Property Market 2020

lsjmhar

cunnifferous wrote:

Below 15% of the workforce is public sector. So I wouldn't call it a huge section of society.

That is actually quite low. Given all the shouting after the last crisis I would have thought it was higher. If current crisis continues for an extended period there will be little finance to purchase from the private sector then. Does not bode well if the country doesn't start moving in next 2/3 months, me thinks!!

addaword

cunnifferous wrote: »

Below 15% of the workforce is public sector. So I wouldn't call it a huge section of society.

.

Not only that, but because of the economic collapse it is inevitable public sector salaries will be cut.

pearcider

Marius34 wrote: »

As you are here to provide some information, and bring your advice. Just to bring more balance, so audience can have better idea of those unemployment predictions. I see you using Central Bank as trustable source.
Would you mind to give more details what is Central Bank prediction for the rest of the year? What this 25% unemployment means, is it Permanent or Temporal, any idea if people with Covid-19 wage subsidy schema are counted as unemployed?

I trust their short term projections (for the next quarter) as they have good data and their nowcasts are highly accurate and subject to only minor revisions. So if they say 25% unemployment for Q2 I believe them.

Long term their record is horrible partly because the models don’t work that far out but also partly because they have created the mess we are in with the bailout culture for big business and banks. So when they say there will be a v shaped recovery they are really just being politically correct at that stage. The macro picture (not just covid 19 but also the fiscal monetary and demographics picture) is pretty grim for the entire world.

The whole world is in economic contraction and any potential restructuring of the economy will be retarded by the debt load and the bailouts of the zombie companies who in a fair world should be made bankrupt.

You can’t make a dent in 25% unemployment over a few months. Most of the lost jobs are lost for at least 2 or 3 years and I’d say half of them are gone forever since restaurants and hotels operate on tiny margins. Only when the world economy is restructured will new jobs be created in new industries and that will take several years. These never ending bailouts will make that restructuring all the more painful and drawn out.

Padre_Pio

Brussels Sprout wrote: »

Even before Covid-19, the highlighted people would have struggled to afford the average house given how difficult that has been in recent years for most people.

The people who would previously have been bidding for the 250k+ house - how many of them will be affected?

I disagree. There's a lot of potential buyers in these bracket.
2 people on relatively low 30k a year can get a FTB mortgage of 210k, plus their 10% puts them on the 250k house bracket.
Just on Property Register and picked a random month for Dublin last year. Half of properties sold under €350k.

There's a lot of potential buyers who are on the Covid payment and will start eating into their deposit to pay bills.

Marius34

pearcider wrote: »

I trust their short term projections (for the next quarter) as they have good data and their nowcasts are highly accurate and subject to only minor revisions. So if they say 25% unemployment for Q2 I believe them.

Long term their record is horrible partly because the models don’t work that far out but also partly because they have created the mess we are in with the bailout culture for big business and banks. So when they say there will be a v shaped recovery they are really just being politically correct at that stage. The macro picture (not just covid 19 but also the fiscal monetary and demographics picture) is pretty grim for the entire world.

The whole world is in economic contraction and any potential restructuring of the economy will be retarded by the debt load and the bailouts of the zombie companies who in a fair world should be made bankrupt.

You can’t make a dent in 25% unemployment over a few months. Most of the lost jobs are lost for at least 2 or 3 years and I’d say half of them are gone forever since restaurants and hotels operate on tiny margins. Only when the world economy is restructured will new jobs be created in new industries and that will take several years. These never ending bailouts will make that restructuring all the more painful and drawn out.

I don't think it's nice to come up with this kind of "Facts", about coming Armagedon, with a purpose to scare anyone about total collapse. Meanwhile not knowing, or hiding what's behind this data.
In case you didn't know:
Based on Central Bank unemployment to Peak in Q2, due to Covid-19 related payments:
" if all those receiving Covid-19 related payments are counted as unemployed, the unemployment rate would rise to around 25 per cent in the second quarter."
I'm confident you would never share this information.

The Student

Marius34 wrote: »

I don't think it's nice to come up with this kind of "Facts", about coming Armagedon, with a purpose to scare anyone about total collapse. Meanwhile not knowing, or hiding what's behind this data.
In case you didn't know:
Based on Central Bank unemployment to Peak in Q2, due to Covid-19 related payments:
" if all those receiving Covid-19 related payments are counted as unemployed, the unemployment rate would rise to around 25 per cent in the second quarter."
I'm confident you would never share this information.

Don't muddy the water with actual facts.

addaword

addaword wrote: »

Not only that, but because of the economic collapse it is inevitable public sector salaries will be cut.

