Property Market 2020

Empty_Space

baggio29 wrote: »

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

Have a look online.

People still think the economic difficulties are due to the pandemic.

This has just sped up the journey to the impending depression that's been on the horizon for some time in the west. We are on course for a depression and deflation. Do not purchase property right now.

Yes, you are going to find it very difficult to get a mortgage in a year or two but still a far better prospect than being in a situation where the value of your house falls while your mortgage value rises astronomically.

GreeBo

schmittel wrote: »

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

Same or rise unless significant building happens.
The population of people looking for somewhere to live is always growing, if they can't buy a house they need to rent one instead.

PommieBast

addaword wrote: »

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

Doesn't mean the fish are good...

GreeBo

Empty_Space wrote: »

People still think the economic difficulties are due to the pandemic.

This has just sped up the journey to the impending depression that's been on the horizon for some time in the west. We are on course for a depression and deflation. Do not purchase property right now.

Yes, you are going to find it very difficult to get a mortgage in a year or two but still a far better prospect than being in a situation where the value of your house falls while your mortgage value rises astronomically.

How does a mortgage value rise exactly?
I'm starting to think that you might not really know what you are talking about at all I'm afraid.

Empty_Space

GreeBo wrote: »

Same or rise unless significant building happens.
The population of people looking for somewhere to live is always growing, if they can't buy a house they need to rent one instead.

Hilarious

Empty_Space

GreeBo wrote: »

Same or rise unless significant building happens.
The population of people looking for somewhere to live is always growing, if they can't buy a house they need to rent one instead.

Hilarious

addaword

baggio29 wrote: »

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

Have a look online.

China was relatively unaffected by the virus. Only 4 thousand deaths out of a population of over a billion. Their new infections now are only a fraction of ours. In western countries like us and our trading partners eg UK France, USA, the virus has had and will have a much bigger effect.

hometruths

GreeBo wrote: »

Same or rise unless significant building happens.
The population of people looking for somewhere to live is always growing, if they can't buy a house they need to rent one instead.

That's a fairly fundamental difference to my outlook which largely explains the differences in our thinking about buy now or wait.

I think rents will fall below the level of the equivalent mortgage and then all of sudden the buy now decision is not quite so clear cut.

MrMusician18

schmittel wrote: »

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.

Indeed, and now with the property price register we have more information than ever when it comes to achieved prices.

Ever evening I go for a walk which takes me through a rather nice, relatively small Dublin estate. It has about 100 houses, and I sometimes think it would be nice to buy in there, but it wasn't the right time for me, so I've seen lots of houses come and go. I've never been like, oh darn, that's a shame that's come to market now, when I'm not ready though... Why you might ask... Because over the course of the last four years that had been at least two to three of these houses on the market at any given time. Just like buses, miss one and two very similar come along.

Empty_Space

GreeBo wrote: »

How does a mortgage value rise exactly?
I'm starting to think that you might not really know what you are talking about at all I'm afraid.

It's very simple really.

In a deflationary period the value of currency rises. Therefore any debt becomes greater.

The value of assets like property or goods decreases.

addaword

GreeBo wrote: »

Same or rise unless significant building happens.
The population of people looking for somewhere to live is always growing, if they can't buy a house they need to rent one instead.

Ah? the auld auld demographics was touted as a reason in 2006 why prices would never fall either.

GreeBo

Empty_Space wrote: »

It's very simple really.

In a deflationary period the value of currency rises. Therefore any debt becomes greater.

The value of assets like property or goods decreases.

Decreases compared to what?

Snow Garden

addaword wrote: »

China was relatively unaffected by the virus. Only 4 thousand deaths out of a population of over a billion. Their new infections now are only a fraction of ours. In western countries like us and our trading partners eg UK France, USA, the virus has had and will have a much bigger effect.

The Chinese economy is collapsing. Demand for their products is dramatically reduced already. I am not sure when their house prices will be impacted but it's inevitable.

Empty_Space

addaword wrote: »

Ah? the auld auld demographics was touted as a reason in 2006 why prices would never fall either.

Yes, don't you see, the economy must grow forever. It can never stop. House prices, stock values are on a never ending upward trend despite the fact that actual growth has long ago been left behind.

GreeBo

addaword wrote: »

Ah? the auld auld demographics was touted as a reason in 2006 why prices would never fall either.

There was a global credit bubble that burst, housing was caught up in it, it wasn't the cause.

If demographics are irrelevant, what has house prices and rents back near or beyond 2006 levels?

Empty_Space

GreeBo wrote: »

Decreases compared to what?

With respect, I suggest you do some reading on the subject. I don't want to be answering stupid questions one after the other.

MrMusician18

GreeBo wrote: »

Same or rise unless significant building happens.
The population of people looking for somewhere to live is always growing, if they can't buy a house they need to rent one instead.

I have to ask, do you have a vested interest in the property market that might be colouring your judgement? In the next year they're cannot be anything but falls in rental prices. Indeed I think we are going to see a lot of liquidity in the market as people will be looking at falling prices and looking to escape extortionate rents that they are currently paying.

