Property Market 2020

hometruths

GreeBo wrote: »

I dont disagree, but that attitude is the same irrespective of the house being worth more or less than they paid for it.
i.e. negative equity doesnt comes into it

Negative equity very much comes into it.

It is the biggest driver of non performing mortgages, higher than employment or interest rates.

hometruths

GreeBo wrote: »

I have to say I have followed this thread pretty closely and I didn't see any body suggest either of those things, did I just miss them? Can you point them out? Its certainly not a running theme.

Someone recently took a comment I made and spun it to mean that people should apply now before they lose the jobs, but since I didnt say anything of the sort, I'm discounting that.

Posted in this thread:

randoplh134 wrote: »

It's amazing to what lengths humans will complicate their lives and find a way to rationalize it.

I know a couple who are mortgaged to the tilt and are after going sale agreed on a mediocre property for 420k, asking was 440k. They have very little deposit and both work in jobs that are not safe ( infact the woman has already had her hours cut back due to this situation ). Their excuse is they are paying 1100e per month in rent for a 1 bed apartment and the mortgage on the 3 bed house will " only " be 1400 per month and they expect to start a family in 5 years time.

Amazing, what they fail to realize is this house was put up for sale 3 weeks ago and they already got it for 20k under asking, can you imagine what price reductions they will get if they wait a mere 6-12 months.

I hear the excuse of "oh rents are high right now, we are being ripped off etc " . What people fail to realize is that rents are short term, a mortgage is often a life sentence.

Property prices will tank very soon and so too will rents, the rent you are paying now is not forever. The money you save waiting to buy and end up getting a bargain will stand you in good stead for the rest of your life.

Think long term

Replied to:

awec wrote: »

If their jobs are as unsafe and shaky as you suggest then there's a high chance they'll end up unable to get a mortgage in future in the event of prices and the economy tanking.

So yea, think long term, and realise that waiting is not without risks, you could end up waiting a long time.

SozBbz wrote: »

Can you not also appreciate that if the economy tanks that people like the above won't be able to get any mortgage, no matter what "bargains" are out there?

You have to be awfully unlucky to get your PPR repossessed in Ireland, you do not have to be particularly unlucky to get evicted from rented accommodation.

Also, if theyre only sale agreed, changes are the bank will pull their approval before this goes through as there has already been a change in circumstances by one person getting their working hours cut back.

I could go on.

awec

schmittel wrote: »

Posted in this thread:



Replied to:





I could go on.

Actually if you had actually read the posts and the context at the time you would see that the poster in question was suggesting that everyone just wait, and then everyone will get a bargain next year.

The poster you quoted was fond of inventing stories and people to try and make their point, which is where the particular reference to shaky jobs comes in. Probably not the best poster to be using to try make your point.

hometruths

awec wrote: »

Actually if you had actually read the posts and the context at the time you would see that the poster in question was suggesting that everyone just wait, and then everyone will get a bargain next year.

The poster you quoted was fond of inventing stories and people to try and make their point, which is where the particular reference to shaky jobs comes in. Probably not the best poster to be using to try make your point.

You and SozBbz were the posters I was using to try and make my point. He was just the context.

hometruths

awec wrote: »

Actually if you had actually read the posts and the context at the time you would see that the poster in question was suggesting that everyone just wait, and then everyone will get a bargain next year.

The poster you quoted was fond of inventing stories and people to try and make their point, which is where the particular reference to shaky jobs comes in. Probably not the best poster to be using to try make your point.

Is Julissa Bitter Jeep fond of inventing stories too?

Julissa Bitter Jeep wrote: »

Few friends of mine who are mortgage approved and still have their jobs are now very keen to get into the market before they lose their jobs etc. Wonder if there is many in this boat, could lead to one final market pump in the short term?

GreeBo

Empty_Space wrote: »

If you more then a 99 percent certainty, I dont know what I can do for you.

The problem is that you are 99% certain of a catastrophic result, but 1% that it all might be fine.

It doesnt seem like a very measured view.

For example, I expect to see some drop in the house price index within the next 12 months, maybe 10-15% overall. like other I dont expect this to be across the board, rather less desirable properties will plummet and more desirable might see a slight dip, if at all.

If what you say actually comes to pass, then I'll be personally loading up on discount properties in the D4 area and cant wait.
Somehow I expect to be disappointed.

GreeBo

schmittel wrote: »

Is InstaSte fond of inventing stories too?

None of your examples are people on this thread encouraging anyone to do what you are saying they are doing.
Rather they are all people talking about what they are hearing others do...

awec

schmittel wrote: »

You and SozBbz were the posters I was using to try and make my point. He was just the context.