Thanks nurses and doctors and ambulance staff for all your hard work and sacrifice during the covid emergency. Now we are going to cut your wages.

addaword

[Deleted User] wrote: »

Thanks nurses and doctors and ambulance staff for all your hard work and sacrifice during the covid emergency. Now we are going to cut your wages.

The government will not run out of compassion , it will run out of money, as a well known and respected economist said on the radio the other day. And there are some public servants doing sfa now. Not all are healthcare workers.

eagle eye

Isn't there a massive shortage of houses? I'm sure lots of planned houses will not be built during a downturn?

Assetbacked

eagle eye wrote: »

Isn't there a massive shortage of houses? I'm sure lots of planned houses will not be built during a downturn?

There is a shortage of affordable housing, but there is a lot of planning permission through the planning process and construction workers due to get back to work in the next few weeks so we will see supply start to pick up. At the same time, with job losses and no new jobs being created, demand won't rise. More supply and no increase in demand is the projection for the next 6-12 months.

Browney7

eagle eye wrote: »

Isn't there a massive shortage of houses? I'm sure lots of planned houses will not be built during a downturn?

The fact of the matter is that the Dublin property index has shown quite a small change in two years: index values 124.6 Jan 20,125.1 Jan 19, 121.8 Jan 18.

So if the economy was going gangbusters before Covid and yet house price growth was flat despite the presence of the same IT and pharma workers, public sector employees, solicitors, accountants (who are not immune to this drop - just ask finance managers in Ryanair and the big 4s audit fees are going to be under pressure), how there won't be a fall and a period of stagnation for a number of more years is beyond me. We can speculate on the % fall but 10-15% over the next 12 to 18 months is the range I have in mind.

Commercial property also looks to have had its hayday cut short with 6 month notice periods on withdrawals implemented on the Irish Life, Aviva and several other property funds, the demand for investment in new office space is going to fall. More builders or tradesmen available and downward pressure on incomes in the sector (if there is any work for them to do at all).

People are right in that unmotivated sellers of prime property won't sell immediately but if we're a year down the tracks and property drops 10% and rents start to fall, the cohort of motivated buyers may fall with it as they sit on the sidelines anticipating further falls.

The demand side of Irish property market is a complex mix of credit, FOMO and confidence. Credit is going to dry up, FOMO will drop as people stop fearing being left behind by increasing prices and confidence - if we're at double digit %s in employment....

Melanchthon

Padre_Pio wrote: »

I disagree. There's a lot of potential buyers in these bracket.
2 people on relatively low 30k a year can get a FTB mortgage of 210k, plus their 10% puts them on the 250k house bracket.
Just on Property Register and picked a random month for Dublin last year. Half of properties sold under €350k.

There's a lot of potential buyers who are on the Covid payment and will start eating into their deposit to pay bills.

A lot of those will be apartments, generally if your a couple your not looking to buy a Dublin apartment in your 30's, the whole people in Europe live in apartments thing is a seperate argument as the apartments that are available now are generally not that large.
Aside from that a significant amount of the houses in that price bracket need work.

Hubertj

Assetbacked wrote: »

There is a shortage of affordable housing, but there is a lot of planning permission through the planning process and construction workers due to get back to work in the next few weeks so we will see supply start to pick up. At the same time, with job losses and no new jobs being created, demand won't rise. More supply and no increase in demand is the projection for the next 6-12 months.

With the requirements around social distancing I presume the speed at which existing projects move at will slow and further add to the delays already caused? That probably means further delays in starting other projects. So will that further dampen supply. It could be 2022 before some level of normality returns to construction whatever happens to the property market.

The Student

Assetbacked wrote: »

There is a shortage of affordable housing, but there is a lot of planning permission through the planning process and construction workers due to get back to work in the next few weeks so we will see supply start to pick up. At the same time, with job losses and no new jobs being created, demand won't rise. More supply and no increase in demand is the projection for the next 6-12 months.

I would think if demand is not increasing developers more likely to hold back on too much supply in case they can't sell at prices to cover cost and profit.

I expect a complete slowdown in the property market.

ChelseaRentBoy

eagle eye wrote: »

Isn't there a massive shortage of houses? I'm sure lots of planned houses will not be built during a downturn?

I'd imagine we are going to see a lot more ghost estates springing up in dublin especially over the next few months. I just can't se how people are going to have the money to be buying property at the beginning of the biggest recession we will see in our lifetimes.

AlmightyCushion

Brussels Sprout wrote: »

Even before Covid-19, the highlighted people would have struggled to afford the average house given how difficult that has been in recent years for most people.

