Property Market 2020

baggio29

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.

It’s nothing to do how affected country was with cases or deaths in this topic here. The country was shut down completely- more then in Europe. Two months of strict lockdown
I work with Chinese in my company and they couldn’t get out for 8 weeks from apartment in Shanghai and other places. We are talking here about economy, factories closed for 2-3 months, shops schools etc. If they had less cases that’s good but lockdown was long and strict so economy suffered more less the same as in other countries

Hubertj

Tried to read through all the posts from yesterday and last night. Did people come off their meds over weekend or what? Some real mad opinions / comments / lies spouted out. Calm down!!!!

GreeBo

schmittel wrote: »

Nobody. That’s the point

You are seriously suggesting that "nobody" is living in the houses that were either empty or didnt exist since the last recession?

CSO statistics on ‘new dwelling completions’, which state that 64,595 new places to live were delivered between July 2016 and September 2019.

That statistic is made up of 52,647 ’brand new’ completions, another 3,657 completed homes in unfinished housing estates, and 8,291 more homes which were returned to use after they were deemed to have been vacant for at least two years.

One would wonder why someone would build over 50K homes just for no one to live in them.

Bass Reeves

baggio29 wrote: »

It’s nothing to do how affected country was with cases or deaths in this topic here. The country was shut down completely- more then in Europe. Two months of strict lockdown
I work with Chinese in my company and they couldn’t get out for 8 weeks from apartment in Shanghai and other places. We are talking here about economy, factories closed for 2-3 months, shops schools etc. If they had less cases that’s good but lockdown was long and strict so economy suffered more less the same as in other countries

China claimed at the start that they had only about 2.5K deaths in Wuhan. They later upgraded this figure to over 4K. We can take Chinese figures with a grain of salt. With France finding a case as late Dec before China reported it to the WHO it highly likly it was in Italy before France. This indicates that the Chinese may have been way worse effected than they reported. Deaths could be in the tens of thousands in China

hometruths

GreeBo wrote: »

You are seriously suggesting that "nobody" is living in the houses that were either empty or didnt exist since the last recession?



One would wonder why someone would build over 50K homes just for no one to live in them.

I'm suggesting that a large number of properties that were on the rental market in 2011 are now no longer on the rental market. This is a significant factor in the rental price increases since then.

Snow Garden

Hubertj wrote: »

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

https://www.wsj.com/articles/china-economic-data-indicate-v-shaped-recovery-is-unlikely-11589257260

China Economic Data Indicate V-Shaped Recovery Is Unlikely
Factory-gate prices post steepest decline in four years in April as coronavirus pandemic shrinks demand globally

China’s factory-gate prices contracted in April, falling by the steepest margin in four years, as manufacturers struggled with deflationary pressures from the coronavirus pandemic, which has crimped demand both at home and abroad.

OwlsZat

On one hand the IMF is bracing us for the worst downturn since the Great Depression and on the other Irish EAs and sellers are still advertising at 2019 prices. It's like they're sleepwalking on the decks of the Titanic as she slowly submerges.

lawrencesummers

OwlsZat wrote: »

On one hand the IMF is bracing us for the worst downturn since the Great Depression and on the other Irish EAs and sellers are still advertising at 2019 prices. It's like they're sleepwalking on the decks of the Titanic as she slowly submerges.

And both are doing what they are supposed to do.
IMF giving guidance on how they think things will go and EA’s trying to get the highest prices for their clients.

It’s a market, and for the last while it’s been a sellers market, maybe this will change it to being a buyers market, so if you have cash, equity, mortgage approval then start offering less than what you believe is an inflated asking price and see how it goes.

OwlsZat

lawrencesummers wrote: »

And both are doing what they are supposed to do.
IMF giving guidance on how they think things will go and EA’s trying to get the highest prices for their clients.

It’s a market, and for the last while it’s been a sellers market, maybe this will change it to being a buyers market, so if you have cash, equity, mortgage approval then start offering less than what you believe is an inflated asking price and see how it goes.

