paying full tax so 51% does to the tax man not to mention property tax, home & life insurance, mortgage. I don't think there is much room to maneuver here. Maybe the reits and vultures who I think are only paying 25% I could be wrong in this but I thought I seen that tax rate being bandied about for what they pay

Landlords only pay 51% if they have other income pushing them into the highest tax band.

fliball123

FVP3 wrote: »

If the supply of houses is the same with 50 year mortgages, then the price of housing will rise and the cost of the mortgage will be the same per month.

I am also confused by what happens when people get to pensionable age. They have to keep paying until they die? Or do they hand over the payments to their children who might be living somewhere else?

Crazy talk.

Why do you reckon the price of housing will rise under this model? I also said when the person gets to pension age they could be paying the mortgage anywhere from 20 to 50 years there should be some equity in the house, if the house still has a mortgage the person kids have the choice of taking on the rest of the mortgage and if they dont the house gets sold and the person gets their equity.

I put this up as an outside the box thinking for those who are locked out of the market. Also can you or anyone else show me one location where property prices are less now than they were 50 years ago?

GreeBo

eagle eye wrote: »

No, there are a multitude of reasons why people in good financial situations might want to sell. Everything from retirees relocating to people upsizing/downsizing etc.
The biggest hit on the market will come from the lack of younger people being able to get a mortgage. There will be less buyers and from every expert I've talked to they say that the cash buyer will be in a really strong position.

Yeah, but the people upsizing (and even those downsizing) are buying another home, their sale is balanced by a purchase, so arguably doing nothing for prices.

JimmyVik

fliball123 wrote: »

Maybe but its a viable option for some who don't want to take a hair cut on the price they might get and with an option of renting 5 months at a time and then giving the tenant a free day and then going another 5 months it puts an end to all this bullsh1t of 90 days notice if you want them out. It is only 28 days which is a bit more reasonable. So when the market bounces back maybe in 2, 3, 4, 5 years your ready to sell at a nice profit and with knowledge that mr tenant has paid a significant amount or even all your mortgage for you in that period

Or someone who is plunged back into negative equity when they were nearly out and now cant sell.
My bet is there wont get any new blood into buy to let.
Nobody with any financial cop on would sink money into buy to let now.

All you will have is the ones who were already stuck with it.


And then you have the REITs. I think that will grow and they should be taxed at the same rate as normal landords.

FVP3

OwlsZat wrote: »

Says who?

Property materials are 3X prices of UK. We've long had a problem with land hoaring and crazy pricing. It wouldn't take much legislation to fix both these issues.

Because builders sell prices at the price they can sell houses. If they can sell a house for 400k they sell it for 400K.

The only time that lower prices will reduce costs to consumers is in a highly competitive market where supply equals or exceeds demand.

fliball123

OwlsZat wrote: »

Says who?

Property materials are 3X prices of UK. We've long had a problem with land hoaring and crazy pricing. It wouldn't take much legislation to fix both these issues.

Well just on historic evidence what happened when people were given the first time buyers grant?? New builds went up by that amount almost straight away, you would be naive to think that the builders will be thinking oh look there is a pool of money lets be good citizens and not take it. They are all for profit and if there is a pool of money there for the taking they sure as hell are going to take as much as they can.

GreeBo

JimmyVik wrote: »

Im gonna go out on a limb here and say the upsizer market just died.
The FTB market is about to be decimated. There are so many right now who have mortgage approval that will not have mortgage approval when it comes to drawdown, if the sale even makes it that far.
Downsizers, I dont think that is a big pool anyway. IT certainly wont be growing.
Cash buyers will hold their powder for a while yet.

If all house prices drop by 10% then I gain by selling my 750K house and buying a 1M house.

JimmyVik wrote: »

Buy to let is a toxic swamp to get into IMO.
I dont think you will see too many people jumping in there these days.
Loads are dying to get out or have got out.

Why would you not get in if houseprices take a 30-50% cut? not necessarily for rental yields, but as a pension top up?

GreeBo

JimmyVik wrote: »

Or someone who is plunged back into negative equity when they were nearly out and now cant sell.
My bet is there wont get any new blood into buy to let.
Nobody with any financial cop on would sink money into buy to let now.

All you will have is the ones who were already stuck with it.


And then you have the REITs. I think that will grow and they should be taxed at the same rate as normal landords.

How is it not "financial cop on" to buy when prices hit a 10+ year low?
What else would you suggest people with cash do? (Considering we are a country with extermely high levels of household deposits)

JimmyVik

FVP3 wrote: »

Landlords only pay 51% if they have other income pushing them into the highest tax band.

I am in the high tax bracket. Im comfortable on what I make.
I dont even do overtime when asked because of how much the tax man takes. Its not worth it to me. If he took less then yes i would do it.


No way in hell would I put up hundreds of thousands on a buy to let at the amount of tax i would be paying on profits. If there even were any profits.


Its a calculation that just doesnt not work out when I do it. High risk, very low reward, and goal posts movign every 6 months, never in your favour. I just dont see why anyone would get into it.

fliball123

FVP3 wrote: »

Landlords only pay 51% if they have other income pushing them into the highest tax band.

Remember we hit the higher tax band at a ridiculously low level of income in this country its just above the average wage that it kicks in. So my thinking is if someone has a property to rent they will have had to save hard as they will have 2 properties on the go their home and their buy to let so they must have a good job or a high paying job so I would take bets that the majority will be in the higher tax bracket. Not saying there are those who have inherited the house or those who have lost jobs and working on a lower wage but a very high % would be already in the higher tax bracket before taking rent income into the equation.