The people who would previously have been bidding for the 250k+ house - how many of them will be affected?

You do realise people get into relationships with people in other sectors. People in retail can date people in IT.

Assetbacked

The Student wrote: »

I would think if demand is not increasing developers more likely to hold back on too much supply in case they can't sell at prices to cover cost and profit.

I expect a complete slowdown in the property market.

Demand is not increasing, that doesn't necessarily mean it is decreasing. There is still demand for new homes and therefore money to be made for those that build them. Restricting supy means no money is to be made, that doesn't make sense where there is a market to sell into.

The Belly

Assetbacked wrote: »

Demand is not increasing, that doesn't necessarily mean it is decreasing. There is still demand for new homes and therefore money to be made for those that build them. Restricting supy means no money is to be made, that doesn't make sense where there is a market to sell into.

The market for new homes will shrink as availability of credit and those that qualify reduces.

The Student

Assetbacked wrote: »

Demand is not increasing, that doesn't necessarily mean it is decreasing. There is still demand for new homes and therefore money to be made for those that build them. Restricting supy means no money is to be made, that doesn't make sense where there is a market to sell into.

Supply decreases in a falling market. Developers will just sit on the land.

The Belly

The Student wrote: »

Supply decreases in a falling market. Developers will just sit on the land.

Depends on if they can afford to.

cd76

Maitguel wrote: »

Another property I was watching sold at auction today at 290k or 100k over the initial reserve. Property is nice but needed a lot of work.

The daft ad is down now but it was located in Co. Limerick and a DNG auction today. Property was a detached house on an acre of land but needed a serious refurb

There was no DNG Auction, spoofer.

cd76

Refused what ? Sale Agreed is nothing more than an indication that you wish to buy. It is not binding so you call it. The Vendor has no say in terms of whether you can pull out or not, they are not is a position to refuse anything(unless they too want to pull out..unlikely !).
You should pull out now and play really hardball. Seek at least 20% off. If not go rent for a year, loads of new rentals available. Then you will have your pick next spring and will be able to better understand the market.
Up to you put park your heart for now and think €€€€€s. Good luck !

cd76

addaword wrote: »

Give it time, there will unfortunately be plenty of sales of properties of deceased and unemployed people. The price of property can only drop.

..absolutely. Happening already.

The Student

The Belly wrote: »

Depends on if they can afford to.

If you can't afford to hold the land would you risk building in a falling market and running the risk of further losses?

If the developer can't hold the land he will find a less risky use for it.

ciaranmul

cd76 wrote: »

..absolutely. Happening already.

I'm trying to keep an eye on price drops in Dublin as best I can over on www.instagram.com/crazyhouseprices

I'm getting a lot of messages from worried folks who have gone sale agreed but don't know whether to back out and also a lot of folks whose mortgages have been reduced or even revoked because of Covid payments.

I've seen some properties drop as much as 40%, most around 7-8% and some have even gone up in price!

JimmyVik

The Belly wrote: »

The market for new homes will shrink as availability of credit and those that qualify reduces.

Lots of trader uppers becoming stay putters too i think.

Pablo_Flox

ciaranmul wrote: »

I'm trying to keep an eye on price drops in Dublin as best I can over on www.instagram.com/crazyhouseprices

I'm getting a lot of messages from worried folks who have gone sale agreed but don't know whether to back out and also a lot of folks whose mortgages have been reduced or even revoked because of Covid payments.

I've seen some properties drop as much as 40%, most around 7-8% and some have even gone up in price!

Can you show an example of a property that has dropped 40% since March?

ciaranmul

Pablo_Flox wrote: »

Can you show an example of a property that has dropped 40% since March?

One in Sandycove there that dropped from €2.75m to €2m... 37.5% or thereabouts? There was another one down the country that had a 41% drop. Can't remember where though, someone sent it to me last week.

KaiserSochez

ciaranmul wrote: »

One in Sandycove there that dropped from €2.75m to €2m... 37.5% or thereabouts? There was another one down the country that had a 41% drop. Can't remember where though, someone sent it to me last week.

Hardly speaks to the entire market and a bit alarmist tbf ...are houses in the 250-350k ie: first time buyers market dropping by 30-40%?....nope.

ciaranmul

KaiserSochez wrote: »

Hardly speaks to the entire market and a bit alarmist tbf ...are houses in the 250-350k ie: first time buyers market dropping by 30-40%?....nope.

Did I say the entire market dropped 40%? If you look hard enough you'll find some prices have even gone up. But majority are price drops.