What point? If you think I encouraged anyone to apply before losing their job you might want to go read a bit more carefully.

Empty_Space

GreeBo wrote: »

The problem is that you are 99% certain of a catastrophic result, but 1% that it all might be fine.

It doesnt seem like a very measured view.

For example, I expect to see some drop in the house price index within the next 12 months, maybe 10-15% overall. like other I dont expect this to be across the board, rather less desirable properties will plummet and more desirable might see a slight dip, if at all.

If what you say actually comes to pass, then I'll be personally loading up on discount properties in the D4 area and cant wait.
Somehow I expect to be disappointed.

You are getting overly caught up on percentages.

I just mean chances are weighted massively towards big drops and deflation. Don't get too caught up on percentages.

addaword

In 2006 a wise man said " in every recession property falls at least 20%". Nobody believed him but he was proven right some years later.

GreeBo

Empty_Space wrote: »

You are getting overly caught up on percentages.

I just mean chances are weighted massively towards big drops and deflation. Don't get too caught up on percentages.

What a fool I am to get caught up with silly things like numbers :rolleyes:

"massively* weighted towards big drops and deflation"



*but might not happen at all.

Melanchthon

Ozark707 wrote: »

I think the likes of the REITs will be influenced by how the rental market gets on and we don't necessarily need to see a drop in migration for that to correct. Of course it won't help in keeping rental prices high if migration tails off.

My view is that even if the impact of this isn't the worst cases but is similar to what a lot of reputable institutions are putting out immigration will fall, public finances are going to be stressed but there will be a lot of people on housing lists, a sizable propertion of first time buyers are going to have reduced ability to take big mortgages a lot of couples in that group will have one partner who's job is suddenly looking very insecure.
What's going to happen to the new builds then? They already seemed over priced to me but apparently there isnt a much the price can be dropped before they are loss making (personally I don't 100% believe this and not without reason believe in some cases there is some weird stuff in relation to lands being "sold")

hometruths

awec wrote: »

What point? If you think I encouraged anyone to apply before losing their job you might want to go read a bit more carefully.

Ok, I have read it again, and still come to the conclusion that you were suggesting it is better to proceed with the purchase now at the current price because if they think longer term they might not be able to purchase at any price.

If that is wrong can you tell me what you meant by this? Just so I understand it better?

awec wrote:

If their jobs are as unsafe and shaky as you suggest then there's a high chance they'll end up unable to get a mortgage in future in the event of prices and the economy tanking.

So yea, think long term, and realise that waiting is not without risks, you could end up waiting a long time.

Empty_Space

GreeBo wrote: »

What a fool I am to get caught up with silly things like numbers :rolleyes:

"massively* weighted towards big drops and deflation"



*but might not happen at all.

Dont worry about it.

Just realize I am saying there is going to be massive drops and inflation.
But I would never say I am 100 percent sure of anything as I am too wise for that.

hometruths

GreeBo wrote: »

None of your examples are people on this thread encouraging anyone to do what you are saying they are doing.
Rather they are all people talking about what they are hearing others do...

Except for awec and SozBzs in my opinion - in as far as they are saying it is better to buy when you have the mortgage approval, even if jobs are uncertain, because you may not get it again. But of course I may have misread them.

To make sure I don't misunderstand you, are you saying that you and (as far as your interpretation of their posts allows) none of the more bullish posters on here think people should or will buy now, even if employment is uncertain, because they have the mortgage offer in place, and it is better to buy now even if you think prices will fall, because you may not get the mortgage in future?

Bass Reeves

fliball123 wrote: »

In order to do that your going to have to get building contractors in and willing to make SFA on their hard work. Cant see any government building like this for years sure the builders were moaning back in 2018 when the prices hit their high point in the last decade saying there is no money to be made.

If you looked I said build on state owned land. For a developer to build a development, he must first buy the site, get planning and then proceed to build. He had certain costs the state would not. When he builds he have planning development costs, sales and legal costs, interest on cost of complete development from building to site cost. It is quite possible that if the economy slows a bit, small to mid sized building firms would tender very competitively for government funded development's as guaranteed payment would negate some of the risk and allow for better credit terms offs banks and builders providers. 180 k was a ball park stab, if a developer was trying to build a similar development add 50k for local authority planning and development costs, legal and sales costs and interest on the loans while carrying out the development

GreeBo

Hulk Hands wrote: »

I'll never understand this line of thinking. If you have a total of 100k, that you put all into a house, and the house devalues by 50k in a year, that's your net worth basically halved.