Indeed. An EA is meant to be getting the highest price for their client. There is a real risk that pitching for silly asking prices will mean their client is caught with a depressed asset they were eager to sell right in the middle of a financial meltdown. I'm not sure how in tune the typical estate agent is with the financial backdrop, do they have any training to read the reports of the ECB IMF etc.,? If the house doesn't sell it won't makes much difference to the EA in the long run.

Yurt2

Hubertj wrote: »

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

Chinese figures from PMI to reported GDP is Lord of the Rings level stuff mostly.

If you want an honest appraisal of what's going on, the Chinese Beige Book (see Twitter link), who compile data from alternative metrics to get an idea what's going on under the hood and away from the politically acceptable figures

Or, the Caixin PMI index is an alternative independent source.

https://mobile.twitter.com/chinabeigebook?lang=en

A Chinese brokerage firm had to retract their assessment that unemployment is running at 20 percent. Probably too close to the truth to have it out there floating around.

https://www.bloombergquint.com/global-economics/china-brokerage-retracts-estimate-that-real-jobless-level-is-20

Pivot Eoin

OwlsZat wrote: »

Indeed. An EA is meant to be getting the highest price for their client. There is a real risk that pitching for silly asking prices will mean their client is caught with a depressed asset they were eager to sell right in the middle of a financial meltdown. I'm not sure how in tune the typical estate agent is with the financial backdrop, do they have any training to read the reports of the ECB IMF etc.,? If the house doesn't sell it's it won't makes much difference to the EA in the long run.

Agreed, whole situation is like The Big Short, The EAs are the big banks, laughing at Christian Bale, Steve Carrel, Ryan Gosling and Co. (Buyers) and the whole market just refuses to react to the deepening crater of what is happening to the economy and the housing market is just priced as usual until an inevitable and sharp Decline!

In the end, there is going to be a few sellers who get burnt particularly bad due to greedy practice by EAs, hopefully an industry that doesn't exist too much longer with the likes of Auctioneera, BidX1, Purple Bricks etc.

lawrencesummers

OwlsZat wrote: »

Indeed. An EA is meant to be getting the highest price for their client. There is a real risk that pitching for silly asking prices will mean their client is caught with a depressed asset they were eager to sell right in the middle of a financial meltdown. I'm not sure how in tune the typical estate agent is with the financial backdrop, do they have any training to read the reports of the ECB IMF etc.,? If the house doesn't sell it's it won't makes much difference to the EA in the long run.

Yep, but the reports of the ECB and IMF are not really relevant to the day to day working of EA’s. The closing price of houses in the local market is the key indicator, when they value a house it’s based on the most similar house or houses in the area And then give or take a bit because of a few factors.

I keep an eye on daft regularly in a certain area and some high value places 800k plus have been up for months, will be interesting to see if they reduce asking prices on those.

The problem with the prices though is that the market is primarily serviced by new builds, and the builders have been trying to finish as much as possible in the last 2 years, if this pandemic reduces prices then they will reduce supply to keep prices inflated. It’s possible that the biggest difference we will see from this pandemic is a reduction in supplied units versus projected units As opposed to a reduction in price.

coolshannagh28

Bass Reeves wrote: »

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

That will come on trial.

GreeBo

schmittel wrote: »

I'm suggesting that a large number of properties that were on the rental market in 2011 are now no longer on the rental market. This is a significant factor in the rental price increases since then.

But we weren't only talking about rental properties!
We were specifically talking about house prices and rent costs since the last recession and the cause for them to return to near or beyond those levels.

hometruths

GreeBo wrote: »

But we weren't only talking about rental properties!
We were specifically talking about house prices and rent costs since the last recession and the cause for them to return to near or beyond those levels.

Fair enough, forget about house prices for a second, and let's just talk about rent prices.

Would you agree that a large number of properties that were on the rental market in 2011 are now no longer available on the rental market?