We are also likely to see very few foreign students in the next year, in addition to a fall in the number of migrant workers here. This will all free capacity that will put near term downward pressure on rents

addaword

GreeBo wrote: »

There was a global credit bubble that burst, housing was caught up in it, it wasn't the cause.

If demographics are irrelevant, what has house prices and rents back near or beyond 2006 levels?

On a national basis, they are not at their 2006 2007 levels.

Demographics in 2006/7 did not prevent the crash in values over the next 6 years.

GreeBo

MrMusician18 wrote: »

I have to ask, do you have a vested interest in the property market that might be colouring your judgement? In the next year they're cannot be anything but falls in rental prices. Indeed I think we are going to see a lot of liquidity in the market as people will be looking at falling prices and looking to escape extortionate rents that they are currently paying.

We are also likely to see very few foreign students in the next year, in addition to a fall in the number of migrant workers here. This will all free capacity that will put near term downward pressure on rents

No, do you have one clouding yours?
It would suit me if prices drop significantly actually as I am in the market to buy.

Rents have a very long way to fall before they get to the point of impacting house prices. Even then that would rely on landlords needing to sell up and exit.
There is also a significant excess of rent demand that needs to disappear before your downward pressure appears.

Note that I'm not saying there will be none, but overall I don't see it a significant

GreeBo

addaword wrote: »

On a national basis, they are not at their 2006 2007 levels.

Demographics in 2006/7 did not prevent the crash in values over the next 6 years.

I said near, how do rents compare with 2006 levels?

The average listed rent is now €361 per month higher than the previous peak in 2008 (up 35%) and almost €650 higher than the low seen in late 2011.

Did demographics not cause the bounce back in both cases? If it wasn't demographics I'd have to ask who is living in all those properties?

OwlsZat

Hoffmans wrote: »

Some crazy prices still being sought for property,
Uk is already down 10%

Some areas down 20%.

GreeBo

Empty_Space wrote: »

With respect, I suggest you do some reading on the subject. I don't want to be answering stupid questions one after the other.

I'll go ahead and take you not answering my posts as a personal win and remove myself from further interaction with you.

Empty_Space

GreeBo wrote: »

I'll go ahead and take you not answering my posts as a personal win and remove myself from further interaction with you.

Sorry, I reread my comment and it was unnecessarily offensive.

What I should have said is. Try Googling deflation and effects around property markets, particularly mortgages.
It will give you better idea of what I'm talking about than I can trying to write it out. There are plenty of short articles to read.

hometruths

GreeBo wrote: »

There was a global credit bubble that burst, housing was caught up in it, it wasn't the cause.

If demographics are irrelevant, what has house prices and rents back near or beyond 2006 levels?

Do you have a view on the global debt levels today versus 2008 levels?

alias no.9

Empty_Space wrote: »

Sorry, I reread my comment and it was unnecessarily offensive.

What I should have said is. Try Googling deflation and effects around property markets, particularly mortgages.
It will give you better idea of what I'm talking about than I can trying to write it out. There are plenty of short articles to read.

In the absence of intervention, there is a huge deflation risk but the primary mandate of the ECB is to prevent deflation and maintain low single digit inflation.

The ECB have nowhere to go with interest rates, even the Germans will be on board with printing money when the stark reality of deflation stands in front of them.

I think that this is where the new found spendthrift attitude in Government is coming from and it's probably the correct way to move forward. Now really is the time to borrow to spend on infrastructure. The one question that remains is if that spending will include public housing, which I think it should, but can't be sure if it will.

hometruths

GreeBo wrote: »

I said near, how do rents compare with 2006 levels?


Did demographics not cause the bounce back in both cases? If it wasn't demographics I'd have to ask who is living in all those properties?

Nobody. That’s the point

cnocbui

alias no.9 wrote: »

In the absence of intervention, there is a huge deflation risk but the primary mandate of the ECB is to prevent deflation and maintain low single digit inflation.

The ECB have nowhere to go with interest rates, even the Germans will be on board with printing money when the stark reality of deflation stands in front of them.

I think that this is where the new found spendthrift attitude in Government is coming from and it's probably the correct way to move forward. Now really is the time to borrow to spend on infrastructure. The one question that remains is if that spending will include public housing, which I think it should, but can't be sure if it will.

The Germans have taken the ECB to court in Germany, which basically ruled against the ECB, precisely in protest at it's QE, so I don't see them being on board, at all. https://www.cnbc.com/2020/05/08/german-court-ruling-on-ecb-purchases-is-laughable-socgen-chair.html

Bass Reeves

cnocbui wrote: »

The Germans have taken the ECB to court in Germany, which basically ruled against the ECB, precisely in protest at it's QE, so I don't see them being on board, at all. https://www.cnbc.com/2020/05/08/german-court-ruling-on-ecb-purchases-is-laughable-socgen-chair.html

EU law supersedes German law just like it supersedes Irish law.

cnocbui

Bass Reeves wrote: »

EU law supersedes German law just like it supersedes Irish law.

That was the theory, but not any more. The Bundesbank has indicated it will abide by the German court ruling.

Hubertj

Snow Garden wrote: »

The Chinese economy is collapsing. Demand for their products is dramatically reduced already. I am not sure when their house prices will be impacted but it's inevitable.

Is it? I thought their April output figures were higher than expected?