The 50k you couldve saved by waiting would mean €250 less p/m on a typical mortgage repayment. The lack of equity you now have will massively affect your ability to refinance, whether to upsize if things go well, efficiently downsize in bad times or go after an investment opportunity.

Someone's net worth will always be calculated by the sum total of their assets. Hard to fathom how people could discard that with the "home for life" line, while their life's work up to that point gets eroded by a poor decision.

That's not to say property prices will rise or fall or that anyone's wrong to buy now. Just that getting the decision right either way has huge consequences for the majority

It's only eroded when you sell.
If things go well, why wouldn't your house value increase?
What if it goes up by 50k in a year and you are priced out of the area you want?
What if there are no houses for sale in the area you want in a year?

GreeBo

Hulk Hands wrote: »

So you don't think the €250 p/m repayment i referenced, which is a tame example given the price drops back then, would've made a significant difference to the quality of life you had? For most that's a yearly family holiday, or could influence someones decision on a having a further child.

Obviously none of us have a crystal ball, and we can only speculate and go on advice we trust. But it's silly to think you should just plow on if your situation at the moment is ok and think it'll have no affect on your life thereafter. Someone who bought in 2010 over 2007 had a lot more disposable income thereafter, as did someone who bought in 2015 over 2018.

How much of that disposable income are they still forking out on crazy rents while they wait for house prices to drop so they can start saving?

Experience_day

GreeBo wrote: »

How much of that disposable income are they still forking out on crazy rents while they wait for house prices to drop so they can start saving?

This is the bit that sways me more towards certain groups buying. If you know that you're going to be staying put, then it makes sense to pay a mortgage for more reasons than quantitative. But there is also money to be saved.


For myself I purchased a house a few years ago now (post 2016) when I was in my twenties. Since then I'm not sure what rent is in this part of Dublin but I doubt its what I'm paying for a 3 bed detached (sub 700). That's quite a lot of savings....

GreeBo

MrMusician18 wrote: »

Sorry, houses are like that. Due to our penchant for developing cookie cutters houses there will most likely be a very similar property down the road if you miss out on one. The major difference being the number on the front door.

It's only in the top end of the market where true one-offs exist and if you miss one you might not ever get one like it again. I would suspect most people participating in the conversation here are notin the €1m+ market.

Perhaps you are just operating in a very different marker to some other posters on here and your advice and your advice makes no sense in their context?

You don't have to be in the 1m market to have restricted supply.

hometruths

awec wrote: »

What point? If you think I encouraged anyone to apply before losing their job you might want to go read a bit more carefully.

schmittel wrote: »

Ok, I have read it again, and still come to the conclusion that you were suggesting it is better to proceed with the purchase now at the current price because if they think longer term they might not be able to purchase at any price.

If that is wrong can you tell me what you meant by this? Just so I understand it better?

No need to clarify the above, I read a few other posts in the thread a bit more carefully as you suggested, and as I recalled the discussion has come up before https://www.boards.ie/vbulletin/showthread.php?t=2058041687&page=82 - a few excerpts:

JamesMason wrote: »

Totally agree pearcider. You'd be mad to buy this year. When the financial term liquidity crisis becomes credit crunch to the man in the street, the penny will drop.

awec wrote: »

What do you propose that families who need somewhere to live do instead?

Buy a tent? Declare themselves homeless?

What do you think is worse? Being genuinely homeless this time next year because you decided to keep waiting and it turns out that the arse does fall out of it and there's nothing for you to buy because people can't afford to sell their homes and the developers have all gone bust, or to buy now and find out next year you have overpaid? I know which I'd choose.

In almost all cases it's better to have a home than not.

Admittedly this says almost all cases, but later there is clarification that does caveat does not include losing your job:

awec wrote: »

If you lose your job, you are far more likely to end up homeless if you are a renter vs a home owner.

You will end up in negative equity, you will end up in mortgage arrears, but you will still have a place to call home.

pearcider wrote: »

This is a silly argument. If you lose your job you’re better off without a mortgage. That’s a no brainer. The stress alone of debt in a recession kills people.

SozBbz wrote: »

What about losing your job and not being able to pay rent? Not everyone has mam and dads house to fall back on. If you're a single man for example, you're not going to get a council property for years if ever.

I'd say homelessness is more stressful than mortgage arrears, especially in a country thats practically allergic to repossessions.

The idea that if you're facing uncertainty in your employment it is better to get your mortgage now and buy a house whilst you actually have a job, is often floated both on this forum and beyond.