And if so would you agree that is a significant factor in the rental price increases since then?

Hubertj

Pivot Eoin wrote: »

Agreed, whole situation is like The Big Short, The EAs are the big banks, laughing at Christian Bale, Steve Carrel, Ryan Gosling and Co. (Buyers) and the whole market just refuses to react to the deepening crater of what is happening to the economy and the housing market is just priced as usual until an inevitable and sharp Decline!

In the end, there is going to be a few sellers who get burnt particularly bad due to greedy practice by EAs, hopefully an industry that doesn't exist too much longer with the likes of Auctioneera, BidX1, Purple Bricks etc.

so do you think all properties should be sold at auction with a minimum reserve? Why do some properties go at auction while many more at offered for sale a X price? I've never understood that.

Pivot Eoin

Hubertj wrote: »

so do you think all properties should be sold at auction with a minimum reserve? Why do some properties go at auction while many more at offered for sale a X price? I've never understood that.

Not necessarily, I just have to agree with wide sentiment that EAs are only in it for one reason; their commission. Granted I've never sold a house, so maybe I'll have a different view then. But in general, I'm in the interest of getting rid of middle men where at all possible.

I feel the same way about Recruiters in Business, having used them from both sides, for the large part they're just mostly interested in their own self.

I believe the P2P sales model is the way forward. I'm more than happy to photo my own house, deal with solicitors, assess market price... it's not that difficult. At the end of the day, I just fail to see the value that an estate agent adds to the transaction to justify an average €6k commission per sale in Dublin. They only frustrate 90% of buyers.

listermint

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?

You said prices .

.then when called on it you said rents.

At least back track when it obvious prices are not beyond or close to 2006 levels. That part isn't true.

lawrencesummers

Pivot Eoin wrote: »

Not necessarily, I just have to agree with wide sentiment that EAs are only in it for one reason; their commission. Granted I've never sold a house, so maybe I'll have a different view then. But in general, I'm in the interest of getting rid of middle men where at all possible.

I feel the same way about Recruiters in Business, having used them from both sides, for the large part they're just mostly interested in their own self.

I believe the P2P sales model is the way forward. I'm more than happy to photo my own house, deal with solicitors, assess market price... it's not that difficult. At the end of the day, I just fail to see the value that an estate agent adds to the transaction to justify an average €6k commission per sale in Dublin. They only frustrate 90% of buyers.

What they do is pretty simple, they Value the house admin the promotion and showing of the house and find a buyer, then take a cheque.

If you can post on daft, show prospective people your house and get it into a solicitor then work away. You will save yourself a nice bit of money, I think things will eventually move in that direction anyway especially with more online assistance.

But to a buyer the estate agent offers something kind of intangible, A private Sale gives the impression that something is amiss with the house, that someone is pulling a fast one, you loose the professional touch of an Administrators office, and it’s possible that prospective buyers can be turned off a property because of it. People don’t connect the fact that solicitors are the ones who actually ensure the sale is above board, they assume the Presence of and EA matters.

Pivot Eoin

lawrencesummers wrote: »

What they do is pretty simple, they Value the house admin the promotion and showing of the house and find a buyer, then take a cheque.

If you can post on daft, show prospective people your house and get it into a solicitor then work away. You will save yourself a nice bit of money, I think things will eventually move in that direction anyway especially with more online assistance.

But to a buyer the estate agent offers something kind of intangible, A private Sale gives the impression that something is amiss with the house, that someone is pulling a fast one, you loose the professional touch of an Administrators office, and it’s possible that prospective buyers can be turned off a property because of it. People don’t connect the fact that solicitors are the ones who actually ensure the sale is above board, they assume the Presence of and EA matters.

Yes I do see the sense in that intangible value for some. But I also think the kind of buyer you mention in your last paragraph is becoming less and less so the "typical" buyer.

I'm in my early 30s, and I don't know of anyone of my friends who've bought were in love with the EA, nor would they have an issue with a future thinking online platform to conduct the heavy lifting for the sale. It is kind of becoming the new norm for the younger generations.

GreeBo

schmittel wrote: »

Fair enough, forget about house prices for a second, and let's just talk about rent prices.

Would you agree that a large number of properties that were on the rental market in 2011 are now no longer available on the rental market?

And if so would you agree that is a significant factor in the rental price increases since then?

Yes I would, but I don't think you can isolate one from the other since they are all in the property bucket.

Also, a large number of properties (typically apartments) that historically would have been in the purchasing market are now in the rental market due to massive REIT investors

Villa05

From the Examiner


Fianna Fáil's housing spokesman, Darragh O'Brien, says money is being wasted.

"The State has become far too relient over the last three-four years in particular on HAP," said Mr O'Brien.

"If you are looking at subventions to the private rental market it is nearly touching a billion euro a year now.

"Now for a billion euro you could build approximately 5,000 public homes."

lawrencesummers

Pivot Eoin wrote: »

Yes I do see the sense in that intangible value for some. But I also think the kind of buyer you mention in your last paragraph is becoming less and less so the "typical" buyer.

I'm in my early 30s, and I don't know of anyone of my friends who've bought were in love with the EA, nor would they have an issue with a future thinking online platform to conduct the heavy lifting for the sale. It is kind of becoming the new norm for the younger generations.

I dont know of anyone Who has had a good word to say about any EA, but I also only know one person ever that bought without an EA.

Assetbacked

The Daft rental report has today been published;

https://www.daft.ie/report

Some of the key things which stand out for me;

- April rents down 2.1% from March but still higher than a year ago (by 3.8%). Average rent in Dublin City is €1974-2111. The opinion of the author is that rents will continue to fall for the rest of the year at least given the rise in unemployment.

- Rental Listings were up in March with the short-term properties being listed which then dropped in the first half of April but then rose again the second half of April. Year on year there are 40% more rental listings on Daft.

- Rental yields in for one bedroom apartments in Dublin are anywhere from 7-13%.

- It is still far cheaper to pay for a mortgage than to pay for rent.

- 1 bedroom apartments average €1605-€1770 in Dublin City centre; €1745 in South County Dublin, €1357 in North County Dublin and roughly €1393-1602 in the rest of the Dublin Post codes.

- Listings of homes for sale down 75% in April based on the same month last year. However, the report notes that that the sales market could be closed down until a form of normality returns so listings drops doesn't translate to drops in prices.

- BTL sector has a healthy level of projects in the pipeline, but (my view) the State needs to get onto a mass home building project to help continue bring down the cost of housing.

Hubertj

Assetbacked wrote: »

The Daft rental report has today been published;

https://www.daft.ie/report

Some of the key things which stand out for me;

- April rents down 2.1% from March but still higher than a year ago (by 3.8%). Average rent in Dublin City is €1974-2111. The opinion of the author is that rents will continue to fall for the rest of the year at least given the rise in unemployment.

- Rental Listings were up in March with the short-term properties being listed which then dropped in the first half of April but then rose again the second half of April. Year on year there are 40% more rental listings on Daft.

- Rental yields in Dublin 1 bedroom apartments in Dublin are anywhere from 7-13%.

- It is still far cheaper to pay for a mortgage than to pay for rent.

- 1 bedroom apartments average €1605-€1770 in Dublin City centre; €1745 in South County Dublin, €1357 in North County Dublin and roughly €1393-1602 in the rest of the Dublin Post codes.

- Listings of homes for sale down 75% in April based on the same month last year. However, the report notes that that the sales market could be closed down until a form of normality returns so listings drops doesn't translate to drops in prices.

- BTL sector has a healthy level of projects in the pipeline, but (my view) the State needs to get onto a mass home building project to help continue bring down the cost of housing.

interesting. Is the increase all down to short term lets coming onto market as well as standard lets being unable to shift due to restrictions? Or has a % of new builds added to the stock further increasing supply?