It's madness, but there is no denying it.

GreeBo

schmittel wrote: »

Except for awec and SozBzs in my opinion - in as far as they are saying it is better to buy when you have the mortgage approval, even if jobs are uncertain, because you may not get it again. But of course I may have misread them.

To make sure I don't misunderstand you, are you saying that you and (as far as your interpretation of their posts allows) none of the more bullish posters on here think people should or will buy now, even if employment is uncertain, because they have the mortgage offer in place, and it is better to buy now even if you think prices will fall, because you may not get the mortgage in future?

I am saying you should buy now if you have found the house you want in the area you want for the price you can afford. You should never make any significant purchase if you think your finances are in jeopardy, covid 19 doesn't alter that advice.
Right now is the only time you can buy a house while armed with all the facts.
Buying in the past would be better, but sadly is impossible
Buying in the future is taking the purchase out of your hands and relying on things outside of your control. I prefer to make significant decisions when I have all the facts and am in control.

GreeBo

schmittel wrote: »

No need to clarify the above, I read a few other posts in the thread a bit more carefully as you suggested, and as I recalled the discussion has come up before https://www.boards.ie/vbulletin/showthread.php?t=2058041687&page=82 - a few excerpts:




Admittedly this says almost all cases, but later there is clarification that does caveat does not include losing your job:







The idea that if you're facing uncertainty in your employment it is better to get your mortgage now and buy a house whilst you actually have a job, is often floated both on this forum and beyond.

It's madness, but there is no denying it.

There certainly is denying it as that's not what he is saying at all.
Saying it's better to own a home than renting if you lose your job is in no way telling people to buy if you think you are about to lose your job!

addaword

GreeBo wrote: »

I am saying you should buy now if you have found the house you want in the area you want for the price you can afford.

Dangerous advice in my opinion, given how prices are almost certainly going to drop and the uncertain times ahead for our economy in the next year or two.

baggio29

addaword wrote: »

Dangerous advice in my opinion, given how prices are almost certainly going to drop and the uncertain times ahead for our economy in the next year or two.

Prices in China post covid and 2 months strict lockdown didn't drop - they actually raised slightly in April

Have a look online.

GreeBo

addaword wrote: »

Dangerous advice in my opinion, given how prices are almost certainly going to drop and the uncertain times ahead for our economy in the next year or two.

Deferring a property purchase indefinitely, when you can afford to buy now, is dangerous advice, just ask all the people paying more in rent than any mortgage.

hometruths

MrMusician18 wrote: »

Sorry, houses are like that. Due to our penchant for developing cookie cutters houses there will most likely be a very similar property down the road if you miss out on one. The major difference being the number on the front door.

Which is also exactly why the much vaunted lack of supply will not protect price falls.

Acacia Avenue, Acacia Close and Acacia Drive etc might have a few hundred houses, many identical, most broadly similiar.

They may have been selling for €350k 3 months ago, and sure if things slow down, would be vendors will not put their house up for sale.

But what if one or two do? They may be a forced seller because their business has just gone wallop, or they want to get out of the rental market, they're cashing in their CGT exemption, or just because they think it is a good time to get out of the market having read talk about a global recession. There is any number of reasons an individual might sell.

If they sell at €315k the best guess anybody has for the value of 22 Acacia Avenue etc is now €315k.

And that is the baseline that the next house in Acacia burbs will be working off. WOuld be buyers and bank valuers will have that figure in mind.

If the next seller says crikey, the last one was €315k, things are slow, I'll drop price a little and actually €300k would be be a good result given I only paid €175k for it, then €300k is the new baseline

This happens on the way up as well. It only takes one buyer to go from €175k to €200k to push the baseline price up.

It's what people mean when they say prices are set at the margin. There may not be many sales happening, but those that are happening are the ones setting the prices.

It's one of the main reasons I am not convinced by the argument that any falls will be minor because of tight supply and only poor properties being available.

hometruths

GreeBo wrote: »

Deferring a property purchase indefinitely, when you can afford to buy now, is dangerous advice, just ask all the people paying more in rent than any mortgage.

Do you have a view on rental prices - i.e are they likely to stay same, fall or rise?

PommieBast

addaword wrote: »

Dangerous advice in my opinion, given how prices are almost certainly going to drop and the uncertain times ahead for our economy in the next year or two.

Trouble is that in a falling market the "good" properties tend to disappear.

addaword

PommieBast wrote: »

Trouble is that in a falling market the "good" properties tend to disappear.

There are always fish in the sea. There were in the last recession too.