Other data such as length of time it takes a unit to shift would be interesting in the medium term once some level of normality returns. I presume this metric will increase over coming months as demand falls?

GreeBo

listermint wrote: »

You said prices .

.then when called on it you said rents.

At least back track when it obvious prices are not beyond or close to 2006 levels. That part isn't true.

You've totally lost me I'm afraid.
Below is the flow of conversation, addaword brought up prices, I was responding to a question from schmittel on rents...

schmittel wrote: »

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

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.

addaword wrote: »

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

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?

Assetbacked

Hubertj wrote: »

interesting. Is the increase all down to short term lets coming onto market as well as standard lets being unable to shift due to restrictions? Or has a % of new builds added to the stock further increasing supply?

Other data such as length of time it takes a unit to shift would be interesting in the medium term once some level of normality returns. I presume this metric will increase over coming months as demand falls?

Maybe leases ending the end of March caused people to return home and then when the places were cleaned and relisted this brought us up to mid-April. It's very difficult to get new tenants in under the current lockdown situation and when we tentatively re-emerge in 2 weeks there is a glut of rentals available with lots of competition between places which will make it even harder. It doesn't look like any sort of increase in demand will occur so long as foreign travel is still restricted which looks like it will last for another 3 months anyway. It's hard not to see significant drops in rents.

Ozark707

Assetbacked wrote: »

The Daft rental report has today been published;

https://www.daft.ie/report

Some of the key things which stand out for me;

- April rents down 2.1% from March but still higher than a year ago (by 3.8%). Average rent in Dublin City is €1974-2111. The opinion of the author is that rents will continue to fall for the rest of the year at least given the rise in unemployment.

- Rental Listings were up in March with the short-term properties being listed which then dropped in the first half of April but then rose again the second half of April. Year on year there are 40% more rental listings on Daft.

- Rental yields in Dublin 1 bedroom apartments in Dublin are anywhere from 7-13%.

- It is still far cheaper to pay for a mortgage than to pay for rent.

- 1 bedroom apartments average €1605-€1770 in Dublin City centre; €1745 in South County Dublin, €1357 in North County Dublin and roughly €1393-1602 in the rest of the Dublin Post codes.

- Listings of homes for sale down 75% in April based on the same month last year. However, the report notes that that the sales market could be closed down until a form of normality returns so listings drops doesn't translate to drops in prices.

- BTL sector has a healthy level of projects in the pipeline, but (my view) the State needs to get onto a mass home building project to help continue bring down the cost of housing.

If this is a Q1 report why does it include April figures? Or is it just a one off due to Covid? It gets a bit confusing when his tables refer to Q1 (which makes YoY, QoQ trends easy to analyse) but then he throws in April figures for rents.

hometruths

GreeBo wrote: »

Yes I would, but I don't think you can isolate one from the other since they are all in the property bucket.

Also, a large number of properties (typically apartments) that historically would have been in the purchasing market are now in the rental market due to massive REIT investors

Ok so you agree supply has fallen and this has driven rental prices up.

And you don't think you can isolate rental price from purchase prices.

So what impact do you think the rental price increases has had on purchase prices?

GreeBo

schmittel wrote: »

Ok so you agree supply has fallen and this has driven rental prices up.

And you don't think you can isolate rental price from purchase prices.

So what impact do you think the rental price increases has had on purchase prices?

Hold on now, thats not what I said.
You asked did I agree that a large number of properties that were previously on the market were no longer on the market and I agreed.
I also pointed out that there are a huge number of REITs now in the market that didnt exist before, this has undoubtedly increased the supply of rental properties, which has in turn increased the cost of buying a property as it increased demand.

You are trying to isolate a market to 1 thing to explain it, its far more complicated and interlinked than that.
Both purchasers and renters and investors are all utilizing the same thing, property; ergo they interact and influence each other. I dont think this is news?